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Home care and prescription drugs to be funded under medicare.

Canada's first ministers have signed a health accord that could potentially lead to significant changes to Canada's health-care system. But the agreement is short on details and the new initiatives may not keep pace with the expectations of Canadians.

Canada↗

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Decision Making↗

Will consumer-directed health care improve system performance?

Consumer-directed health care plans have attracted attention as a method for managing rising health care spending by giving consumers greater financial control over their health care. However, increased cost-sharing--the principal tool used by these plans to achieve lower spending--may also cause patients to consume less care, even when that care is essential. Research studies have found that lower-income individuals and those with serious health concerns will particularly be at risk, as these consumers bear the burden of higher out-of-pocket costs. Instead of focusing solely on financial incentives, the real goal should be to encourage quality and efficiency among health systems, physicians, and hospitals.

Community Participation↗

Reimbursement dilemma regarding home health-care products and services.

Reimbursement mechanisms for home health-care products and services are discussed in detail. The two major categories of the home health-care industry--(1) skilled nursing, homemaker, and other services, and (2) equipment, supplies, and other products (including drugs)--are reimbursed by third-party payers differently. While prospective pricing of inpatient care encourages the growth of home-care services, government administrators are concerned about potential spending growth at a time of ballooning deficits, and private health insurers are uncertain about coverage criteria. Nuances of Medicare coverage criteria and private insurance reimbursement for home health-care services are described. Medicaid coverage of drugs and biologicals for home patients is also described. The Health Care Financing Administration (HCFA) is expected to clarify and restrict Medicare coverage and payment of home-care products, equipment, and supplies. Medical justification will probably become more specific with greater attention to patient diagnoses and prognosis of patient therapies. Per-case payment methods will be refined to encompass home care. The government and private insurance programs will move toward capitation payment methods under which institutions will have even greater incentives to develop sophisticated home-care programs to substitute for institutional care.

Enteral Nutrition↗

The role of economic evaluation in the pricing and reimbursement of medicines.

In most countries, governments or health insurers have taken initiatives to influence the price and utilization of medicines. One stated objective of these schemes is to encourage efficiency, or cost-effectiveness. In principle, economic evaluation should to be relevant to decisions about the pricing and reimbursement of health technologies, since it offers a way of estimating the additional value to society of a new intervention (e.g. medicine) relative to current therapy. However, the application of economic evaluation in drug pricing and reimbursement schemes is variable. Therefore, this paper reviews the actual and potential role of economic evaluation in different drug pricing and reimbursement schemes, such as 'free pricing' systems (United Kingdom, United States), two-stage administered systems (France), reference pricing systems (Germany, Netherlands, Sweden) and economic evaluation systems (Australia, Canada). It is concluded that, other than in the case of Australia and Canada, the potential role of economic evaluation could be greatly developed, especially in the case of new medicines, for which there is no close substitute. Comments are also given on the practical problems of using this approach. However, it is noted that economic evaluation alone cannot set a price for a medicine, since a decision has to be made about the proportion of added value going to society and the proportion going to the pharmaceutical company as a reward for innovation.

Australia↗