Role of Innovation in Medical Technology in the Efficient Allocation of Healthcare Resources

Transcription

1 Role of Innovation in Medical Technology in the Efficient Allocation of Healthcare Resources ISPOR MDD Panel Discussion at 11 th Global Forum for Health Research Beijing, October 30, 2007 Ashoke Bhattacharjya, PhD Executive Director Health Policy and Economics J&J Medical Asia Pacific 1

2 Key Healthcare Issues in Emerging Markets Aging Populations and Increased Demand for Healthcare Products Access and Affordability for Healthcare Products/Services Developing/Fragmented Healthcare Infrastructure Developing Regulatory and Reimbursement Landscape 2

3 The global healthcare market: Demographics and spending 16.0% Healthcare spending % GDP vs. Per capita GDP Healthcare spending % GDP 14.0% 12.0% 10.0% 8.0% 6.0% IND 4.0% 2.0% PAK 0.0% PRC PHL THA MLY KOR $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 FRA SIN JPN US EU USA Asia AUS UK West Africa Per Capita GDP per annum Adapted from: Professor Uwe Reinhardt (using 2002 World Bank Development Indicators) 3

4 Chronic Diseases Cardiovascular disease Diabetes Arthritis End-stage renal disease (ESRD) Chronic obstructive pulmonary disease (COPD) Osteoporosis Hypertension Some types of cancers Asthma Neurodegenerative disorders (Alzheimer s, Parkinson s, etc.) Chronic pain Stroke and other brain injuries 4

5 Fastest Growing Cardio Populations ( ) Major Countries with Highest Cardiovascular Disease Population CAGR Rank Country 2001 (Millions) 2004 (Millions) CAGR (%) Saudi Arabia Singapore Luxembourg Philippines Malaysia Israel Egypt Canada China India

6 Fastest Growing Diabetic Populations ( ) Major Countries with Highest Diabetic Population CAGR Rank Country 2001 (Millions) 2004 (Millions) CAGR (%) 1 Turkey United States Philippines Malaysia Iceland China India Peru United Kingdom Saudi Arabia

7 Advances in Medical Technology Investments in healthcare have had a significant impact on patients lives PS: Most data are from advanced countries as research on economic impact of medical technology developing countries is almost non-existent

8 Medical Technologies: Myths and Realities Myth To manage health care costs, technology must be controlled. The Facts Maximizing the value of medical technology is central to helping patients live longer and better lives, as well as curing the ills of health care systems. Medical technologies can improve quality, increase economic productivity, and save lives. Hospitals and physicians are seeing how medical technology can reduce treatment and recovery time, cut the length of hospital stays. 8

9 How is value of medical technology measured? Measures Examples Clinical Improvements in: Efficacy Quality Economic Safety & Mortality Improvements in: Patients physical or psychological state Care-givers physical or psychological state Measurements selected depend on perspective and time horizon of interest: Cost of care, length of hospital stay Physician, Patient, Hospital, Employer, Payer, Society Labor productivity (output / worker-hour) Cost per intervention avoided Cost per quality-adjusted life year (QALY) 9

10 New technologies enable shorter lengths of stay Average Decrease in Number of Inpatient Hospital Days ( , 13 years) Hospital days per 10,000 patients Heart diseases, generally Ischemic heart disease Source: Health United States, National Center for Health Statistics, Table ~50% decrease in hospital days in only13 years 33 Acute myocardial infarction 10

11 Some Beneficial Aspects of Shorter Hospital Stay due to Technology Enable more efficient utilization of limited (quality) hospital capacity/beds to serve a greater number of patients, reduce waiting times and potentially raise hospital revenues. Decrease risk of hospital-acquired infection Avoid days off work and lost wages of family members Reduce costs of transportation from peri-urban or rural areas to hospital and vice-versa for family Reduce cost of lodging near hospital for family members 11

12 Investments in health deliver health gains Value of Health Gains from Investments in Health Care Innovation $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0 10% return 50% return 60% return Heart attack Type 2 Diabetes Spending 380% return Stroke Breast Cancer Overall Health Value of health gains per health dollar spent 200% return Each additional $1 invested in health care over the last 20 years has produced health gains valued at between $2.40 and $3.00. Source: Medtap publication, The Value of Investment in Health Care,

13 In Cardiac Care, Mortality From Heart Disease Has Plummeted by 40% Since Decline in Coronary Heart and Stroke Disease Deaths and Advances in Medical Technology 300 Deaths per 100, PTC Angioplasty Pacemakers ACE Inhibitors MRIs CAT Scans Implantable Defibrilators Statins Stents PET Scans Improved Ultrasound Endoscopic Techniques Stents w/ drugs Age adjusted to the year 2000 standard population CHD Source: CDC, NCHS, National Vital Statistics System (NVSS), Stroke 13

14 Value of Technology: History of Acute Myocardial Infarction (MI) Year Technology / Innovation Value of Technology 1959 Acute inferior myocardial infarction 6 weeks in hospital 6 weeks gradual mobilization Major economic/psychological impact 1979 MIILIS Trial of hyaluronidase, beta blockers to limit infarct size Other treatment similar to s TIMI Trials of thrombolytics More rapid mobilization 1990s PTCA in acute MI 2000 Bare metal stent in acute MI 2006 CYPHER Stent in acute MI (TYPHOON and SESAMI) 12% ~2.5% mortality rate ~50% decrease in mortality (JAMA 2007) 14

15 Current Global Use of Med Tech: An Example Total Joints Per 1 Million Pop. 3,000 2,500 2,000 1,500 1, USA UK Germany France New Zealand Australia Japan Taiwan Korea Hong Kong Singapore Thailand Malaysia China Pakistan Vietnam Philippines India Indonesia Total joint per 1MM pop by country Hips per 1MM pop Knees per 1MM pop 15 Presented by Dr. Dan Berry at Wrightington June 2002

16 Trends in Medical Needs, Innovations and Value Use of Mammography by Women Age 40+ Years (US), Percentage of women having a mammogram within the past 2 years 80% 70% 60% 50% 40% 30% 20% 10% 0% 70% 70% 67% 60% 61% 55% 52% 29%

17 Trends in Medical Needs, Innovations and Value Death Rates for Malignant Neoplasm of Breast for Females (US), Deaths per 100,000 resident population 34% 32% 30% 28% 26% 24% 22% 20% 33.3% 30.8% 31.9% 28.6% 28.1% 27.0% 27.1% Source: CDC, National Center for Health Statistics, Health, United States, 2003 The US Preventive Services Task Force (USPSTF) recommends screening mammography, with or without clinical breast examination, every oneto-two years for women aged 40 and older. Although many factors have influenced mortality rates over the last 20 years, such as improvements in cancer treatments, the USPSTF concluded that mammography screening significantly reduces mortality from breast cancer. 17

18 Trends in Medical Needs, Innovations and Value Number of Total Hip and Total Knee Replacement Procedures (US), Number of Procedures (Thousands) Total hip replacements Total knee replacements Source: CDC, NCHS, National Hospital Discharge Survey,

19 Benefits of Glucose Control (US Data) Key Studies Used to Calculate Value of Investment in Treatment of Type 2 Diabetes Reference Comparators Population Value of Investment Eastman et al. Goal of blood glucose control to achieve normal glucose levels vs. no specific goal Patients newly diagnosed with type 2 diabetes (ages 19 75) For every additional dollar spent on controlling glucose levels, gain of $8.65 CDC (2002) Goals of intensive blood glucose control, intensified blood pressure control, reduction in cholesterol level vs. standard of care for each of these parameters Patients newly diagnosed with type 2 diabetes (ages 25 or older) For every additional dollar spent on intensive blood glucose control, gain $3.77. Intense blood pressure control actually leads to savings in overall treatment costs as well as health gains. For every additional dollar spent on lowering cholesterol levels, gain of $

20 Investments in Health Deliver Health Gains Over the last twenty years, each additional dollar spent on health care has produced health gains valued at $2.40 to $3.00. Health care costs per person between 1980 and 2000 increased by $2,254, but: Annual death rates declined 16% Life expectancy increased 4% Disability rates for people over 65 declined 25% Number of hospital days declined 56% Without this investment in health, the US would have spent over $600 billion less on health care in 2000, but: 470,000 more deaths 2.3 million more people with disabilities 206 million more days spent in the hospital Source: Medtap publication, The Value of Investment in Health Care,

21 Economic benefits of medical technology Australian Productivity Commission reported: Average life expectancy has increased about 3 months per year over the past decade For context, an additional 6 days of life for average Australians would justify Australia s expenditure on medical technologies U.S. studies suggest that the economic benefits of treating cardiovascular disease and low birth weight infants together equal total U.S. medical spending for the past 50 years (MEDTAP reports, Cutler et al) 21

22 Medical Technologies and Economic Welfare Noted Yale economist Nordhaus observes that, the medical revolution over the last century appears to qualify, at least from an economic point of view as the greatest benefit to mankind. Says Nordhaus: It will come as a surprise to most noneconomists that improvements that come from new [medical] products are completely omitted incurrent measures of real output. 22

23 Access to medical technology: Issues The cost-reducing benefits of medical technologies are well-documented The difficulty is in bringing the fruits of innovation to the patient and the economy This may be due to: Regulatory or other decision-making barriers Lack of satisfactory or inappropriate reimbursement systems Insufficient training in the use of new medical technologies 23

24 Stakeholder Alignment is critical to broadening Access to Medical Technology Gov t Physicians Hospitals Industry Issue: Access to Technology Patients Private Payers Public Payers Regulators 24

25 Conclusions and Recommendations Given the demographics and chronic disease profiles of emerging economies, we can expect health care burden and cost trends to be similar to those observed for developed countries These trends will exert great pressure on the healthcare budget and fragmented infrastructure Medical technologies can play a vital role in managing these pressures if used in a timely and efficient manner, recognizing their total benefits and value. Assessing the value of new technologies is not only a question of price or cost 25