Meeting Summary

European Summit I: 4 February 2005
Berlin, Germany
Global Medical Forum Foundation

Solidarity and consumer choice: Design principles for EU healthcare systems

Speech Title: Welcome and Opening Remarks

Speakers
Prof. Raphael H. Levey, MD; Chairman, Global Medical Forum Foundation
Dr. Catharina Maulbecker-Armstrong; Chair Europe, Global Medical Forum Foundation

Takeaways

• The U.S. healthcare system is undergoing a second wave of change similar to the managed care movement from 1994 to 1996:
• This change is triggered by the Consumer Driven Healthcare (CDHC) movement which has the potential to significantly alter the U.S. healthcare system (as that system is largely based on third party payment by employers and the government for first dollar insurance policies, with little consumer input);
• A catalyst for the CDHC movement is the January 2004 Health Savings Account (HSA) legislation allowing consumers to set aside pretax money ($2600 per person, $5150 per family in 2004) to spend on qualified medical expenses. This is often coupled with a high deductible health plan (HDHP);
• The expectation is that CDHC will drive innovation in the areas of patient "self information", EMRs, standardization of provider information and disease management;
• Proponents contend that CDHC will stimulate more responsibility and reduce over-utilization. Critics argue that HAS and CDHC may favor adverse risk selection and may have little impact on the high cost patient population.
• As was previously true of the managed care movement, healthcare systems in Europe should be able to learn from the CDHC movement and integrate lessons and tools from that movement into the frameworks of their given systems.

Moderator
Mr. William Boyles; Publisher, C-D Report

Takeaways
Mr. William Boyles; Publisher, C-D Report

• 3.5 million Americans have signed up for CDHC plans so far; it is expected that this number will rise to up to 12 million within 2 years;
• If 15% of the patient population goes in to CDHC plans, this minority has the ability to significantly transform the U.S. healthcare system.

• CDHC has the potential to get people to think longer term. Note that in the U.S. the average turnover with a health plan is often as short as 2.5 years;
• HSAs offer the opportunity to bundle health insurance with all retirement and financial planning, thus blurring the line between health plans and financial institutions.

• The problem with the U.S. third party system is the lack of transparency for the consumer (e.g. on invoices);
• The system therefore needs to channel healthcare purchasing to more efficient and higher-quality provider organizations;
• Tools are being developed to help turn patients into consumers:
• Tiered networks with strong incentive to use more efficient (and higher quality) healthcare organizations;
• Persistent disease management programs;
• Consumer-driven financial tools.

• Consumerism is emerging: 2.5 million lives in CD plans today, vs. none in 1999;
• First observations on the impact of CDHC:
• 30% cost reduction due to lower frequency of visits;
• 35% more registrations on consumer information platforms;
• 8% increase in preventive services;
• 85% of people carried a positive balance on their HSAs from 2004 into 2005.
• Need for good Health Risk Assessment Tools (HRA). Such tools' - although developed on a 50 million U.S. population model - underlying statistics can be applied to EU systems.

• HSA and CDHC do not address EOL (end of life care) and the needs of the chronically ill;
• Long term planning is not as much of an issue in EU systems;
• Solidarity, at least for EU systems, would demand a mandated safety net through a low level universal coverage model.

Moderator
Mr. R. Matter; n-TV

Takeaways
Prof. R. Busse; European Observatory for Healthcare Systems in Berlin

• All EU systems are converging around common denominators including: more powerful patient organizations, stricter cost control measures, enhanced use of informatics;
• The solidarity principle will be upheld even in the face of tiered cost shifting;
• Patient bodies are part of decision-making in most EU systems, even the EMEA, unlike the FDA in the U.S.;
• There is an increasing impact of EU regulatory bodies on national healthcare systems;
• CDHC will have to enable both individual choice and collective participation if it going to be implemented in Europe;
• Choice will result in a separation of risk structures, which will create a need for risk adjustments.

• The German healthcare system is in the middle of a massive reform effort;
• An independent national institute for quality of care has been created to enhance transparency;
• The German government's patient advocacy unit received 400 000 emails last year;
• A Euro 10 co-payment - which steers patients to a GP first and functions as a de facto gatekeeper system - combined with other health reform measures have saved Euro 4 billion for the sickness funds;
• Healthcare reform strengthens patients' ability to obtain information;
• Integrated care and disease management have so far one million enrollees;
• Insured have to pay an extra contribution rate of 0.9 % from 1 July 2005, however balance is maintained by capping the maximum to 2% of gross income in co-payments.

• Consumer Driven Healthcare has greatly enhanced patient demand for information - i.e. health information website offered by Hewitt has 20 million visitors per year;
• Up to 50% variation in cost of healthcare, with those selecting high deductible HRA plans showing 35% less claim cost than the year before;
• Employers' interest in healthcare extends beyond direct care expenditures - with indirect per person expenditures at $3620 vs. $6100 in direct healthcare expense.
• Both consumer behavior and the supply chain / healthcare marketplace respond to the incentives created, however even a $20 co-payment was not effective in changing behavior.
• HSA, co-payments and menus to design personal health plans are all needed to create incentives. They do not however impact money spent for high cost episodes.
• Alternative consumer-driven models that enable more consumer and provider accountability may better match European needs, than the current U.S. CDHC model.

Reaction Panel Takeaways
Mr. B. Knof; Director of International Affairs, DKV (Private German Health Insurance)

• European systems tend to lack negotiation power for individuals;
• Security for the later stages of life is attractive in the HSA model;
• This may reduce turnover with health plans in favor of a lifelong perspective.

• System redesign has to be in conjunction with the provider side directing the care to where it is needed;
• HRA should be used to develop needs indicators;
• There is no impact on high cost patients.

• Patients need to be put at the center of all healthcare procedures;
• Patient organizations need to fight the "McDonaldization " of Healthcare;
• In Europe, the IAPO is working to have patient representation at all levels of decision-making in healthcare.

Discussion Takeaways
Degree of savings through CDHC?

• Will depend upon variability in the system;
• Choice with a price tag may be the answer, whereby reducing choice will reduce variability and enhance outcomes;
• Physician associations (in Germany specifically) could help with more data, transparency on medical procedures.

• Independent patient advocate needed - i.e. German government model.

• All EU patients irrespective of system type are "impatient" for change according to 2004 Stockholm Network survey.

Moderator
Mr. Robert Laszewski; Chairman North America and China, Global Medical Forum Foundation

Panelists

Mr. Larry Leisure; Senior Vice President, Kaiser Permanente
Ms. Ann Haas; Senior Officer for Health Policy, AOK Bundesverband
Prof. Kieke Okma; Former senior policy advisor to the Dutch Government
Mr. Johan Hjertqvist; Senior Advisor to the Greater Stockholm Council on Health Care Reform Timbro
Mr. Franz Knieps; Senior Advisor to the German Health Minister
Dr. Marcel Mangen; Vice President Commercial Strategies, Janssen Cilag
Dr. Alex Wyke; Managing Director, Health and Social Campaigners' Network International
Dr. Gillian Leng; Implementation Systems Director, National Institute for Clinical Excellence

Discussion

Questions by Laszewski:

• Do CDHC and HSAs as practiced in the U.S. provide techniques for us to learn together as we work to improve our healthcare systems?
• Is there a mid-Atlantic conversion towards common design concepts in HC systems?
• There is clearly agreement from the previous discussion that CDHC leverage is on first dollar and not on chronic or high cost types of care.

Leisure: There is common agreement in all systems that cost decrease is needed. There is disagreement however what the right level of cost sharing ought to be. The expectation is that EMRs will play an important role as well as direct access to health information.

Okma: Consumers in Holland and Sweden are very involved as a group in designing new parameters for the system.

Hjertqvist: A 2004 EU consumer survey showed that :

• 1/3 of consumers are willing to spend private money for HC;
• 2/3 are ready to cross borders to access better care;
• 3/4 ask for better access to information;

Knieps: All EU countries share the same values. There is a danger in comparing systems and to converging them under a common EU norm. We should rather find common applicable tools such as those developed for the CDHC.

Haas: Information is needed to empower consumers both in the U.S. as well as in EU systems. i.e. in Germany 79% of consumers would like to have access to a ranking of providers. However, who pays for the administration of HSA, i.e. on what is the money spent?

Mangen: There is a need to better define the scope and funding of solidarity across EU systems. CDHC can help in educating patients towards more responsibility and informed choices.

Wyke: In Europe there is a strengthening of healthcare advocacy movements that provide patient representation. There is a drive supported by WHO to link drug and medical device reimbursement to economic capabilities.

Leng: The freedom of information act provides information on individual doctors and hospital performance within the NHS. A quality and outcomes framework rates individual GPs, who, when compliant, get higher compensation. This may be applicable across other EU systems to enable better consume choices.