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Why is there a dilemma in formulating a medical insurance catalogue? ——Reflections triggered by the principal-agent relationship

 Last Update: 2023-01-01
 Source: Internet
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In recent years, the scope of medical insurance reimbursement, especially the scope of medical insurance drug list, has attracted much attention, and problems such as difficult to see a doctor, expensive to see a doctor, and drugs that cannot be prescribed are still plaguing some patient groups
.
It is difficult for the medical insurance catalogue to meet the needs of all patients, on the one hand, because the formulation of the medical insurance catalogue is limited by the ability to pay for medical insurance, and on the other hand, there is a complex agency relationship
between medical insurance and patients.
This article attempts to analyze and discuss the feasibility
from the perspective of how medical insurance funds can better play the role of strategic purchasing and how to meet the needs of clinical patients to improve accessibility and accessibility.
Based on the formulation of the medical insurance catalogue, it is related to multiple subjects such as medical insurance, patients, hospitals and governments, and there is an asymmetric information game, which is now carried out
through the principal-agent relationship.

1.
There is a multilateral agency relationship between health insurance, patients, hospitals and governments

There is a multilateral agency relationship between health care, patients, hospitals, and governments

In the relationship between medical insurance and patients, medical insurance is the agent of the insured, paying part of the medical services for the insured, and obtaining more rights and interests
for the insured through unified price negotiation.
In the relationship between medical insurance and hospitals, medical insurance is the client, entrusting the hospital to provide medical services to patients, and at the same time monitoring whether the hospital uses drugs rationally and whether medical funds
are wasted.
In the relationship between health care and the government, health insurance is the government's agent, assisting the government to achieve the national medical goal, which is usually based on people's health and sense of access, and is therefore affected by the needs of patients
.

Figure 1: Multilateral agency relationships between health care, patients, hospitals, and governments

Source: Able to Purchase? Agency Problems in China’s Social Health Insurance System and the Pitfalls of Third-Party Strategic Purchasing.

Second, the agency problem directly affects the effectiveness and efficiency of the agent

Agent issues directly affect the effectiveness and efficiency of the agent

In this complex multi-agency relationship, two major factors directly affect the effectiveness and efficiency of the agent, on the one hand, whether the goal pursued by the agent and the principal is the same, and on the other hand, whether the information between the agent and the principal is smooth
.

1 Differences in goals affect medication choice

The higher the overlap in the needs of different parties, the more likely it is that health care will have a consistent standard
of action.
When the needs of the various parties involved overlap very little, there is a risk
that the principal-agent relationship will be out of order.

From the patient's perspective, the patient wants to alleviate the pain in the most economical way, including the
cost, time and effort spent.
However, due to the differences in urban and rural income and expenditure, the differences in residents' education level, the differences in disease distribution, and the differences in treatment preferences in China, there will also be different needs
for clinical drugs among patient groups.
These needs vary in urgency, and not all preferences are reasonably necessary
.
From the perspective of medical insurance, because most medical insurance agencies are administrative undertakings, fund security is the primary goal
of their management.
Therefore, there may be a large balance of medical insurance funds in many regions, insufficient protection for medical insurance participants, and lack of motivation and methods to improve the efficiency of medical insurance fund use
.
From the perspective of hospitals, their own benefits directly affect the income level of medical staff and the ability
of hospital discipline construction.
Since medical insurance adopts the total prepayment method for hospitals, hospitals need to consider the requirements of medical insurance assessment and management goals while considering the clinical needs of patients
.
From the government's point of view, the improvement of people's well-being and industrial development are important goals
.
After the institutional reform in 2018, the connotation of "medical insurance" has changed from "medical insurance" in the past to "medical security" now, medical insurance has changed from "passive payment" to "active selection", and from only paying fees to "strategic purchase" to improve service quality and drug quality
.

2 Information transmission and feedback are inefficient

Difficulty
in transmitting market demand.
Both the government and the medical insurance administration will face a large amount of fragmented information, and patients will pass on their needs to the government and medical insurance, on the one hand, through public voices and other forms, on the other hand, through clinicians
.
Both methods have the problem
of difficult transmission and selective transmission of information.
For the use of drugs, after the medical insurance determines the reimbursement scope, it will also face centralized procurement organized by provincial and municipal alliances, hospital selection, and multiple screening of department medications, and finally form a form of
serial selection.
After this layer of selection, doctors and patients face a limited number of drugs, and if there is an out-of-range need, they need to transmit the sound
upwards in reverse order.
This way of calling for access to medication and payment through voices is undoubtedly difficult
.

Product sales are a direct indicator of how enterprises feel market demand, but the drug market is greatly affected by policies, and there may be deviations
between sales and actual market demand.
Negotiated drug sales increased, and a large number of drugs participated in medical insurance negotiations in 2019; Negotiated drug sales are not good, and a large number of drugs will withdraw from medical insurance negotiations
in 2022.
In the long run, sales will not only affect the willingness of enterprises to participate in medical insurance access, but also affect the strategy of
enterprises to deploy product development pipelines.

Product feedback takes a long time
.
The evidence gained at this stage of an innovative drug that has gone from 10 to decades of development will be used to support the launch
of the drug.
After a drug is on the market, another real-world study begins, and companies need access to broader evidence to support the clinical benefit and innovative value
of the product.
This part of the evidence will be used for health insurance payments and clinical practice guidelines
.
Throughout the process, confidence in the future market is an important guarantee
for enterprises to invest a lot of money to continue to develop products.
Therefore, in the face of complex changes in the disease spectrum and insufficient security capacity caused by the aging of the population, it is often difficult to use medical insurance access and price control to adjust product supply only when public opinion responds
.

Figure 2: Drug R&D process

Why does it take so long to develop medical treatments?

3 Hospitals limit the number of drugs prepared to exacerbate the agency problem

With the implementation of reform measures such as unifying the medical insurance catalogue and adjusting the renewal cycle, the reform results brought about by the advantages of the system are very remarkable
.
The number of varieties in the national medical insurance catalogue has expanded from 2,196 in 2016 to 2,860 in 2021, and the average time interval between the listing of drugs and their entry into medical insurance has also decreased from 4.
5 years to 1.
2 years
.
But at the same time, another strange circle has emerged: the increase in medical insurance catalogs and the acceleration of medical insurance access; The total number of hospital directories remains unchanged, and hospital access difficulties increase
.
As the last mile of patient medication, the hospital directory discounted the reform of the medical insurance catalog, but this itself stemmed from the management of
medical insurance.

Taking tertiary hospitals as an example, hospitals can generally be equipped with 1,500 drug specifications, and referring to the allocation habit of one product and two regulations, the actual generic names of drugs involved may be less than 1,000
.
According to the requirements of the "14th Five-Year Plan" for universal medical security issued by the General Office of the State Council in 2021, the number of centralized procurement varieties of drugs increased from 112 in 2020 to 500 in 2025, then more than half of the drugs in public hospitals in the future will be purchased with volume, and the remaining 500 other drugs will inevitably face more fierce competition
.
Supply exceeds demand, the entry threshold of hospital drugs is constantly increasing, and innovative drugs lacking long-term drug experience must have more obvious advantages
if they want to cross the entry threshold.

For new drugs that were obtained by the joint efforts of the two negotiating parties and the difficult game, there are two solutions at this stage: one is that the negotiated drugs are not included in the total number of drugs in the hospital, are not included in the assessment indicators, etc.
, and the other is to open a "dual channel"
for drugs used in out-of-hospital pharmacies.
Both solutions are green channels beyond the norm, and the clinical use process in different regions will face different degrees of difficulties
.

Figure 3: Factors influencing drug marketing to patient use

Source: "14th Five-Year Plan" National Drug Safety and Promotion of High-quality Development Plan, "14th Five-Year Plan for Universal Medical Security" of the General Office of the State Council, etc.
, compiled by the Policy Research Center

Third, gradually solve the problem of agency, establish a reasonable scope of drug list, and continue to enhance the sense of gain of the masses

Gradually solve the problem of agency, establish a reasonable scope of drug list, and continue to enhance the sense of gain of the masses

There is no cure and there is no cure, which is also a hidden concern
in everyone's heart.
The medical insurance catalogue determines the "price accessibility" of patients, the hospital catalogue determines the "access to medication" of patients, and the drug market formed by the medical insurance catalogue and the hospital catalogue affects the future use of patients
.
Using the hand of cost control, without facing the current "medicine cannot be cured", it is possible to challenge the future "no cure", which is undoubtedly a dry and fishing behavior
.
In order to meet the long-term needs of patients, the following three aspects can also be considered
.

The first is to take patients as the center and protect the interests of
the insured.
Explore more reasonable pricing logic, payment methods and systems, and reduce the situation
that patient groups (especially a small number of rare disease groups) are completely unable to obtain medical insurance payment due to the inability to reach an agreement on price issues.
Only by continuing to expand the scope of the medical insurance catalogue to include innovative products with clinical advantages as soon as possible and including more patient groups in the protection can we better play the role of
medical insurance in promoting social equity and welfare.

The second is to form synergy with medical institutions
.
Coherent policy cohesion can effectively enhance the role of
policy guidance.
After actively selecting drugs through negotiation, health insurance can further play a proactive role through more detailed incentive measures
.
For example, through relevant research, pay attention to long-term disease changes and population characteristics, and prospectively guide necessary products to enter the market; Through joint discussions with drug evaluation institutions and drug use regulatory agencies, we will give full play to the advantages of the system and further refine the definition of the scope of clinically necessary innovative drugs from the perspective of clinical value
.

The third is to cooperate with the government's strategic layout and establish a payment plan
that is compatible with the development of China's pharmaceutical industry.
Medical insurance negotiation originated from the period when China still lacked an innovative environment, and through the rapid access of medical insurance, meeting patients' drug needs is also the support and encouragement
of innovative drugs.
At present, it is urgent to respond to the call of the "20th National Congress", closely follow the wind vane of pharmaceutical industry policies, start from top-level design and long-term planning, and specifically support and encourage products
that can effectively reduce the burden of disease and improve the health level of our people.

On the basis of paying attention to the current livelihood issues and the safety of medical insurance funds, medical insurance can take into account the long-term development of the pharmaceutical innovation industry, promote the implementation of the overall coordination mechanism of medical insurance, medicine and medical collaborative governance, and realize the effective connection
of China's drugs from R&D and marketing, access to medical insurance to hospital use.
Looking to the future and planning for the present, it is urgent to hope that the central government and medical insurance institutions will actively study and formulate long-term development plans
as soon as possible.

Policy Research Center, China Association for the Promotion of Pharmaceutical Innovation

Author: Lianghui Tong, Assistant Researcher tonglh@phirda.
com

Review proofreader: Zhang Zhijuan, Liu Fapeng

Resources:

1.
General Office of the State Council "14th Five-Year Plan for Universal Medical Security"

2.
A quote from an old director: A few views on the medical/pharmaceutical market

3.
Notice of Beijing Medical Insurance Bureau on Printing and Distributing Administrative Measures for Excluding Payment of New Drugs and Technologies Paid by CHS-DRG (for Trial Implementation)

4.
Blockbuster Collection! In the past 10 years of medical reform, the industry has changed dramatically

5.
"Implementation Opinions of the State Council Leading Group for Deepening the Reform of the Medical and Health System on Deeply Promoting the Experience of Sanming City, Fujian Province and Deepening the Reform of the Medical and Health System"

6.
Can Medicare make valid third-party purchases? The Principal-Agent Problem in China's Social Medical Insurance System and the Pitfalls of Third-Party Strategic Purchasing

7.
Where is the medical insurance service? That's it!

8.
Medical insurance negotiation products, it is difficult to enter the hospital

9.
"Strategic purchase" of medical insurance: the "only magic weapon" to hold the bottom line of people's livelihood protection

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