Risk Sharing To Fund Innovative Health Care Technologies- Lessons From The Airline Industry

Published May 12, 2014
Edmonton, AB, Canada - The evidence for innovative health technologies is, by definition, highly uncertain and their acquisition costs are frequently an order of magnitude greater than the technologies they replace. Health care payers struggle to manage the budget impact of these technologies whilst maintaining patient access. Risk-sharing schemes are a possible solution to this struggle as they attempt to extract price discounts and collect additional data on real-world effectiveness. In the majority of schemes, however, the payer assumes all remaining risk at the time of purchase, because the full price is paid up front. Risk can be managed by linking payment to reliable service delivery. For example, in the airline industry, leasing arrangements devolve risk management down to the individual production unit (i.e. the plane). The airlines pay for engines in terms of time in the air, not engines delivered. The value of such arrangements is demonstrated by their widespread use. Researchers from the Universities of Auckland (New Zealand), Alberta (Canada), and Leeds (UK), proposed a new design of health care risk-sharing schemes, drawing on the successful use of leasing in other industries, such as the airline industry. The Technology Leasing Reimbursement Scheme ensures that the risk of innovative technologies is shared between payer and provider over the useful life of the technology; thus reducing the wasted resources associated with technologies that fail to deliver on early promise, whilst allowing technologies that out-perform expectations to receive greater rewards. According to Dr. Christopher McCabe, PhD, from the University of Alberta, and lead researcher on the project, “Conventional risk-sharing schemes have been tried in different health care systems for nearly two decades. The continued role of new technologies in driving unsustainable growth in health care costs suggests they do not work. Health care can learn from other industries and do things differently to manage the new challenges presented by innovative health technologies. In technology leasing, we believe we have identified a learning opportunity that can protect health care budgets from technologies that fail to deliver, whilst rewarding innovations that do.” The full study: “Sharing Risk between Payer and Provider by Leasing Health Technologies: An Affordable and Effective Reimbursement Strategy for Innovative Technologies?” is published in Value in Health.

Value in Health (ISSN 1098-3015) publishes papers, concepts, and ideas that advance the field of pharmacoeconomics and outcomes research as well as policy papers to help health care leaders make evidence-based decisions. The journal is published bi-monthly and has over 8,000 subscribers (clinicians, decision-makers, and researchers worldwide).

International Society for Pharmacoeconomics and Outcomes Research (ISPOR) is a nonprofit, international, educational and scientific organization that strives to increase the efficiency, effectiveness, and fairness of health care resource use to improve health.

For more information: www.ispor.org

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