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Leasing health technologies- an affordable and effective reimbursement strategy for innovative technologies?

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  • Christopher McCabe

    ()
    (Department of Emergency Medicine, School of Community Medicine, University of Alberta, Edmonton, Canada)

  • Richard Edlin

    (Health Systems, School of Population Health, University of Auckland, New Zealand)

  • Peter Hall

    (Academic Unit of Health Economics, LIHS, University of Leeds)

  • Klemens Wallner

    (Department of Emergency Medicine, School of Community Medicine, University of Alberta, Edmonton, Canada)

Abstract

The challenge of implementing high cost innovative technologies in health care systems operating under significant budgetary pressure has seen a radical shift in the health technology reimbursement landscape. New reimbursement strategies attempt to reduce the risk of making the wrong decision; i.e. paying for a technology that is not good value for the health care system, whilst promoting the adoption of innovative technologies into clinical practice. However, the remaining risk is not shared between the manufacturer and the health care payer at the individual purchase level; it continues to be passed from the manufacturer to the payer at the time of purchase. In this paper we propose a health technology payment strategy – Technology Leasing Reimbursement Scheme (TLRS) - which allows the sharing of risk between the manufacturer and the payer; the replacing of upfront payments with a stream of payments spread over the expected duration benefit from the technology, subject to the technology delivering the claimed health benefit. Using trastuzumab (Herceptin) in Early Breast Cancer as an exemplar technology we show how a TLRS not only reduces the total budgetary impact of the innovative technology, it also truly shares risk between the manufacturer and the health care system, whilst reducing the value of further research and thus promoting the rapid adoption of innovative technologies into clinical practice.

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File URL: http://medhealth.leeds.ac.uk/download/236/auhe_wp13_02
File Function: First version, 2013
Download Restriction: Final version published in Value in Health, volume 17, issue 4, June 2014, Pages 438–444. DOI: 10.1016/j.jval.2014.01.010

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Bibliographic Info

Paper provided by Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds in its series Working Papers with number 1302.

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Length: 15 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:lee:wpaper:1302

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  1. Christopher McCabe & Richard Edlin & Peter Hall, 2012. "Navigating time and uncertainty in health technology appraisal: would a map help?," Working Papers 1201, Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds.
  2. Christopher J. McCabe & Tania Stafinski & Richard Edlin & Devidas Menon, 2010. "Access with Evidence Development Schemes: A Framework for Description and Evaluation," PharmacoEconomics, Springer Healthcare | Adis, vol. 28(2), pages 143-152.
  3. Tania Stafinski & Christopher J. McCabe & Devidas Menon, 2010. "Funding the Unfundable: Mechanisms for Managing Uncertainty in Decisions on the Introduction of New and Innovative Technologies into Healthcare Systems," PharmacoEconomics, Springer Healthcare | Adis, vol. 28(2), pages 113-142.
  4. Peter S. Hall & Claire Hulme & Christopher McCabe & Yemi Oluboyede & Jeff Round & David A. Cameron, 2011. "Updated Cost-Effectiveness Analysis of Trastuzumab for Early Breast Cancer: A UK Perspective Considering Duration of Benefit, Long-Term Toxicity and Pattern of Recurrence," PharmacoEconomics, Springer Healthcare | Adis, vol. 29(5), pages 415-432.
  5. McCabe, C & Claxton, K & Culyer, AJ, 2008. "The NICE Cost-Effectiveness Threshold: What it is and What that Means," MPRA Paper 26466, University Library of Munich, Germany.
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