Market Access and Reimbursement Opportunities in the British NHSMarket Access and Reimbursement Opportunities in the British NHS
Market access and reimbursement expert Michael Branagan-Harris discusses characteristics, challenges and opportunities to introduce new technologies into the British NHS.
September 16, 2015
With 900 more hospital admissions per day in NHS England this year over 2014, the opportunities and need for change have never been greater. The medical device and diagnostic industries have to rise to the challenge and work collaboratively with the system to play a key role in transforming care though innovation, but introducing new medical technologies and diagnostics into NHS England has always been challenging.
In 2014 the NHS was rated as the world’s best healthcare system in terms of efficiency, effective care, safe care, coordinated care, patient-centred care and cost-related problems, according to a study conducted by the Commonwealth Fund, a private US foundation. Compared to healthcare systems of other developed countries, the NHS is very efficient. In 2013, health expenditure in the UK was 8.46 per cent of GDP. This compares to 16.43 per cent in the USA, 10.98 per cent in Germany, and 10.95 per cent in France. Per capita spending for the UK was $3,235 in 2013 compared to $8,713 in the USA, $4,819 in Germany, and $4,124 in France.
“The device and diagnostic industries play a key role in delivering new products that benefit the NHS, the economy and above all, patients.”
Professor Dame Sally C. Davies Chief Medical Officer Department of Health
“Transformation on this scale needs strength of purpose, unwavering commitment, and investment to support innovation and to release the entrepreneurial energies within the NHS, to bring care closer to people’s homes and communities, and to support the empowerment of patients to better manage their own health through modern technologies.”
NHS England Chairman Sir Malcolm Grant
While the NHS manages to be less expensive than most other healthcare systems, this doesn’t seem to affect the quality of the service. In the 2014 Care Quality Commission inpatient satisfaction survey 84 per cent of 56,300 respondents rated their overall experience as 7 (11%), 8 (24%), 9 (22%) or 10 (27 %) out of 10. 95.37% of 184,711 inpatients treated by NHS trusts and foundation trusts would recommend their provider to friends or family. Average length of stay for all causes in the UK was 7.0 days in 2013. This compares to 17.2 in Japan, 9.1 in Germany, and 5.6 in France.
However, the NHS is likely to face severe funding challenges in the nearer future. As one of few countries in Europe, the kingdom’s population is projected to increase from an estimated 63.7 million in mid-2012 to 67.13 million by 2020 and 71.04 million by 2030. At the same time, the UK population is expected to continue ageing, with the average age rising from 39.7 in 2012 to 42.8 by 2037. The number of people aged 65 and over is projected to increase from 10.84m in 2012 to 17.79m by 2037. As part of this growth, the number of over-85s is estimated to more than double from 1.44 million in 2012 to 3.64 million by 2037. With the higher share of older people, age-related diseases will occur more frequently. For instance, it is estimated that there will be 4 million people with diabetes in the UK by 2025 compared to 3.2m today. In England the proportion of men classified as obese increased from 13.2% in 1993 to 26.0% in 2013 (peak of 26.2% in 2010), and from 16.4 % to 23.8 % for women over the same timescale (peak of 26.1% in 2010).
Already, the demand for health services is increasing constantly. In 2013/14 there were 64 per cent more operations completed by the NHS compared to 2003/04, with an increase from 6.712m to 11.030m. There were 15.462m total hospital admissions in 2013/14, 32 per cent more than a decade earlier (11.699m). The increase has an effect on both cost and quality of the service. At the end of April 2015, there were 3.026 million patients on the waiting list for treatment. 6.7% had been waiting for longer than 18 weeks, compared to 6.3% at the same point in 2014. NHS net expenditure (resource plus capital, minus depreciation) has increased from £64.173 billion in 2003/04 to £109.721bn in 2013/14. Planned expenditure for 2014/15 is £113.035bn and for 2015/16 is around £116.4bn. Health expenditure per capita in England has risen from £1,712 in 2008/09 to £1,912 in 2012/13. “The NHS is facing a perfect storm, caught between huge increases in demand and the prospect of a massive £30 billion deficit. Without revolutionary change the NHS as we know it will become unsustainable,” said NHS England Chairman, Sir Malcolm Grant.
Understanding NHS Health Technology Assessment - The National Institute for Health and Care Excellence (NICE) and its various programmes
NHS Facts and Figures
• 209 clinical commissioning groups who commission and fund primary and secondary care activities
• 155 acute trusts (including 100 foundation trusts)
• 56 mental health trusts (including 43 foundation trusts)
• 34 community providers (15 NHS trusts, 3 foundation trusts and 16 social enterprises)
• 10 ambulance trusts (including 5 foundation trusts)
• 8,000 General Practitioner practices
• 853 for-profit and not-for-profit independent sector organisations, providing care to NHS patients from 7,331 locations
The NHS Employs 1.388 M NHS staff
• 150,273 doctors,
• 377,191 qualified nursing staff,
• 155,960 qualified scientific, therapeutic and technical staff and
• 37,078 managers.
There were 32,467 additional doctors employed in the NHS in 2014 compared to 2004. There were 18,432 more NHS nurses in 2014 compared to 2004.
Managers and senior managers accounted for 2.67 per cent of the 1.388 million staff employed by the NHS in 2014.
Understanding this background is important for medical device companies who intend to market their products in the UK. Like many others, the British healthcare system is faced with the challenge to uphold healthcare standards with decreasing funds. Innovative technologies to treat patients more efficiently will certainly be part of the solution.
The most important organization to introduce new technologies in the UK healthcare system is the National Institute for Health and Care Excellence (NICE). There is always confusion about what NICE does, its guidance and what it means. NICE run many different programmes, looking at Medical Devices and Diagnostics in many ways from safety and efficacy, to patient, system and economic benefit.
NICE is the national guidance organization providing guidance to the health and social care system on public health interventions, care pathways and specific technologies. NICE guidance helps the UK’s National Health Service (NHS) adopt effective and cost-efficient technologies and procedures. NICE Guidance is highly influential among health authorities across the World. The organisation achieves that by thoroughly reviewing of the evidence and by incorporating advice and expertise from experts, patients and care-givers. The organisation does this nationally for local health authorities, for local government, for charities, and for anyone with a responsibility for commissioning or providing health and social care. With the exception of some Technology Appraisal (TA) guidance, there is no legal requirement for the hospitals and clinicians to comply with the recommendations NICE makes, although it is considered best clinical practice for the NHS to do so.
It became clear that NICE had not applied the same level of varied assessment in the device and diagnostic area as they did with pharmaceuticals. Until 2010 there were really only two main programmes that evaluated new medical technologies Interventional Procedures (or IP) Programme, and Technology Appraisal (or TA) Programmes. In 2010 two new programmes were introduced – Medical Technology Guidance or MTG, and Diagnostic Assessment Programme or DAP.
NICE Interventional Procedures Programme (IPG)
The 37 week long established NICE Interventional Procedures Programme looks purely at safety and efficacy of new or novel procedures. Unlike medicines, there is no licensing system in the UK for operations or other interventional procedures. This means that it can be difficult for healthcare professionals to be fully informed about the possible risks and benefits of procedures that are emerging within UK clinical practice. The guidance both encourages doctors to consider newer procedures that they may not have otherwise used, as well as protects patients by advising on the risks and benefits of their use.
The guidance means that innovative procedures that could provide significant health benefits can be incorporated into clinical practice in a responsible way. Under the Interventional Procedures programme, comparative effectiveness and health economic considerations are not relevant. It focuses on if the technique or approach is safe for the NHS to adopt and results in a number of outcomes and conditions from normal guidance, special arrangements, only in research and do not use.
Based on this, NICE publishes guidance on whether or not doctors should consider specific interventional procedures to treat or diagnose their patients. This type of NICE guidance does not consider how much the procedures would cost the NHS, or whether the NHS should allocate funding for them. These decisions are made at a local NHS level and usually on a case-by-case basis. This means that if NICE has issued guidance recommending any given interventional procedure, the NHS is not obliged to provide it. To date this programme has performed over 529 assessments.
IP guidance does not name or relate to the specific devices that may be used: it evaluates the procedure or intervention
The clinician wishing to perform the procedures completes a notification to NICE and there is very little interaction with the device manufacturer. NICE describes an interventional procedure as one that involves making a cut through the skin, using instruments to enter the body (e.g. endoscopes) or equipment, which uses energy sources (e.g. ultrasound or electromagnetic radiation) to diagnose or treat patients
This programme is currently under review and new updated processes and methods will be available in 2015. The guidance results in allocation of OPCS or procedure codes and ICD-10 diagnostic codes, which combined are then calculated and grouped into a Healthcare Resource Group (HRG) tariff or Diagnostic Related Group (DRG) IP guidance does not lead to mandatory funding. Two of the most recent IP being total prosthetic replacement of the jaw – known as “the bionic jaw” procedure (IPG500) and insertion of a double balloon catheter for induction of labour (IPG528).
A medical device manufacturer’s perspective:
“As a global Market Access leader in a Medical Device company, I am pleased to see the significant progress NICE made in the last several years toward providing a modified review pathway tailored for the unique requirements of a medical device. The Medical Technologies Evaluation Programme (MTEP) is a highly collaborative, objective review process where devices are assessed based on clinical outcomes and cost effectiveness.
The MTEP team in Manchester is responsive, professional and genuinely interested in partnering with industry and physicians to provide the best available technologies to UK patients through the development of guidelines. Timelines are well established and adhered to, and multiple opportunities exist for stakeholder review and input.
I believe that NICE has reset the bar globally on ‘best in class’ partnership with the medical device industry. It has been a true pleasure working with the team.”
Kathy Sherwood – Head of Global Market Access - AMS Medical Inc.
About NICE Technology Appraisal (TA) Guidance
NICE’s technology appraisals assess the clinical and cost effectiveness of health technologies, such as new drugs and devices, to ensure that all NHS patients have equitable access to the most clinically- and cost-effective treatments that have significant impact on NHS or policy priorities. Regulations require clinical commissioning groups, NHS England and local authorities to comply with recommendations in a technology appraisal within 3 months of its date of publication.
During a technology appraisal, an independent Appraisal Committee examines the evidence and reaches a consensus on the effectiveness of a technology. The committee uses information from clinical trials as well as information from patients and clinical experts. The committee then makes recommendations about the use of the drug or technology in the NHS. An appraisal may contain multiple technologies and therefore a number of recommendations may be made in each appraisal. From 1 March 2000 to 30 June 2015, NICE published 344 technology appraisals (TA) in total, less than 10% of these appraisals involved a device or diagnostic.
The Newer NICE Evaluation programmes
Two brand new programmes – Medical Technology Guidance Programme (MTG) and the Diagnostic Assessment Programme (DAP) were designed specifically to help speed up the ultimate adoption of new technologies into the NHS, by setting new levels of clinical evidence requirement.
NICE medical technologies guidance (MTG) addresses specific technologies notified to NICE by manufacturers. The ‘case for adoption’ recommendations are based on the claimed advantages of introducing the specific technology compared with current management of the condition. This ‘case’ is reviewed against the evidence submitted and expert advice. If the case for adopting the technology is supported, then the technology has been found to offer advantages to patients and the NHS. NICE MedTech Programme takes approximately 48 weeks to complete. The first 10 weeks stage of the process is confidential between the sponsor (Company) and NICE and this allows NICE to ensure that the device meets the criteria and the evidence matches the claims and for the NICE Medical Technologies Advisory Committee (MTAC) to engage with NHS users that support the adoption of technology. If the device or simple diagnostic is accepted then there is an announcement made on the website, and the remaining part of the programme (38 weeks) commences. The MTG programme is based around the evaluation of Medical Devices and diagnostics that are cost saving or cost neutral compared to the comparator outlined in the submission. The economics are based on cost consequence modelling.
NICE Diagnostic Assessment Programme (DAP)
Diagnostics Assessment Programme (DAP) focuses on the evaluation of innovative medical diagnostic technologies in order to ensure that the NHS is able to adopt clinically and cost effective technologies rapidly and consistently.
The Diagnostics Assessment Programme (DAP) provides specialist capacity for undertaking complex assessments of diagnostic technologies. In many cases, the meaningful assessment of diagnostic technologies requires detailed knowledge of the post-diagnosis care pathways, which results in considerable complexity. The economics can be based around Quality Adjusted Life Years (QALY) that NICE will commission to produce. The DAP takes around 60 weeks and can lead to commissioned research by NICE.
The programme is closely linked to NICE's Medical Technologies Evaluation Programme MTEP) and the Medical Technologies Advisory Committee (MTAC). MTAC undertakes topic selection for all medical technologies and routes appropriate diagnostics topics to the DAP.
Opportunities for research – the NHS National Institute for Health Research (NIHR)
From a Market Access perspective, there is good news for those considering entering the market here. To start with if you are an overseas company with a CE Marked product and needing to generate evidence, The National Institute for Health Research (NIHR) funded through the Department of Health is in place to improve the health and wealth of the nation through research. It is a large, multi-faceted and nationally distributed organisation. Together, NIHR people, facilities and systems represent the most integrated clinical research system in the world, driving research from bench to bedside for the benefit of patients.
Since its establishment, the NIHR has transformed research in the NHS. It has increased the volume of applied health research for the benefit of patients and the public, driven faster translation of basic science discoveries into tangible benefits for patients and the economy, and developed and supported the people who conduct and contribute to applied health research.
The National Office for Clinical research infrastructure (NOCRI) is a special department within the NIHR set up to provide direct and simplified access to experienced NIHR investigators for the Medical Device and Diagnostic industry. NOCRI provides a direct route to these experts and facilities and can support companies to set up collaborations with one or more research centres in a streamlined and efficient way.
These investigators can help companies understand the potential of their devices and diagnostics, shorten cycle times and enable earlier go or no go decisions. These introduction services are free and have helped many Device Access clients accelerate research, which has been used for evidence submissions for a health technology assessment.
How to get reimbursement in the NHS
The publically funded NHS reimbursement system does not reward clinicians financially for performing a procedure – clinicians are paid an annual salary. There are no specific product related codes that are used either. The system is the same across NHS England, so unlike other markets and countries, you do not need to negotiate with hundreds of insurance companies. The Clinical Commissioning Groups (CCG’s) pay the Hospitals for performing procedures, are CCG’s are now often referred to as ‘payers’.
The NHS reimbursement system works on the following;
The diagnosis of the patient and their co-morbidities by ICD code
The procedure or procedures performed by OPCS code
Length of stay and type of admission
The location of the hospital known as Market forces Factor or MFF – for example London Hospitals get paid around 30% more that those in other parts of the country due to higher local costs.
Put simply, the above ICD and OPCS codes and information are put into a hospital computer system called a grouper, by the coding department and the result of these codes is a HRG (or DRG) code, which has a financial value or tariff. The Hospital claims the amount for the procedure from the CCG monthly in a payment system called SUS.
There are several other factors that make a difference to what the hospital is paid for performing the procedure that can make a significant difference to the HRG, below are some examples:
Emergency admissions are often paid higher
Specialist service top-ups – ie paediatric procedures have a significant % top up
There are several rewards in place to financially drive day case treatments over longer stays to reward productivity- these are called Best Practice Tariff or BPT.
Overall the NHS Reimbursement system, once called Payment by Results or PbR but now Monitor Payment system is a complex one. It really rewards activity and not necessarily results, and a very recent NHS announcement states a significant increase in the current number of HRG Tariff codes from 1285, to 2266 next year.
A CE marked medical device may be sold into the NHS without NICE approval or a specific product code. It would depend though on a number of factors:
Is the device a brand new type of operation? For example, are you entering the body in a new unproven way? Does the procedure involve a new type of energy or radiotherapy? If so the clinician will need to notify the NICE Interventional Procedures (IP) department to advise them, and in addition get local ethics approvals.
Price – is the price significantly higher than the comparator?
Is there enough money in the NHS HRG tariff to cover the cost of using the device or diagnostic?
Has the clinician been sufficiently trained in the technique?
Has the clinician got Hospital / local approval for using the technology?
Does the company have $8M public and $8M private liability insurance in place to sell to the NHS?
Is it financially worth the hospital doing the procedure? There are a number of perverse incentives in the system and it could be better for the hospital to continue to perform the old more expensive procedure because it makes more profit out of this activity.
The NHS probably holds the richest data of episodes of care in the World
One of the biggest benefits with NHS England is the fact that this single organisation collects information on every single episode of care. This is recorded by an organisation called the Health and Social Care Information Centre, and has been made available to a number of select commercial organisations including Device Access UK Ltd. This data can be analysed by looking at single or multiple diagnostic or ICD-10, Procedure or OPCS and Spend HRG/DRG codes.
In December 2014, Device Access was granted a licence to access over 1/2 billion anonymised patient records and 3 years historic procedure activity data and can supply MedTech and diagnostic companies (subject to strict data reuse agreement and eligibility) bespoke information to examine the current NHS patient pathway and see precisely where their MedTech or diagnostic device could be best used with for example the most appropriate cohort of patients, and help improve NHS patient, hospital and NHS system outcomes. This by NHS England Hospital data includes outpatient, inpatient, critical care and maternity episodes, by diagnosis, treatment, length of stay and spend, and can be updated and refreshed monthly to help analyse NHS activity trends over time.
Michael Branagan-Harris, CEO of Device Access UK, incorporated Device Access UK Ltd in 2010, which is now UK’s leading NHS MedTech Market Access consultancy.From assistance in getting the right clinicians and centres on board to generate research through clinical studies, right through to assessment though NICE, and onto reimbursement and commercialisation, Device Access has assisted over 120 start up and multinational companies navigate their way into the UK’s National Health Service (NHS).
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