Value or Volume: Is the APAC Region Transforming into Value-Based Health Care?

Published Nov 22, 2022

A report from the Virtual ISPOR Asia Pacific Summit 2022  Opening Plenary Session

Amid the global COVID-19 outbreak, many countries are trying to provide equitable, good quality, and cost-effective healthcare services. Value-based health care (VBHC), which aims to improve healthcare services by increasing outcomes with lowered costs, has been in the spotlight against volume-based healthcare delivery systems such as fee-for-service payment models. The Asia Pacific region is no exception in this global trend of VBHC and the concept of VBHC is rapidly spreading with various value-based payment, value-based pricing, or value-based procurement demonstrations being undertaken.  Moreover, discussions to adopt a value-based approach are actively underway in the Asia Pacific region. There have been a wide-range of VBHC innovations across the Asia Pacific region such as the VBHC arrangements limited to specific technologies (e.g., pharmaceuticals, medical devices, and diagnostics) or comprehensive health care delivery transformation to embrace VBHC throughout the healthcare system. In addition, there are some countries that still focus on volume-based payment rather than value as their primary payment models.

In this session, speakers and participants discussed examples of VBHC in operation across the Asia Pacific region as well as the health policy aligned with VBHC in the areas of reimbursement, pricing, and payment models. Opportunities and challenges to implementing VBHC to help build sustainable and resilient healthcare systems was also discussed.

The session was moderated by Kathleen Carberry, RN, MPH, the Outcomes Program Officer at the Value Institute for Health and Care at The University of Texas at Austin in the United States.  The esteemed plenary speakers included: Kylie Woolcock, the Policy Director and Acting Chief Executive of the Australian Healthcare and Hospitals Association (AHHA); Daphne Khoo, MD, the Deputy Director of Medical Services at Healthcare Performance Group and Executive Director of the Agency for Care Effectiveness in the Ministry of Health of Singapore; and Sun Min Kim, MD, PhD, the President of Health Insurance Review & Assessment Service (HIRA) in South Korea.

This brief summarizes the discussion from the panel.

Update on Value-Based Healthcare reforms in Singapore

Dr. Daphne Khoo’s presentation focused on the key developments in VBHC in Singapore over the past 2 years. These were:

  1. Extension of value-based pricing to national insurance coverage of cancer drugs
  2. The launch of the new Healthier SG (Singapore) initiative
  3. A shift of public sector financing to a capitation model
  4. An increasing focus on end-of-life care  

Prior to September 2022, cancer patients were allowed to claim $3000 (SGD) a month for cancer drug costs from the national medical insurance scheme, Medishield Life (MSHL). The cancer drug funding model has since switched to value-based pricing with risk sharing agreements. This has resulted in increased subsidies for cancer drugs and tiered MSHL funding.

Singapore has also embarked on its most significant healthcare transformation initiative in recent decades called Healthier SG (HSG). HSG will result in every Singapore resident being assigned to a primary care provider linked to one of Singapore’s 3 public health care clusters for preventative health and chronic disease management. The funding model for HSG will also switch from a fee for service model to capitated funding. Finally, alongside these changes, there will be an increasing focus on end-of-life care.

Value-Based Healthcare in Korea

Dr. Sun Min Kim explained two domains of value-based healthcare in Korea, which are benefit arrangement and Pay-for-Performance (P4P). In terms of value for money, benefit listing and price management in Korea are made with the consideration of safety, efficacy, and cost-effectiveness. She stressed the case of high price medicines mainly focused on risk sharing agreement (RSA). The number of RSA targeted pharmaceuticals, covered by National Health Insurance (NHI), has increased and as of September 2022, 61 drugs were applied to RSA. She mentioned issues, which are financial sustainability of NHI and access to ultra-expensive pharmaceuticals and innovative digital healthcare services.

Dr. Kim added P4P based on quality assessment result. The quality of healthcare in Korea has improved overall over the last two decades, and there also remain many challenges regarding patient experience assessment and expansion of quality assessment from large hospitals to the small and medium sized hospitals. Also, she emphasized utilization of data in Health Insurance Assessment and Review Service (HIRA) by linking them with others from external parties such as cancer registries.

The pursuit of VBHC in Australia

Kylie Woolcock discussed four emerging enablers of value-based health care in Australia outlined in the AHHA blueprint for outcomes-focused value-based health care.  The first is the National Health Reform Agreement that outlines the following:

  1. Nationally Cohesive Health Technology Assessment
  2. Paying for value and outcomes
  3. Joint planning and funding at a local level
  4. Empowering people through health literacy
  5. Prevention and well-being
  6. Enhanced health data
  7. Interfaces between health, disability, and aged care systems

The second is the Treasury’s new well-being framework that is focused on performance measurement and reporting that is “fit for purpose.”  This framework includes a broad range of issues such as: 1) variation and clinical quality registries; 2) standards and interoperability; 3) workflow, clinical governance, and care pathways; and 4) transparency and public reporting. The third enabler is a recognition of barriers to innovation.  And the fourth is movement toward linking outcomes with funding and pricing.

For more information about the Virtual ISPOR Asia Pacific Summit 2022, visit here.

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