The Medical Technology Group organised . This week involved MPs and Peers, clinicians, NHS staff and policy makers mixing with patients and industry representatives to discuss the benefits that medical technology can have for patients.
The highlight of the week was the
Parliamentary Pledge Signatories at the reception:
David Amess MP
Eric Ollerenshaw MP
Heather Wheeler MP
Ian Mearns MP
Jim Dobbin MP
Jim Dowd MP
Jim Fitzpatrick MP
John Pugh MP
Julian Huppert MP
Lord Walton of Detchant MP
Mark Durkan MP
Rosie Cooper MP
Steve McCabe MP
Eventually the MTG will present the pledge to 10 Downing Street with patient representatives and MTG representatives, when the number of parliamentary signatories reaches a significant number.
As a continuation of the MTG will be demonstrating the value of medical technology to MPs in their constituencies. We will organise visits to hospitals and meetings with CCGs, clinicians and patient groups. Several of these are being organising in the upcoming months and local media will be similarly coordinated around these visits.
Eric Ollerenshaw OBE MP addressing MPs, Peers, clinicians and patients at the Medical Technology Awareness reception in Parliament
I am hosting Medical Technology Week because I have seen first-hand what medical technology can do for people in my constituency of Lancaster and Fleetwood. For example, I hosted an exhibition on prosthetic legs and knees in February and since then I have learnt more about how medical technology of different types can make all the difference to a person and their life.
This week’s reception focused on five different areas where patients are helped by medical technology: the head, the heart, the abdomen, hips and knees and the legs. There are many proven technologies out there which are not taken up on any scale.
Deficit-reduction is vital, so all government expenditure must be considered carefully. But a lot of medical technology has immediate and long-term benefits for taxpayers as well as patients. It saves taxpayers’ money directly in the form of reducing the need for hospital treatments and supports the government’s agenda of helping get people off benefits and back into work. This is better for patients and taxpayers in Lancaster and Fleetwood – and across the entire country.
- Eric Ollerenshaw OBE MP
Today sees the launch in Parliament of our new report Hip and Knee Surgery: Combating Patient Lotteries as part of our spotlight campaign. It shows that shortly before Christmas may be the best time of year to need hip or knee surgery – but just after Christmas may be the worst time.
Like a postcode lottery, this time of year lottery means patient outcomes are radically different depending on the financial calendar. There is a 15-week wait for a hip or knee replacement and March is the busiest month for operations. But the number of operations falls off dramatically in April, coinciding with the end of the financial year, implying financial calendars for trusts are driving outcomes for patients.
So those who start their wait after Christmas may have the longest wait. The last ten years saw an average of 498 fewer hip procedures and 641 fewer knee procedures in April than in March.
There is also new evidence of a postcode lottery in hip and knee treatments, with dramatic variation in waiting times and half of local Trusts reporting patients being held back from treatment.
The key findings of the report are:
- 46,501 hip procedures were performed by the NHS in March over the last ten years – compared to 41,519 in April. This is a difference of 4,982 or 11%.
- 49,351 knee procedures were performed by the NHS in March from 2004 to 2013 – compared to 42,944 in April. This is a difference of 6,407 or 13%.
- The postcode lottery persisted in 2012. Patients in London waited 33% longer than patients in the East Midlands for a hip operation in 2012. Londoners waited an average of 121 days compared to 91 days for patients in the East Midlands.
- 33 (49%) of 67 Trusts across England who responded to our Freedom of Information request confirmed that Commissioners are applying more stringent conditions before referring patients to their Trust. See Notes below for a full list.
- There is also great variation in the number of knee and hip procedures are performed in each region – and by each hospital Trust. The Trusts that perform more procedures also do them better. See Appendix 1 and Appendix 2 of the report for data by region and by hospital Trust.
- Demand for hip and knee surgery has increased hugely in recent years - up 92% from 72,006 operations a decade ago to 138,281 in 2012.
- 87% of hip replacement patients and 78% of knee replacement patients report an improved condition after their operation, according the NHS’s Patient Reported Outcomes Measures. This is higher than for any other procedure and suggests more hip and knee procedures are one of the best ways to improve outcomes for patients.
Q1. To set national prices for 2014/15, we propose to apply 2013/14 prices but adjust these generally to reflect changes in input costs and provider efficiency. We refer to this as a “rollover” approach since we are rolling over the previous years' prices.
Using the 2013/14 prices as a basis for the 2014/15 prices can help to create more certainty for commissioners, providers and manufactures of medical technology and pharmaceuticals. This should ultimately be for the benefit of patients and their outcomes.
Predicating this principle however, the 2013/14 tariff prices must be set at the right levels, otherwise the “rollover” approach will only compound any problems, and potentially deny patients access to appropriate treatments.
Due to the incremental improvement associated with the development of medical technology and the research & development associated with this, it is important that these factors are taken into account.
A feature of the current tariff system which we support Monitor maintaining is the ‘Best Practice Tariffs’. Best Practice Tariffs can allow providers to be properly reimbursed for helping patients receive the best outcomes. Not only is this better for the patients and their families, but can also save money for the NHS through reduced readmissions and future complications.
Q2. We are proposing to calculate the cost uplift to the 2013/14 tariff prices by using various sources of data for pay settlements, drugs, and other cost inflation appropriately weighted by their proportion of total costs.
This matches the approach taken in previous years for uplifting costs for expected inflation.
a) Do you agree with our proposed method for calculating cost uplifts? Yes
b) Do you agree with our proposed data inputs for calculating cost uplifts? No
We feel that the cost uplift to the 2013/14 tariff prices should reflect the significant research and development costs that go into the development of existing and future medical devices.
Q3. The purpose of the efficiency factor is to reflect the efficiency gains that an average provider should reasonably be expected to make. Given the data available to us, we have estimated the efficiency opportunity for the sector as a whole and then considered what proportion of this should be reflected in unit prices.
Do you agree with our proposed method for calculating efficiency?
Improving efficiency is clearly an important challenge, as laid out by Sir David Nicholson. It is important however that the methods used to improve efficiency and reduce costs where possible are appropriate.
As discussed in the previous question the largest component of “Hospital and Community Health Services” (HCHS) costs is staff pay, accounting for 66%.
To achieve efficiencies it is important that rather than salami slicing small amounts off all costs, activity is changed to achieve efficiencies appropriately. This should be achieved by changing healthcare provision to reduce hospital readmissions and future complications. This will achieve efficiencies by reducing demand on healthcare services, and at the same time improve patient outcomes.
On pg 45 of the engagement document the following paragraph is particularly important – “improvements where providers and commissioners work together to deliver equal or better health outcomes by choosing a different mix of services that delivers higher value overall”.
Resources should be focused on procedures that have been shown to reduce long term complications and reduce hospital readmissions, allowing more care to take place in the community. Best Practice Tariffs could be a means of promoting this concept.
An example of a medical technology that reduces long term complications is insulin pumps. Insulin pump therapy provides greater lifestyle flexibility and reduces the risk of diabetic complications through improved control over blood glucose levels. It can help reduce cardiovascular disease which can prevent heart attacks, strokes and limb amputations; kidney disease which can prevent patients requiring dialysis; and diabetic retinopathy which can lead to blindness, amongst others. These complications have a serious impact on patients’ quality of life and their mortality and have a serious cost implication on the NHS.
Our view on the proposed efficiency factor of 3.0% - 4.5% is that it is potentially achievable, but arguably too ambitious. As it states on page 47 of the engagement document – “historic longer-term NHS productivity gains have been much lower, for example ONHS has estimated a 0.4% annual average productivity gain between 1995 and 2010”. That is however potentially explainable by unprecedented growth in NHS spending over that period.
For ambitious efficiency gains to be achieved, difficult decisions need to be taken, in particular around the changing mix of healthcare provision. These decisions often have to be taken against a political background of local opposition. We feel that the proposed 75% - 90% of efficiencies being generated from unit prices is too high, and that more should be attempted by changing the mix of healthcare provision.
Examining table 3-11 we feel that some areas such as “supply chain/procurement” projected savings are too optimistic, whereas others such as estates optimisation are not ambitious enough. Enhancing self-care and chronic management is a critically important area for improving efficiency especially as many of the demographic changes affecting healthcare provision relate to increasing levels of chronic disease.
Q4. Do you agree with the methods that we propose to use to calculate 2014/15 prices?
We agree that it is sensible to calculate 2014/15 prices based on those in 2013/14 to create more certainty for providers, commissioners and industry. It is however critical that the 2013/14 tariffs are right, so as not to compound problems in 2014/15.
Healthcare therapies including medical technology and drugs account for a relatively low percentage of healthcare spending and should not be the focus of efficiency drives and reducing costs.
Medical technology should be viewed and analysed alongside drugs as a therapeutic component of healthcare and not combined with logistical and administrative costs as this gives an inaccurate perception, especially with regards to inflation of costs. Medical technology requires a huge amount of research and development, with many devices in use in the NHS having been introduced relatively recently. This needs to be taken into account.
The efficiency drive is very important for the NHS, but it must be carried out in the correct way to ensure benefits for patients. The changing mix of healthcare provision needs to take a larger proportion efficiency savings than a squeeze on unit prices.
Q5. Over the coming years, we intend to review all aspects of the rules set out under the Payments by Results payment system. For 2014/15 we intend to leave certain variations and rules unchanged, while making modifications to others. To what extent do you agree with our general approach to rules and variations?
A national tariff to be effective needs to have an element of rigidity to be worthwhile, however it also needs to have flexibility to meet local challenges. We therefore tend to agree with the types of rules and variations outlined by Monitor for the tariff.
The medical technology industry is continually innovating to both improve existing technology incrementally, as well as developing new devices which can revolutionise the treatment of certain conditions. It is therefore particularly important that the tariff and its rules and variations reflect this.
An example of this disruptive innovation is renal denervation which is a minimally invasive, endovascular procedure which uses radiofrequency ablation on the renal arteries to treat resistant hypertension.
For new technologies which are yet to receive a tariff there is the challenge of securing sufficient funding for its use in the NHS whilst trials and evaluation are taking place. We will discuss suggestions to mitigate this through innovation tariffs and payment through evaluation in subsequent questions.
This challenge has potentially been increased by the new England-wide specialised services commissioning through NHS England.
Another aspect of the challenge relating to the adoption of technologies, is that putting new, innovative devices to one side, there are many existing technologies that have been proven to be clinically and cost effective and recommended by the National Institute of Health and Care Excellence (NICE) that are still under-utilised. Patient access to these technologies is in fact often at levels much lower those recommended by NICE.
The incorporation of NICE guidance into the payment by results tariff, both for technology appraisals and the Medical Technologies Evaluation Programme (MTEP), would help manufacturers of medical technologies understand the value of the NICE process and enable patient access to appropriate technology.
Q6. In developing the rules and oversight for local payment variations, a balance must be struck. We want to permit innovation in payment approaches to reflect new and better ways for care to be delivered. However, we need to ensure that risk is appropriately managed across the system and that we deter inappropriate behaviour. What suggestions do you have for how Monitor and NHS England can design the rules for local payment variations?
Tariff should be an incentive to deliver the best clinical practice as well as simply a means of ensuring the NHS gets value for money. However, the length of time it takes to incorporate innovation into the tariff is a barrier to the uptake of innovative medical devices by the NHS and patient access to the latest therapies.
Where an innovation requires a new procedure code (OPCS) to describe it and a new or update Healthcare Resource Group (HRG) classification to ensure that providers are remunerated, the classification and coding system does not rapidly respond to this need. A new OPCS code can take up to 3 years to be implemented and a new HRG up to 6 years to be developed! Therefore, NHS Trusts may have a counter incentive against potentially useful and cost effective technologies because of initial budget impact.
In Germany a mechanism has been developed that enables relatively expeditious access to innovative medical devices as an intermediate step for integrating into the regular German tariff system – this is known as the NUB.
The NUB Application can be filed by hospitals only for technologies that have just been introduced in Germany. Every hospital is required to apply separately for the “on-top” payment which is directly negotiated between the successful hospital and the commissioner (in the case of Germany this would be the patient’s private insurer). The NUB pathway has the potential to accelerate market access for new technologies but requires significant effort from its users.
A similar system in the UK would allow reimbursement for innovations which offer considerable cost and clinical benefit over an incumbent, despite initially being more expensive, while new OPCS and HRG systems are developed to formalise reimbursement. With the developing role of NHS England in commissioning specialised services, which in many instances use new innovative medical technologies, a hybrid approach between the German NUB mechanism for funding innovative technologies and the NHS England “Payment through Evaluation” procurement mechanism may be the most effective method of promoting innovative technologies. It is however crucial that whatever approach is developed acts to promote innovation and does not in practice stifle it.
Speeding up the development, clinical trials, evaluation and implementation of effective medical technologies is a key aspect of the Government’s Life Sciences Strategy *3, and supported by documents such as Innovation, Health & Wealth , *4*5.
An Innovation Tariff, or “Payment through Evaluation”, a concept devised following the development of specialised services specifications by NHS England, could help the Government to achieve the aims of the Life Sciences Strategy to make the UK the best country in the world to develop healthcare technologies.
Section 4.2 of the engagement document refers to scenarios for local payment variations two of which involve the use of medical technology. The first discusses the potential to “have a service delivered closer to, or even inside, patients’ homes.” Telehealth and telecare are exciting medical technologies whose potential to revolutionise healthcare will develop over the coming years. The second looks at “delivering care in a less invasive way”. Many medical technologies are minimally invasive using endoscopic techniques and others. In many cases this improves the patients’ experience by being safer, allowing them to recover, return home and return to work more quickly.
Another interesting concept raised on pg 63 is that of the “Year of Care” tariff or “whole pathways payments”. Finding new innovative payment approaches to different healthcare therapies is an important concept. Medical technology’s upfront costs are often significantly or completely mitigated when the longer term savings are taken into account.
The longevity of therapies is also important. Technologies that have longer lives either through their design, manufacturer or technology, such as battery life for example, can often be better for patients and the NHS as they enable repeat procedures to be carried out less frequently. It should be an ambition to factor this into the tariff and commissioning process.
Q7. Monitor has set out a proposed methodology for determining whether services are uneconomic and therefore eligible for a local modification. For a service to be uneconomic, the provider must face unavoidable, structural differences in costs which are not reflected in the national tariff price or mandatory variations. We set out a number of criteria which we will use to determine what constitutes an unavoidable, structural cost difference.
N/A - This question is more focused at commissioners and providers.
Q8. Given the potential cross-subsidisation between different tariff services, Monitor is proposing to limit local modification applications to cases where the provider cannot cease to provide the service and where the provider is in deficit on tariff services and at an organisational level. (These limitations do not apply to agreements). To what extent do you agree with our outlined method for limiting local modification applications?
N/A - This question is more focused at commissioners and providers.
Q9. Local modifications are a new component of the regulatory framework for setting prices in the NHS. This policy will allow prices that are determined based on national tariff rules to be modified in cases where the provision of a service or services is uneconomic. What do you believe will be the impact of the proposals for local modifications set out for the 2014/15 national tariff?
N/A - This question is more focused at commissioners and providers.
Q10. The Health and Social Care Act requires Monitor to publish its methodology for deciding whether to approve local modifications. a) What are your views on the proposed methodology for calculating local modifications? b) Do you foresee any challenges with the implementation of this methodology?
N/A - This question is more focused at commissioners and providers.
Q11. We will conduct an impact assessment of the new national tariffs each year. In this we are seeking to identify, describe, and quantify the impacts or consequences of the changes in tariffs on the main stakeholder groups, namely: commissioners, providers and ultimately, patients. In so far as possible, we will conduct our assessment using evidence provided by stakeholders. Where we do not have evidence or the evidence is incomplete or of questionable quality, we shall conduct qualitative (descriptive) assessment of impacts. To what extent to you agree with our proposed approach to Impact Assessment?
Tend to agree
In conclusion the MTG is generally supportive of Monitor’s plans for rolling over the 2013/14 to 2014/15, with minor adjustments, which help to maintain some continuity and certainty in a rapidly changing NHS structure.
Finally we just wanted to take this opportunity to discuss more strategically the future of tariff and some of the concepts that we feel would result in better patient access to technology, better outcomes and more cost effective use of NHS resources.
One of the key challenges of developing a tariff system based on the average costs of carrying out a procedure is that hospitals are extremely variable and in many cases unreliable in estimating these costs. An example of this is uterine fibroid embolisation, which was going to experience a 40% decrease in tariff due to the inaccurate submission by some hospitals of costs that were clearly inaccurate and inappropriate. If this had been accepted it would have made the procedure no longer financially viable and prevent patient access to this procedure.
The cost plus basis for tariffs tends to encourage older, more established procedures, to be performed and emphasised within hospitals. The lack of consistent and up to date hospital cost information within the tariff system tends to favour more resource intensive (and often older) procedures against, newer, innovative, less invasive treatments which require less bed days, enable patients to recover more quickly, return home more quickly and return to work more quickly. As Monitor has laid out in its engagement document, it wishes to enable variation in tariff to encourage procedures that are carried out less invasively and closer to patients homes. This is positive, but it is also important to reduce or remove incentives to carry out more invasive, more costly procedures, especially those that result in worse patient outcomes.
The Medical Technology Group would recommend a tariff system based on the following principles:
• Encourages the uptake of newer innovative technologies that are less invasive and allow patients to return home more quickly, with better outcomes.
• Discourages older invasive treatments which have been shown to have worse outcomes for patients and greater costs for the NHS by cutting their tariff.
• Encourages compliance with NICE Clinical Guidelines as well as Technology Appraisals.
• Supports innovative technologies through the use of an ‘innovation tariff’ or ‘payment through evaluation’.
• Be a ‘payment by results’ tariff which has a greater focus on results and outcomes.
The MTG is organising a Medical Technology Awareness Week from 4 to the 8 November 2013. We will involve MPs and Peers, clinicians, NHS staff and patients in promoting the need for better and more consistent access to medical technology across the NHS. We want to get people talking about medical technology!
On the 6 November there will be a reception at the House of Commons between 12.15pm and 3pm – where we will showcase medical technology and hear from patients on how technology has changed their lives. It will be your chance to show Parliamentarians, NHS England and others how important patient access to medical technology can be.
On the Friday of Medical Technology Awareness Week we will be demonstrating the value of medical technology to MPs in their constituencies. We will organise visits to hospitals and meetings with CCGs, clinicians and patient groups.
The Medical Technology Group has replied to the think tank Policy Exchange's inquiry into Joining Up Employment Support and Welfare in the UK. We recommend:
- Appropriate and timely medical interventions would enable a greater percentage of people affected by long term or chronic conditions to remain employed for longer periods and eliminate or reduce their need to seek disability payment.
- Preventative or timely early intervention to mitigate the impact of worsening health not only improves health and quality of life outcomes, but can also reduce the need for more intensive health care services and thus save money at a time of austerity.
- NICE should be free to comment on the wider societal benefits of medical technologies as part of its technology appraisal process and not stick to a rigid clinical cost-effectiveness thresholds.
- The implementation of mandatory NICE guidelines needs to be improved and the new NICE medical technology pathway strengthened to enable better patient access to medical technology.
- There needs to be better data collection and availability to allow for more informed assessments of the costs and benefits associated with the effective use of innovative medical technologies.
- The Department of Health should make more explicit provision within the NHS Outcomes Framework to evaluate clinical and labour market outcomes in relation to the use of medical technologies to inform innovative best practice.
- Healthcare professionals need to improve their awareness of currently available and innovative medical technologies.
- The Department of Health should work in partnership with patients, industry and commissioners, and in conjunction with the Ministerial Medical Technology Strategy Group (MMTSG) to develop guidance which increases patient awareness and choice over treatment, therapies and medical devices.
- Consideration could be given to some type of systemic modification that rewards long-term NHS decision-making or incorporates improved long-term health care and quality of labour market outcomes in the budgeting calculus at the local NHS level.
- Cost savings associated with the use of new technologies will often require changes to the way NHS services are delivered in order to be realised. This is something that should also be recognised through NICE assessment processes.
- NICE needs to speed up its assessment of medical technology to take account of its swift, incremental development.
- More technology appraisals should focus on medical technology to enable NICE implementation initiatives to improve patient access to these types of therapies.