Health Care Technology and Its Assessment

in Eight Countries

February 1995

OTA-BP-H-140

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Recommended citation: U.S. Congress, Office of Technology Assessment, Health Care

Technology and Its Assessment in Eight Countries, OTA-BP-H-140 (Washington, DC:

U.S. Government Printing Office, February 1995).

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Foreword

I

n 1980, when OTA examined the management of health care technology

in 10 countries, we stated that “international literature in the area of evaluating and managing medical technologies is sparse. ” The richness and

variety of experiences in 1994, captured for eight countries in this background paper, is evidence that major changes have occurred. Technology assessment in health care was just emerging in the United States at the earlier

date, and in other countries it was largely a new concept whose role had not yet

been defined. Today, it would take a volume bigger than this one to fully describe technology assessment just in the United States. In each of the other

countries studied—Australia, Canada, France, Germany, the Netherlands,

Sweden, and the United Kingdom—technology assessment organizations also

have become part of the health care landscape.

It is easy to catalog health care technology assessment organizations and

their work in each country but difficult to discern how the adoption and use of

technology has been affected by those efforts. In this background paper the experiences of each country with six technologies (or sets of technologies)—inincluding evaluation and management efforts and how the technologies diffused—are presented and compared. The six areas are: 1 ) treatments for

coronary artery disease, 2) imaging technologies (CT and MRI scanning), 3)

laparoscopic surgery, 4) treatments for end–stage renal disease, 5) neonatal intensive care and 6) breast cancer screening.

This background paper is part of a larger study on International Differences

in Health Care Technology and Spending, which consists of a series of background papers. lnternational Health Statistics: What the Numbers Mean for

the United States was published in November 1993, and International Comparisons of Administrative Costs in Health Care appeared in September 1994.

An additional background paper will report on lessons for the United States

from a comparison of hospital financing and spending in seven countries.

The country chapters of this background paper were written by experts in

those countries, and the entire effort was guided by David Banta of the Netherlands. It was greatly assisted by the advisory panel for the overall study, chaired

by Rosemary Stevens of the University of Pennsylvania. In addition, many

other individuals helped in various ways and OTA acknowledges gratefully the

contribution of each one. As with all OTA documents, the final responsibility

for the content rests with OTA.

ROGER C. HERDMAN

Director

.,. Ill
Advisory Panel

Rosemary Stevens, Chair

University of Pennsylvania

Philadelphia, PA

Stuart Altman

Brandeis University

Waltham, MA

Jan E. Blanpain

Leuven University, Belgium

Leuven, Belgium

Harry P. Cain II

Blue Cross and Blue Shield Association

Washington, DC

Thomas W. Chapman

The Greater Southeast Healthhcare System

Washington, DC

Louis P. Garrison, Jr.

Syntex Development Research

Palo Alto, CA

Annetine Gelijns

Columbia University

New York, NY

John Iglehart

Health Affairs

Bethesda, MD

Ellen Immergut

Massachusetts Institute of Technology

Boston, MA

Lynn E. Jensen

American Medical Association

Chicago, IL

Bengt Jonsson

Stockholm School of Economics

Stockholm, Sweden

Kenneth G. Manton

Duke University

Durham, NC

Edward Neuschler

Health Insurance Association of America

Washington, DC

Jean-Pierre Poullier

Organisation for Economic Co-operation and

Development

Paris, France

Mark Schlesinger

Yale University

New Haven, CT

Note: OTA appreciates and is grateful for the valuable assistance and thoughtful critiques provided by the advisory panel members.

The panel does not, however, necessarily approve, disapprove, or endorse this background paper. OTA assumes full responsibility for

the background paper and the accuracy of its contents.

iv
Hellen Gelband

Project Director

Clyde J. Behney

Assistant Director

Health, Education, and

Environment

Sean R. Tunis

Health Program Director

ADMINISTRATIVE STAFF

Beckie Ericksonl

Health Program Office

Administrator

Louise Staley2

Health Program Office

Administrator

Charlotte Brown

Word Processing Specialist

Daniel B. Carson

PC Specialist

Carolyn Martin

Word Processing Specialist

Carolyn Swarm

PC Specialist

Preject Staff

CONTRACTORS

Martha Cooley

Washington, DC

A. Mark Fendrick

University of Michigan

Ann Arbor, MI

Claudia Steiner

Johns Hopkins University

Baltimore, MD

1 Until September 1994. 2 From September 1994
—

contributors

H. David Banta

Netherlands Organization for Applied Scientific

Research

Leiden. The Netherlands

Renaldo N. Battista

Conseil devaluation des Technologies de la Sante'

du Quebec and

McGill University

Montreal, Canada

Michael Bos

Health Council of the Netherlands

The Hague, The Netherlands

Hellen Gelband

Office of Technology Assessment

U.S. Congress

Washington, DC

David Hailey

Australian Institute of Health and Welfare

Canberra, Australia

Matthew J. Hedge

Montreal General Hospital

Montreal. Canada

Egon Jonsson

Karolinska Institute and

Swedish Council on Technology Assessment in

Health Care

Stockholm, Sweden

Stefan Kirchberger

Landesversicherungsanstalt Sachsen and

University of Muenster

Leipzig, Germany

Jackie Spiby

Bromley Health

Hayes, Kent, United Kingdom

Sean R. Tunis

Office of Technology Assessment

U.S. Congress

Washington, DC

Caroline Weill

National School of Public Health

Saint–Maurice, France

Robert Jacob

Quebec Ministry of Health and Social Services

Quebec, Canada

vi
Rob Carter

National Centre for Health Program Evaluation

Melbourne, Australia

Bernard Cohen

Eurotransplant Foundation

Leiden, The Netherlands

Dell Cowley

Australian Institute of Health and Welfare

Canberra, Australia

Bernard Crowe

Australian Institute of Health and Welfare

Canberra, Australia

Wolodja Dankiw

Australian Institute of Health and Welfare

Canberra, Australia

Acknowledgments

Naarilla Hirsch

Australian Institute of Health and Welfare

Canberra, Australia

Guido Persijn

Eurotransplant Foundation

Leiden, The Netherlands

Diane Telrnosse

Conseil devaluation des Technologies de la Sante

du Que'bec

Montreal, Canada

Gabriel ten Velden

Health Council of the Netherlands

The Hague, The Netherlands

Yvonne van Duivenboden

Health Council of the Netherlands

The Hague, The Netherlands

vii
—

contents

1 Health Care Technology as a Policy Issue 1

The Diffusion of Health Care Technology 2

Content of This Report 2

Treatments for Coronary Artery Disease—CABG and

PTCA 4

Medical Imaging (CT and MRI) 6

Laparoscopic Surgery 8

Treatments for End-Stage Renal Disease (ESRD) 9

Neonatal Intensive Care 11

Screening for Breast Cancer 12

Interpretation of the Cases 13

References 13

2 Health Care Technology in Australia 19

Overview of Australia 19

Health Status of the Population 20

Controlling Health Care Technology 25

Health Care Technology Assessment 29

Case Studies

Treatments for Coronary Artery Disease 39

Medical Imaging (CTand MRI) 42

Laparoscopic Surgery 44

Treatments for End-Stage Renal Disease (ESRD) 47

Neonatal Intensive Care 49

Screening for Breast Cancer 51

Chapter Summary 53

References 55

3 Health Care Technology in Canada

(with special reference to Quebec) 61

Overview of Canada 61

Health Status of the Population 64

The Canadian Health Care System 64

Controlling Health Care Technology 67

Health Care Technology Assessment 75

. . .

Vlll
Case Studies

Treatments for Coronary Artery Disease 79

Medical Imaging (CT and MRI) 82

Laparoscopic Surgery 86

Treatments for End-Stage Renal Disease (ESRD) 88

Neonatal Intensive Care 90

Screening for Breast Cancer 92

Chapter Summary 95

References 96

4 Health Care Technology in France 103

Overview of France 103

The French Health Care System 105

Controlling Health Care Technology 110

Health Care Technology Assessment 114

Case Studies

Treatments for Coronary Artery Disease 120

Medical Imaging (CT and MRI) 122

Laparoscopic Surgery 124

Treatments for End-Stage Renal Disease (ESRD) 126

Neonatal Intensive Care 129

Screening for Breast Cancer 131

Chapter Summary 132

References 134

5 Health Care Technology in Germany 137

Overview of Germany 137

Health Status of The Population 138

The German Health Care System 139

The Cost Containment Debate 144

Controlling Health Care Technology 147

Regulation of Placement of Services and Quality

Assurance 151

Case Studies

Treatments for Coronary Artery Disease 154

Medical Imaging (CT and MRI) 155

Laparoscopic Surgery 158

Treatments for End-Stage Renal Disease (ESRD) 160

Neonatal Intensive Care 162

Screening for Breast Cancer 164

Chapter Summary 165

References 167

ix
6 Health Care Technology in the Netherlands 171

Overview of the Netherlands 171

Health Status of the Population 173

The Dutch Health Care System 173

Controlling Health Care Technology 178

Health Care Technology Assessment 183

Case Studies

Treatments for Coronary Artery Disease 188

Medical Imaging (CT and MRI) 191

Laparoscopic Surgery 197

Treatments for End-Stage Renal Disease (ESRD) 198

Neonatal Intensive Care 201

Screening for Breast Cancer 203

Chapter Summary 205

References 207

7 Health Care Technology in Sweden 209

Overview of Sweden 209

Health Status of the Population 211

The Swedish Health Care System 213

Controlling Health Care Technology 219

Health Care Technology Assessment 222

Case Studies

Treatments for Coronary Artery Disease 225

Medical Imaging (CT and MRI) 227

Laparoscopic Surgery 229

Treatments for End-Stage Renal Disease (ESRD) 231

Neonatal Intensive Care 232

Screening for Breast Cancer 233

Chapter Summary 234

References 236

8 Health Care Technology in the United

Kingdom 241

Overview of the United Kingdom 241

Health Status of the Population 241

The British Health Care System 242

Controlling Health Care Technology 243

Health Care Technology Assessment 256
Case Studies

Treatments for Coronary Artery Disease 258

Medical Imaging (CT and MRI) 260

Laparoscopic Surgery 262

Treatments for End-Stage Renal Disease (ESRD) 264

Neonatal Intensive Care 267

Screening for Breast Cancer 269

Chapter Summary 271

References 272

9 Health Care Technology in the United

States 275

Overview of the United States 275

Health Status of the Population 276

The U.S. Health Care System 276

Health-Related Research and Development 280

Controlling Health Care Technology 281

Health Care Technology Assessment 291

Case Studies

Treatments for Coronary Artery Disease 304

Medical Imaging (CT and MRI) 307

Laparoscopic Surgery 311

Treatments for End-Stage Renal Disease (ESRD) 315

Neonatal Intensive Care 318

Screening for Breast Cancer 321

Chapter Summary 324

References 325

10 Lessons from the Eight Countries 335

Health Systems of the Eight Countries 335

Technology Adoption 336

Technology Utilization 338

Public Reactions and Pressures 339

Health Care Technology Assessment 343

The Case Studies 344

Conclusions 352

References 353

INDEX 355

?

xi
Health Care

Technology as

a Policy Issue ,

by H. David Banta

T

he rapidly rising costs of health care became the most important health policy issue in many countries during the

1980s and early 1990s. These costs are now threatening

the prospects for providing higher quality services to

broader population groups, especially in the United States. The

reasons for rising costs clearly include the aging of the population, with associated increasing rates of chronic diseases and disabling conditions. Another critical factor is the rate at which

resources are used in health care-which in turn is linked with the

rapidity of technological change.

Apart from inflation and its effects on wages and the costs of

goods, the increase in resource use is the primary reason for rising

health care costs. Nations seeking to control these costs must control the growth and/or use of resources—an effort that inevitably

has involved trying to control the processes by which health care

technologies are developed, evaluated, adopted, and used.

Yet even without rising costs, controlling technology seems

necessary. Choices among technologies have to be made—this

occurs at different levels of health care systems. Some choices are

made at the national or regional policy level, as when laws and

regulations prevent the purchase of equipment or the provision of

certain services. Most choices, however, are at the operational

level of clinical practice: made by hospital administrators, heads

of clinical departments, and health care providers working day to

day. The ability to influence these choices, and the means through

which that influence is exerted, are prominent health policy issues.

One means of positively influencing choice is through the application of health care technology assessment. Now about 20

years old, the assessment field developed as a tool for policy-

. .

1
2 I Health Care Technology and Its Assessment in Eight Countries

— —

Population GDP per capita ‘/0 GDP on health ‘/0 public Spending per

Country (millions) ($US)a care spendingb

capitac ($ US)

Australia 17.3 17,038 8.6 67.8 1,409

Canada 27.0 21,537 10.0 72.2 1,915

France 56.4 21,022 9.1 73.9 1,605

Germany 78.0d

24,585 8.5 71,8 1,659

Netherlands 14.9 19,298 8.3 73,1 1,360

Sweden 8.5 27,498 8.6 78.0 1,443

United Kingdom 57.5 17,596 6.6 83.3 1,035

United States 251.4 22,204 13.4 43.8 2,867

a Average GDP per capita for Organisation for Economic Co-operation and Development countries $US20,305

b percentage of health spending from public Sources

c Made comparable through purchasing power parity, in $US

d Germany West, 61 3; Germany East, 16.7

SOURCE Organasation for Economic Co-operation and Development, OECD Health Data A Software Package for the International Comparison

of Health Care Systems (Paris, France Organsation for Economic Cooperation and Development, 1993)

makers to help shape the course of technological

change in health care. One major focus of this report is the relationship between policy and operational levels and the field of health care

technology assessment.

THE DIFFUSION OF HEALTH CARE

TECHNOLOGY

Influencing technological change in health care

means developing policies that affect basic research, applied research, clinical investigation

and testing, and diffusion of technologies. Basic

research produces new knowledge about the biological mechanisms underlying the normal functioning of the human body and its malfunctions in

disease. Public policies definitely can affect this

stage of technological change, as public funds

support most of the world’s health-related basic

research. However, basic research is rather far

from clinical technology. The paths by which

technology develops are not well understood. Interventions at the basic research stage that might

change the course of knowledge development

would have unknown effects on later technology

development. For these reasons, intervening in

basic research has not been very promising as a

policy tool.

Applied research uses information from basic

research and other sources to generate new solutions to problems of disease prevention, treatment, or cure. Policy interventions at this stage

could have greater effects on technological

change; however, little is known about these processes. Attempts to direct the course of technological change by undertaking applied research are

hampered by the fact that such research related to

pharmaceuticals and equipment is carried out by

industry, which means that much of the information concerning both these processes and their results cannot be easily obtained. Governments at

various levels can, of course, fund applied research aimed at certain ends, but governments

have been reluctant to invest heavily in applied research.

Clinical investigation and testing involves

testing new health care technologies in human

subjects. This stage encompasses a range of activities, from first human use to large-scale clinical

trials and demonstration projects to determine efficacy and effectiveness (i.e., health benefit) and

safety. Many of these activities are closely

associated with technology assessment, as they

form an essential part of the evidentiary basis for

the field.

Diffsion is the stage of adoption and use of

technology. As a new technology appears to be of

value, clinicians begin to use it and patients begin

to ask for it. Diffusion may culminate with the

technology’s attainment of an appropriate level of

use or with the technology’s abandonment, either
Chapter 1 Health Care Technology as a Policy Issue 13

Country 1981 1988 1990 1991

Australia 7,5 8.0 8.2 8.6

Canada 7,5 8.8 9.5 10.0

France 79 8.5 8.8 9,1

Germany 8.7 8.6 8.3 8.5

Netherlands 8.2 8.1 8.2 8.3

Sweden 9.5 8.5 8.6 8.6

United Kingdom 6.1 6.1 6.2 6.6

United States 9.6 10,8 12.4 13.4

SOURCE Organisation for Economic Co-operation and Development, OECD Health Data A Software Package for the International

Comparison of Health Care Systems (Pans, France Organisation for

Economic Cooperation and Development, 1993)

because it was of no value or because a more effective technology has been developed. The technology also may be used too much or too little, as

often seems to be the case.

In recent years a great deal of attention has been

paid to the possibility of assessing the benefits,

risks, and costs of technologies before they come

into general use and employing the results of these

assessments to guide technology adoption and

use. The way in which such technology assessments have developed in eight countries is the major theme of this report.

For various reasons the effect of technology assessment has been limited in these nations, especially when the forces of the health care system

lead to behavior that differs from what is seemingly desirable. Consider the powerful incentives

embodied in payment for health care. Physicians

may be paid highly for doing endoscopies, and

studies showing that endoscopy is overused will

probably have little effect on practice as long as

use is well rewarded. This situation underlines the

importance of the structure of the health care system and the nature of policies on technology adoption and use. These factors are discussed in the

chapters that follow.

CONTENT OF THIS REPORT

Industrialized countries have begun to intervene

with mechanisms to influence the development,

diffusion, and use of health care technologies. The

general and specific public policies that affect

these processes in eight industrialized countries

are discussed in chapters two through nine of this

volume, which cover Australia, Canada, France,

Germany, the Netherlands, Sweden, the United

Kingdom, and the United States. Each chapter

also presents that country’s experience with a

number of specific technologies: treatment for

coronary artery disease (mainly coronary artery

bypass grafting and percutaneous transluminal

coronary angioplasty); medical imaging; laparoscopic surgery; treatment of end-stage renal disease (including dialysis, renal transplant, and

erythropoietin); neonatal intensive care (including extracorporeal membrane oxygenation); and

screening for breast cancer.

The eight countries are all at similar levels of

socioeconomic development. Their populations

vary from 8.5 million to 251 million and their

gross domestic product per capita varies from

about $17,000 to about $27,000 (table 1-1). In

1991, the percentage of Gross Domestic Product

(GDP) going to health care ranged from 6.6 in the

United Kingdom to 13.4 in the United States

(table 1-2). The health levels of the selected countries are generally similar (tables 1-3 and 1-4).

One must be aware, however, that health status is

related to many factors besides health care and

health care technology (88).

Country 1981 1986 1990 1991

Australia 10.0 8.8 8.2 7.1

Canada 9.6 7.9 6.8 —

France 9.6 8.0 7.2 8.3

Germany 11.6 8.7 7.1 —

Netherlands 8.3 7.8 7.1 6.5

Sweden 6.9 5.9 6.0 6.1

United Kingdom 11.2 9.5 7.9 7,4

United States 11.9 10,4 9.1 8.9

SOURCE Organisation for Economic Co-operation and Development, OECD Health Data A Software Package for the International

Comparison of Health Care Systems (Paris, France Organisation for

Economic Cooperation and Development, 1993)
4 I Health Care Technology and Its Assessment in Eight Countries

1981 1986 1990 1991

Country Women Men Women Men Women Men Women Men

Australia 78,4 71,4 79,2 72.9 80.0 73.9 NA NA

Canada 79.1 71.9 79,7 73.0 80.4 73.8 NA NA

France 78.5 70,4 79.7 71.5 80.9 72.7 81,1 73,0

Germany 76.9 70.2 78.4 71.8 NA NA NA NA

Netherlands 79.3 72.7 79.6 73,1 80.1 73.8 80.3 74,0

Sweden 79,1 73.1 80.0 74.0 80.4 74.8 NA NA

United Kingdom 76,8 70,8 77.6 71,9 78.5 73.0 78.6 72.0

United States 77.8 70.4 78.3 71.3 78.9 72.0 NA NA —.

NOTES 1990 and 1991 figures for US and UK are not confirmed: NA = not available

SOURCE Organisation for Economic Co-operation and Development, OECD Health Data. A Software Package for the International Comparison

of Health Care Systems (Pares France Organisation for Economic Cooperation and Development, 1993)

Each of these chapters introduces the country’s how these policies have been applied.

form of government and economy and then de- The final chapter of the report draws general

scribes the country’s health care system. Policies lessons from the eight countries. As background

concerning research and development (R&D), for the policy discussions in the remaining

evaluation, diffusion, regulation, and payment for chapters of this volume, the technologies featured

technologies are discussed, and the chapters end in the case studies are defined below and their

with the case studies mentioned above showing uses, efficacy, and costs briefly described.

TREATMENTS FOR CORONARY ARTERY

DISEASE-CABG AND PTCA

Coronary artery disease, the most frequent cause

of death in the industrialized world, is caused by

narrowing and blocking of one or more of the arteries that supply blood to the heart. Coronary

artery bypass grafting (CABG) is a surgical procedure in which a grafted vessel is placed between

the aorta and a coronary artery to bypass a contracted portion of the artery, improving blood supply to the heart muscle.

A number of surgical procedures were tried in

the past to improve the blood supply to the heart,

but CABG is now the standard procedure. The

American surgeon Michael DeBakey performed

the first CABG in 1964, using a vein from the patient leg as a graft to bypass the occlusion in the

coronary artery. After its introduction CABG

spread rapidly into practice. In 1991 more than

400,000 CABG procedures were done in the eight

countries discussed in this report.

The first randomized clinical trials to evaluate

CABG took place in the early 1970s. It was clear

early on that the operation effectively relieved angina pain, but the impact on survival was less

clear. A recent overview of the trials, in which

CABG was compared with medical therapy,

shows the following results (93): significantly improved survival in patients with left main coronary artery disease, and in patients with single- or

double-vessel disease; a non significant trend toward improved survival at five years, but no difference at 10 years (68).

During the 1960s and 1970s, the use of a catheter to dilate arterial stenosis (narrowing) was investigated. In 1964 Dotter and Judkins (22)
Chapter 1 Health Care Technology as a Policy Issue 15

al vascular system, noting substantial improvement in health status and avoidance of amputation

of the limbs when used for peripheral blockage.

This technique continues to be used in Europe but

never gained adherents in America (40).

In 1974 Gruentzig and his colleagues (36) used

a catheter with a modified distensible tip to dilate

renal and peripheral arteries. Two years later a

similar but smaller tip was used to dilate coronary

arteries in animals, and the technique was then

used in humans. This procedure, percutaneous

transluminal coronary angioplasty (PTCA), is

now the standard noninvasive (minimally invasive) procedure for cardiovascular disease. PTCA

is done under local anesthesia and does not require

an operating room, although emergency backup is

necessary in case of cardiac arrest or other lifethreatening complications.

PTCA involves penetrating the skin (percutaneous), crossing the inner space of the blood vessel (transluminal), and affecting the vessel

constriction (angioplasty). It uses a guide catheter

that can travel to the constricted area and a balloon

threaded by wire through the catheter and across

the stenosis. When the balloon is in the appropriate location, it is inflated repeatedly with a mixture of saline and contrast material. As the balloon

presses against the artery wall, fluid is expelled

from the plaque, which then splits at its weakest

point. Over time, healing occurs. Immediate success rates for stenosis are above 90 percent, depending on the characteristics of the stenosis, the

patient’s clinical status, and the skill of the clinicians (39,48). Success rates for total blockage are

considerably lower. PTCA is particularly indicated for short, segmental, and high-grade (more

than 50 percent) blockages. Although restenosis

occurs in 25 to 35 percent of patients, usually

within six months of the procedure (46), PTCA

has excellent later results, with few recurrences after six months.

PTCA was not tested in randomized controlled

trials in its early diffusion. Trials comparing

PTCA and CABG are only now underway in both

the United States and Europe.

The evaluation of outcomes in the case of procedures on the coronary arteries is difficult. Cure

cannot be expected. The patient generally continues to have the disease, and symptoms are often

progressive. Cardiologists favor PTCA primarily

because it delays the need for CABG, a much

more invasive procedure. An issue of increasingly

visibility in the United States and some other

countries is the possible inappropriate use of

CABG and PTCA (92).

In recent years a number of new technologies

have come into development, including laser

treatment, stents, rotary devices, and others (89).

In general these have not proved (yet) to have better results that PTCA (74). One prominent alternative used increasingly in a number of countries is

excimer laser angioplasty (6). Excimer laser angioplasty is being tested in a randomized clinical

trial in the Netherlands.

The cost-effectiveness of PTCA versus CABG

has been analyzed, but results the are not entirely

convincing because of the lack of definitive information on the effectiveness of the procedures.

Comparing PTCA with CABG (without a previous attempt at PTCA), the costs for a year of care

(in 1984) averaged $US1l ,472 for PTCA and

$US13,262 for CABG (70). A major expense in

the PTCA group was the treatment of restenosis,

seen in 33 percent of patients. These U.S. results

might not necessary transfer readily to other coun -

tries.

Comparing 100 patients with PTCA for at least

two vessels to a matched group of controls undergoing CABG, in one year of followup, one repeat

PTCA was required in 10 patients, two were repeated in one patient, and three PTCA patients underwent a CABG. The average costs for a year of

care in this case were $US1 1,100 for the PTCA

group and $US22,862 for the CABG patients (in

the mid- 1980s) (9). More recently, RAND Corp.,

using data from the Framingham heart study and

expert judgment, estimated five-year costs at

about $US33,000 for PTCA and $US40,000 for

CABG (50).
6 I Health Care Technology and Its Assessment in Eight Countries

A 1991 study estimated the cost per quality adjusted life year (QALY) for CABG in patients

with left main disease with severe angina pectoris

at 2,090 British pounds, compared to 18,830

pounds for patients with one-vessel disease with

moderate angina pectoris.

MEDICAL IMAGING (CT AND MRI)

Medical imaging was born with the discovery of

x-rays in 1895 by Roentgen in Germany. By 1900,

x-rays were being used to diagnose fractures, gallstones and kidney stones, foreign objects in the

body, and lung disease. Bismuth was used beginning in 1896 to allow x-ray pictures of the gastrointestinal tract (71 ).

The innovation of x-rays forced changes in

health care organization in all countries. Departments of radiology were established in the early

decades of this century, and they expanded rapidly

in the 1920s (79,80). The specialty of radiology

was formally established in the 1930s. Physicians

thereby gained complete control of the medical

uses of x-rays.

Medical imaging remained relatively unchanged until the computed tomography (CT)

scanner was introduced to the market by the EMI

Co. in 1972. The CT scanner is a diagnostic device

that combines x-ray equipment with a computer

and a cathode-ray tube (a television-1ike device) to

produce images of cross-sections of the human

body. The principle of CT scanning was developed by the English physicist Hounsfield; he

succeeded in producing the first scan of an object

in 1967, and in 1971 he was able to scan the head

of a live patient. Commercialization of the CT

scanner in 1972 initiated a revolution in the field

of diagnostic imaging (86). The first machines

were “head scanners,” designed to produce

images of abnormalities within the skull (e.g.,

brain tumors). “Body scanners” able to scan the

entire body were then developed.

CT scanning was rapidly and enthusiastically

accepted by the medical community. Despite concerns about its high cost—up to and more than

$US1 million—it diffused extraordinarily rapidly

and came into widespread use throughout the

world. A number of companies developed CT

scanners; the international market is now dominated by such companies as General Electric,

Philips, and Siemens. Although no randomized

studies of the value of CT scanning were done in

its early years, clinical experience gradually accumulated that indicated its usefulness in many

conditions. It is now a fully accepted diagnostic

technology.

Magnetic resonance imaging (MRI) is a more

recent innovation in the field of medical imaging,

based on nuclear magnetic resonance (NMR).

NMR images are formed without the use of ionizing radiation and reflect the proton density of the

tissues being imaged, as well as the velocity with

which fluid is flowing through the structures being imaged and the rate at which tissue hydrogen

atoms return to their equilibrium states after being

excited by radiofrequency energy. The first NMR

image was published by Lauterbur of the State

University of New York in 1973 (49). Prototype

MRI units were developed in the United States,

England, and the Netherlands in the late 1970s

(87).

MRI produces images of cross-sections of the

human body similar to those produced by CT

scanning (86), with some important differences. A

CT scanner depicts the x-ray opacity of body

structure. MRI images depict the density or even

the chemical environment of hydrogen atoms

(42). These various properties are not necessarily

correlated.

MRI has several advantages. It gives a highcontrast sensitivity in its images, and it can distinguish between various normal and abnormal

tissues. Blood flow, circulation of the cerebrospinal fluid, and contraction and relaxation of organs

can be assessed. Tissues surrounded by bone can

be represented. Also, MRI does not employ potentially dangerous ionizing radiation, as do CT scanning and other imaging methods. It is not

necessary to inject toxic contrast agents, as is

often done with CT scanning (although contrast

agents are being used more and more frequently

with MRI scanning). MRI allows for a choice of

different imaging planes without moving the pa-
Chapter 1 Health Care Technology as a Policy Issue 17

tient; CT scanning can produce an image of only

one plane at a time, and some planes are not scannable. Finally, images can be obtained from areas

of the body where CT scanning fails to produce

clear images.

Despite its potential, the initial diffusion of

MRI in most countries was less rapid than had

been the case with CT scanners. Introduction and

diffusion were slowed because of the economic recession in the early 1980s. At the same time health

authorities were unwilling to invest heavily in

MRI before any thorough evaluation had taken

place. Questions such as these were asked: Is present MRI an advance in imaging technology as

compared with CT scanning? Does it produce useful information at a reasonable cost? Does it produce diagnostic information not otherwise

available?

MRI has been repeatedly and formally assessed

since its introduction (1 ,24,35,45,60,61,62,82,

86). An early issue of the International Journal of

Technology Assessment in Health Care examined

many aspects of MRI (72). These assessments

agree that MRI is a reliable diagnostic device that

produces information that can be quite useful.

However, evaluation of MRI scanning has been

far from optimal. For example, a literature review

published in 1988 (18) found that 54 evaluations

did poorly when rated by commonly accepted

scientific standards, such as use of a “gold standard” comparison of blinded readers of the images

(i.e., the expert doing the reading does not know

the status of the patient). Only one evaluation had

a prospective design. Also, over the period examined there was no improvement in quality of research over time, and this problem continued in

later years (44,45).

Literature shows that MRI is probably superior

to CT, its main competitor, for detection and characterization of posterior fossa (brain) lesions and

spinal cord myelopathies, imaging in multiple

sclerosis, detecting lesions in patients with refractory partial seizures, and detailed display for guiding complex therapy, as for brain tumors (44,45).

In other diseases the efficacy of MRI is similar to

that of CT. In fact, the best designed study, carried

out in a heterogeneous group of patients in neuroradiology studied in a matched pair design, found

that the sensitivity and specificity of CT scanning

were somewhat better than those of MRI (38).

As for the diagnostic or therapeutic impact,

little information is available. Investigators in

Norway found that 33 percent of patients had their

main diagnosis changed by MRI scanning (67).

Plans for surgery changed in 20 percent of the patients, and plans for radiotherapy changed in 8

percent.

Although most MRI scans are of the brain(11 ),

a specific advantage of MRI lies in diagnosis of

spinal cord problems, where MRI may replace

myelography, an x-ray procedure involving injection of a potentially dangerous dye. In the spinal

cord two studies have examined the relative accuracy of MRI in relation to myelography and CT

(57,58). The studies found that MRI and CT were

roughly equivalent in terms of true positive results

but that both were superior to myelography. MRI

is gradually replacing both CT scanning and myelography (8,58). In one study the percentage of

physicians ordering myelography prior to MRI

dropped from 15 percent to zero during the twoyear study period (67).

Another area in which MRI could be quite useful is in imaging joints (19,53). A common problem is torn or damaged menisci (cartilages) of the

knee. The standard diagnostic procedure is either

arthroscopy by scope or arthrogram, an x-ray procedure. Both are invasive in that the scope must be

inserted into the joint or a contrast material must

be injected. MRI is not invasive. However, the advantage of arthroscopy is that a therapeutic procedure can be done if an abnormality is found.

Another common problem for which MRI may

eventually be useful is herniated nucleus palposis

(“ruptured disc”).

The capital cost of an MRI scanner varies greatly, depending particularly on the strength of the

magnets. A basic unit costs at least $US1 million.

Operating an MRI facility in the United States

costs between $US840,000 and $US1, 115,000

per year in the mid-1980s (1 1,3 1). Only about

one-third of this operating cost is accounted for by

the capital investment in the scanner itself. Other

expenses include space, personnel, equipment,
8 I Health Care Technology and Its Assessment in Eight Countries

and maintenance. The cost per scan in one

mid- 1980s study was between $US370 and

$US550, and the fee paid for the scan was

$US500. (The costs apparently do not include

payment to the physician.) Other studies have

demonstrated that the costs of an MRI scan are

considerably more than those of a CT scan (45).

With increased throughput, MRI units have done

well financially (32).

MRI costs maybe offset by replacement of other diagnostic procedures, particularly myelography (1 1). Although myelography requires

hospitalization of at least one day, MRI can be

done on an outpatient basis. It does not appear to

have replaced other modalities, such as CT scanning in the brain, except that it is used preferentially in suspected posterior fossa tumors (84). In

general, however, replacement of other procedures by MRI has not been demonstrated. The result is a considerable increase in costs (7,66).

The basic issue with CT scanning and MRI

scanning is that they provide similar information.

It has been difficult to demonstrate much advantage with MRI.

LAPAROSCOPIC SURGERY

Laparoscopic surgery is part of what has become

known as “minimally invasive therapy” (MIT) or

“minimally invasive surgery,” a new and rapidly

growing area of medical treatment that causes

substantially reduced trauma to patients. MIT is

truly a new field in medical technology, depending in most cases on new, advanced technologies-specially endoscopes, vascular catheters,

and imaging devices.

In some respects, however, MIT is not completely new. Physicians and surgeons have always

used the orifices of the body to observe internal

structures. The first workable endoscope was developed by Desorrneaux in 1853. The laryngoscope, which made it possible to look at the larynx

and the vocal chords, was developed in 1857. The

benefits of the ophthalmoscope and laryngoscope

stimulated the development of devices to explore

other body cavities, such as the vagina, rectum,

and stomach (1860). Visual scopes, such as the

hysteroscope (1869) and the gastroscope (1870),

came into use later; however, these procedures became truly widespread with the introduction of the

flexible fiberoptic endoscope in the mid-1950s.

Endoscopy then became a routine diagnostic tool.

The movement toward surgery came as instruments were gradually incorporated into the

scopes; they included miniature forceps, scissors,

and (more recently) lasers, heat probes, electrocoagulation devices, and cryotherapy devices.

The first endoscopic examination of the abdominal cavity was carried out by Ott in 1901 in a

procedure he named “ventroscopy.” Kelling also

carried out this procedure in 1901 and published a

paper in which he described the entire procedure

and its future possibilities (37). Nevertheless, the

procedure was not often used, probably because of

limitations of the technology. Introduction of the

flexible fiberoptic endoscope in 1957 solved

many of the technical problems and led to the

widespread use of diagnostic laparoscopy.

The laparoscope was first used therapeutically

in gynecology during the 1960s. The first International Symposium of Gynecological Endoscopy

was held in 1964, and tubal sterilization by laparoscope was done with increasing frequency by

1969 (37). By 1974, a few treatments of endometriosis through the laparoscope by fulguration had

already been reported (52).

Appendectomy is among the commonest surgical procedures in most countries. Appendectomy

removes an inflamed appendix, which may perforate and spread infection. Appendectomy by laparoscope has now been done by Semm (73) in

Germany for more than 10 years with good success. A gynecologist, Semm observed that during

diagnostic laparoscopy for pelvic pain in young

women, he sometimes found an unexpected inflamed appendix. He developed instruments to allow removal of the appendix through the

laparoscope. The procedure is gradually gaining

favor in the United States and Europe.

Laparoscopic cholecystectomy is the most dramatic case of laparoscopic surgery. Cholecystectomy, removal of the gallbladder, has been done

since 1882. It is one of the most frequent surgical
Chapter 1 Health Care Technology as a Policy Issue 19

procedures in industrialized societies. The standard treatment for symptomatic gallbladder disease (e.g., inflammation, stones) has been surgical

removal, a procedure associated with ileus, pain,

and a slow return to normal functioning (21) and a

hospital stay averaging five days (90).

The first successful cholecystectomy via laparoscope was done by Mouret in France, in 1987.

The procedure spread in France, and in 1988, particularly after publication of the experience of the

group headed by Dubois (23), it began to spread

internationally, particularly rapidly in North

America (12). The first procedure was done in the

United States in 1988 (69), but most of the spread

has occured in the 1990s. In late 1990 more than

two-thirds of 29 Canadian hospitals responding to

a survey were already in the laparoscopic cholecystectomy business (13), Surgeons in the United

States and elsewhere were skeptical initially, but

patients began demanding the less invasive procedure and surgeons have acquiesced (5, 12).

Laparoscopic cholecystectomy was not evaluated initially by randomized controlled trials

(5). In fact, evaluations of laparoscopic cholecystectomy played little part in its diffusion. Nonetheless, a number of uncontrolled studies give

clear evidence of the superiority of this procedure

in skilled hands (41 ,78). Other applications of laparoscopic surgery (in general surgery and gynecology) have not yet been well evaluated. These

applications include hernia repair, bowel resection, treatment of colorectal cancer, removal of

kidney stones, and a number of gynecological procedures, such as hysterectomy and removal of

ovarian cysts (5).

Laparoscopic procedures are assumed to be

more cost effective than the corresponding open

surgeries, but few good analyses have been performed. The assumption of cost-effectiveness is

based on a shorter length of hospital stay and an

earlier return to normal activities. A comparative

study of Australia and Canada estimated that the

change to this procedure from open surgery could

potentially reduce the health care costs of cholecystectomy in Canada from $C271 million to

$C215 million and in Australia from $A124 million to $A1OO million (54). One can readily observe that the potential total savings from the 100

or so procedures included in MIT could be enormous. However, the number of cholecystectomies

actually rose 15 to 20 percent after introduction of

the laparoscopic technique in Canada and Australia (54). The actual health system savings

achieved were only 56 percent of the potential

savings in Canada and only 13 percent of those in

Australia.

TREATMENTS FOR END-STAGE

RENAL DISEASE (ESRD)

Hemodialysis and renal transplantation are two

life-extending therapies developed in the early

1960s for victims of ESRD, a clinical condition

reached when a person has such a degree of deterioration of kidney function that without treatment,

he or she will soon die. In hemodialysis toxic

waste products are removed from the blood by

means of an artificial kidney. The first dialysis

machine was built in the Netherlands by physician

and bioengineer Kolff in 1943. His machine was

the basis for dialysis treatment as provided today.

In the beginning the dialysis machine could be

used only for patients with acute renal failure because the cannulas inserted into the patient arteries caused serious damage and could be used only

for a short time (a matter of days). This changed

around 1960 when Scribner and Quinton invented

a new shunt system linking an artery to a vein and

making use of teflon and silicone rubber cannulas,

which prevent blood clotting and damage to the

arteries and allow the shunt to stay in place permanently. Since then, patients have been able to live

on “chronic intermittent dialysis,” usually about

three times a week.

In renal transplantation a healthy kidney from a

living person or from someone who has just died

is substituted for an individual’s nonfunctioning

kidney. Kidneys were the first successfully transplanted organs and remain the prototypic transplant. The Russian surgeon Voronoy attempted

the first kidney transplantation in a human being

in 1933; however, this and other attempts inevitably ended in rejection of the organ and death of

the patient.
— —

10 I Health Care Technology and Its Assessment in Eight Countries

After the Second World War, new attempts

were undertaken. A great step forward was made

through the work of Peter Medawar, an Oxford zoologist who studied the immune response and

found ways to manipulate it and induce immunological tolerance. On the basis of this work, immunosuppressive therapy using different drugs was

developed. Medawar’s finding that the immune

response was not present in closely related individuals gave doctors the courage to try kidney

transplantation between identical twins. In December 1954 Murray performed the first successful kidney transplant in Boston between the twin

brothers Richard and Ronald Herrick. Richard

survived for eight years with a functioning donor

organ.

In 1962 the first successful kidney transplantation using the kidney of a deceased, genetically

unrelated donor took place, following the discovery of the effective immunosuppressive drug

6-mercaptopurine. In 1958 the French immunologist Dausset discovered the role of human leukocyte antigens in graft rejection, and this became

the basis for tissue typing and matching, making

possible the matching of organs from deceased

unrelated donors to recipients. Kidney transplantation on a large scale thus became a reality.

Steroidal hormones were used in conjunction

with antimetabolites beginning about 1962, producing better results. Antilymphocyte serum

joined the other two types of drugs around 1966,

further improving results. In the 1970s cyclosporin, a particularly effective drug that acts by

suppressing certain T-lymphocytes, was discovered and began to be used clinically. (In addition

to their benefits, these drugs have significant toxic

effects.)

With these improvements, kidney transplantation spread into use around the world, beginning

in the 1960s. Kidney transplants are performed for

ESRD associated with all major causes—mostly

in people under 65 years old but increasingly in elderly people as well. Transplants are considered a

fully established medical intervention.

The current rate of kidney survival is about 65

percent survival for five years after one transplant

and 45 percent after a second transplant ( if the first

one fails). The five-year rate of survival from live

donors (about five percent of the total) is about 85

percent: for patients in the age group up to 45

years, it is about 95 percent, and in the age group

45 to 65, about 80 percent (34).

Kidney transplant and different forms of renal

and peritoneal dialysis comprise the treatment

mix of ESRD programs. Without dialysis, patients with ESRD would die if an organ did not

become available in time. After irreversible rejection of a donor kidney, the patient would die without a second transplant or dialysis. In practice,

kidney transplant is a substitute for dialysis; therefore, the effects of kidney transplant as well as financial costs must be considered in comparison

with the outcomes of dialysis. In general, quality

of life following kidney transplant is nearly equal

to that of the general population and is considerably higher than that of people on dialysis treatment (29,43,77). (An increased number of kidney

transplants does not lead to a gain in years of life

because of the availability of dialysis, however.)

An exemplary study from the Netherlands illustrates the financial savings to be gained by

transplant (20). The yearly cost of renal dialysis

carried out in a dialysis center was found to be Dfl

77,000 (about $US40,000). Renal transplant was

found to cost Dfl. 69,000 (about $US38,000) in

the first year and Dfl. 6,000 (about $US3,300) in

every succeeding year.

The cost per QALY has been estimated for different ESRD treatments (55). Hospital hemodialysis costs 21,970 British pounds per QALY,

compared with 19,870 pounds for continuous ambulatory peritoneal dialysis, 17,260 pounds for

home hemodialysis, and 4,710 pounds for kidney

transplant.

A new technology frequently used as part of renal dialysis is erythropoietin (EPO), licensed in

the United States in June 1989. EPO is a substance

produced through biotechnology that stimulates

the bone marrow to make red blood cells. The

most frequent use of EPO is inpatients on chronic

hemodialysis for ESRD, as such patients suffer

from a depressed bone marrow leading to frequent

blood transfusions. EPO can make transfusions
Chapter 1 Health Care Technology as a Policy Issue 111

unnecessary or much less frequent. In clinical

trials EPO has been found to reverse uncomplicated anemia of renal failure within months

(16,47,91).

Several clinical trials have examined the efficacy of EPO. Evans and colleagues (30) examined

the quality of life in 300 patients before and after

treatment with EPO and found it was improved in

various respects. Patients reported increased energy, activity levels, functional ability, sleep and

eating behavior, disease symptoms, health status,

satisfaction with health, sex life, wellbeing psychological affect, life satisfaction, and happiness.

The Canadian EPO Group reported similar findings.

EPO is very expensive, however. In the United

States, it costs about $US 10,000 per year per patient on chronic dialysis. Because patients apparently do not return to work, there is no financial

offset for this expenditure, raising serious questions about the cost-effectiveness of EPO in the

setting of chronic renal failure.

Maynard (55) found that the estimated cost per

QALY gained by EPO for dialysis anemia, assuming a 10-percent reduction in mortality, was

54,380 British pounds. Assuming no increase in

survival, the cost per QALY was 126,290 pounds.

McNamee and colleagues (56) estimated that

the cost per QALY gained at Df1374,000 (about

$US21O,OOO).

NEONATAL INTENSIVE CARE

Neonatal intensive care involves the constant and

continuous care of the critically ill newborn. The

origin of “modem” neonatal intensive care

technology can be traced to the first incubators developed by the obstetrician Tarnier in Paris in

1880. He took the idea from a chicken incubator

that he had seen at an agricultural fair. The scientific development of medical care for the premature child started with Pierre Budin, a pupil of

Tarnier, who published a treatise on the care of the

premature newborn in 1890. In the years up to

1950, the Tamier prototype was improved. The

“Lion incubator,” introduced in 1896 (at the Berlin World Exhibition) by Couney, had a metal

frame with glass doors, and air, temperature, and

moisture could be regulated. Through Couney’s

promotional activities, specialized care for premature babies became established in the United

States.

Another development was the Auvard incubator, a less sophisticated device made of wood in

which hot-water bottles were placed. This machine became very widely used because it was relatively cheap. (Some hospitals used it up to the

1950s.) The most significant technological developments have occurred since World War II.

Most babies with severe problems weigh less

than 2,500 grams at birth. During the late 1940s

and 1950s, babies began regularly to be fed with

indwelling tubes and to be given high concentrations of oxygen (15). Subsequently, the use of respirators, electronic monitoring, analysis of small

blood samples, and the development of specialized staffs of highly trained nurses have become

part of neonatal intensive care. Regional networks

have been organized to coordinate services for obstetrical and newborn care in many countries. Regional tertiary-care centers have been developed

to specialize in high-risk births and the care of sick

infants.

Beginning about 1980, there has been concern

about both the effectiveness and costs of neonatal

intensive care. However, most studies (as in the

case of prenatal care) consider the effectiveness

(and/or costs) of a package of care given to high

risk and very low weight infants, and it is difficult

to isolate either the effective or the ineffective

parts of this care (1 5).

There is evidence of falling mortality among

populations of babies born weighing less than

1,500 g during the period of introduction of neonatal intensive care methods; evidence that lowweight babies born in institutions with neonatal

intensive care units (NICUS) have a lower mortality rate than similar babies born in other institutions (65): and evidence in geographically based

populations of better outcomes for low birthweight babies with access to NICUS (4,33). The

mprovements in outcome have been seen

in the group weighing from 750 to 1.000 g (26).
12 I Health Care Technology and Its Assessment in Eight Countries

More than 700 randomized controlled trials of

aspects of neonatal care have been identified (59).

These trials do not help much in gaining an impression of what works in NICU and what does

not. They deal with quite varied subjects, such as

the effect of supplementary feeding on neonatal

jaundice or the value of red blood cell transfusion

for infants with low hemoglobin levels. The numbers in these trials are generally small. For the

most part, the trials give little guidance on best

practice because of these problems and a general

lack of relevance (59).

An increasing rate of handicap among the population might have been expected from the growth

in NICUS, but it has not been seen (26). (Numbers

of handicapped children have, however, increased.)

The most comprehensive evaluation of neonatal intensive care was carried out in Canada (10),

in a study in which the economic aspects of neonatal intensive care of very -low-birthweight infants

were evaluated using costs and outcomes before

and after the introduction of a regional neonatal

intensive care program. The two periods

compared were 1964 to 1969 and 1973 to 1977.

Information on health state was collected from

parents and used to calculate outcomes in QALYs.

The overall results show an apparently good outcome in the group weighing from 1,000 to 1,499 g

as compared with the 500 to 999 g group. The economic cost per QALY gained in the first group is

$Cl ,000, compared with $C17,500 for the other

group (expressed in 1978 Canadian dollars).

There seems little doubt that NICU, as a package,

is effective. It is also an expensive intervention.

Technology development has been rapid in

neonatal intensive care. This has resulted in a proliferation of untested technologies in a situation in

which effectiveness already is not well understood

(15). Although randomized trials of new interventions would be desirable, clinicians feel that they

cannot withhold possibly effective treatments.

The result is that “many interventions become part

of the armamentarium of the practicing professional without ever having been proven to be effective” (15).

An example of such a technology is extracorporeal membrane oxygenation (ECMO), developed

in the United States in the early 1970s. This technique is used to improve oxygenation and lower

mortality in certain serious diseases (81). It is an

expensive and invasive technique that is potentially both effective and hazardous. ECMO entails diverting part of the blood circulation through a

device that permits gas exchange across a permeable membrane (51) and involves ligating (tying)

the carotid artery of the infant (although a newer

technique uses a catheter connecting two veins).

Some feel that only a few infants could benefit

from this treatment, as compared with conventional treatments such as supports for respiration

and oxygen (3). Only one small randomized trial

(19 babies) was done before widespread diffusion

of ECMO in the United States (64) All other studies have been much less rigorous. Yet although

ECMO is not proved to be of benefit, it has been

stated that randomized trials are no longer possible in the United States (28). A multicenter randomized controlled trial is currently under way in

the United Kingdom, coordinated by the National

Perinatal Epidemiology Unit in Oxford. A trial using historical controls in the Netherlands, incorporating a cost-effectiveness analysis as part of

the study, reported preliminary results in 1994 favoring ECMO over conventional treatment for

neonates with severe respiratory distress (at a cost

of DF153,500 per infant).

A recent development is the use of nitric oxide

(NO) as an alternative to ECMO in the United

States. The use of ECMO has begun to decline following experience with an apparently effective

and less invasive modality. However, careful evaluations of NO have not yet been carried out.

SCREENING FOR BREAST CANCER

Screening for breast cancer was developed during

the late 1960s and early 1970s. The key event in

this case was a large, well-designed randomized

trial carried out in the Health Insurance Plan (HIP)

of Greater New York during the 1970s, showing

clear benefits from routine screening in terms of
Chapter 1 Health Care Technology as a Policy Issue 113

mortality from breast cancer in women over the

age of 50 (75).

Two procedures are used in organized breast

cancer screening programs (25): breast physical

examination by a trained practitioner and x-ray

mammography. Other methods, such as thermography, ultrasonography, CT, and photoluminescence, have also been proposed for screening, but

have not proved effective. Breast self-examination has also been promoted and may be of benefit.

The HIP randomized trial offered the interventional group, approximately 31,000 women aged

40 to 64 years, four successive annual screenings

with two-view mammography and breast physical

examination. About 67 percent of the women accepted, and approximately 50 percent of those received at least three screenings (76). The trial

showed a statistically significant reduction in

mortality in women who were over 50 years of age

at entry into the study. Five years after entry, the

reduction in mortality was about 50 percent, falling to about 20 percent at 18 years after entry. For

women 40 to 50 years of age at entry, the reduction

in mortality was small (about 5 percent at five

years, and not statistically significant) (17).

These studies have been followed up by two

randomized studies in Sweden (2,83), one in the

United Kingdom (85), and a number of nonrandomized studies. These studies in total seem to

demonstrate benefit from screening but leave a

number of unanswered questions. One problem is

that each one has used a different screening regimen, so the independent contribution of the two

methods of examination cannot be estimated.

(Despite this, most articles reporting on the studies refer to “mammography screening.”) Another

problem is that the studies have been done at different times with different x-ray technologies; the

question of the usefulness of modern technology

cannot then be answered. Nonetheless, it is widely

assumed that modern x-ray mammography

screening alone is of benefit.

A contentious issue is the question of screening

women under the age of 50 years. In the United

States some groups do not recommend screening

women under 50 years of age (25), but others do.

In Canada the Task Force on the Periodic Health

Examination does not recommend screening

younger women (14), but the province of British

Columbia does support this practice.

A number of cost-effectiveness analyses of

breast screening have been carried out. For illustrative purposes the results of one study from the

United States will be presented. Using a number

of assumptions, Eddy (25) estimated that a program that screened 25 percent of American

women between the ages of 40 and 75 would cost

$US4.2 billion for annual breast physical examination alone and $US15 billion for examination plus mammography. Using outcomes from

the HIP study, the marginal cost of adding a year

of life with both examination and mammography

would be $US 134,081 in the age group from 40 to

50 years; $US83,830 in the age group from 55 to

65 years; and $US92,412 in the 65 to 75 year-old

group. Other studies have found lower costs per

year of life added with breast cancer screening.

Typical figures range between $US13,2000 and

$US28,000 per year of life saved (27). Maynard

(55) found that the cost for a QALY gained

through breast cancer screening was 5,780 British

pounds. All of these analyses embody certain assumptions about benefit that might not be true.

INTERPRETATION OF THE CASES

Each country has dealt with these technologies,

and information on their benefits and costs, in different ways that reveal various forces at work in

technological diffusion. The chapters that follow

will examine them from each country’s perspective.

In chapter 10, these technologies are revisited.

Differences and similarities in how they have been

treated in each country are highlighted in that

chapter.

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14 I Health Care Technology and Its Assessment in Eight Countries

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Chapter 1 Health Care Technology as a Policy Issue 115

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Health Care

Technology

in Australia

by David Hailey 2

OVERVIEW OF AUSTRALIA

A

ustralia, which lies southeast of Asia between the Indian

and Pacific oceans, consists of the smallest continent (and

the world’s largest island—approximately 4,000 km from

east to west and 2,000 km from north to south) as well as

the island of Tasmania. About a third of the continent is uninhabitable; in another third the rainfall is too low to permit close settlement. The climate varies from tropical to alpine, with very limited

rainfall in the deserts in the center of Australia.

I Population Characteristics

The country’s population in 1992 was 17.4 million (17). The

population is highly urbanized; 85 percent of Australians live in

urban areas, and 65 percent live in the six state capitals. The main

concentration is in the southeast, predominantly in the coastal

zone. The crude fertility rate is 15.4 births per 1,000 population.

Since the establishment of New South Wales as a British Colony

in 1788, Australia’s population growth has been dominated by

European settlement, with immigration from Asian countries becoming more significant in recent years. Aborigines and Torres

Strait Islanders (descendants of the country’s inhabitants prior to

European settlement) make up 1.4 percent of the population.

 Government and Political Structure

The current political structure follows the federation of the former colonies into the commonwealth in 1901 and the basis for

government is set out in the Constitution. Legislative power of

the commonwealth is vested in a Parliament consisting of the

Queen, a Senate, and a House of Representatives. The system of

government follows the Westminster system; Australia’s Parlia- 19

ment was modeled on the six state Parliaments, which were in-
20 I Health Care Technology and Its Assessment in Eight Countries

turn modeled on the British House of Commons.

Parliaments of all states except Queensland are bicameral. The two major territories in the country-the Northern Territory and the Australian

Capital Territory-are self-governing and unicameral.

The relative powers of the commonwealth and

states have evolved considerably since federation

through “cooperative federalism” and interpretations of the Constitution by the High Court of

Australia (96). In its development of governmental relationships through the High Court, Australia has followed a pattern that is closer to the

United States than to the British experience; many

features of the commonwealth Constitution are

based on the U.S. Constitution.

 The Economy

Primary production plays an important role in

Australia’s economy, and the country is a major

exporter of food and minerals. The Gross Domestic Product (GDP) in 1991/92] was $386 billion,2

and the average annual growth rate of the GDP

was 3.4 percent from 1981 to 1990, with declining

or lower growth since then.

Japan is Australia’s major trading partner, and

trade links with other Asian countries are

strengthening. In 1991/92, the value of exported

goods and services was $68.8 billion, of which 23

percent was composed of agricultural and related

products and 57 percent of nonrural exports (3).

Manufactured goods constituted 55 percent of exports, of which 14 percent comprised food, beverages, and tobacco; 21 percent, basic metal

products; and 8 percent, machinery and equipment. Foreign exchange earnings from tourism totaled $7.2 billion. Imports are dominated by

manufactured goods.

HEALTH STATUS OF THE POPULATION

The marked decline in death rates in Australia

since the late 1960s continued up to 1990 (13).

Life expectancy at birth increased, and the difference in life expectancy between males and females narrowed slightly to 6.1 years. The life

expectancy for females was 80 years; for males,

73.9 years (in 1990).

These trends largely reflect declines in death

rates from diseases of the circulatory system. This

group of diseases remains the leading cause of

death, however, and was responsible for 45 percent of all deaths in 1990. Death rates for injuries

also continued to decline steadily. Deaths and incidence rates for cancers, responsible for 26 percent of deaths in 1990, have been steady for some

years. In 1990 the infant mortality rate was 8.2 per

1,000 live births (13).

In 1988 there was slightly more than one hospital admission for every five people. For males the

highest admission rate was for the category of

“diseases of the digestive system,” followed by

“injury and poisoning.” Complications of pregnancy and childbirth were the leading cause for

admission for females, followed by diseases of the

genito-urinary system. For children up to 14 years

old, the leading causes were diseases of the respiratory system, injury and poisoning, and diseases

of the digestive system. For the older age groups

(65 years and over), diseases of the circulatory

system, neoplasms, and diseases of the digestive

and respiratory systems were the most common

reasons for hospitalization (13).

According to the 1989/90 health survey conducted by the Australian Bureau of Statistics

(ABS), 30 percent of males and 29 percent of females aged 18 or over reported excellent health

status, with a further 50 percent considering their

health good; only 20 percent of males and 21 percent of females reported their health status as fair

or poor (2). Sixty-four percent of males and 60

percent of females reported one or more long-term

health conditions—most commonly eye sight disorders, arthritis, hay fever, back trouble, asthma,

hypertension, deafness and eczema or dermatitis.

1 1991/92 (and similar references to years) refer to the Australian fiscal year, which runs from July 1 through June 30.

2 Dollar figures in this paper are Australia dollars. In early 1994, the value of the Australian dollar was about $USO.7.
Chapter 2 Health Care Technology in Australia 121

In 1988 one or more disabilities were reported by

16 percent of Australians, with 13 percent reporting being handicapped in some way by their disability (13). Most frequently, disabling conditions

were those of the musculoskeletal system and

connective tissue, hearing loss, and conditions of

the circulatory system.

Some of Australia’s major health concerns are

common to those in other developed countries, including the major causes of illness and death—

heart disease, stroke, and cancer. Efforts have

been made through health promotion strategies to

reduce the prevalence of risk factors for those diseases. A recent estimate of the cost of diet-related

disease is $3.6 billion a year, with premature

deaths due to poor diet contributing 36,600 potential years of life lost in 1989 (27).

Various concerns regarding women’s health are

being addressed through a series of initiatives, including cancer screening programs and strategies

to manage osteoporosis. Substantial government

programs have been put in place to assist the prevention and treatment of HIV infection.

Some problems that are more specific to Australia include high rates of skin cancer, including

malignant melanoma (associated with exposure to

high levels of sunlight) and asthma. Asthma

deaths in Australia have continued to increase,

with mortality rates higher than those in England

and Wales, Canada, and the United States (103).

The reasons for this high prevalence remain uncertain (91 ).

Like other countries, Australia has experienced

differentials in health status that are strongly

linked to employment and socioeconomic status.

Amongst employed males, those whose occupations are classified as professional or technical

have the lowest death rate, whereas those in occupations classified as transport/communications

have the highest—with a differential of 87 percent. Most major causes of death show strong occupational linkages. In addition, the numbers of

serious chronic and recent illnesses and average

days of reduced activity reported by men and

women rise as family income decreases (13).

There are also concerns regarding the health status

of certain migrant groups and their use of health

services—particularly migrants with significant

cultural differences from most Australians and

those with poor English skills.

Yet another concern is the very large differential between the health of Aborigines and Torres

Strait Islanders and that of other Australians. Aboriginal health has improved over the last two decades but remains substantially worse than that of

other Australians. Overall life expectancy at birth

is 15 to 17 years less than that for the total Australian population. Considerably higher mortality

levels are experienced by young and middle-aged

adults, and the infant mortality rate is three times

that for all Australians. Diseases of the respiratory

system, complications of pregnancy and childbirth, and injury and poisoning have been the most

frequent causes of hospitalization for Aborigines.

THE AUSTRALIAN HEALTH CARE

SYSTEM

 Organization and Funding

The health care system in Australia is pluralistic,

complex, and only loosely organized (13). It involves all levels of government as well as public

and private providers. Government has been playing an increasing role in financing health services,

but most medical and dental care and some other

professional services are provided by private practitioners on a fee-for-service basis.

After an amendment of the Constitution in

1946, the commonwealth was empowered to

make laws on pharmaceutical, hospital, and sickness benefits and on medical and dental services.

These powers and the extension of conditional

specific-purpose grants under section 96 of the

Constitution have enabled the commonwealth to

expand its role in the health care system. The commonwealth government is primarily concerned

with funding programs and the development of

broad policies. It influences policymaking and

health services through financial arrangements

with state and territory governments, provision of

benefits and grants, and regulation of health insurance. State and territory governments are responsible for providing most health services, including

public hospital systems, mental health services.
22 I Health Care Technology and Its Assessment in Eight Countries

public health regulation, and licensing. The main

responsibilities of local governments are in environmental control and a range of personal, preventive, and home care services.

Since 1956 the commonwealth has introduced

benefits schemes covering medical, pharmaceutical, hospital, and nursing home services funded

through government budgets. Many other programs, including health promotion, control of alcohol and drug abuse, and the campaign against

AIDS, have involved conditional grants to the

states and territories. A universal health insurance

plan—Medicare—has been in operation since

1984, administered by the commonwealth government.

The structures of the various commonwealth,

state, and territory health authorities have undergone frequent changes. At the commonwealth level, the Department of Health became the

Department of Community Services and Health in

1987 and subsequently expanded further to include housing and then local government. At the

end of 1993, the name of the agency changed to

the Department of Human Services and Health

(DHSH)(used throughout this chapter for both the

current department and its predecessors). A separate statutory authority, the Health Insurance

Commission (HIC), administers the Medicare

program of universal health insurance and the

Pharmaceutical Benefits Scheme.

At the state and territory level, some jurisdictions have combined health and community services functions. The momentum has been toward

creating central agencies that delegate responsibilities in varying degrees to regional or area authorities (13). Because of each state’s separate

political development and the significant distances between major population centers, state

governments have tended to take distinctive approaches to the provision and support of health

care technologies (50). Differences between the

states reflect varying philosophies on the level and

organization of hospital and other services, population distribution, and development of centers of

excellence.

In 1991/92, health care expenditure in Australia was $33.2 billion, an average of $1,900 per person (18). The commonwealth government

provided $13.3 billion; state and local governments, $8.1 billion; and the private sector, $9.5

billion. Since 1984/85, the proportion of total expenditure funded by governments has declined

from 72 to 68 percent, with the private sector proportion rising correspondingly.

The government contribution is funded from

general taxation revenues and a Medicare levy on

taxable incomes. General distribution of funds

from the commonwealth to the states and territories occurs through financial assistance grants

whose amounts are determined by the Commonwealth Grants Commission. The states decide the

proportion of those grants that are allocated to

health services. Hospital funding grants, which

totaled $3.9 billion in 1992/93, are the main form

of direct commonwealth assistance to the states

and territories for health purposes (39).

For each health care technology included on the

Medical Benefits Schedule, Medicare reimburses

a proportion of the cost. If a technology is not included on the schedule, costs are typicall y paid by

the patient; private insurance coverage is relatively limited. (For some high-cost technologies,

funding has been provided through government

grants with very limited private sector involvement.) Availability of Medicare benefits often has

a major effect on a particular technology’s diffusion. Once a technology is on the Medical Benefits Schedule, private providers are more likely to

obtain it, knowing that payment for its use will be

covered by insurance.

Capital grants that fund the acquisition of highcost technologies are a means for government to

achieve controlled introduction and distribution

of health care technologies, which have remained

largely in the public sector; to some extent this has

also applied to lower-unit-cost technologies within the public hospital system, where the allocation

of resources (including additional commonwealth

grants) is determined by the state governments.
Chapter 2 Health Care Technology in Australia 123

 Medical Research and Policy

Coordination

Coordination of medical research at a national level is largely the responsibility of the National

Health and Medical Research Council (NHMRC).

Its principal committees are concerned with medical research, health care, public health, public

health research and development, and health ethics. The Council, which obtains funding through

the federal budget, is the major funding source for

medical research in Australia.

In 1991/92 the NHMRC provided $105 million

in basic research funding through its Medical Research Committee, including $67 million in project and program grants and nearly $18 million in

block grants to research institutes. About $5 million was provided for projects through the Council’s Public Health Research and Development

Committee.

Other research, particularly related to health

services and health promotion, is supported by

DHSH. Some states and the Northern Territory

provide infrastructural support for medical research institutes established in association with

universities and teaching hospitals. In some cases

(notably in Victoria), revenue from tobacco taxes

has been used to support health research and

health promotion activities.

There have been relatively few attempts to

channel research toward the development of new

or modified health care technologies. The

NHMRC’s funding tends to support basic research projects in particular areas; specific downstream products are relatively uncommon. The

NHMRC also channels research funds to defined

areas of public health need (e.g., research on asthma). Evaluation research (through requests for

proposals on specific topics) is also funded by

NHMRC and DHSH.

Some research on potential commercial products has been supported by the commonwealth’s

Department of Industry, Technology and Regional Development. Many of its programs have, however, been directed toward assessing specific

proposals rather than focusing research on particular types of technology. An interesting recent initiative has been the development of cooperative

research centers (CRCS) in various fields of science and technology. A CRC, typically a consortium of research and commercial agencies,

undertakes basic and applied research with a view

to developing commercial products; matching

funds are provided by the commonwealth government. Some of the CRCs cover areas of health

care, including eye research and technology, insulin and cellular growth factors, vaccine technology, cardiac technology, tissue growth and repair,

and cochlear implant, speech, and hearing research.

Responsibility for the development of national

health statistics lies largely with the Australian

Institute of Health and Welfare (AIHW), the ABS,

Worksafe Australia, and the DHSH. The first three

are statutory bodies and their functions, responsibilities, and constraints are defined by their enabling legislation.

One mechanism for Australian governments to

discuss matters of mutual interest concerning

health policies and programs is provided by the

Australian Health Ministers’ Conference

(AHMC) and its advisory body, the Australian

Health Ministers’ Advisory Council (AHMAC).

AHMAC includes commonwealth, state, and territory health ministers; New Zealand and Papua

New Guinea health ministers attend meetings as

observers. AHMAC consists of the heads of Australian health authorities and the chair of the

NHMRC. It is concerned with health services

coordination across the nation. Some of its standing committees deal with organ registries and

donation, women’s health, and communicable

diseases. Recently, additional coordination has

been achieved through joint meetings with the

Standing Committee of Social Welfare Administrators.

 Health Expenditures and Health

Services

In real terms, health expenditures are continuing

to grow at a relatively steady rate. As a proportion

of GDP, health expenditure in 1991/92 was 8.6

percent; the increase from the previous year’s proportion of 8.2 percent was largely the result of low
24 I Health Care Technology and Its Assessment in Eight Countries

growth in real GDP during the recession ( 17). For

the six years from 1984/85 onwards, health expenditure as a proportion of GDP was almost constant

at around 7.8 percent.

The largest component of recurrent health expenditure (43 percent) is attributed to hospitals.

Most personal health care is paid for through

Medicare, and all residents of Australia (except

foreign diplomats and dependents) are eligible for

Medicare benefits. The amounts that a patient can

claim for general practitioner services are set at 85

percent of the schedule fee for each item on the

benefits schedule. Diagnostic services entail higher out-of-pocket expenses for patients.

Doctors are not obliged to abide by schedule

fees, but if they bill the Health Insurance Commission directly for a service, the amount payable is

the Medicare benefit and the patient is not required to pay any additional amount. The proportion of all services direct billed in this way

increased from 45 percent in 1984/85 to 60 percent in 1990/91 (13).

Agreements among governments enable all patients covered by Medicare to obtain free care at

public hospitals from appointed doctors. Private

insurance can be purchased to cover the charges of

private hospitals and for private status in public

hospitals. Private insurance funds also sell coverage for services not covered by Medicare (particularly private dentistry, physiotherapy, chiropractic

services, and appliances) and for prescribed medicines not covered by pharmaceutical benefits.

For private patients in hospitals, the Medicare

benefit is 75 percent of the schedule fee, and the

gap between the benefits obtainable by the patients and the fees charged is insurable. In other

circumstances, the gaps between fees and the

amount that can be claimed by patients cannot be

covered by private insurance. Patients who receive social security are not usually required to

pay the gap between schedule fees and Medicare

benefits. A safety-net “threshold” above which

full schedule fees are reimbursed applies to all patients.

Pharmaceutical benefits are provided for prescribed items purchased at retail pharmacies;

items are listed on a schedule. Unsubsidized prescribed items can also be purchased in pharmacies, and many drugs are available without a

prescription. When listed prescribed items are

supplied, the pharmacist recoups the cost through

a patient contribution and a commonwealth subsidy. Safety-net arrangements limit the amount to

be paid by a patient in any calendar year.

In 1990/91, the total cost of drugs was about

$1.8 billion. This included $985 million through

the Pharmaceutical Benefits Scheme (PBS) and

other commonwealth programs, $127 million for

private prescriptions, and $200 million for hospital drug use (13).

Some tension exists between the commonwealth policies and programs and those of the

states and territories. Areas of debate include the

level of grant funding to be provided by the commonwealth for state-operated programs and

whether certain services provided through state

institutions are reimbursable under Medicare (and

therefore a charge on the commonwealth). The

AHMAC has helped resolve some of these difficulties, but negotiations on the funding of services

and division of responsibilities can still be protracted. Tension also exists between health authorities generally and medical and other health care

professions regarding the degree of support provided through Medicare and other mechanisms

for particular services and technologies. A major

focus of debate is the perceived pressure on the

public hospital system because of the limited

availability of certain technologies.

 Proposals for Change

In recent years the commonwealth, states, and territories and the private sector have collaborated to

improve hospital information and financial systems, hence to increase the effective use of hospital resources. This collaboration has entailed the

development of “casemix systems.” A Casemix

Development Program, introduced in 1988, provided approximately $30 million in funding over

five years (13). Activities funded to date have

been directed toward developing patient record information systems in hospitals, examining ways

in which different types of patients can be classi-
Chapter 2 Health Care Technology in Australia 125

fled in casemix groups, developing suitable computer software, improving the understanding of

relative costs of treating different types of patients

in hospitals (diagnosis-related group cost

weights), and using casemix information to examine the appropriateness and quality of hospital

care. The health ministers agreed in 1992 that the

adoption of uniform national casemix classifications and of cost and service weights should be addressed so as to advance structural reforms within

the Australian health care system.

In 1991 the commonwealth government put in

place a national health strategy. Over a two-year

period the strategy was intended to focus on institutional, community, and personal health services

primarily concerned with treating and caring for

the ill, and also to consider activities that foster

good health (66). The strategy project released a

series of about 20 papers on a wide range of issues;

their substance and recommendations have provided input for further consideration of changes to

the health care system.

CONTROLLING HEALTH CARE

TECHNOLOGY

The introduction and diffusion of health care

technologies in Australia is determined by a complex interaction of market forces, public funding,

and regulation (12). Nongovernmental parties, including professional groups, equipment suppliers, consumer organizations, third-party payers,

local service administrations, and medical specialists all exert significant influence, and the

introduction of a particular technology may not always be consistent with health care priorities. (For

example, the establishment of laser comeal

sculpting services was a result of decisions made

by individual specialists without the involvement

of health policy makers.) In some areas, such as the

introduction of pharmaceuticals, there have been

strong legislative provisions and regulatory control. More common] y, however, the major method

of control is financial.

 Regulation of Pharmaceuticals

Major changes to the way drugs are regulated have

been introduced in the 1990s, updating a system

developed largely in the 1970s. The first comprehensive program for appraising the safety and efficacy of pharmaceuticals was developed by the

commonwealth during the early 1970s, with some

additional regulatory measures imposed by the

states of New South Wales and Victoria. The federal controls applied to imported pharmaceuticals

and to products registered under the PBS. For

these categories of product, the Therapeutic

Goods Act and the Customs (Prohibited Imports)

Regulations could be applied, requiring assessment of safety and efficacy (compliance with label

claim).

Until recently, much weaker controls existed

for pharmaceuticals manufactured in Australia

that were not registered under the PBS, including

over-the-counter preparations. Control of these

was to some extent effected by state regulations,

which included provisions for joint commonwealth-state inspections of manufacturing premises. The control of locally manufactured products

has now been strengthened by an amendment to

the Therapeutic Goods Act.

The approach to evaluating new products paralleled that used by the United States and Sweden.

Pharmaceuticals were evaluated in accordance

with a New Drug Formulation document developed by the commonwealth; chemistry and quality control, animal and human safety, and efficacy

for each preparation were to be described by

manufacturers. Following a detailed assessment

by the DHSH, which included some chemical and

pharmacological testing of new products, pharmaceuticals that met the evaluation requirements

were certified for use by the Austral i an Drug Evaluation Committee (ADEC). An Adverse Drug

Reactions Advisory Committee coordinated postmarketing surveillance.

Long-standing concerns within the pharmaceutical industry about the slowness of the evaluation
26 I Health Care Technology and Its Assessment in Eight Counfries

procedure generated pressure for streamlining.

This pressure was increased by such issues as the

perceived needfor’’fasttracking” of approvals for

newdrugs fortreatingAIDS. The pharmaceutical

industry had also expressed concern about the rate

of government reimbursement available through

the PBS and had suggested that commonwealth

policies were unduly restrictive on industry in the

prices they could charge for drugs covered by the

PBS.

These concerns eventually led to an inquiry regarding the drug evaluation system (20), including extensive informal discussion and bargaining

as well as formal hearings (29). An important issue identified by the inquiry was a perceived overemphasis on safety and efficacy over timeliness.

Recommendations included the adoption of strict

target deadlines for evaluation and easier access to

experimental drugs. The review also suggested

greater use of evaluation reports from other countries, building on programs that had already been

started in Sweden and Canada.

Proposed administrative reforms included reduction of “dead time” while drug applications

were pending and a decrease in the need to reformat data by accepting European Community data

formats. It was further recommended that routine

evaluation of all individual patient data be discontinued to reduce the costs to industry and the Department and to facilitate the use of evaluations

undertaken abroad. Preparation of product information after marketing approval was to be

speeded up. The ADEC was to cease its involvement with more routine matters and to return to

providing expert advice on difficult clinical issues

and considering appeals of rejected applications.

The findings of the inquiry were accepted by the

government and have led to substantial changes in

the drug evaluation program.

Availability of drugs subsidized by the commonwealth under the PBS is achieved through the

Pharmaceutical Benefits Advisory Committee

(PBAC), which makes recommendations on

which products should be listed on the schedule.

The PBAC is required to take into account the

cost-effectiveness of drugs when making such

recommendations. Since 1993, industry applications for listing under the PBS have had to include

formal evidence of cost- effectiveness (34). The

guidelines for industry to follow in preparing their

applications are intended to be flexible and pragmatic while remaining linked to theoretical

foundations. They do, however, pose challenges

to industry and to government officials (31).

Some emerging issues are the shortage of analytical expertise, selection of comparative therapies,

degree of accuracy of estimates of incremental

health benefits, and consistency of levels of evidence (69).

Despite the control exercised by the commonwealth government over pharmaceuticals’ distribution and use, information about most aspects

of their use is poor ( 13). Information from DHSH

indicates that between 1980/8 1 and 1990/91, the

real price per prescription issued through pharmacies increased by 34 percent. Average expenditures per person on prescription drugs increased

by almost 240 percent—about twice the increase

in the Consumer Price Index. The number of prescriptions per person increased by 16 percent and

the price per prescription increased even more.

Much of the increase in prices was due to the

switch to newer, more costly drugs. Expenditures

on drugs by public hospitals have decreased since

the mid-1 980s, essentially through the transfer of

costs to the commonwealth (PBS) by reducing the

supply of drugs to patients on discharge.

I Regulation of Medical Devices

Systematic assessment of the safety and efficacy

of medical devices is less well developed than is

the program for pharmaceuticals. A formal process of evaluation of medical devices by DHSH

was implemented in the mid- 1980s (under the

Therapeutic Goods Act). The most comprehensive component of this program has been the establishment of a national register. Companies

marketing medical devices in Australia must register their name and description with DHSH,

which triggers an appraisal of product labeling. A

Therapeutic Devices Evaluation Committee appointed by the commonwealth minister provides
Chapter 2 Health Care Technology in Australia 127

recommendations on the import, export, and production of devices.

Beyond this, more detailed evaluation is undertaken for a limited number of categories of device

that are prescribed by regulation. This list now extends to drug infusion systems, cardiac valve

prostheses, cardiac pacemakers and accessories,

intrauterine devices, intraocular lenses, intraocular viscoelastic fluids, and biomaterials of human

and animal origin. For such products, departmental evaluations look at evidence of safety, efficacy,

and the manufacturer’s quality control process.

Because such appraisals are resource-intensive,

DHSH has moved to establish priorities to take account of major areas of need (22).

 Financial Controls for Health Care

Technology

As noted earlier, the main avenues open to governments for controlling the use of health care

technologies (including procedures) have been financial-either through budgets for hospitals and

clinic services (at the state level), through rate-setting for procedures funded through the Medicare

and PBS programs, or through the allocation of

grants for specific technologies or services. It is

generally recognized that these are crude and

imperfect ways of influencing the diffusion of

technology and that control by regulation can only

be partial (1 2).

Inclusion of items on the Medical Benefits

Schedule is dominant in any consideration of payment for medical services, including technologies. Toward the end of the 1980s, 75 percent of all

medical services in Australia were eligible for

Medicare benefits, which covered a high proportion of the total costs. A further 18 percent of all

medical services were provided to in-patients in

public and repatriation general (i.e., Veterans’)

hospitals; the remainder was composed of veterans’ services, workers’ compensation, public laboratories, and community services (13).

Given the prominence of the Medicare program

in recent years, the listing of new technologies on

the Medical Benefits Schedule and reimbursement policies for technologies already in place are

of major significance. Listing on the schedule is

gained after submissions from professional

groups to DHSH, which considers in detail both

cost and efficacy data.

To date there has been no systematic linking of

Medicare Benefits Schedule appraisals with

health care technology assessment. Similarly, reviews of older technologies on the schedule have

not drawn systematically on data from Australian

assessments. From time to time recommendations

in reviews of particular technologies by Australian assessment bodies have influenced subsequent decisions for listing. For example,

computed visual perimetry was included on the

schedule following an assessment (76), and reimbursement for use of a portable fluoroscope was

not supported after the national assessment body

expressed concerns about it (75).

Variations in technology use by different practitioners have concerned the commonwealth government for many years. Although there will

always be some variation among medical practitioners, some appear to be overusing services as

judged by data obtained by the HIC (which is responsible for administering the payment of Medicare Benefits). Pursuit of such practitioners

through the courts has had limited success. The

HIC has more recently begun providing feedback

to practitioners whose level of use of technologies

is considerably above average. This appears to be

having some success as an educational process, although the long-term effects remain to be seen.

Governments can control the introduction of

certain technologies that have high capital costs

by funding their purchase in limited numbers.

Commonly, costs are shared by the commonwealth and one or more state governments. Such

approaches appear to be successful in the short to

medium term and have been undertaken, for example, in the introduction of renal lithotripsy services, where initial restriction of government

support to two sites prevented early diffusion of

the technology (8). Such approaches seem to be

essentially stopgap arrangements prior to the wider diffusion of technologies under Medicare funding, through health program grants from the
28 I Health Care Technology and Its Assessment in Eight Countries

commonwealth, or public hospital funding provided by the states.

9 Regulation of the Placement of Services

Regulation of the placement of services has generally been the responsibility of state governments

and has typically been associated with some financial control over public sector facilities. States

have at times followed the suggestions and recommendations offered by guidelines on specialty services but often have reacted more to local

pressures and imperatives. The placement of very

specialized services has in recent years been directed by a policy on nationally funded centers

adopted by AHMAC (discussed later).

Some control over the use of medical devices is

exerted at the state level, particularly under radiation health legislation, which is used by some

states to license various sites to operate technology such as radiotherapy equipment. In Victoria the

introduction of certain new technologies was effectively controlled for several years by certificate

of need (CON) provisions under the State Health

(Radiation Safety) Act. State approval was required before certain equipment could be installed

and operated. This legislation was applied to the

introduction of new diagnostic scanners (particularly computed tomography (CT) and magnetic

resonance imaging (MRI)) and to restrict lithotripsy introduction. No other state has adopted

CON legislation and the Victorian use of this approach now appears to be at an end.

The background to the Victorian initiative has

been described by Duckett (33), who commented

that at that time, commonwealth and state incentives worked in opposite directions. For CT scanning, for example, commonwealth incentives for

both capital and recurrent expenditure were covered by the Medical Benefits Schedule fee, thereby encouraging installation of scanners (as all

costs were covered). State incentives were an attempt to regulate CT scanner acquisition.

 Quality Control and Accreditation

Quality control requirements for health care

technology services funded by governments are

not mandatory in most areas, and standards and

practice in this area are still evolving. A survey of

hospitals in 1987 found that hospital quality assurance programs were embryonic and that although peer review was fairly common, its

effectiveness had not been assessed (90).

A significant force in hospital and other institutional quality assurance has been the Australian

Council on Health Care Standards (ACHS), established in 1974 by the Australian Hospital Association and the Australian Medical Association as an

independent body to promote and encourage the

efficient provision of best quality health care. It

develops and implements national standards of

care through an accreditation program in cooperation with professional bodies.

ACHS policy requires that health care facilities

evaluate the care and services they provide in order to be eligible for full accreditation. This formal evaluation involves medical, nursing, allied

health, and administrative staff. If granted, accreditation may be for one or three years, depending on the degree of compliance with guidelines.

As of April 1993,379 hospitals were accredited

by ACHS, accounting for 73 percent of private

hospital beds and 59 percent of public hospital

beds in all states and territories. Accreditation of

hospitals is perceived as a useful means of raising

and maintaining standards, but it does not necessarily reflect an institution’s access to funding for

the use of a particular technology or service.

ACHS is in an early stage of widening its activities to cover extended care and day procedure facilities. Results of follow-up surveys published by

ACHS suggest that accredited hospitals are active

in responding to recommendations made by surveyors. Some areas, notably medical record content, continue to be resistant to change, however.

In 1989 ACHS, in collaboration with medical

colleges and other professional bodies, began the

Care Evaluation Program, which involves the development of objective clinical indicators that reflect the process and outcomes of patient care.

Development of the indicators stemmed in part

from the medical colleges’ requirement for a

greater clinical component in the accreditation

process and ACHS’ wish to have greater clinical
Chapter 2 Health Care Technology in Australia 129

involvement in quality assurance and a more defined role for clinician surveyors. National standards are to be established that are specific for

disciplines and facilities but that account for casemix and illness severity. Hospital-wide medical

indicators have been developed by the Royal Australian College of Medical Administrators in conjunction with ACHS. Their use became a formal

requirement for accreditation in 1993, and they

are being phased in gradually.

The ACHS programs have given Australia a

coherent framework for improving the quality of

its health care institutions. However, even with

the Council’s effort, there are limits to what has

been achieved even for those hospitals that are accredited. Coverage of ACHS accreditation is far

from complete, and participation in the program is

not mandatory.

National pathology laboratory accreditation

came into being with amendments to the Federal

National Health Act. Accreditation is awarded on

the basis of laboratory inspections by the National

Association of Testing Authorities using standards developed by the National Pathology Accreditation Advisory Council. Only those

premises that provide pathology services to be reimbursed through Medicare are obliged to become accredited (outside of Victoria), but in

practice, a large majority of laboratories are accredited, including all significant public sector facilities. One of the requirements for accreditation

is that laboratories participate in appropriate quality assurance programs, typically those offered by

the Royal College of Pathologists of Australasia

and the Australian Association of Clinical Biochemists. Pathology laboratory accreditation has

generally been regarded as successful in raising

the standards of pathology services. While accreditation has had no obvious effect on levels of use of

pathology testing, it has, in association with licensing costs, been one factor in restricting to a

very low level all norlaboratory pathology use in

Australia.

HEALTH CARE TECHNOLOGY

ASSESSMENT

Health care technology assessment in Australia is

undertaken by university groups, private consultants, and health authorities, but its major direction for over a decade has been set by national

advisory bodies established by governments with

secretariats provided by health authorities. Assessments from other sources have at times been

influential, but the work of the national committees has had the most obvious effects on health authorities’ opinions about health care technologies

and on the formulation of policy.

Interest in health care technology assessment

outside the context of the regulatory appraisal of

pharmaceuticals developed during the late 1970s.

A number of concerns and options were addressed

in the report of the Committee on Applications

and Costs of Modem Technology in Medical

Practice (97), which was established to address

the increasing costs of medical investigations and

patient care. It considered various effects of technological developments on medical benefits and

public hospital costs, with some emphasis on

diagnostic methods that were then emerging as a

significant area of concern. Certain key issues relating to technology assessment were clearly identified in this committee’s report:

Modem technology has increased the diagnostic capability and therapeutic effectiveness

of doctors. It has made significant contributions

to improvements in . . . health and . . . quality of

life . . . . However, it has been suggested that the

extra resources consumed through further increases in the use of modem technology may

have only marginal benefits in terms of further

improvements in health . . . . Both [doctors and

patients] now tend to be less willing to accept

diagnoses that have been arrived at solely on the

basis of clinical examinations.

The report viewed technology assessment as

one of several long-term measures to improve the

effectiveness of technological services in the
30 I Health Care Technology and Its Assessment in Eight Countries

Australian Health Technology Advisory Committee (AHTAC)

Identify, gather data on, and assess new and emerging health technologies and highly specialized services, Including

their safety, efficacy, effectiveness, cost, equity, accessibility, and social impact in the context of the Australian

health care system.

Assess and develop guidelines for established health technologies and highly specialized services in light of their

history of use.

Determine methods of and priorities for assessment of health technologies.

Advise the Australian Health Minister’s Advisory Council (AHMAC) on requests relating to the assessment of

technologies in the context of AHMAC’S nationally funded centers policy,

National Health Technology Advisory Panel (NHTAP)

Identify, gather data on and, where appropriate, assess new and emerging health technologies, including their safety,

efficacy, effectiveness, cost, accessibility, and social impact In the context of the Australian health care system.

Review and assess established health technologies in light of their history of use,

Determine methods of and priorities for assessment of health technologies, and issue guidelines on these topics.

Make recommendations on appropriate areas of research into health technologies.

Make recommendations on educational measures for promoting the appropriate use of health technologies,

AHMAC Superspecialty Services Subcommittee (SSS)

Develop guidelines for superspecialty services, defined as highly specialized services for relatively rare diseases or

which are unusually complex and costly. Guidelines should include the potential for integration, coordination, and

rationalization of superspecialty services. Guidelines are submitted through AHMAC to the Australian Health

Ministers’ Conference for approval.

SOURCE D M Halley, 1994

health care system. The committee recommended

that an expert national panel be established to advise on the scope of new technology; whether

medical benefits should be paid for its use and, if

so, whether it should be restricted to specific locations; and likely changes in patterns of use of related technology.

D The Formation and Operation of

National Advisory Bodies

A National Health Technology Advisory Panel

(NHTAP) was established by the commonwealth

in mid-1982 (table 2-1). As envisaged by the Sax

Committee, its membership balanced various interests and included representatives of the medical

profession, hospitals, the health insurance industry, and manufacturing, as well as technical specialists. The DHSH chaired and provided a

secretariat for the Panel, which reported to the federal minister for health and had broad terms of reference.

The Panel selected MR1 as its first topic and

produced its first report in 1983. This influential

assessment was a major input to policy on MRI.

The MRI report established a process used by the

Panel in later work: detailed consideration of

available literature plus consultation with professional bodies, manufacturers, and health authorities, culminating in a synthesis of available

information. Particular focuses were on clinical,

technical, safety, and utilization data (cost data

were also included but without duplicating activities undertaken by the DHSH). The Panel was also

involved in two major assessments involving primary data collection: the MRI study that followed

from the first report and one on dry chemistry

pathology analyzers. Both were coordinated by

technical committees that included representatives from appropriate professional bodies.

The Panel produced numerous assessment reports as administrative arrangements evolved.
Chapter 2 Health Care Technology in Australia 131

Year Topic Originator of request ——..—— ..——.

1987-90

1987

1988

1983-90 MRI, MR spectroscopy

1984 Medical Cycloton Facilities

1985 Lasers in medicine

1985, 1987 Renal extracorporeal shock wave Iithotripsy

1986, 1989 Bone mineral assessment

1986 Digital subtraction angiography

Vestibular function testing

Surgical stapling

Lasers in gynecology

Oxygen concentrators

Nonlaboratory pathology testing

Endoscopy

Digital radiology

CT scanning

Portable fluoroscope

Screening Mammography

Billary extracorporeal shock wave Iithotripsy

Dynamometry for low back pain

1989 Coronary angioplasty

High energy radiotherapy equipment

Computerized perimetry

1990 Extracorporeal Membrane Oxygenation

Cerebrovascular embolizatlon

Positron emission tomography

NHTAP

Federal Minister

NHMRC

DHSH

DHSH

DHSH

DHSH

Industry

Professional body

NHTAP

AHMAC

Professional body

NHTAP

NHTAP

DHSH

AHMAC

NHTAP

Accident Compensation Org

NHTAP

State Health Authority

DHSH

AH MAC

AHMAC

DHSH — ——— —.—.————

KEY AHMAC = Australian Health Mlnlsters Advisory Council, DHSH = Department of Human Serwces and Health, NHMRC = Nahonal Health and

Medical Research Council

SOURCE D M Halley, 1994

During 1987/88 support for the Panel was transferred to the Australian Institute of Health (AIH)

which had recently been created as a statutory authority. A review of NHTAP in 1988/89 endorsed

the concept of an impartial and independent Panel

and the continued operation of a health technology unit within the AIH (98). The unit’s primary

function would be to support the work of the Panel, but it also would conduct reviews of existing

and significant emerging technologies, act as a

reference center, and maintain a database, including primary data on health care technologies in

Australia. The Institute continued to provide research and secretariat support to the Panel until it

was subsumed by the Australian Health Technology Advisory Committee (AHTAC) in 1990.

NHTAP faced realities and problems common

to other medical and health technology assessment agencies (44). These include the time taken

to collect and analyze information and occasional

tensions with policy makers seeking prompt advice; difficulties in securing resources to support

data collection on a range of technologies; restrictions on time for meetings and the relatively few

technologies that could be considered in detail;

and the tendency to focus on “big-ticket” items.

NHTAP produced 41 reports covering the

technologies listed in table 2-2. The Panel secretariat undertook most of the research and drafting

tasks. The quality of the reports was enhanced by

an ongoing dialogue with health professional

groups and with industry; the Panel sometimes

was able to follow up on technologies after the initial report and provide updated advice.

In a number of assessments, resource allocation

was considered in some detail, although this did
32 I Health Care Technology and Its Assessment in Eight Countries

not always include economic analysis. The more

common approach undertaken by the Panel was to

include cost analyses without proceeding to full

economic evaluation. However, in these and other

reports, many of the concepts embedded in models of economic assessment of health care technologies were taken into account (32).

Health authorities were major targets for

NHTAP assessments—particularly DHSH with

respect to technologies that were potential candidates for funding through Medicare. About half

the referrals received by the Panel came from

health authorities, but in some cases NHTAP initiated work on its own to provide early warning of

potentially significant developments.

Although many of its recommendations were

concerned with the adoption of technology and

guidance on appropriate, phased introductions, in

various instances the Panel also offered suggestions to professional bodies on the appropriate use

of medical devices or procedures.

Another initiative in the early 1980s was the

creation by the AHMAC predecessor of a Superspecialty Services Subcommittee. It developed

guidelines for highly specialized services catering

to relatively rare diseases or those that entailed unusually costly or complex forms of treatment.

This initiative was motivated by increasing pressures on state health authorities to organize and

fund more complex services within their hospitals. The Subcommittee, which was composed of

commonwealth and state officials, relied on individual health departments to provide research

support as resources became available.

Aided by professional bodies and other centers

of expertise, the Subcommittee compiled information on the use, demand, distribution, and

appropriate operation of various health services.

Its publications provide general background descriptions of services followed by guidelines on

such issues as bed requirements, sizes of units,

geographic distribution, design of facilities,

equipment requirements, and relationships with

other services and staffing. The development of

these guidelines proved to be demanding. Needed

Year Topic

1982 Burn treatment

1983 Cardiac surgery

Level 3 neonatal intensive care

(updated 1990)

1985 Bone marrow transplant services

Genetic disorders

1987 Cancer treatment services

1988 Major plastic and reconstructive

surgery

1989 Acute spinal cord injury services

1990 Refractory epilepsy centers —

SOURCE D M Halley, 1994

data were hard to obtain, and there were problems

in achieving consensus on what were effectively

aset of standards for specialized health services

throughout the country (44).

The Subcommittee prepared nine guidelines

with one major update (table 2-3). Most of the

guidelines are valuable resource documents and

continue to be widely regarded, although their recommendations are not necessarily followed by all

jurisdictions.

 Current Structure of Assessment

Entities

In 1990 both the Panel and the Subcommittee

were subsumed by a new body, the Australian

Health Technology Advisory Committee (AHTAC) which was to report to the Health Care

Committee of the National Health and Medical

Research Council (NHMRC). This change was in

line with a move to establish stronger links between AHMAC and NHMRC and to involve

NHMRC more closely in advising health authorities on health services and technology.

Still in its early stages of development, AHTAC retains some of the characteristics of

NHTAP. Its membership provides a range of expertise and is drawn from diverse sectors. AHTAC

will be regarded as a source of advice to AH MAC
and DHSH on various matters, and may also receive requests for advice through the Health Care

Committee. AHTAC is tending to follow the

NHMRC practice of convening a working party

for each project.

AHTAC’S work to date has been dominated by

references on Nationally Funded Centers passed

to it by AHMAC. The Committee is also continuing with the Subcommittee’s work on guidelines

preparation, which seems likely to be a significant

ongoing function. Another likely undertaking is

the preparation of brief statements on technologies, particularly for patients and the general public; the Committee’s place within the NHMRC

structure may provide a particular advantage in

drawing on networks and achieving publicity. The

Committee’s reports are issued through the

NHMRC system, and all are endorsed by this

body (table 2-4 lists AHTAC’S publications to

date).

AIHW undertakes health technology assessments in addition to its work in support of

AHTAC, following the general directions recommended in the review of the earlier Panel. This

work includes assessments initiated by the Institute or requested by other agencies, including

DHSH; collation and publication of statistics on

health care technologies in Australia; and participation in collaborative work with hospitals and

other centers. (Assessments published by the

Institute are listed in table 2-5.) In addition, on behalf of AHMAC the Institute undertook a major

assessment project on screening for breast and

cervical cancer.

Following a project undertaken for DHSH, in

1991 the Institute started a series of emerging

technology briefs intended to provide prompt advice to health authorities and managers on new

medical devices and procedures that seemed likely to have a significant impact on the health care

system (table 2-6). There has been some collaboration with Canadian agencies in the preparation

of these briefs. Briefs on current issues dealing

with more established technologies have also

been developed.

In some cases assessments that have been undertaken by the Institute have formed the basis for

Chapter 2 Health Care Technology in Australia 133

Year

1991

1992

1993

1994

Topic

Consensus statement on clinical efficacy of

MRI

RenaI stone therapy

Liver transplantation programs

Statement on sleep disorders

Guidelines for renal dialysis and

transplantation

Liver transplantation programs--2nd review

Treatment of sleep apnea

Statement on laser corneal sculpting

Renal lithotripsy

Heart and lung transplantation programs

Low power lasers in medicine

Treatment options for benign prostatic

hyperplasia

Briefs (Nationally Funded Center Assessments)

“1 990 Alfred Hospital, Melbourne cardiac

transplantation unit

1991 Pediatric cardiac transplantation

Stereotactic radiosurgery

1992 Craniofacial surgery

Bone marrow transplantation using

unmatched donors

1993 Queensland cardiac transplantation service —

SOURCE D M Halley, 1994

subsequent evaluation by AHTAC or other groups.

For example, the statement on laser corneal

sculpting followed an emerging technology brief

and then a discussion paper by the Institute, which

were in turn followed up by AHTAC. In other

areas—for example, in a discussion paper on telemedicine (25)—the Institute has undertaken

broader reviews that have served as resource documents for health authorities and other interested

parties.

The National Center for Health Program Evaluation, which is partly funded through NHMRC

and is part of Monash University in Melbourne,

has had some involvement with health technology

assessment matters. Its work has included costutility analysis of treatments for biliary disease,

evaluation of whole body protein monitors, and

assessment of laser treatment of benign prostatic

hyperplasia.
34 I Health Care Technology and Its Assessment in Eight Countries

Year Short title Origin and use by advisory bodies

1991

1992

1993

1994

1989 Angioplasty and Other Percutaneous

Interventions

1990 Tinted Lenses in Reading Disability

Options for Stereotactic Radiosurgery

Screening Mammography Technology

Gadolinium Contrast Agents in MRI

Developments in PACS

Medical Thermography

Laparoscopic cholecystectomy

Implantable Cardiac Defibrillator

Biliary Lithotripsy (also 1992, 1993)

Boron Neutron Capture Therapy

Laser Corneal Sculpting

Assessing MRI in Australia

Lasers in Angioplasty

Minimal Access Surgery

Cochlear Implants

Peripheral Angioplasty

Products for Office Pathology Testing

Cardiac Imaging

Telemedicine

Lasers in Medicine

New Technologies for Cervical Cancer Screening

and Treatment

Treatment of Menorrhagia and Uterine Myomas

Treatment of Benign Prostatic Hyperplasia

Health Technology and the Older Person

Technologies for Incontinence

Social Impact of Echocardiography

Hip Prostheses

Minimal Access Surgery--Update

Intraoperative Radiotherapy

Laparoscopic Cholecystectomy in Canada and

Australia

Magnetic Resonance Imaging at the Knee

Pap Smear Examinations Under Medicare

Source material for NHTAP and SSS evaluations

Follow-up to preliminary work in DHSH

Source material for NHTAP and AHTAC

Referred from AHMAC committee

Referred from DHSH

Follow-up to NHTAP assessment

Follow-up to preliminary NHTAP work

AIH

AIH

Trial funded by Commonwealth and Victoria

Inquiry from NHMRC

Source material for AHTAC

Position paper on national assessment

AIH

Source material for AHTAC

Referred by industry

Suggested to NHTAP

Referred from DHSH

Interest from State authorities

AIHW

Follow-up of NHTAP review

Referred from DHSH

AIHW, source material for AHTAC

AIHW, source material for AHTAC

Australian Science and Technology Council

AIHW, source material for AHTAC

Study by La Trobe University/St. Vincent’s

Hospital, Melbourne

Source material for AHTAC

Referred from State health authority

Joint studies with CCOHTA

Follow-up from earlier AHTAC discussion

Referred from DHSH

SOURCE D M Halley, 1994

 Funding for Health Care Technology about $80,000, plus $90,000 provided by AHAssessments MAC for work related to Nationally Funded CenCore funding for the national advisory body ters, superspecialty services guidelines, and other

(NHTAP and now AHTAC) and AIHW has main- referrals from the Council. Direct salary-related

ly been provided via annual appropriations of the and administrative funding for the AIHW technol

ogy assessment function is roughly $400,000 per commonwealth’s health portfolio. The level of

funding has been about the same for some years. year.

In 1994AHTAC received direct annual funding of
Year Topic —..—

1991 Laser corneal sculpting

Radiofrequency catheter ablation

Cervical loop diathermy

New laparoscopic procedures

1992 Endovascular coronary stents

Helium lasers in corneal sculpting

Cardlomyoplasty

Collagen Implant therapy for treatment of

stress incontinence

Excimer lasers in coronary angloplasty

Technologies for treating benign prostatic

hyperplasia

Cerebral oximetry

Magnetoencephalography (MEG)

Cultured skin

Magnetic resonance anglography

Laparscopically assisted hysterectomy

Transurenthral Iithotnpsy

1993 Lasers in dentistry

Coronary atherectomy

Radiolabeled monocolonal antibodies in

diagnostic Imaging

Fall oposcopy

Focused extra corporeal pyrotherapy

Levonorgestrel IUD for menorrhagia

1994 Digital mammography

Dedicated MRI extremly scanners

Stereotactic Image-guided surgery

Health technology issues

1993 Carotid endarterectomy

Diagnostic hysteroscopy

Prostheses for total hip replacement

Implantable defibrillators

Hellcal CT scanners

Cholesterol screening and associated

Interventions —

SOURCE D M Hailey, 1994

In practice, other funding has generally become

available on a short-term basis for the national advisory body, and the Institute receives grants from

DHSH and other sources. In 1990,$200,000 was

made available by DHSH for specific small projects under the auspices of NHTAP, which were adChapter2 Health Care Technology in Australia 135

ministered by AIH. The Department continues to

provide evaluation funding for projects that are

broadly related to current policy—including, for

instance, support for a randomized trial of laparoscopic cholecystectomy, work by AHTAC on

minimal access surgery, and a review of technologies for cervical cancer screening undertaken by

AIHW.

In general, over the last decade the level of

funding for the health technology assessment provided some assurance of continuity, but it remains

at a modest level, limiting what can be achieved.

Additional resources would permit more detailed

economic studies, more consistent follow-up of

technologies after their initial evaluation, wider

coverage of technologies, and greater focus on patient perspectives.

 Impacts of Health Care Technology

Assessment

The early studies of MRI and dry chemistry

pathology testing (where local primary data

collection was being undertaken) and assessments

of medical cyclotrons and renal lithotripsy, all

were prompted by policy considerations and the

results were used in the decisionmaking process

(40,41).

Possible measures of impact and the conditions

for these to occur were described and applied to a

review of 24 technologies assessed by NHTAP

(43). The Panel’s reports appeared to have had a

significant influence in the short to medium term

for 11 of 20 technologies assessed through 1988;

major recommendations were accepted, and subsequent governmental or other action was taken.

Sixteen reports proved useful as source and educational materials, as judged by requests and literature citations. As an indirect indicator of impact,

there was a steady growth in the number of requests for reports, and some publications were

used in university courses.

The influence of Australian assessments of 10

health technologies (by NHTAP, AU-I and AHTAC) was discussed in more detail by Drummond

and coworkers (32), who felt that the assessments

met important criteria (e.g., whether evaluation

questions were clearly specified, alternatives ad-
36 I Health Care Technology and Its Assessment in Eight Countries

dressed, follow-up studies undertaken, and policy

and practice influenced). The evaluations were influential, although the impacts of some of them

had yet to be fully established given the interval

between receipt of advice and policy formulation.

As in other countries, the most obvious successes,

in terms of policy being informed by assessment,

have been linked to the possible introduction of a

technology. The evaluation mechanisms available

and their influence on the actual use of technologies become less certain after diffusion.

A further analysis noted that the impact of assessments by advisory bodies was greatest when

local primary data were collected and the technology was not yet available or had just been

introduced (42). The data generated by the various

assessments was important, but perhaps equally

significant was the commitment made by governments to support data collection in the first place.

Each of the assessed technologies was seen as significant in policy terms so that evaluation funding

was made available to hospitals and other institutions.

Assessments of eight technologies considered

under the Nationally Funded Centers policy faced

difficulties because of limited data and time for

analysis but were nonetheless very successful: almost all the recommendations were accepted by

AHMAC. In these cases the influence on policy is

more obvious and direct, given the relatively narrow focus (i.e., to fund or not fund from a particular pool of money under set criteria) and the clear

wish of health authorities for advice. Of 18 assessments undertaken by AIHW, five were used as input for subsequent NHTAP and AHTAC

evaluations, all but two seemed to provide significant source material, and eight appeared to significantly influence policy or further research.

A survey undertaken by AHTAC of government agencies and other recipients of assessment

reports showed that many considered the background information, the data on use, caseload, effectiveness, and cost, and the recommendations to

be generally useful. The background information

seemed of rather more immediate help to some

policy makers than the cost/economic analyses.

The scope of the assessments in most cases was

seen as generally relevant or (less often) very relevant; to some extent this probably reflected the

difficulty of capturing the immediate policy interest of the moment. Although the reports were seen

as generally timely by a most survey respondents,

only a small proportion thought they were “very

timely.”

The impact of health care technology assessment has been most readily visible in the decisions

of health authorities and other funding sources.

The effects on patterns of clinical practice is less

certain; they have probably been more limited, but

detailed studies have yet to be undertaken. The review of the impact of NHTAP assessments drew

attention to the probable increased acceptance by

professional bodies of the need for evaluation and

critical consideration of health technologies (43).

Changes to clinical practice maybe slow, however: some influences of health technology assessment will be felt only over the long term. The

further review of 10 technologies suggested that

in five cases, assessment had probably affected

clinical practice; it was too early to make such a

judgment for another two cases (32).

In some areas there maybe reluctance to accept

new evidence. An Australian randomized trial

was among several studies that demonstrated that

antenatal fetal heart rate monitoring had no detectable effect on mortality or morbidity in high-risk

cases (65). However, during the year after the trial

ended, use of the technology in the hospital increased 16-fold, and it extended to less and less

appropriate groups (64). This technology continues to be widely applied some years later.

A recent initiative of NHMRC has been the

formation of a Quality of Health Care Committee

that is responsible for preparing clinical practice

guidelines. Three guidelines currently under development cover treatment of breast cancer,

ischemic heart disease, and depression in adolescents. This approach offers the potential to

strengthen the impact of assessment by providing

a further channel for the results of individual evaluations.

The appraisals of impact indicate a need for improved dialogue among concerned parties, the desirability of timely advice, and the need for
Chapter 2 Health Care Technology in Australia 137

realistic linkages with the policy processes and

methods of practice. There is an unmet need for

systematic appraisal of a greater range of technologies and for follow-up after their introduction.

This in turn points to the need for a wider constituency in health care technology assessment, with

input from hospitals and other organizations.

Both NHTAP and AHTAC have involved clinicians (as well as other experts) in the assessment

process, both through consultation during development and through comment and debate on

drafts at the review stage. Public involvement in

the work of the national advisory bodies has so far

been limited, although NHTAP included a consumer representative; such representation is standard practice with NHMRC committees,

including AHTAC. If there are significant moves

toward organizing consensus conferences, a form

of assessment that has not been widely used in

Australia, public involvement may increase. Further development of advisory statements by AHTAC (making use of the NHMRC distribution

process) might also increase public involvement.

Health technology assessment is well established in Australia and has influenced health

policy. However, limitations on resources, the degree of coverage of technologies, and the extent to

which initial assessments can be followed up are

concerns that need addressing as technology assessment proceeds in Australia. It would also be

desirable to achieve better coordination of evaluation groups and to complement existing successful patterns of assessment with further use of more

formal methods, such as detailed cost-effectiveness studies and meta-analyses. Finally, greater

use could be made of health technology assessment by policy makers, health care providers, and

funders.

 Policies on Specific Technologies and

Pharmaceuticals

Nationally Funded Centers

In 1989, Australia’s health ministers agreed to a

policy supporting certain highly specialized or

high-cost technologies that typically only one or

two centers in the country might provide. This

policy, applied by AHMAC, is aimed at ensuring

access for all Australians to approved high-cost,

low-demand services and avoiding unnecessary

duplication. Support is provided on a relatively

short-term basis; renewal of funding is subject to a

review of the technology and of the centers that are

providing it. The expectation is that in many

cases, Nationally Funded Center status will be

discontinued as technologies diffuse further.

Support for Nationally Funded Centers is provided through a special fund created by a portion

of each state’s Medicare grant. The policy rests on

agreements reached between governments, rather

than on legislation. Proposals for funding are

made by individual states, with submissions prepared by the hospitals that intend to establish or

develop the technology. Most of the funding has

so far been applied to transplantation services.

Proposals for support under this policy are referred by AHMAC to AHTAC for evaluation

against two sets of criteria. The first set is designed to establish the suitability of the technology as judged by measures of safety, efficacy,

national demand, and need to concentrate services

for cost-efficiency and best performance. The second set of criteria relates to the suitability of the

proposed site in terms of established expertise, research programs, and support services. Each

technology funded is eventually reviewed by AHTAC to determine whether support should continue or if the technology should be regarded as a

superspecialty service funded by individual

states.

Application of the policy to new proposals can

be illustrated by the evaluation of technologies for

treatment of arteriovenous malformations

(AVMs) and other cerebral lesions. Evaluation of

cerebrovascular embolization was carried out by

NHTAP and completed by AHTAC (80). Proposals were assessed from a center in Perth with a

long record of research in this technique and from

hospitals in Sydney and Melbourne. It was accepted that embolization demanded high levels of

skill and integration of specialties, that technology development continued to be significant, and

that it was a useful approach to managing small
———————.—.

38 I Health Care Technology and Its Assessment in Eight Countries

numbers of patients at significant risk of major

neurological deficit or death. In view of the estimated national caseload and the developing expertise in the eastern states, the establishment of

two national centers was recommended—in Perth

and in Sydney. After AHMAC accepted this recommendation, a budget was developed on the basis of assessment data. Both centers will collect

clinical and cost data for subsequent review by officials and evaluation by AHTAC.

Initial interest in establishing stereotactic radiosurgery, also used in the treatment of AVMS

and certain types of cerebral tumor, related to

introduction of the gamma knife, a focused array

of gamma radiation from cobalt 60 sources. However, it became apparent that there had been significant developments in the alternative approach of

the focused linear accelerator (linac). The technology was assessed by AHTAC in 1992 in response

to applications for funding from centers in Perth

and Sydney. AHTAC took the view that the focused linac option was more realistic and that because of the probable diffusion of this approach

and the comparatively limited additional expertise required (compared with that found in major

radiotherapy units), the technology would not be

appropriate for Nationally Funded Center status

(8). This position was accepted by AHMAC.

Funding of radiosurgery units is therefore a matter

for individual state governments.

The ongoing review process for Nationally

Funded Centers can be illustrated by assessments

of programs for liver transplantation services that

were supported at three centers—in Sydney, Brisbane, and Melbourne. AHTAC considered liver

transplantation in terms of criteria specified under

the policy: whether the technology was continuing to evolve, whether further diffusion would

lead to additional costs and inefficiencies, and

whether the move to superspecialty status would

adversely affect access to such services. In an initial review the Committee considered that technical development was still significant, further

diffusion was not appropriate (particularly to

smaller centers of population), and the situation

should be reviewed again in two years (7). The follow-up review concluded that technical development had plateaued, further proliferation would be

unlikely to generate significant inefficiencies, and

a move to superspecialty status would not adversely affect access. The recommendation was

for discontinuation of Nationally Funded Center

status for the centers (10); it was accepted by AHMAC.

 Highly Specialized Drugs

Following the states’ concerns over rapid growth

in the use of expensive specialized drugs provided

through the public hospital system, discussions by

AHMC and AHMAC led to an agreement on

funding for such services and the establishment of

a Highly Specialized Drugs Working Party

(HSDWP). This entity selects drugs for inclusion

in funding arrangements, monitors new highly

specialized drugs that are potential candidates for

inclusion, and monitors the way in which drugs

supplied under the program are used. Decisions on

listing drugs are made by the Pharmaceutical

Benefits Advisory Committee. The criteria for

selection of a drug for funding specify that ongoing medical supervision is required; the drug is for

treatment of chronic medical conditions, not acute

inpatient episodes; the drug is highly specialized,

is subject to marketing approval by the commonwealth, and has a high unit cost; and there is an

identifiable patient target group.

In addition to erythropoietin (discussed later in

the case study on end-stage renal disease), the program was also initially applied to the supply of cy -

closporine to patients through public hospitals,

with grants of $25.1 million being made to states

and territories in 1991/92. Subsequently, the

HSDWP has focused especially on drugs for management of AIDS. Forward estimates for commonwealth funding of zidovudine (AZT) in

1992/93 were $12.9 million. Recommendations

have been made on listings and prices for didanosine, desferoxamine, and ganciclovir. In each case

supply of the drugs is handled by the public hospitals. States provide funding for an initial period,

after which the commonwealth meets all subsequent costs subject to receipt of usage data based

on individual patient records.
Chapter 2 Health Care Technology in Australia 139

TREATMENTS FOR CORONARY ARTERY

DISEASE

 Coronary Artery Bypass Grafting

(CABG)

CABG commenced in Australia in 1970, and

usage rates have increased steadily ever since. The

status of CABG was considered briefly in guidelines prepared by the Superspecialty Services

Subcommittee (100). At that stage, CABG procedures accounted for about 75 percent of all cardiac

surgery caseloads in some states, after a period of

rapid growth in use of the technique. The Subcommittee predicted that CABG caseloads would stabilize at about 500 procedures per million people.

Recommendations did not address CABG per se

but included minimum caseload levels for a cardiac surgery service of 200 adult patients per year

within two years of inception, with a longer term

goal of at least 1,000 patients per year. The Subcommittee’s guidelines helped the New South

Wales Health Department make a decision to limit

the number of centers for such surgery; the guidelines were less influential in other states.

In 1991 there were 12,694 operations for coronary artery disease (CAD), all but 45 involving

bypass grafting—an increase of 11 percent over

1990 (85). This amounts to 669 operations per

million, which is substantially above the original

Subcommittee estimate even after the diffusion of

coronary angioplasty. Of these operations, 11,586

were without concomitant procedures. Mortality

nationally was 2 percent (6 percent for the 7 percent of all bypass procedures that were reoperations). The number of grafts per patient in 1990

stabilized over the previous six years at just over

three.

There was no national evaluation of CABG, although the National Heart Foundation has monitored the use and diffusion of the technology for

many years. Published accounts of Australian

work appear to be limited to descriptions of experience and outcomes for small series of patients.

Diffusion of the technology has been determined

largely by decisions of individual hospitals and

state health authorities and by the availability of

reimbursement through Medicare benefits. The

initial growth of bypass surgery was particularly

rapid in South Australia and Western Australia;

there is now a more even coverage. Rates of surgery continue to increase in all states; in 1991 they

ranged from 834 per million in New South Wales

to 548 per million in Queensland.

 Percutaneous Transluminal Coronary

Angioplasty (PTCA)

PTCA was introduced in Australia in 1980. In

1991, 5,726 procedures were undertaken at 20

units (18 percent were repeat procedures), a 17

percent increase over 1990. The number of procedures per unit averaged 286 (ranging from 11 to

656), performed by 81 physicians (84). The overwhelming majority of procedures were for single

vessel disease; procedures for double-vessel disease decreased from 10.2 to 8.1 percent between

1989 and 1991. Procedures on more than two vessels are still uncommon.

The primary success rate in 1990 was 91 percent, an increase of about 3 percent over five

years. In 91 percent of all cases, indications for

PTCA were stable or unstable angina, with acute

myocardial infarction (AM I) accounting for 4 percent and prognostic reasons for 2 percent; 9 percent of procedures were performed on patients

with CABG grafts. In 1991, 127 patients (2.2 percent) required CABG after PTCA during the same

hospital admission, about three-quarters within

24 hours as emergency operations for complications. Over a 10-year period the rate of CABG
40 I Health Care Technology and Its Assessment in Eight Countries

post-PTCA has fallen from initial values of 11 to

12 percent. The overall rate for AMI following

PTCA is 2 percent over a 10-year period, with no

clear trends over the last seven. The mortality rate

for PTCA was about 0.4 percent between 1980

and 1991.

Coronary angioplasty was assessed by NHTAP,

drawing on a review commissioned by AIH

(79,93). The Panel’s assessment looked in some

detail at the indications for PTCA, efficacy, complications, and cost in comparison with bypass

surgery and medical therapy; distribution of services in Australia; and institutional requirements.

The Panel commented that each form of therapy

(CABG, PTCA, and medical) had its own range of

indications but that these overlapped substantially. It recommended the development of guidelines

for PTCA, noting that these would need to be reviewed as results emerged from trials comparing

CABG and PTCA for treating multi vessel disease.

NHTAP also noted that there was a potential for

substantially increased use of PTCA in Australia,

with replacement of some CABG procedures, increased use after AMI, and use for patients considered too frail for CABG or whose condition was

not considered serious enough for surgery. The

danger of overuse was also flagged-for example,

for patients whose angina was satisfactorily controlled by medication, asymptomatic patients, and

those for whom the cause of symptoms was uncertain. The Panel also saw a possibility of underuse,

particularly in the public sector, as the result of

funding constraints on public hospitals. This

could lead to loss of productivity y, unnecessary use

of CABG, and inadequate medical treatment with

costs that could have been avoided if PTCA were

more readily available. A possible reason for the

modest growth of PTCA use in Australia (which

has eased since preparation of the NHTAP report)

is the limited capacity of cardiac catheterization

laboratories.

There was no formal training program for

PTCA in Australia, although all practitioners had

in fact been trained under supervision (largely in

the United States). Because peer review processes

in Australia are strong, hospitals would be unlikely to award angioplasty privileges unless the practitioner had adequate experience. The Panel found

no apparent immediate need for the introduction

of credentialing for Australian users of PTCA.

 Costs of PTCA and CABG

NHTAP estimated a cost for a single PTCA procedure of approximately $7,100, including an angiogram and other tests. Average cost per patient

to the health care system, which also included

CABG for a proportion of cases including later

elective procedures, was $9,400. In comparison,

the estimated cost of CABG was $10,500, rising

to$11 ,700 in average cost per patient if complications were taken into account. No allowance was

made for repeat CABG or PTCA, which would be

required by many patients within 10 years of the

first CABG procedure. In comparison, the costs of

medical treatment of angina would vary widely,

perhaps between $1,500 and $10,600 over a

10-year period.

The Panel recommended further analysis of the

costs and benefits of PTCA by AIH in consultation with professional and government bodies. It

also urged that appropriate professional bodies (in

consultation with health authorities) consider the

desirability of an accreditation system for institutions providing PTCA services.

 Recent Developments

PTCA services have continued to grow, but although the Cardiac Society of Australia and New

Zealand has developed guidelines, accreditation

provisions have not yet been applied further to

institutions and specialists. Because of funding

constraints and other priorities for assessment, the

proposed analysis of costs and benefits has yet to

be undertaken. The question of more comprehensive guidelines for cardiac interventions is now

being addressed by AHTAC, in part as a follow-up

to the original cardiac surgery guidelines produced by the Subcommittee. The NHMRC’s

Quality of Health Care Committee is addressing

the question of practice standards in this area.

It might have been expected that as PTCA became more accepted, possible CABG cases that
would have required only one or two grafts would

be increasingly referred to angioplasty and that

simple bypass procedures would make up a smaller proportion of the total (79). In fact, the proportion of CABG procedures requiring one or two

distal anastomoses has fallen only slightly since

PTCA was introduced, suggesting that PTCA

might not be substituting for CABG to any major

extent in Australia. International developments in

this area have been followed with interest in Australia, but the use of CABG and PTCA has been

determined largely by funding and organizational

priorities and, to some extent, by assessment input

from NHTAP and AIH.

Statistics collected by the National Heart

Foundation show that the application of newer

technology as an extension of PTCA and CABG

has so far been quite modest. Thrombolytic therapy was used prior to angioplasty in 7.4 percent of

all cases in 1991. Until recently, atherectomy was

performed by only a few centers, and its level of

use is low (42 cases in 1991). It seems to be regarded as an extension of PTCA, especially for

application to extensively calcified or occluded

lesions.

Use of coronary stents is increasing slowly

(used in 50 PTCA procedures in 1990 and 78 in

1991 ), leading to increased costs (14). There are

also issues related to patient selection criteria, appropriate training, and the need for appraisal of

new stent designs and their use in Australia. The

Institute saw coronary stents as a developing, additive technology that would find a useful but limited niche in algorithms for management of CAD.

The application of lasers for coronary artery

disease has not yet occurred in Australia except

for a brief trial in Perth. A review of lasers in angioplasty concluded that there was no evidence

that laser treatment could replace balloon angioplasty, although lasers might play a limited role in

the recanalization of complete or nearly complete

obstructions (25). At that stage none of the lasers

being evaluated overseas looked so promising as

to make the case for evaluation in Australia particularly attractive. A more recent Australian review

has concluded that laser coronary angioplasty is

still a developing technology and that cost-effecChapter 2 Health Care Technology in Australia 141

tiveness has not yet been established (28). On the

basis of expected potential caseload, use of an excimer laser would cost $50,000 to $60,000 per

year per hospital, with no clear indication at this

stage of benefits or of complication rates (15)

Proven methods for treatment of CAD are well

established in Australia, and access to them is generally good. Waiting list data are at present not

generally available, but there are some indications

for Western Australia. According to recent information for elective procedures in that state, median waiting times are about one week for PTCA

and about one month for cardiothoracic surgery.

The numbers of cases on the cardiology and cardiothoracic lists were halved between June 1992

and June 1993 (55).

Areas for consideration are achieving suitable

balance between the different methods and resolving any problems of coverage in the public sector.

A specific concern is the continuing growth of

both CABG and PTCA despite earlier expectations that angioplasty might replace the surgical

procedure to a large extent.

A further issue, identified in the NHTAP assessment, is the pressure placed on public hospital

budgets by demand for PTCA services. Many

public hospitals have imposed severe rationing on

the number of PTCA procedures that they perform. Their costs are significant, and the benefits

have accrued to the patient and the commonwealth

rather than the state and the hospital (because of

decreased commonwealth-funded medication and

quicker return to normal activity). The situation

has changed somewhat since a Medicare schedule

benefits item for PTCA became available. This

problem illustrates the type of funding debate that

can occur between commonwealth and state governments.

The influence of technology assessment on this

area has been relatively modest. The early Subcommittee report was helpful to some state governments, but although later assessments have

been considered by policy makers and professional bodies, there is no evidence that they have exerted any major influence. Other factors have

proved more significant.
—

42 I Health Care Technology and Its Assessment in Eight Countries

MEDICAL IMAGING (CT AND MRI)

I Computed Tomography (CT)

CT scanning was introduced into Australia in the

mid- 1970s with the acquisition of head scanners

by private radiology practices. There appears to

have been no systematic early evaluation of CT

scanning. Opit and Dunt (89) analyzed the level of

need for CT head scanning in a defined population

and were among the first to express reservations

about the number of machines that would realistically be needed for this new technique.

The private sector dominated the early stages of

CT diffusion; the only governmental control was

imposed by certain state authorities in terms of

various units installed in public hospitals under

their jurisdiction. Reimbursement for CT examinations rapidly became available through

Medicare.

In early 1984 the Royal Australasian College of

Radiologists (RACR) issued a statement on CT

scanning that outlined suggested uses for the

technology and gave details and suggestions for

its distribution. An overview of health care

technology assessment at that time noted that although the statement contained useful data, further appraisal involving other organizations in the

health care system was now needed (44).

A synthesis report by NHTAP considered patterns of use of CT in Australia and its clinical role,

costs, safety aspects, and clinical value (77). By

mid- 1987 there were at least 170 CT units in Australia, 118 in the private sector and 52 in the public

sector; at that stage, installation of public hospital

units had become more widespread. It appeared

that on a per capita basis, Australia offered higher

levels of CT services (10.8 scanners per million

residents) than any European country, but lower

than the United States and Japan.

Although CT services were widely disseminated in Australia, there appeared to be room for

improving the pattern of distribution, including

keeping public hospital facilities under review

and perhaps widening coverage to include smaller

population centers. However, even taking into account the earlier methods that CT had replaced

and widening indications for its use, it was not

possible to account for the very large increase in

numbers of examinations in recent years.

The Panel also drew attention to studies in other countries that suggested that use of CT scanners

was unrewarding for patients with headaches and

normal neurological findings, and to a Western

Australian study that evaluated the use of CT in

private neurological practice (52). Sixty patients

had a CT scan before consultation, and 95 percent

of those were normal. Of the 83 patients referred

for CT after neurological consultation, 91 percent

had normal CT findings. The Panel questioned the

possible overuse of CT in this area.

Concern about certain applications of CT continues. In a series of 100 CT exams on 87 consecutive patients with low back pain or sciatica

referred for specialist orthopedic opinion, 36 exams could be justified (of which 16 influenced

management of the condition); 47 unnecessary

exams were abnormal, but the abnormal findings

were irrelevant. Some 75 percent of unnecessary

scans would have been eliminated if somatic pain

had been recognized and if the fact that CT does

not contribute to an evaluation of such cases had

been appreciated (94).

While accepting the technique’s diagnostic excellence NHTAP noted that little quantitative information was available on how CT was being

used in Australia or its effect on patient management, particularly outside major public hospitals.

It recommended that a study be undertaken to determine the contribution of CT to patient care and

the cost savings achieved through its use. It also

recommended that professional bodies consider

the development of guidelines for medical practitioners on the use of CT, including advice on appropriate indications for procedures, examination

risks, costs, and expected benefits.

The first recommendation was considered in

detail and a proposal for a study discussed by AHMAC. However, support for such an assessment

was not approved largely because of disagreement

between governments as to responsibilities for

funding. The second recommendation (on guidelines) was taken up by NHMRC’s Health Care

Committee. Guidelines were subsequently pub-
Chapter 2 Health Care Technology in Australia 143

lished (71) that drew on broader imaging guidelines developed by the Victorian Post-Graduate

Foundation and the RACR (63) as well as on input

from individual radiologists. The impact of these

guidelines will probably not be apparent for some

time and will depend on the degree of reinforcement by professional bodies.

The NHTAP report has been used as a source

document by health authorities and has provided

input for discussions on levels of reimbursement

under Medicare. Medicare fees for CT have decreased in recent years, and the CT examinations

eligible for payment under Medicare are specified

in considerable detail in the benefits schedule. At

the state level, replacement of older generation

scanners has occurred in a number of public

hospitals.

By November 1992 the total number of Australian CT scanners had reached 292, or 17 per million people (16), and in early 1994 it was

approaching 350 (19). It appears probable that this

increase will continue, given the comparatively

lower numbers in Victoria following the earlier

CON strategy in that state. On a per capita basis,

numbers of services have increased by 115 percent

over the last five years, and Medicare Benefits

payments by 54 percent. There are still no quantitative data on how most CT services are being

used and to what effect. The continuing proliferation of CT services maybe due to a combination of

factors, including the availability of reimbursement under Medicare, support through the public

hospital system, competition among hospitals and

practices, and pressure from requests by referring

physicians.

 Magnetic Resonance Imaging (MRI)

The introduction and diffusion of MRI in Australia has followed a different pattern than that of CT

because of technology assessment, related policy

decisions, and investment judgments by private

radiology practices in the early 1980s.

Australia’s program for introducing and evaluating MRI (45) had its origins in a synthesis report by NHTAP (73). MRI was regarded as an

expensive, rapidly evolving, and promising diagnostic imaging method that should be assessed before any widespread diffusion within Australia

was contemplated. The report recommendations

were accepted by the commonwealth government, which acted with the states to implement an

assessment of MRI. This support for the rational

introduction of MRI was prompted to some extent

by concerns at the level of use of CT scanning. Issues for the governments included the likely cost

of the new technology, its realistic range of application, likely benefits when compared with existing methods, technical performance, and areas

of weakness.

At the start of the Australian evaluation, little

was known about the performance and clinical use

of MRI. Information from other countries was of

limited use in the Australian context. Many early

studies were poorly done and, in any case, applicable to different health care systems. The Australian governments sought a broad assessment of

the overall place of the new technology, meaning

that a wide range of possible examinations and

disease states had to be considered.

The study was carried out at radiology departments in five public hospitals with general direction by a technical committee of NHTAP and

collation and monitoring of data by the Panel’s

Secretariat. Each MRI unit collected cost data according to a defined protocol; a minimum data set,

completed for every patient, which provided information on demographics, history, MRI findings, and radiologists’ assessment of the benefit of

MRI at the time of examination; and 71 more detailed follow-up studies on selected groups of patients to assess the usefulness of MRI in the

diagnosis and management of specific conditions.

No government funding for MRI was available

outside the program.

One specific study reported on 2,810 consecutive examinations at the Royal North Shore Hospital in Sydney, which provided follow-up data on

2,100 cases (99). The accuracy of MRI in a number of conditions was considered in detail, and

clinical impact was assessed on the basis referring

clinicians’ opinions. The impact of the technique

was apparent in 104 cases where surgery was

avoided; in 55 where invasive procedures were

avoided: in 151 where MRI led to surgery or im-
— — -.

44 I Health Care Technology and Its Assessment in Eight Countries

proved surgical planning; and in 175 where a correct diagnosis was established after incorrect

results from CT or other tests.

Another study considered the follow-up of

1,119 cionsecutive patients examined at the Sir

Charles Gairdner Hospital in Perth who had been

referred by specialists for imaging of brain or

spine (47). MRI made a dominant contribution to

the final diagnosis with neoplasia and vascular

disorders but was less significant for white matter

disease, including multiple sclerosis. In a high

proportion of cases, other types of examination

also influenced final diagnosis. MRI affected patient management in a high proportion of spinal

examinations and in cases of cerebral neoplasm,

with a lesser contribution to cases of cerebral vascular disorder and white matter disease. Although

MRI was seen to be generally superior to other

imaging methods, in practice it was often only one

input to diagnostic and management decisions.

For some cases, such as pituitary neoplasm and

suspected acoustic neuroma, MRI replaced older

tests and was not additive.

Following recommendations of NHTAP at the

end of the assessment (82), the governments

agreed on a policy to develop a network of teaching-hospital MRI units, with 18 to be placed in

centers with major neurosurgical responsibilities.

Government funding continues to be channeled

only to such units, and reimbursement is not available for further services provided by private radiology practices except for limited numbers of

“overflow” cases from public hospitals to designated private units. Decisions on levels of funding

for the public MRI units have drawn on the cost

data obtained in the assessment. The limited numbers of government-funded examinations at private units have had to comply with the MRI

guidelines of a consensus statement developed

during the assessment (6).

Despite this policy on limited government

funding of services, the number of private radiology MRI scanners has increased substantially since

the assessment (46). For most private units the caseload has been limited and dominated by workers’ compensation cases. By early 1992 there were

seven public and 16 private units in Australia, or

1.3 per million people—a somewhat lower proportion than in several European countries but

now increasing to a projected 41 units by the end

of 1994 (or 2.3 per million). There is concern that

the proliferation of I may eventually lead to

provision of services that are not cost effective and

that much of the spread of the technology will

have occurred outside the immediate influence of

health authorities.

 Influence of Technology Assessment

The introduction and use of MRI were strongly influenced by the assessments undertaken by

NHTAP (similarly, assessments have influenced

the more recent introduction of positron emission

tomography (PET) (74,83). In contrast, assessment effect on the use of CT have been 1 imited to

date, and it is too early to say whether the

NHMRC guidelines developed following the

Panel’s report will have a major influence.

LAPAROSCOPIC SURGERY

The most common of the well-established laparoscopic procedures (based on Medicare data) include laparoscopy for treatment of ovarian cysts,

endometriosis and adhesions, and arthroscopic

operations on the knee. These widely established

techniques were introduced in the 1970s. Arthroscopic surgery to the elbow, wrist, shoulder, and

ankle was added to the Medical Benefits Schedule

in 1990 and 1991. The numbers of these newer

arthroscopic procedures are still quite small. Therapeutic thoracoscopy, esophagoscopy, and uteroscopy have also been established for many years,

but their numbers also are small (less than 1,200

per year for each) but increasing. Most of these laparoscopic procedures have replaced older more

invasive procedures, although the number of additional knee arthroscopes has risen substantially

(60).

Use of diagnostic hysteroscopy has increased

considerably in recent years (from 1,000 payments under Medicare benefits in 1985/86 to almost 28,000 in 1991/92). Over the same period,

payments for dilatation and curettage (D&C) have

declined. Some replacement of the older tech-
Chapter 2 Health Care Technology in Australia 145

nique may have occurred, although the Royal

Australian College of Obstetricians and Gynecologists (RACOG) advises that diagnostic

hysteroscopy is usually an adjunct to, rather than a

replacement for, D&C. It is also regarded by the

College as complementary to the radiological

technique of hysterosalpingography rather than as

an alternative. Since 1989/90 there has been increasing use of outpatient endometrial sampling,

which is being seen by RACOG as less invasive

and cheaper than hysteroscopy and probably as effective. The trend toward office-based procedures, with further reduction in hospital

admissions for D&C, seems likely to continue.

 Laparoscopic Cholecystectomy

The more recent introduction of minimal-access

surgical procedures has been dominated by developments and debate on laparoscopic cholecystectomy. The technique was assessed by AIH in 1990

following its introduction into Australia that year

(58). Its early use was undertaken within major

teaching hospitals. Diffusion within Australia has

been rapid because of the acceptable up-front

costs to hospitals, early eligibility for government

reimbursement under Medicare, and public

awareness and demand for a less invasive procedure. At present the benefits schedule fee for laparoscopic cholecystectomy is higher than that for

the open procedure.

The early experience of teaching hospital units

is illustrated by the results obtained as part of the

Australian biliary lithotripsy evaluation (95).

When compared with open cholecystectomy, a series of laparoscopic cases at the hospital showed

decreased length of hospital stay and down time

for the patient before returning to normal activities, and substantially decreased requirements for

analgesia following the operation. Estimated

costs of the laparoscopic procedure were lower

than for open surgery, largely reflecting the decreased hospital stay. Such estimates of savings,

however, do not necessarily take into account the

full costs to a hospital of introducing such a procedure and the associated infrastructural changes.

A cost-utility analysis showed that the outcome

of laparoscopic cholecystectomy was superior to

both the open procedure and lithotripsy, unless

subsequent evidence indicated a very high incidence of common bile duct damage (24). This

study included an assessment of costs to patients

associated with both forms of cholecystectomy

and lithotripsy. The costs to patients per case were

estimated at between $1,800 and $2,500 less for

laparoscopic cholecystectomy than for open cholecystectomy (101). A further study has confirmed shorter hospital stays, lower costs, and

faster recovery for laparoscopic cholecystectomy

as compared to open surgery (53).

Diffusion of laparoscopic cholecystectomy has

continued rapidly. In early 1993 the Royal Australasian College of Surgeons (RACS) advised that

the technique was in place in all teaching hospitals

and inmost smaller surgical centers. The spread of

the technique has been associated with an increase

in total numbers of cholecystectomies.

An early estimate was that there had been a 26

percent increase in the rates of cholecystectomy in

the first two years after introduction of the laparoscopic method, following a period of several years

where rates for gallbladder removal were almost

constant (68). Conversion rates for laparoscopic

to open surgery were high during the first two

years of use: Health Insurance Commission data

indicated a level of over 14 percent. At that stage

only an estimated 13 percent of potential savings

to health program costs through use of the new

method were being realized. Decreased costs per

case for laparoscopic surgery appeared to be largely offset by the increased numbers of procedures.

The increase in the rate of cholecystectomies

has subsequently slowed, although the number of

procedures per year remains considerably higher

than the levels prior to introduction of the laparoscopic method (49). The conversion rate has fallen

with increasing experience with the procedure, to

8.4percent in 1992/93. Possible reasons for the increase in surgery rates include extension of services to frailer patients, a wish to resolve

symptomatic cases rather than watchful waiting,
46 I Health Care Technology and Its Assessment in Eight Countries

application to asymptomatic cases, and applications to misdiagnosed cases (68).

Concerns remain regarding standards of performance of laparoscopic cholecystectomy in smaller centers, and in response, the RACS has

developed accreditation and training procedures.

There have been anecdotal accounts of serious

complications following performance of laparoscopic procedures at smaller centers. Routine intraoperative cholangiography has declined by 66

percent since the introduction of laparoscopic

cholecystectomy. It has been suggested that routine laparoscopic exploration of the bile duct

should be adopted as a standard practice to permit

treatment of common duct calculi at the time of laparoscopic surgery (37).

 Other Laparoscopic Procedures

Data on the other recently developed laparoscopic

procedures are more limited. Laparoscopic appendectomy was first performed in Australia in the

early 1980s (36). Since then its use has been restricted primarily to gynecologists treating chronic recurring lower abdominal pain in women.

Although laparoscopic appendectomy is increasing in Australia, its uptake is likely to be slower

than for laparoscopic cholecystectomy because

training in the technique has not been widespread

and because of the undesirability y of applying laparoscopic procedure in an emergency situation

(60). There is also some feeling that the laparoscopic procedure may offer 1imited advantages for

hospitals and surgical staff and that there would be

little improvement in recovery time for patients as

compared with the open procedure.

The major impact of laparoscopic surgery on

hysterectomy is expected to be through use of laparoscopically assisted vaginal hysterectomy

(LAH) rather than the full laparoscopic procedure

(59,67). Neither LAH nor laparoscopic myomectomy are yet in general use in Australia. The RACOG is developing training and accreditation

protocols for LAH.

LAH offers uncertain advantages to service

providers over abdominal or vaginal hysterectomy as cost estimates are sensitive to lengths of

stay, substitution rates, and instrument costs (59).

However, if half of the abdominal hysterectomies

performed for myomas were replaced by LAH,

annual savings to the health care system could be

on the order of $2 million. Future attention may

focus on options for reducing the costs of disposable instruments (currently about $1,200 per

case).

In terms of societal costs, LAH offers potential

major benefits through considerable reduction in

post-operative recovery (by four weeks) and probably in the cost of complications. Such factors are

likely to increase the pressure for diffusion of

LAH. A counterforce will be the availability of

competing, minimally invasive approaches, including endometrial ablation or resection using

diathermy. Endometrial ablation/resection is well

established, with over 4,000 procedures funded

through Medicare benefits in 1991/92 (59). During this period the rate of hysterectomy for menorrhagia in public hospitals declined by

one-third.

Laparoscopic hernia repair was introduced into

Australia in 1990 (21). This procedure’s impact is

expected to increase, although some centers do

not regard the immediate advantages of the laparoscopic approach over a short-stay open repair to

be clearcut, particularly in view of the experimental nature of the technology. If laparoscopic approaches for hernia repair ultimately result in

faster recovery, decreased pain, and overall reduced costs, they are likely to be popular with both

patients and organizations responsible for compensation payments, despite uncertainties about

long-term recurrence (60).

Laparoscopic vagotomy has been performed in

Australia (88), although its level of use is currently low; most patients are now treated with drugs.

There still appears to be some uncertainty as to the

appropriate technique for this procedure. Laparos -

copically assisted bowel resection was introduced

in 1991 at the Sydney Hospital, with the mobilized bowel taken out of the body via a laparotomy

excision to perform the resection and form the

anastomosis (102). At least some centers in Aus-
Chapter 2 Health Care Technology in Australia 147

tralia appear to be moving toward the use of the

full laparoscopic approach for this application.

Unanswered questions surrounding newer laparoscopic procedures relate particularly to assurance of appropriate training, availability of

adequate caseload, mechanisms for appropriate

follow-up of patients after laparoscopic surgery,

and costs to hospitals through changes to infrastructure (48). Up-front costs of disposable instruments, which are preferred on technical grounds,

are a chronic problem for hospital administrators.

In a number of cases public hospitals have been

using reusable equipment, accepting the less obvious cost of cleaning and sterilization plus the

consequences for patients if these procedures are

not performed adequately.

 The Impact of Technology Assessment

The impact of technology assessment on the

use of laparoscopic procedures is uncertain. Several assessments have provided information to

health authorities and professional bodies, but

there has been no discernible influence in the short

term on the use and organization of services. For

example, the trends in use of laparoscopic cholecystectomy and diagnostic hysteroscopy have

largely occurred as a result of influences other

than formal evaluation. Possibly assessment may

be more significant in the longer term as data from

the initial phase of some techniques are more

closely considered and guidelines are established.

AHTAC is developing a report on minimal-access

surgery that may provide further focus and help

set directions for the future.

TREATMENTS FOR END-STAGE

RENAL DISEASE (ESRD)

Rates of ESRD treatment continue to rise in Australia. The Australia and New Zealand Dialysis

and Transplant Registry has accumulated records

on over 10,000 patients who have begun treatment

for ESRD in Australia (30). In 1989 the treatment

rate was 34.4 per 100,000 population.

These rates are rising largely because of an increase in the number of people over 60 years beginning dialysis. Diabetic nephropathy appears to

be involved in an increasing proportion of cases of

renal failure treated by dialysis and transplantation. Compared with many other nations, Australia has a high level of a nephropathy caused by

analgesic medicines, although new cases are declining (9). Recent data indicate that Aborigines

may have a more extensive requirement for renal

dialysis. The rate at which Aborigines began treatment was over three times that for all Australians,

and there still may be much untreated disease.

Guidelines for renal dialysis and transplantation have been prepared by AHTAC (9). There appears to be little scope for identifying preventive

strategies to lower the incidence of renal failure.

Although renal transplantation is recognized as

the preferred method of managing ESRD, dialysis

remains the dominant treatment method. The

transplantation rate has remained at about the

same level for the last decade; in 1990 only 12 percent of dialysis patients received a transplant.

During the 1980s the number of home dialysis

patients grew slowly, and the proportion relative

to population has been declining. In 1989 there

were 798 home continuous ambulatory peritoneal

dialysis (CAPD) patients (4.6 per 100,000), 582

(3.5 per 100,000) home hemodialysis patients and

18 (O. 1 per 100,000) home intraperitoneal dialysis

(IPD) patients. Overall there were 16.3 dialysis

patients per 100,000 population.

The overall median survival rate for patients

with ESRD after five years of treatment is 61 percent; outcomes become poorer with increasing

age. Variations in survival among different centers

is substantial. For primary cadaver grafts after 12

months, there is a 22 percent variation in terms of

patient survival and a 36 percent difference in

graft survival between the best and the worst centers, AHTAC has recommended that every effort

be made to elevate those units with poor results to

an acceptable standard.

With regard to current service provision and expertise and the efficient use of staff and facilities.

AHTAC considered a minimum of 30 transplant

operations per year at each center to be desirable

and recommended that centers that are not performing 20 operations per year should either cease

transplantation altogether or increase their com-
48 I Health Care Technology and Its Assessment in Eight Countries

mitment. All dialysis units should be linked organizationally to a renal transplantation program

(9).

Transplantation is the preferred treatment on

cost grounds, with hospital hemodialysis the most

expensive of the alternative approaches. Opportunities for home dialysis appear to be lacking. AHTAC recommended that new facility development

be promoted in the following order of priority:

transplantation facilities, home dialysis (including CAPD), satellite dialysis, and hospital dialysis. In addition, efforts should be made to

minimize maintenance dialysis in hospitals. Renal treatment programs should review their policies on dialysis location for patients with a view to

relocating suitable patients to satellite and home

dialysis.

Major themes of the AHTAC guidelines document were the need to increase the rate of organ

donations for transplants and to decrease the proportion of dialysis patients treated in hospitals.

Changing community and professional attitudes

toward organ donation have the greatest potential

to alter ESRD’S impacts and to affect cost allocation. According to the Australian Coordination

Committee on Organ Registries and Donation

(ACCORD), the current donation rate is 13.5 organs per million per year. If all suitable potential

donors were to become actual donors, this rate

could be nearly doubled.

Insufficient kidney donation is a major problem in overcoming the backlog of patients awaiting transplantation (40 to 45 percent of dialysis

patients). ACCORD is addressing organ acquisition difficulties and promoting improvements to

infrastructure and financial support.

Living related donor transplantation accounts

for 10 to 12 percent of renal transplants in Australia and New Zealand. Increased use of this approach would be desirable because of the

excellent results compared with cadaver transplants and the shortage of cadaver organs. In a series from a Melbourne hospital, the living related

donor approach was associated with shorter waiting times for transplantation (38). Pancreas

transplantation in association with renal transplantation is being undertaken on small numbers

of type 1 diabetic patients with renal failure. The

service is offered at a hospital in Sydney under

the Nationally Funded Centers policy, after its

consideration by the Health Care Committee of

NHMRC and AHTAC.

 Erythropoietin (EPO)

Recombinant EPO for management of anemia due

to renal failure has been used in Australia since

1990, initially on a restricted basis because of its

cost. It was suggested that treatment might need to

be limited to patients in whom anemia causes serious disability unrelieved by other measures (35).

Various centers have adopted measures to reduce the EPO dose to the lowest level suitable for

maintaining benefits in each patient. Experience

at the Queen Elizabeth Hospital, Adelaide, has

suggested that the cost per patient per year might

fall to $6,()()(). At the Royal Adelaide Hospital, the

annual cost for EPO given subcutaneously maybe

as low as $2,000 to $3,000 per patient (9). A study

at Westmead Hospital, Sydney, reported the successful use of low-dose EPO at a yearly per-patient drug cost of $3,681 (54).

The question of financial support for EPO was

subsequently considered by HSDWP. Following

its recommendations, funding was provided in the

1991 commonwealth budget to support the drug’s

use for treatment of anemia requiring transfusion

associated with ESRD, where treatment is initiated in a hospital with a renal dialysis unit. (Any

application outside these indications is not covered by the commonwealth.)

The states are responsible for meeting the drug

costs of the in-hospital phase (taken to be three

months from the initiation of treatment); the commonwealth meets subsequent costs. commonwealth grants to the states and territories for EPO

in 1991/92 totaled just under $7.5 million (57),

and the drug is now being used by all major centers. Evaluation procedures must still be developed.

 The Impact of Technology Assessment

The impact of technology assessment in this area

has been limited to date. The AHTAC guidelines
Chapter 2 Health Care Technology in Australia 149

summarize current statistics, concerns, and possible future directions. Their influence will depend on how the suggested targets are viewed by

state health authorities and professional groups.

NEONATAL INTENSIVE CARE

Like many other countries, Australia has accepted

the concept of regionalization for perinatal services as a means of improving access to secondary

and tertiary levels of care. A paper on organization

of perinatal services, which drew on Canadian experience, defined three levels of neonatal care:

level 1 (suitable for uncomplicated situations),

level 2 (generally located in larger or suburban

hospitals with obstetric services), and level 3 (sophisticated services based in major general maternity or children’s hospitals) (70).

State guidelines for the numbers of beds in 1evel 2 units vary considerably, from 1 to 2 per 1,000

live births in Queensland to 4.25 in New South

Wales. Infants admitted to a level 2 unit are generally over 32 weeks in gestation and over 1,500 g in

birthweight. Most level 3 units have obstetric services and accept many high-risk pregnancies referred in from the region in which they are located;

they also handle the management of normal pregnancies in their immediate area.

Guidelines for level 3 neonatal intensive care

were developed by the Superspecialty Services

Subcommittee in 1983 and updated in 1991 (5).

Apart from an increase in the recommended number of ventilator beds from 0.6 to 0.7 per 1,000 live

births, no substantial changes were made to recommendations in the guidelines during that period. Other major specifications are that level 3

units should have 10 to 20 level 3 beds (1.1 per

1,000 live births) and nurse-to-patient ratios of 1

to 1 for ventilator beds and 1 to 2 for other level 3

beds. The guidelines also outline the need for level

3 units to provide support for parents, to have a

well-defined role in staff and public education,

and to monitor data and outcomes on a long-term

basis. The need for control of nosocomial infection is stressed, although infection is not currently

a major cause of neonatal death.

In 1990, 20 hospitals in Australia had level 3

neonatal intensive care units (NICUS) and fulltime neonatologists; these had a total of 160 ventilator beds. A further 14 ventilator beds were

planned for New South Wales and Victoria.

In 1983 the average cost per baby from the time

of admission to the NICU to the time of discharge

home, transfer to another hospital, or death was

estimated at $13,952 (based on a hospital in

Sydney): the average cost per survivor was

$16,415 (61). In 1988/89 the average cost per

baby had fallen to $10,279, and the average cost

per survivor to $10,953 (62). The cost to the community of neonatal intensive care averaged

$13,857 per surviving baby, with a range of

$4,064 for a birthweight of more than 2,000 g to

almost $138,000 for those less than 750 g (62).

The survival rate for very immature infants rose

from 20 to 61 percent, associated with the

introduction of positive pressure-assisted ventilation. Between the 1977-83 and 1984-86 periods,

survival increased by 9 percent while the cost per

additional survivor rose by 60 percent.

Both outcomes and costs for each individual

baby are variable and difficult to predict (4).

Those making decisions about withholding intens ive care for individual babies are essential 1 y making value judgments. Cost and economic data can

only be one component of these judgments. The

Subcommittee’s guidelines point to statements on

ethical issues in intensive care and to other guidelines for very -low-birthweight babies developed

at consensus conferences at Westmead Hospital,

Sydney.

Concern has been expressed about the increased need for NICU services that may result

from births following in-vitro fertilization (IVF)

and gamete intrafallopian transfer (GIFT) techniques. Assisted conception by IVF and GIFT in

1991 resulted in 2,009 live births up to September

1992, with overall totals of 6,932 and 3,794, respectively, since these techniques were introduced (86). About 1 in 200 births in Australia now

result from these new reproductive technologies.

These births are more likely to result in low birthweights, to be multiple, and to require neonatal intensive care. Over one-third of IVF/GIFT babies

are of low birthweight, and about 23 percent of

these births are multiple. Some NICUS report that
50 I Health Care Technology and Its Assessment in Eight Countries

the IVF/GIFT cases consume up to 7 percent of

bed days.

 Extracorporeal Membrane Oxygenation

(ECMO)

ECMO was introduced in Australia in mid-1988

at the Royal Children’s Hospital, Melbourne, and

about a year later at the Prince of Wales Children

Hospital, Sydney (51 ). The decision to develop an

ECMO program was made by the hospitals, and

costs were met from their own budgets. Early results for neonates and other children were excellent. Different approaches were adopted at the two

Australian centers. In Melbourne ECMO was offered to all neonates who met specified entry criteria. In Sydney high-frequency ventilation was

tried first and ECMO was used only when it failed.

Following the units’ initial experience, a consensus conference organized by the Australian

Association of Pediatric Teaching Centres and

NHMRC was held to define the role of ECMO as

well as resource and research requirements. It was

apparent that local clinical and cost data were limited and that a strong minority opinion held that

satisfactory results were obtainable using conventional treatment.

The improvement in conventional treatment

over recent years suggested the need for a critical

comparison of ECMO with alternative approaches. Local evaluation was seen as necessary

because of differences between Australia and other countries both in patient population and in standards of obstetric and neonatal care. For example,

perhaps 40 percent of neonatal cases treated with

ECMO in the U.S. have a primary diagnosis of

meconium aspiration syndrome, which is comparatively rare in Australia. Also, the small national caseload would make it difficult to design

and conduct a randomized controlled trial that

could produce definitive results.

It was recommended that a panel be set up to

explore the feasibility of a trial and that AHMAC

be approached for funding and agreement to restrict ECMO units to two centers ( 1,92). AHMAC

in turn referred to NHTAP the question of the

costs and financial benefits of limiting ECMO to

not more than two centers. NHMRC was to give

further consideration to the feasibility of conducting a controlled trial of the technology.

The assessment of costs and financial benefits

drew on information from the consensus conference, further opinions from the hospitals concerned, and relevant literature (81 ). It emerged

that the marginal costs of ECMO were relatively

modest ($5,800 to $8,400 per patient). Although

NHTAP found that there was little difference in

cost terms between the different options for numbers of ECMO centers, there appeared to be compelling reasons to limit the number of centers. The

technology was still evolving and was in some

senses experimental, and an appropriate minimum caseload was seen as necessary to maintain

expertise and achieve efficiencies of scale.

Various issues needed to be considered by

health authorities with regard to the future use of

the technology. ECMO appeared to be a useful

method of last resort in treating neonates and older

children with severe respiratory distress; however, the data on its efficacy were limited, and pediatric use data were not conclusive. Future

selection criteria used by ECMO centers would

strongly influence caseload, cost per case, and the

rate and quality of survival. The efficacy of

ECMO in comparison with conventional therapy

was deemed to need further critical review given

the apparent shifts in practice, possible improvements in conventional therapy, and the perceived

low sensitivity and specificity of selection criteria. NHTAP suggested that it would be wise for

any future research on ECMO in Australia to include appraisal of alternative therapies.

AHMAC subsequently accepted the recommendation that there be not more than two ECMO

centers but did not consider additional support under the Nationally Funded Center policy appropriate, in light of the limited impact of the specialized

service on hospital budgets when marginal costs

were taken into account. The issue of the controlled trial remains unresolved. The NHMRC has

considered the question, but the fact is that many

clinicians and nurses using ECMO have become

convinced of its usefulness and will not accept al-
Chapter2 Health Care Technology in Australia 151

location of at-risk neonates to a control group. Efforts are being made to include one of the

Australian centers in the British randomized trial

of this technology.

 The Impact of Technology Assessment

The impact of technology assessment on neonatal

intensive care has been variable. The original

guidelines produced by the Superspecialty Services Subcommittee were probably influential because of the consultation process that took place

during their preparation. When they were updated, much of the material prepared some six

years earlier was considered still current. Policy

on support for ECMO was clearly influenced by a

consensus conference and subsequent assessment

by an advisory body, although the effect on patterns of practice probably was more limited.

SCREENING FOR BREAST CANCER

Breast cancer is the most common cancer and the

most common cause of death from cancer among

Australian women (4). Small-scale breast cancer

screening services were established in the

mid- 1980s but fell well short of a national program. They were limited in coverage, not subject

to accreditation or other controls, and not designed to recruit and screen those women most

likely to benefit from screening.

Use of mammography services increased in all

age groups between 1984 and 1988, but women

over 65 made least use of them, although the death

rate associated with the disease was highest in that

group (4). Data from the 1988-90 National Health

Survey conducted by the Australia Bureau of Statistics indicated that only 22 percent of women

aged 40 to 64 had had a mammogram in the previous three years, with the highest proportion (25

percent) in the 45-to 49-year age group (2). Poor

awareness appeared to be a contributing factor, influenced by education level, family income, place

of residence, and whether women spoke English

at home.

I Evaluation of Breast Cancer Screening

Two of the targets set in 1987 by an AHMAC committee were to reduce the death rate from breast

cancer by 25 percent or more by the year 2000 and

to increase participation in breast cancer screening

to 70 percent or more of eligible women by 1995

(56).

In 1988, Australian health authorities established a National Breast Cancer Screening Evaluation. The evaluation, coordinated by a unit at

AIH, reported in mid-1990 (4). It drew on a number of pilot projects based on some of the already

established screening services and included a detailed economic assessment. Technical aspects of

screening mammography were considered by

NHTAP as input to the national evaluation (79).

The Panel supported proposals by RACR to accredit clinics for mammography screening and

summarized specifications for mammography

units, film processing and quality control. Brief

consideration was also given to personnel requirements, the need for follow-up facilities, and a national database.

The NHTAP report was followed up by AIH at

the request of the AHMAC Steering Committee

(11 ). The AIH report confirmed that mammography was the only proven technique suitable for

breast cancer screening, gave detailed specifications for mammography units, and recommended

adoption of quality control guidelines prepared by

the Australasian College of Physical Scientists

and Engineers in Medicine. According to a survey

by the Australian Radiation Laboratory, there

were about 300 mammography units in Australia

in 1989, but it was not known how many of these

would be available for screening work.

The Steering Committee’s report supported

introduction of a national screening program for

all eligible women on both scientific and economic grounds. Cost per life year gained was estimated to be in the range of $6.600 to $11,000 (4).

It was recommended that the program select

women on the basis of age alone. The Committee

also urged that mammographic screening be made

available and publicized for women aged 40 years

and older but that recruitment strategies should be

targeted at women from 50 to 69 years old.
52 I Health Care Technology and Its Assessment in Eight Countries

Screening should be made available as widely as

possible to all eligible women in the target group

with the intent of rescreening every two years.

Important practical and ethical issues arise in

addition to cost-effectiveness considerations. The

introduction of a mammography screening program that excluded women from 40 to 49 years old

would encounter a practical difficulty: women in

this age group would obtain mammography outside the screening program. Because such mammography would lack many of the features

required of a national program, it would be likely

to be less effective, with variable quality control,

and seriously undermine the conduct of a national

screening program.

Economic aspects of breast cancer screening

have subsequently been considered by Carter and

co-workers (23), whose analysis suggested that

screening all women aged 50 to 69 every two to

three years is reasonable value for money. For

women from 40 to 49 mortality benefits and costeffectiveness are less clear. It was suggested that

screening in this age group be allowed but not actively pursued until further evidence is available.

This series of assessments addressed major issues in screening mammography, including the

degree of benefit of the technology compared with

other approaches, expected gains in quality of life,

and problems caused by false positive results.

These matters were taken into account during the

development of a national program.

 Establishment of a National Program

In March 1990 the commonwealth announced that

it would contribute $64 million over three years

toward the establishment of a National Program

for the Detection of Breast Cancer. The earlier

AHMAC report formed the basis for this

program’s development. By 1993 all states and

territories had made commitments to populationbased screening programs for eligible women.

The national program fully funds the provision

of screening and assessment services through to

confirmed diagnosis of breast cancer. Funding is

independent of the Medical Benefits Schedule.

Services funded under the program must be accredited.

Proposals in the AIH report regarding machine

specifications and quality control were adopted in

the National Accreditation Guidelines issued as

part of the national program (87). The guidelines

cover recruitment, services, and facilities for

screening and assessment, data collection, training activities, and program management. Other

topics covered include performance objectives

and acceptable process, the timeframe for the national program, technical items to be evaluated in

a quality assurance program, and suggested specifications for mammography units.

Under the national program, each screening

unit will be linked to an assessment center. The assessment center will function with multidisciplinary teams and have primary responsibility for

quality control and for management of screening

and assessment procedures, including counseling

and diagnostic workups.

Coordination units in each state or territory will

have primary responsibility for liaison and negotiation with the commonwealth and implementation of the national program. This responsibility

includes making recommendations on the location, type, and number of screening units and assessment centers; recruitment; accreditation;

monitoring and evaluation; financial management; and data management. The national coordination unit (located within DHSH) is

responsible for data collection and analysis and

program monitoring and evaluation.

The national program has given detailed consideration to the role of general practitioners in the

primary health care of women who are eligible for

screening. General practitioners should be kept informed of the results of screening and any further

workups required unless a woman directs otherwise. However, a doctor’s referral is not a prerequisite for attendance at a screening service.

The current intention is to rescreen women every two years subject to revision as new data become available. Screening will be made available

at minimal or no cost and will be free to eligible

women who would not attend if there was a

charge. Comprehensive and easily understood information, emotional support, and counseling

will be provided. Women will be advised on the
Chapter 2 Health Care Technology in Australia 153

effectiveness and risks of mammography and on

the maintenance of a regime of breast care, such as

breast self-examination, to reinforce the message

that a negative mammographic screen does not

preclude the diagnosis of breast cancer prior to the

next screening.

The program follows earlier recommendations

of the AH MAC Steering Committee in specifying

requirements for screening services. Film-screen

mammography alone is the principal screening

method, using two-view mammography with one

view at rescreening if previous mammograms

have indicated that two views are not required. All

mammograms will be taken by a radiographer appropriately trained in screening mammography,

and read and reported independently by two or

more specially trained readers, at least one of

whom is a radiologist. Reports will be combined

into a single recommendation and results provided to patients promptly and directly.

In 1990, 10 screening and assessment services

were offered in five states that had been pilot projects in the National Screening Evaluation. Screening services under the national policy are now

established in all states and the Australian Capital

Territory (with the Northern Territory to follow in

shortly), for a total of 21 centers in place. Areas

where coverage is poor are being reached by mobile mammography units in order to increase acceptance of the technology before establishing

permanent facilities. Participation rates are rising,

although they remain considerably below target.

Current NHMRC policy on mammography

screening for women under 50 years of age is that

there is insufficient evidence to advise women under 50 years to have routine mammography (72).

Women from 40 to 49 should not be excluded

from screening programs if they request it but

should be counseled on current evidence of benefits; women at higher-than-average risk should

have the option of attending a screening program.

There is no evidence of benefits from screening

women under 40 years old.

Now that substantial resources have been committed by governments to the national program,

concerns are to ensure an appropriately high rate

of recruitment, adequate minimum technical standards, and effective reporting and follow-up procedures. The program will be subject to ongoing

evaluation coordinated by a national advisory

committee. It is hoped that this concerted effort

will lead in the medium term to a significant improvement in one aspect of women’s health.

Technology assessment has strongly influenced the development of screening mammography services. The substantial evaluation

program funded by AHMAC set directions for the

current national program, and the brief assessments by NHTAP and AIH assisted this process.

Assessment will continue with formal reviews of

the performance and impacts of the program.

CHAPTER SUMMARY much should be spent on high-technology mediSubstantial changes in approaches taken to health cine as opposed to preventive and community procare technologies in Australia have occurred in the grams.

Overall, the Australian population’s access to a past two decades. Medical benefits remain an important factor in the funding and use of health care wide and appropriate range of health care technol -

technologies: however, other mechanisms, such ogies is good, and an effective level of support has

been delivered within expenditures that have re- as government grants and the Nationally Funded

Centers program, have become significant. mained at or below 8 percent of GDP for a number

Health care technology mechanisms has been put of years. Concerns typically arise regarding

in place, and quality assurance programs have whether some technologies (notably diagnostic

been developed. The availability and quality of techniques) are overused. delays in providing serdata have improved. Debate continues on how vices to some patients. appropriate levels of reim-
54 I Health Care Technology and Its Assessment in Eight Countries

bursement for use of technologies, and whether

both superspecialty and more routine services are

consistently provided cost-effectively and to appropriate standards.

In Australia significant segments of the population will always be geographically remote from

some technologies and services. Most specialist

medical practitioners with expertise in new health

care technologies are based close to metropolitan

areas or to university teaching hospitals, not easily

accessible for many Australians. The inconvenience and expense to some patients is unlikely to

change in the short term. Certain health care

technologies will continue to be sited in large population centers because of high costs and limited

demand.

Although there are areas of dissatisfaction, including pressure on public hospitals and the level

of out-of-pocket expenses for some services under

current insurance arrangements, the level of public acceptance of the health care system seems

quite high. Notably, the Medicare insurance

scheme continues to be popular. In early 1994

only 38.4 percent of Australians had hospital insurance coverage through private funds.

Australia’s relative success in controlling

technologies—taking account of introduction,

diffusion, level of use, societal costs and benefits,

and equity of access—has been mixed. As described earlier, legislative provisions to control

most types of health technology are limited. Both

health authorities and health professionals have to

live with the realities of operating within a system

with a complex mix of government responsibilities and political and professional imperatives.

The control and use of health technologies in Australia will be strongly influenced by intergovernmental relationships, the size and distribution of

budgets for health care, and funding mechanisms.

Major programs that have been put in place in recent years, such as the casemix development and

cancer screening initiatives, are likely to significantly affect government and professional relationships and patterns of provision of health

The control of pharmaceuticals with regard to

safety and efficacy has been generally successful,

with changes seen as necessary to ensure that evaluation is timely. Close consideration of cost-effectiveness is a recent development. Control of

medical devices has been less certain, and even

less direct influence has been possible with regard

to procedures.

The Nationally Funded Centers policy has provided defined mechanisms for support of very

specialized technologies in their early stages of

use and review to determine when this type of intergovernmental support is no longer justifiable.

Linking government grants conditionally to assessment of new types of medical devices has

been a useful approach. The shortcomings of such

initiatives have been the limited assessment and

monitoring of technologies after diffusion. Accreditation procedures for pathology services

have worked effectively, although they provide

only a narrow focus of control, and the Superspecialty Services Subcommittee and AHTAC guidelines have been successful in providing a

framework for discussion and planning of health

care services.

The Australian experiment of linking the

introduction and support of health care technologies to assessment is now in its second decade.

There have been some significant successes in informing policy through appropriately targeted,

well-timed assessments. Recommendations and

data from the assessments have influenced policy

on whether to fund technologies, levels of funding, indications for use, and placement of services, but only in a minority of cases. Practice,

too, has been influenced, but the data here are

more limited.

Despite “islands” of assessment and fully informed policy, the mainstream of health technology has been deployed through less formal

mechanisms (42). This is perhaps inevitable until

assessment is linked more systematically to decisions on resource allocation and is undertaken

more widely within hospitals and other instituservices.
Chapter 2 Health Care Technology in Australia 155

(ions. Further progress is likely though more systematic linking of funding decisions with formal

assessment, application of practice guidelines,

and longer term educational initiatives.

Reports from Australia’s national advisory bodies have been influential and well regarded and

have contributed to policy formulation and to the

wider education of health technology providers

and purchasers. A major factor in the success of

these assessments has been the expertise and continuity provided by a permanent group of evaluators who have supported the national committees.

Some assessments, notably those involving

collection of primary data, have to some extent

been opportunistic, depending on the level of support obtainable from staff in hospitals and other

institutions. The emerging databases and assessments undertaken by AIHW (some in support of

AHTAC) have also worked well.

The involvement of professional bodies and industry in the work of the national health technology assessment groups, and the practices of

inviting comment and being willing to update reports and recommendations in the light of experience and new data, have helped considerably in

broadening the base of assessments and their acceptance. One possibly undervalued aspect of the

assessments has been the provision of general descriptions of technologies to policy makers, administrators, and the media, which have helped to

demystify technical terms and concepts.

Information from agencies in other countries

has been a valuable input to many assessments.

However, local appraisal of a health technology is

often highly desirable because of limitations in the

data from other countries and the need to take into

account local characteristics (98).

Conducting primary research locally is often

desirable, even if studies are not entirely definitive: counsels of perfection need not impede clinical trials of new technologies. Several Australian

trials have provided rich information on costs, effectiveness, and process even though pragmatic

decisions had to be made on limiting the power of

particular studies.

Health authorities and professional groups face

constraints in controlling technologies and ensuring their appropriate use. The timing of assessments and the prompt provision of results remain

major issues, and evaluators need to be aware of

the pressures on policymaking areas. Mechanisms

are needed to link the introduction and diffusion of

new services and procedures to the assurance of

efficacy and to the collection and provis ion of data

by the new methods’ sponsors. This will not be

easily achieved without legislative changes and

close cooperation between Australian governments and professional groups.

Australia has achieved a realistic balance between the coverage of technologies, rigor and

depth of evaluation, speed of assessment and

available resources. However, changes in the administrative arrangements for national advisory

bodies in recent years have caused some loss of

momentum. A period of stability would be desirable to permit consolidation of achievements and

stronger links between different evaluation

groups—all of which seek increases in funding. It

must be said that assessment output has probably

reached its limits with the current level of resources.

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“Lumbar Spine CT,” Med. J. Aust. 154: 138,

1991.

95. St. Vincent’s Hospital, Melbourne Biliary

Lithotripsy Assessment; Second Interim

Report (Canberra: Australian Institute of

Health, 1992).
60 I Health Care Technology and Its Assessment in Eight Countries

96. Sawer G., The Australian Constitution

(Canberra: Australian Government Publishing Service, 1975).

97. Sax, S. (Chairman), Report of the Committee on Applications and Costs of Modern

Technology in Medical Practice (Canberra:

Australian Government Publishing Service,

1978).

98. Selby Smith, C. (Chairman), Report of the

Committee to Review the Role and Function

of the National Health Technology Advisory

Panel (Canberra: Department of Community Services and Health, 1989).

99. Sorby, W., ”An Evaluation of Magnetic Resonance Imaging at the Royal North Shore

Hospital of Sydney,” Med. J. Aust.

151:8-17, 1989.

100. Standing Committee of the Health Ministers, Superspecialty Services Working Party,

Guidelines for Cardiac Surgery (Adelaide:

SSS, 1983).

101. Street, A., The Cost of Treatment for Gallstone Disease (Melbourne: National Center

for Health Program Evaluation, 1993).

102. Wilson, T., “Laparoendoscopy for Abdominal Cancer,” Med. J. Aust. 153:208, 1991.

103. Woolcock, A., “Worldwide Differences in

Asthma Prevalence and Mortality. Why is

Asthma Mortality So Low in the USA?”

Chest 90( Suppl):405-455, 1986.
Health Care

Technology

in Canada

(with special reference to Quebec)

by Renaldo N. Battista, Robert Jacob, Matthew S. Hedge 3

OVERVIEW OF CANADA

c

anada is a sparsely populated northern landmass of

approximately 10 million km2

. Created in 1867 after

French and then British colonization, the Canadian federation currently consists of 10 provinces and two territories. Provincial populations in 1991 (table 3-1) make apparent the

rather imbalance distribution of Canadians across the country

(119). Compounding this imbalance is the population’s northsouth distribution; 80 percent of Canadians are clustered within

320 km of the border with the United States. Providing services to

the remaining 20 percent living in remote areas has been a key issue throughout Canada’s development.

Despite the logic of north-south transport links between Canadian regions and adjacent regions of the United States, domestic

east-west links have been heavily emphasized. This historical

pattern arose from the central location of the four founding provinces—Ontario, Quebec, New Brunswick, and Nova Scotia—

combined with a mistrust of their southern neighbor, the United

States, in the aftermath of the U.S. Civil War and apparent territorial designs on what was, until 1867, British North America. Eastwest links also clearly benefited English mercantilist trade during

the 1800s. Recent free-trade agreements between Canada and the

United States as well as among Canada, the United States, and

Mexico suggest that Canada now wishes to consolidate and expand its north-south links.

 Government and Political Structure

In light of the strong ties, both economic and historical, to Great

Britain, it is not surprising that until 1982, Canada’s constitution

consisted of the British North America (BNA) Act of 1867 and 61
62 I Health Care Technology and Its Assessment in Eight Countries

Province Year joining confederation

Newfoundland 1949

Prince Edward Island 1873

Nova Scotia 1867

New Brunswick 1867

Quebec 1867

Ontario 1867

Manitoba 1870

Saskatchewan 1905

Alberta 1905

British Columbia 1871

CANADA (excluding Yukon and

Northwest Territories)

Population (1991)

568,475

129,765

899,945

723,900

6,895,960

10,084,885

1,091,940

988,930

2,545,550

$282,065

27,211,415

SOURCE Statistics Canada, The Nation Age, Sex, and Marital Status, Statistlcs Canada Pub No 93-310 (Ottawa 1993)

subsequent amendments. This act of the British

parliament established governmental structures

and jurisdictional divisions between federal and

provincial governments, and amendments required the assent of the House of Commons in

England. Despite the distance between the BNA

Act and the people it governed, this process

worked reasonably well.

In 1982, however, the Constitution Act was

passed by the Canadian parliament, effectively repatriating the BNA Act and enshrining a Canadian

Charter of Rights and Freedoms in a new Canadian constitution. Repatriation was supported by

all provinces but Quebec. To gather sufficient support for repatriation from the other nine provincial

governments, the federal government provided a

“notwithstanding clause” allowing provincial

governments to pursue legislative goals that

might impinge on the guarantees of the Charter of

Rights and Freedoms.

Canada’s federal legislature is a bicameral parliamentary system with 295 Members elected to

the House of Commons and 104 Senators appointed by the Prime Minister for terms until age

75. Legislative power resides almost entirely in

the House of Commons; the Senate only rarely intervenes to reject legislation. Executive power resides in the cabinet, which is composed of the

prime minister and ministers—nearly all of whom

are also members of the legislative branch by virtue of their being elected to the House of Commons.

The provincial legislatures operate in a similar

fashion but without provincial equivalents of the

Senate. Three essentially national political parties

are active in both federal and provincial politics.

The Progressive Conservative Party espouses a

right-leaning, centrist philosophy, and the Liberal

Party advocates a more clearly centrist philosophy. The New Democratic Party (NDP) has traditional links to organized labor but is most similar

to the centrist social democratic parties found in

several European countries. The NDP has been

the source of virtually all major social policy initiatives in Canada, particularly in health care.

During the 1960s the federal Liberal Party established the Medicare system of national health insurance along the lines established by the NDP in

Saskatchewan and in NDP position papers.

Jurisdictional tension between federal and provincial governments has encouraged the growth

of several parties with peculiarly regional support

and agendas generally stressing more autonomy

for their region. In the western provinces these

have been particularly strong, often also advancing a conservative social agenda. In addition, the

Parti Que'be'cois in the predominantly French-
Chapter 3 Health Care Technology in Canada (with special reference to Quebec) 163

speaking province of Quebec has advocated various measures that would markedly diminish

federal jurisdiction there.

Issues of language and ethnicity are a staple of

Canadian political life. Both English and French

are considered official languages, and federal services are ostensibly available in both languages

across the country. Roughly 24 percent of Canadians state that French is their first language, and

of these, 88 percent live in Quebec (118). Treaties

signed with aboriginal peoples have created “status” Amerindians, who constitute approximately

2 percent of the population.

 Population Characteristics

Apart from the small aboriginal population, Canadais a country of recent immigrants, initially from

northern Europe and the British Isles but (after

World War II) increasing y from other parts of Europe and Asia. According to the 1991 census, 19

percent of Canadians were born outside Canada

(11 7). The federal government has adopted an official policy of multiculturalism, encouraging recently arrived Canadians to maintain features of

their places and cultures of origin. Immigrants to

Canada have tended overwhelmingly to settle in

Canada’s three largest cities: Vancouver, Toronto,

and Montreal.

 The Economy

In addition to ethnic and language differences

among regions, important regional economic differences exist. British Columbia, Alberta, Ontario, and Quebec account for 84 percent of the

population and have traditionally been seen as the

“have” provinces. Their economies are the most

diversified and integrated with North American

and world markets. The four Atlantic provinces,

by virtue of their small size, remote location, and

dependence on fishing and lumbering are the

weaker siblings in the Canadian family.

The central prairie provinces, the birthplace of

many of Canada’s social welfare programs, are

heavily dependent on agriculture and resource extraction. With Canada’s national capital located in

Ottawa and the financial capital in Toronto, Ontario has often been perceived, particularly by provinces more distant from central Canada as having

a stranglehold on power in Canadian society. This

perception, accentuated by the relatively large

populations of Ontario and Quebec, has spurred

repeated attempts to recast Canadian political

institutions, particularly the Senate, along regional or provincial lines.

 Background on Quebec

Because much of the data for this chapter are

drawn from the province of Quebec, a few words

on its history are in order. Originally colonized as

New France by French farmers, fishermen, and fur

traders, Quebec was lost to the British in 1759 at

the Battle of the Plains of Abraham. Despite several halfhearted attempts to assimilate the French

into an emerging English society, the British were

seemingly content to govern a colony with a predominantly English-speaking, Protestant urban

center and a French-speaking, Catholic countryside. The Roman Catholic church controlled

many of the social structures, including health

care and education, and encouraged the embrace

of a simple, pastoral life.

As pressure for change built during the late

nineteenth and early twentieth centuries, this fundamental linguistic and geographical division

remained intact, despite rapidly increasing francophone urbanization. By the middle of the twentieth century, forces of social change had ushered

in secular social services and public education in

both English and French and had supplanted the

power of both the Catholic church and Englishspeaking business elites in the province. This

“quiet revolution” represented a wholesale transfer of power and influence from these former pillars to a newly dynamic provincial government

and an array of secular nongovernmental bodies.

Concomitantly, historical expressions of concern about the future of Quebec in Canada and of

the desirability of independence resurfaced with

broader support. In 1980 the ruling Parti Que'be'

cois lost a referendum seeking a mandate to negotiate some form of “sovereignty-association”

with the rest of Canada. Since that time, popular
641 Health Care Technology and Its Assessment in Eight Countries

support in Quebec for sovereignty has remained at

approximately 30 to 45 percent of poll respondents. In keeping with a desire for increased autonomy, Quebec chose not to consent to the

Constitution Act of 1982. The decade since then

has seen the failure of two major, federally initiated constitutional proposals designed in part to

satisfy Quebec’s agenda. Neither has received sufficient support from the constitutionally required

combination of provinces and population.

HEALTH STATUS OF THE POPULATION

The health of Canadians has improved immensely

throughout the twentieth century; life expectancy

is now 81 years for women and 74 years for men

(126). Reflecting a general pattern among Organization for Economic Cooperation and Development (OECD) countries, ischemic heart disease

and cancer are the two main causes of death. Tobacco appears to be a major contributor to these

tolls, despite heavy taxation of tobacco products.

Among Canadian men, ischemic heart disease

accounts for 24 percent of deaths, and lung cancer

for 9 percent (1990 figures) (114). Among Canadian women, ischemic heart disease accounts for

22 percent of deaths, followed by breast cancer (5

percent) and lung cancer (5 percent). Motor vehicle accidents account for 3 percent of male

deaths and 1 percent of female deaths, with much

larger percentages among young men.

The Canadian population continues to grow

from both immigration and natural increase. In

1990 the birth rate was 15 per 1,000 population

and the rate of natural increase was 8 per 1,000.

Birth rates are highest in the Atlantic provinces.

Infant mortality was 6.8 per 1,000 live births, of

which 68 percent occurred in the first month (neonatal mortality) (11 6). These rates were highest in

Newfoundland and the Northwest Territories, the

parts of the country with lowest average incomes.

Circulatory anomalies were the largest single

cause of infant deaths (14.3 percent of female

deaths and 11.8 percent of male deaths). Obstetrical complications accounted for about 10 percent

of infant deaths (115).

Data on overall morbidity are not routinely

gathered; however, accurate data are available on

hospital use. Overall rates of use (excluding pregnancy-related admissions) indicate that men and

women are equal users with a national rateof117

admissions per 1,000 population in 1990. For men

the three greatest causes of hospitalization were

diseases of the circulatory system (18.4 per

1,000), gastrointestinal conditions (16.1 per

1,000), and respiratory disease (15.7 per 1,000).

Pregnancy and related care was the main reason

for female admissions to hospitals (40.7 per

1,000), followed by gastrointestinal conditions

(15.1 per 1,000) and diseases of the circulatory

system (14. 1 per 1,000) (1 14). In general, lengths

of stay have decreased throughout the last decade,

although a growing proportion of beds in acute

care hospitals are occupied by long-term residents, in part because of increasing numbers of

very old people.

THE CANADIAN HEALTH CARE SYSTEM

Under the Canadian constitution, health care is a

provincial responsibility; the federal role is limited to health care financing, health protection,

and environmental health. Although all Canadians are insured for health services, 13 different

health care systems exist, one in each of the provinces and territories and a federally managed one

for aboriginal peoples.

The current system of universal health insurance grew from concerns at both federal and provincial levels that insurance, particularly for

hospital services, was needed to improve the lives

of Canadians. In the aftermath of the Second

World War, a federally subsidized program was

offered to the provinces in return for their ceding

the collection of personal and corporate income

taxes to the federal government. Not surprisingly,

the provinces rejected this plan. Nonetheless, high

public expectations led to the creation of provincially administered plans in several western provinces and the growth of private sector Blue

Cross/Blue Shield plans in several other provinces. Wrangling continued until 1956, when the
Chapter 3 Health Care Technology in Canada (with special reference to Quebec) 165

two levels of government agreed to a financing

scheme based on equal federal and provincial

shares. By 1958 a federally subsidized, provincially administered program of hospital insurance

was in place.

This program, coupled with public pressure,

led the government of Saskatchewan to establish a

program of comprehensive, publicly funded medical insurance in 1961. Physician-sponsored insurance carriers, alarmed at the support for and

success of government-managed insurance, were

instrumental in the 1961 federal decision to form

the Royal Commission on Health Services, directed to address the issue of national health insurance (3, 122).

The Commission’s report, released in 1964,

called for a federally subsidized, provincially administered system of comprehensive medical insurance. The newly elected federal Liberal

administration, having campaigned on a promise

to establish a national health insurance system,

provided a receptive policy environment. Canada’s comprehensive Medicare system was thus

created, with federal contributions conditioned on

four criteria: services were to be comprehensive,

benefits were to be universally available, coverage was to be portable from province to province,

and the system of insurance was to be publicly administered (66). Despite some initial resistance

from physicians, including job actions in several

provinces, all provinces had joined the scheme by

January 1, 1971. Since then, support for national

health insurance has remained high among both

physicians and the public.

Recently, several provinces have reviewed

their health care systems comprehensively. These

reviews include the Commission d’enquete sur les

services de Sante' et les Services Sociaux in Quebec, and groups in Ontario and British Columbia

(56, 102, 106). All of these have been generally oriented to prevention and regionalization and, more

recently, to quality assurance, technology assessment, and cost control. The multiplicity of planning reports underscores the fact that each

province designs its own approach consistent with

the goals and conditions for federal financing. Although all provinces need to slow the growth of

expenditures, the controls in place and available

policy options differ among them.

Despite provincial variation, Canada’s current

health care system represents a balance among

government direction, consumer choice, and provider autonomy. Universal health insurance, administered by provincial governments on a

shared-cost basis with the federal government,

covers inpatient and outpatient care in hospitals,

ambulatory care and, in some provinces, prescribed medications and appliances. All provinces

also provide some coverage for long-term care.

Hospitals are autonomous corporate bodies administered by boards of directors. Patients are free

to consult the physician of their choice as often as

they desire. Physicians are reimbursed on a feefor-service basis, with fee schedules determined

by negotiations between provincial medical

associations and ministries of health. When the

system was first introduced, physician incomes

increased from the levels of the pre- insurance era.

Over the last decade, federal health care financing has fallen in real terms, and several provincial

governments have considered introducing copayments, deductibles, or other revenue sources that

might simultaneously limit the demand for services. Provincial options are, however, limited by

provisions of the Canada Health Act. Promulgated in 1984, this federal legislation sought to

reaffirm the principle of universality by banning

user fees and “extra billing” by which physicians

would charge patients directly for services at rates

higher than those of the fee schedules negotiated

between medical associations and governments

(71). The bill received broad public support but

was viewed by several provinces as unwarranted

federal interference in a clearly provincial jurisdiction.

In spring 1993, candidates for the leadership of

the federal Progressive Conservative Party stated

publicly that user fees may have a place in the Canadian health care system. It remains to be seen

how provinces will respond to increasing health

care expenditures in light of decreasing federal

contributions coupled with the revenue restrictions mandated by the Canada Health Act. Despite

increasingly fragile fiscal health, provincial gov-
66 I Health Care Technology and Its Assessment in Eight Countries

emments have shown little interest in moving

away from a single-payer system.

In addition to the administrative efficiency of

having one payer for all services, the provincial

governments exercise a fair degree of control over

facilities construction and technology diffusion.

Hospitals generally receive an annual, prospective global budget to cover operating expenses,

and some provincial health ministries administer

separate capital budgets for facilities construction

and equipment. This centralized resource allocation scheme, coupled with a degree of power to determine which services in which locations will be

deemed reimbursable, has led to less technology

uptake than in the United States (24,107).

Control over physician numbers has been rather more problematic. Primary care physicians and

specialists are approximately equal in number, but

the total numbers of both are perceived in some

quarters to be excessive. During the 1960s overly

generous predictions of the growth rate in Canada’s population and in the number of doctors who

would leave Canada after Medicare was

introduced led to an increase in the number of

places in Canada’s 16 medical schools. A generation later, provincial governments are trying various schemes to limit the number of practicing

physicians and, more directly, expenditures for

physician services. Recognizing the need for national coordination, the Conference of Deputy

Ministers of Health commissioned a report to examine the state of medical personnel in Canada.

The report made a number of recommendations

that, in the absence of a national framework for action, have been variably adopted by provincial

governments (10).

Despite an increase in the number of physicians

per capita, a geographic maldistribution has persisted, leaving urban areas overstaffed and rural

areas understaffed. In the province of Nova Scotia, for example, roughly 900 of the province’s

2,000 physicians practice in the Halifax-Dartmouth area, home to 36 percent of the population.

The provinces have developed a variety of policies to address maldistribution and contain the

cost of physicians’ services. Quebec appears to

have been the most effective, establishing caps on

gross revenues for family physicians and specialists. Accompanying these caps is a fee differential

such that recently qualified physicians practicing

in one of the province’s three urban areas receive

only 70 percent of the mandated fees, whereas

those in underserved areas receive 115 percent if

they are family physicians and 120 percent if specialists. British Columbia, the province with the

most physicians per capita, sought to limit the

number in the Vancouver area by tying new billing

numbers to specific locations outside Vancouver.

The courts, however, deemed this restriction an

unconstitutional limit of rights to mobility.

Perhaps mindful of the experience in British

Columbia, in 1993 Ontario announced that family

physicians, pediatricians, and psychiatrists establishing practices in all but a few locations designated as underserviced would receive only 75

percent of mandated fees. This plan appears to be

an attempt to circumvent legal challenges based

on limitations to mobility rights while not explicitly invoking the “notwithstanding” clause of the

Canadian constitution. This clause has not yet

been used to address physician distribution but

may become increasingly attractive as provincial

governments perceive that physicians are maldistributed and a cause of rising health care expenditures.

Given the particular reference to Quebec in this

chapter, two features of that province's health care

system deserve mention. The first is the integration of health and social services, which are managed by single bodies at the provincial and

regional levels. Quebec has established a province-wide network of Centres Locaux de Services

Communautaires (CLSCs), intended to be the

front-line point of service. CLSCS have been most

successful in rural areas but less so in urban areas,

where they face competition from physicians in

private offices.

The second distinctive feature of Quebec’s system is regionalization. The province is divided

into 18 administrative regions, each under a regional authority, the Re'gie Re'gionale de la Sante'

et des Services Sociaux (RRSSS). Although these

RRSSSS have been involved for some years in

management of the health system and particularly,
Chapter 3 Health Care Technology in Canada (with special reference to Quebec) 167

responsible for a portion of the budgets for

technology acquisition, their role has been greatly

enhanced by recent reforms giving them broad

powers over planning and organization of services

and the allocation of resources.

One final point is the importance of the frame

of reference from which one examines the Canadian health care system. The United States, by virtue of its size and power and its proximity to

Canada (both geographically and culturally),

looms large as a standard of comparison in any examination of the Canadian way of doing things.

From this vantage point, Canada appears to be doing everything right, spending 30 percent less per

capita on health care than the United States and

having better experience in both infant mortality

and life expectancy (108). However, a more global

view reveals that Canada spends more per capita

on health care than any other country in the world

except the United States. In 1989 Canadian per

capita spending was 36 percent higher than that of

Germany and more than double that of the United

Kingdom (108). From this point of view, Canadian decisionmakers are increasingly concerned

about the future health of Canada’s health care

system and are turning for help to a number of

tools, including technology assessment.

CONTROLLING HEALTH CARE

TECHNOLOGY

 Macro-Mechanisms for Fiscal

Management

In Canada the diffusion of health care technology

is determined largely by the health care system’s

overall structure. Factors promoting or limiting

the system’s expansion have significant effects on

technology diffusion. Among these structural factors, autonomy of both hospitals and physicians is

the main force favoring technology acquisition

and use. Fee-for-service remuneration, making

the physician a quasi-entrepreneur in a publicly

funded system, often creates incentives for practitioners to adopt and use technology. Hospitals’

pursuit of institutional development and physicians” pursuit of professional development combine to favor the rapid uptake and diffusion of

innovative health care technologies.

Countering these expansive forces are several

funding and management mechanisms, the most

important of which is the global budget formula

used to fund hospitals. Under this system hospitals are provided with annual budgets for the basket of services they provide. Hospitals retain a fair

degree of latitude in choosing which services they

will offer, but they must address specified health

needs.

By limiting the resources available for hospital

services, the global budget constrains the ability

of hospitals both to acquire expensive technologies and to expand services. This restriction applies not only to inpatient services but also to a

large number of outpatient services, such as laboratory tests and radiological examinations, most

of which are dispensed by hospitals. Global budgeting at the hospital level thus offsets the expansive incentives of fee-for-service remuneration of

physicians. In several provinces, incentives for

technology use are further tempered by measures

to cap physician billings.

Rules governing the management and financing of capital expenditures constrain hospital autonomy in developing new services, particularly

those requiring expensive technological innovations. In Quebec, hospital capital budgets are separate from operating budgets, and depreciation is

not a recognized component of the global budget.

Because institutions have limited internal funds

for financing capital spending, they must obtain

subsidies from regional authorities or the provincial government for all but small projects. Even if

a hospital manages to obtain private donations to

finance some of its capital projects, authorization

by regional authorities or provincial governments

is still required by law in most cases. Thus, regional and provincial planning and financing act to restrain the development of new services.

Public funding and management of medical

and hospital services with the provincial government as sole payer for health services is the key

factor in modulating the forces and incentives that

determine technology diffusion and use (47). By
68 I Health Care Technology and Its Assessment in Eight Countries

collectivizing health care financing through taxation and subsequent public funding, the public has

both a right to health care services and an obligation to assume the burden of their costs through

taxation. Regulation seeks to balance the citizen

as taxpayer and as health care consumer. Government, both as the overall manager of the health

care system and as a body of elected representatives, must try to minimize the tension between

these two perspectives.

 Recent Policy Reports and Decisions

Given minimal federal jurisdiction over the health

care system, national policy reports or decisions

are limited to particular, generally narrow issues.

Throughout the 1980s, attempts to establish a national technology assessment council or body ran

aground on the shoals of provincial discomfort

with what were perceived to be federal incursions

into perhaps their most critical area of jurisdiction. As a result, national-level policy, data, and

reports on technology have generally appeared

sporadically and have had minimal impact. In

1993 the newly elected Liberal government promised a national inquiry into Canada’s health system with a view to identifying opportunities for

reform.

In Quebec the Commission of Inquiry on

Health and Social Services reviewed the health

care system from 1985 to 1988 (56). The commission’s report led in December 1990 to a complete

overhaul of legislation governing health and social services, redefining the system’s organizational and functional features (69). Despite strong

protests from the medical profession, the new legislation was enacted in the fall of 1991 with slight

modifications.

With regard to health care technologies, the

Commission identified three major problems: obsolescent equipment and a technological lag, haphazard diffusion of certain technologies, and a

need for technology assessment. Addressing obsolescent equipment and the technological lag, the

Commission noted that the lag perceived in relation to the United States vanished when European

countries were compared with Quebec. Haphazard technology diffusion occurred when diffusion

did not follow the priorities dictated by hospital

size and expertise—for instance, when a region’s

first magnetic resonance imaging (MRI) device

was placed in a hospital other than the one responsible for neurological and neurosurgical services.

Regarding the effectiveness and efficiency of

health care technologies, the Commission called

attention to the frequent lack of solid data that

could guide decisionmaking.

In response to perceived technological lags, the

annual investment in new technologies was increased (from $15 to $25 million a year). ] To rationalize the diffusion of expensive and

sophisticated technologies, increased powers

were granted to the Minister of Health and Social

Services to control the organization and deployment of highly specialized services. Two additional steps were recommended: 1) adding health

care technology assessment to teaching, research,

and dispensing of specialized services as a mission of Quebec’s university hospitals and institutes, and 2) establishing a body to assess health

care technologies for Quebec. The government

created the Conseild’ evaluation des Technologies

de la Sante' (CETS) a few weeks before the Commission’s report was published.

 Research Policy

Canada has historically ranked near the bottom of

the OECD countries in terms of per capita government spending on research (74). Both federal and

provincial governments support various types of

research through funding councils responding

primarily to investigator-initiated proposals as

well as through other programs of more directed

funding.

1 All dollar figures are given in current canadian dollars. The value of the Canadian dollar against other currenices has fluctuated but has

generally been in the range of $1 CAN = $0.74 U.S. to $0.82 U.S. over the last decade.
Chapter 3 Health Care Technology in Canada (with special reference to Quebec) 169

Most government spending on health-related

research is through the Medical Research Council (MRC) annual budget of approximately $250

million. Most of this amount funds laboratorybased basic science research, although the MRC

recently unveiled a strategic plan calling for greater efforts in health services research. Currently,

most government-funded research relevant to

technology assessment and health policy is supported by the federal National Health Research

and Development Program (NHRDP) and provincial funding bodies in Alberta, British Columbia,

Manitoba, Ontario, Quebec, and Saskatchewan.

Measuring the actual amounts spent on such research is difficult, as almost all funding bodies

give money to an array of projects ranging from

laboratory basic science to clinical epidemiology

and psychosocial research. In addition, significant

amounts of funding are allocated to career awards,

which provide salaries for university-based researchers. Universities are expected to cover overhead costs, although biomedical research is

shifting increasingly toward hospital-affiliated

and -based research institutes that free scientists

from teaching and other university obligations. In

addition to public sector support of research, philanthropic organizations, particularly those focused on a given condition (e.g., the Canadian

Cancer Society, the Heart and Stroke Foundation),

are important funding sources for investigator-initiated research.

Industry also funds research, but the level of

spending is nearly impossible to measure for

proprietary reasons. The promise of increased corporate research spending was one of the justifications for recent federal legislation extending

patent protection on pharmaceutical products. To

date, industry has favored channeling funds to established university-based researchers rather than

investing in “bricks and mortar” to build freestanding research institutes.

Technology assessment organizations are

another source of funds for research. Recent directed grant competitions in Quebec and British

Columbia, operating through requests for proposals limited to technology assessment, indicate that

technology assessment is an area of growing importance for research funding bodies. The national

body, the Canadian Coordinating Office for

Health Technology Assessment (CCOHTA), was

established with a fairly rudimentary budget for

research; however, it has recently been directed by

the Conference of Deputy Ministers to strengthen

its research efforts. In addition, several provincial

bodies, including CETS in Quebec, have allocated some of their budgets to generate information of particular relevance to ongoing or

impending assessments. The Ontario and Manitoba governments have funded university-based research groups with the understanding that some

portion of their efforts will be directed to policyrelevant research.

Although Canada lags in government-funded

research, Canadian scientists have managed to

produce valuable advances, both in the laboratory

and in addressing policy issues. Given the great

need for health services research and the availability of administrative and other data sources in the

universal health insurance system, research pertinent to technology assessment appears poised to

take over a greater share of Canadian spending on

biomedical research.

 Control of Pharmaceuticals

Pharmaceuticals are the most formally regulated

of technologies in the Canadian health care system, and have been increasingly targeted for systematic assessment. Several vehicles have been

proposed for this task, including a federal-provincial undertaking to establish a stand-alone body

for assessing pharmaceuticals (50). Part of the tension surrounding the creation of such a body stems

from concern over the degree of likely duplication

of activities already underway at CCOHTA and in

provincial drug and technology assessment bodies. Regardless of who ends up doing the work,

systematic assessment of pharmaceuticals can

only grow in importance over the next decade.

Marketing Authorization and

Patent Protection

The Food and Drug Act requires that before a

pharmaceutical can be authorized for marketing in

Canada, its safety and efficacy must be demon-
—

70 I Health Care Technology and Its Assessment in Eight Countries

strated. Authorization is the responsibility of the

Health Protection Branch of Health and Welfare

Canada. Implementing post-marketing surveillance mechanisms is a recognized need but remains a largely unfinished project.

Over the past few years, pharmaceutical patent

protection, which falls under federal jurisdiction,

has been a prominent issue in Canada. Legislation

in effect in the early 1980s was said to provide the

weakest patent protection among industrialized

nations. In 1987, following commitments of the

pharmaceutical industry to increase research and

development investment in Canada, the federal

government adopted Bill C-22, which increased

the patent duration for pharmaceuticals and essentially ended a system of compulsory licensing that

had benefited manufacturers of generic drugs.

Early in 1993 the Canadian parliament adopted

a new act increasing patent protection from 17 to

20 years. Given the strong likelihood that longer

patent protection would increase pharmaceutical

prices and thus provincial expenditures, several

provinces protested the legislation. However,

Quebec, home to roughly half of Canada’s patented medicine industry, supported the change.

According to the Pharmaceutical Manufacturers

Association of Canada, the proportion of sales

revenue allocated by its members to research and

development increased from 3 percent in 1979 to

10 percent in 1992. The legislation extending patent duration contains neither a provision for independent assessment of the degree to which the

pharmaceutical industry meets its promises to increase research spending in Canada, nor penalties

for shortfalls.

Of concern to Canadian policy makers has been

evidence regarding the prices of patented medicines in Canada. According to a recent study produced by the Patented Medicine Prices Review

Board (a federal surveillance organization established as part of the C-22 provisions) prices in

Canada are higher than in other countries. Drugs

with the highest sales volumes were reported to be

priced an average 20 percent higher than the median international price, and launch prices of new

products were similarly elevated.

Authorized Drugs and Prices

Most provinces prepare formularies (lists of authorized drugs) to manage their pharmaceutical

services programs. In Quebec, the government

body charged with advising the minister in this regard is the Conseil Consultatif de Pharmacologic

(CCP). The Council’s recommendations must, by

legislation, consider the therapeutic value of pharmaceuticals and the fairness of their price. The

CCP has also recently commissioned a user’s

guide for certain expensive drugs whose indications are controversial, such as thrombolytics,

erythropoietin, and colony-stimulating factors.

There are two regularly updated formularies, one

for pharmaceuticals provided in health care facilities and the other for those provided outside such

facilities to welfare recipients and all persons over

age 65. (These are the only ambulatory patients

whose prescription drug costs are insured by public programs in Quebec.) Other provinces generally have similar programs with the exception of

Saskatchewan, which insures prescription drug

costs for all citizens.

For services to hospitalized patients, drugs are

limited to those on the formulary. However, exception mechanisms are provided and widely

used. The formulary does not set the prices paid

for drugs; their cost is covered directly by the

global budget of the relevant institution. To minimize drug expenses, most drugs are purchased in

bulk.

The formulary for services to eligible elderly

and indigent ambulatory patients includes not

only the drugs covered but also the price reimbursed by the provincial health insurance plan

(RAMQ). This program covers only drugs prescribed by a doctor or dentist. Until recently, a median-price policy was used, setting the maximum

allowable reimbursement for a drug at the median

price for that category of drug. For more expensive drugs, the patient pays the cost difference (unless it is assumed by the pharmacist).

Changes implemented early in 1993 established guaranteed sales prices. Under this scheme,

manufacturers agree to firm prices for their products for a period of six months, and wholesalers

agree to a set percentage for distribution charges.
Chapter 3 Health Care Technology in Canada (with special reference to Quebec) 171

These promises form the basis of the price appearing in the formulary; however, the price must not

be higher than it is in other Canadian provinces.

This drug program for ambulatory patients accounts for about 4 percent of public health care expenditures. Its cost increases have been the fastest

and the most difficult to control. From 1987 to

1991, drug expenditures rose an average of 16 percent annually, resulting equally from higher costs

per drug and higher numbers of prescriptions (65).

In 1992 the government imposed a $2 user fee per

prescription for elderly patients not receiving a

guaranteed income supplement. This change was

perceived by some as a first breach of free access

to services guaranteed by the Canada Health Act,

hence as the first step toward widespread user fees

to control costs.

 Control of Medical Equipment

Marketing Controls

Current regulatory mechanisms for medical devices are much less developed than those for pharmaceuticals. Regulation of medical devices is a

federal responsibility and aims to make manufacturers or importers responsible for safety and effectiveness. Manufacturers or importers are

required to register devices marketed in Canada

with Health and Welfare Canada and to comply

with labeling standards specifying (among other

things) who is responsible for the products. A

small number of explicit standards apply to specific products.

Users of medical devices are urged to inform

the federal Health Protection Branch’s Bureau of

Radiation and Medical Devices (BRMD) of any

problem they encounter with these products, especially regarding safety. Nevertheless, device regulation is not an obstacle to the introduction of

innovative medical devices in Canada. The relative lack of regulatory requirements for certification and disclosure of devices as compared with

pharmaceuticals has recently created controversy,

particularly regarding breast implants. This situation may shift with recent changes in device evaluation requirements by the federal BRMD and an

increased focus on devices with particularly high

risks (67).

Capita/ Expenditures by Hospitals

In Quebec rules governing hospital acquisition

and funding of medical equipment differ for replacing equipment and for developing new services. If an acquisition does not entail an increase

in operating costs, the institution may finance the

purchase with a line of credit granted to it by the

Quebec Ministry of Health and Social Services

(MSSS) for capital and equipment expenditures.

However, the regional authority’s authorization is

required if the purchase falls into one of the following categories:

m

●

●

m

●

m

●

medical imaging,

radioisotopes and laboratory automation,

electronic patient monitoring,

radiation therapy,

anesthesia and resuscitation,

hemodialysis, or

pacemaker implantation.

If one of these projects is authorized, the regional authority may help finance the purchase

through a line of credit allocated to the region by

the ministry. Half of available capital funds for a

given region are managed by the regional authorities; this gives them considerable influence and

planning power over the distribution of medical

equipment.

If the project entails an increase in operating expenses or will provide new, so-called superspecialized services, the institution must obtain

written authorization from the minister, who consults the regional authority before making a decision. Superspecialized services include:

■

m

■

■

m

8

●

cardiac surgery,

neonatal surgery,

neurosurgery,

organ transplants,

bone marrow transplants,

neonatal intensive care and bum units,

hemodialysis,

high-risk pregnancy units,

radiation therapy,
— ---

72 I Health Care Technology and Its Assessment in Eight Countries

computed tomography (CT) scanning,

magnetic resonance imaging (MRI),

photon- or positron-emission tomography, and

extracorporeal shock wave lithotripsy.

If a project is authorized, MSSS funds are approved for capital expenditures and a negotiated

portion of operating expenses. In recent years this

funding has tended not to coverall the costs, leaving a large gap to be filled by other sources—in

particular, hospital fundraising campaigns. Government funding for these services usually covers

half of capital costs.

 Placement of Services

Planning

For superspecialized services, centralized review

and funding of new services are the main regulatory mechanisms controlling their placement. In

Quebec the MSSS has established committees of

medical experts; local, regional, and provincial

administrators; and, in some cases, representatives from patient associations who recommend

how to orient the organization and development of

these services. This planning, which is open to

considerations of health care technology assessment, has had a major impact on service placement.

Permits for Private Laboratories

In Quebec anyone wishing to operate a private

medical laboratory or diagnostic x-ray facility

must obtain a permit from the MSSS. The Public

Health Protection Act stipulates that such a permit

may be denied if the needs of the region do not justify it. The Act provides some control over the organization of services outside hospitals. As a

result, most laboratory services are dispensed by

hospitals.

The private sector’s share of medical laboratory

output is less than 5 percent as only services provided in hospitals are insured. (In contrast, in Ontario about half of all medical laboratory services

are provided outside hospitals in privately owned

laboratories.) Unlike medical laboratory services,

diagnostic X-ray services provided by private facilities are insured in Quebec. For the most part

these facilities are located in large urban centers,

and their output represents about a third of all xray services.

Decisions on Coverage

Decisions on insurance coverage shape service

placement, as a given service maybe covered only

in hospitals. Such is the case with obstetrical ultrasound in Quebec so as to prevent duplication of

services by hospitals and private clinics and to

limit overutilization. Additionally, by limiting

coverage to hospitals, obstetrical ultrasound falls

under the global budget, which promotes substitution of services. These administrative decisions,

although not explicitly limiting the amount of a

technology in place, have a general uptake-retarding effect when combined with global hospital

budgets. Services may also be insured only in specific locations; an example is extracorporeal biliary Iithotripsy, for which agreements administered

by the provincial health insurance plan state that

the service is covered only in three hospitals designated by the minister.

 Control of Health Care Providers

Medical Personnel

One way to control the use of health care technology is by regulating the numbers and training of

medical personnel. Several provinces have attempted to limit the growth in the number of physicians. In the 1980s Quebec used quotas for

residency and internship positions but despite

this, the number of doctors increased two to three

times more quickly than the population. The government has recently announced firmer action

with regard to medical school enrollments to

make growth in the number of physicians more

congruent with demographic changes (60).
Chapter 3 Health Care Technology in Canada (with special reference to Quebec) 173

Proportion in

private clinics

Year Number of examinations Total costs ($ Canada) (in percent)

1972

.

4,695 -

$ 134,295 77% ‘

1973 11,791 349,965 79

1974 25,256 752,772 86

1975 61,070 1,820,012 98

1976 89,141 2,659,608 96

1977 12,693 380,415 99

1978 5 25 0

1979 0 0 0

1980 4 20 0

SOURCE R Jacob Quebec Ministry of Health and Social Services, personal communication 1994

Ceilings on Physician Revenue

Regulated ceilings on gross revenue earned by

doctors have been instituted to counter incentives

for expansion inherent in fee-for-service remuneration. In Quebec the limits are individual for general practitioners and collective for specialists.

For general practitioners a quarterly revenue ceiling is set above which there is a 75 percent reduction in fees paid for services rendered. For

specialists an average annual target revenue is negotiated between the MSSS and the Federation of

Medical Specialists (FMSQ) for the entire group.

Targets for each specialty practice are then negotiated within the FMSQ. If, during a given year,

the average target revenue is exceeded, fee adjustments are negotiated downward for the following

year to compensate for overages.

In addition, activit y ceilings for certain services

and practice revenue ceilings for some specialties

are set out in agreements with physician organizations. For example, in 1992 any radiologist performing more than 25,000 examinations and

receiving more than $214,000 in practice revenue

would have his or her fees above these limits reduced by 75 percent for the remainder of the calendar year.

Conditions for Coverage of Services

Fee schedules and locations for insurable services

can be used to regulate volumes for specific services. For instance, in Quebec the soaring use of

injections of sclerosing agents to treat varicose

veins from 1970 to 1974 was both curtailed and redirected toward specialists by fee schedule

changes (54).

Limiting the locations where the service was

insured was used to regulate use of breast thermography. From 1972 to 1976, thermography use

skyrocketed in Quebec as the annual number of

examinations increased from 4,500 to about

90,000 (table 3-2). More than 95 percent of these

examinations were performed in private x-ray laboratories. A generous fee for a technology requiring no major investment and involving few risks

made this procedure an attractive opportunity for

some radiologists. However, rapid increases in

output and expenditures led the MSSS and the

FMSQ to review the data on thermography’s effectiveness. The procedure is not very sensitive (a

conclusion that was later reached at a U.S. National Institutes of Health consensus conference as

well) and should not be used routinely in breast

cancer screening programs (123). In 1976, following negotiations with the FMSQ, the government

deinsured the service in private laboratories. Despite continued coverage in hospitals, thermography was completely discontinued by 1978.
74 I Health Care Technology and Its Assessment in Eight Countries

 Control of Provider Locations

In Quebec the government has implemented several policies to ensure an equitable distribution of

physicians in the province. These include:

■ scholarships to medical students who agree to

practice in areas short of physicians

 isolation bonuses for doctors in remote areas;

■ differential remuneration for new physicians:

reduced (70 percent) in regions where there is

an adequate supply and increased (for general

practitioners, 115 percent, specialists, 120 percent) in designated areas; and

● incentives for establishing and remaining in

practice in remote areas, minimum revenue

guarantees, and grants for specialized training

for doctors in designated areas.

The distribution of general practitioners is generally agreed to be satisfactory, but that of specialists is still suboptimal, with heavy concentrations

in the three urban regions where faculties of medicine are located. Some basic specialties, including

general surgery, internal medicine, psychiatry, obstetrics, anesthesia, and radiology, continue to be

unevenly distributed. The implications of this imbalance are unclear, as CETS recently reported

that rural residence does not appear to be

associated with decreased rates of any of nine

common surgeries (36). Nevertheless, legislation

requiring the definition and implementation of

medical staffing plans for each region was recently enacted to address physician distribution.

 Efficacy of Control Mechanisms

Cost Control

With 8.7 percent of its gross national product going to health care in 1989, Canada ranked second

in the world in per capita health spending after the

United States (109). Growth in health care spending is generally considered under control in Canada, in contrast to the situation in the United States

(48,49). Canada’s universal public health insurance plan, permitting the collective purchase of

health care services, appears to be the main factor

responsible for these differences.

Given strict control over the number of hospital

beds available, Quebec’s experience suggests that

growth in hospital spending has been successfully

limited by global budgeting limiting the volume

of resources utilized in the hospital sector (40).

For physician services, costs were initially controlled by slowing price growth through contractual negotiation and, more recently, by controlling

the volumes of services provided by physicians.

The question of underfunding arises frequently. As noted earlier, obsolescent equipment and

technological lag are concerns often raised by observers of the Canadian experience and are taken

as indications that the system is underfunded (73).

In the case of obsolescent equipment, the Quebec

experience with medical imaging suggests that

use of this technology is high and that the equipment pool is constantly growing. Data comparing

Canada and the United States indicate a 20 percent

higher rate of exams per population in Canada

(75). However, a clear preference for using available funds for new equipment rather than consolidating and upgrading existing equipment means

that older, serviceable equipment may well continue to be used.

Technological lag is striking only in relation to

the United States. In the case of capital-intensive

equipment, financial and regulatory control

mechanisms clearly slow diffusion. Less capitalintensive technologies not subject to these mechanisms, such as ultrasound, usually diffuse at a

rapid pace, as illustrated by the data in table 3-3. In

any case, evidence of obsolescence or technological lag leading to suboptimal health outcomes is

difficult to find.

Equal Access to Services

In Canada the publicly funded, universal health

insurance plan guarantees the entire population

access to health services. Care whose cost is not

reimbursed, personal financial disasters linked to

illness, and uninsured patients are eliminated. At

least for hospital services, the data show that the

volume of services used is largely determined by

need, not personal income (86).
Chapter 3 Health Care Technology in Canada (with special reference to Quebec) 175

Specialized hospitals as

Year Hospitals reporting use Annual rate of increase proportion of users

Before 1977

— .

13 — 16,9%

1977 16 23.1% 18.8

1978 22 3 7 5 27.3

1979 30 36.4 46,7

1980 43 43,3 44.2

1981 54 25,5 51.8

1982 63 16.6 58,7

1983 71 12,7 5 4 9

1984 76 7,0 56.6

SOURCE R Jacob, Quebec Ministry of Health and Social Services, personal communication, 1994

In Quebec proximity to resources is still variable, reflecting the nonuniform distribution of the

population. People living in areas far from large

urban centers continue to travel to receive many

services, even in cases where it would be reasonable to provide these services closer by. Although

steps are being taken to address this situation,

studies analyzing geographic variations in utilization rates of certain services in Quebec have not

demonstrated a lower level of use in remote areas

than in areas where resources are concentrated. On

the contrary, for elective surgery, utilization seems

to be higher in remote areas (36).

Efficiency

In Quebec resource limitations imposed by global

budgeting are forcing hospitals to consider efficiency in decisionmaking, creating a context favorable to health care technology assessment. The

combination of pressure exerted by the global

budget and the production of timely, pertinent assessment data has resulted in efficient choices in

such cases as the use of contrast media in radiology, thrombolytics, and the reuse of hemodialyzer

filters (32).

Organizing superspecialized services efficiently remains difficult, however. In these sectors,

particularly tertiary cardiology and organ transplantation, resources are suboptimally dispersed,

for these services are dispensed in a large number

of hospitals—several of which have low volumes

of activity. Various studies have shown that health

outcomes improve and average costs fall as volumes of activity increase in superspecialized services (33).

Individual hospitals, however, tend to approve

projects proposed by their physicians aimed at developing high-tech services. Resource dispersion

then results when the hospitals’ individual global

budgets prevent their achieving levels of activity

generally recognized as sufficient to guarantee

good performance. External review mechanisms

for these projects have not been very effective. Superspecialized services are currently being examined by planning committees with a broad

representation of experts and managers, and their

restructuring is an MSSS priority.

HEALTH CARE TECHNOLOGY

ASSESSMENT

The Canadian Task Force on the Periodic Health

Examination (CTFPHE) is an early example of organized technology assessment in Canada. Established by the Conference of Deputy Ministers of

Health in 1976, the CTFPHE was mandated to

summarize scientific information on clinical preventive services in order to make recommendations to practicing physicians. The CTFPHE was

established soon after the Lalonde report appeared

in 1975 (83).

This report (published under the auspices of

then-Minister of National Health and Welfare

Marc Lalonde) argued for a reorientation of Canada’s health care system and spending toward pre-
—. — —

76 I Health Care Technology and Its Assessment in Eight Countries

ventive services and practices. In this climate the

CTFPHE was seen as a logical step toward preventive health care.

Members of the CTFPHE were chosen on the

basis of their credibility as scientists. The

CTFPHE began by establishing systems for grading scientific evidence based on methodological

quality (an exercise that broke new ground in this

area). Recommendations were then to be published on whether decisions to implement specific

interventions were supported by scientific evidence. The first report was released in 1979. The

CTFPHE is currently revising all of its recommendations for re-release in 1994 (21).

In addition, there have been several consensus

conferences in Canada addressing clinical decisionmaking and targeting their findings to practicing physicians (e.g., 1988 Consensus Conference

on Cholesterol). Despite some minor differences

in organization, scope of final reports, and the actual conference process, consensus conferences in

Canada are broadly similar to those in other countries (89). The impact of consensus reports in Canada has been generally weak. Systematic

investigation of the effects of a consensus statement recommending reduced rates of cesarean

section led to a conclusion that statements had had

little effect in the absence of specific incentives or

disincentives for their adoption (85).

The measurable impact of CTFPHE recommendations on practice has been similarly weak.

Initial dissemination strategies, focusing on publication of recommendations in the Canadian

Medical Association Journal and L’ Union Me'dicale du Canada, appear to have been less effective

than had been expected. The growing recognition

of the importance of actively targeting such information to practitioners as part of a comprehensive dissemination strategy bodes well for

increased impact of CTFPHE recommendations

in the future.

Although the CTFPHE was created relatively

easily by the Conference of Deputy Ministers,

various proposals for a national technology assessment body went unrealized, perhaps reflecting a lack of consensus on the broader role of

technology assessment in the Canadian health

care system (51). Throughout the 1980s, the federal government’s ability to spearhead a national

technology assessment effort was increasingly

weakened by federal attempts to shift health care

financing to the provincial governments. With decreased federal financial leverage and a climate of

federal-provincial tension, activity shifted to the

provinces.

Canada’s first operational technology assessment body was established in Quebec in 1988.

CETS was mandated to promote, support, and

produce assessments of health care technologies;

to counsel the Minister of Health and Social Services, and to disseminate its syntheses and summaries of available knowledge to all the key

constituencies of Quebec’s health care system

(28). Operationally, CETS draws on the skills of a

permanent secretariat complemented by a scientific panel and outside experts retained for specific

projects.

In 1991 CETS’ 11 reports were examined and

their impacts determined by an independent consulting firm. The consultant concluded that 9 of

the 11 reports had measurable impact and that

CETS’ performance compared favorably with

that of the Swedish Council for Health Care

Technology Assessment (46). Estimated efficiency gains as a result of policy decisions that implemented CETS conclusions amounted to $24.9

million (77).

In evaluating the overall performance of CETS,

the consultant noted that the Council had succeeded in establishing its credibility and in developing

the appropriate scope and quality for its products.

The consultant recommended that CETS promote

awareness of its mandate and activities much

more vigorously (46). This need for increased

attention to dissemination parallels that found

with the CTFPHE.

At the national level, unanimity among the

provinces remained elusive despite awareness of

Quebec’s activities and calls for a national effort in

health care technology assessment. In 1989, shortly after CETS’ creation, an interprovincial symposium on technology assessment was organized

to bring together federal and provincial officials

and academics. At this meeting federal and pro-
Chapter 3 Health Care Technology in Canada (with special reference to Quebec) 177

vincial governments agreed to establish and fund

jointly the Canadian Coordinating Office for

Health Technology Assessment (CCOHTA).

In 1990 CCOHTA was formally created with a

modest annual budget of approximately

$500,000. This appears to have represented a

compromise between provincial interests in a

coordinating and clearinghouse role for a national

body, and concern that a body fully equipped to

assess technologies might lead to federally mandated national standards. To put this budget into

perspective, CETS in Quebec began with an annual budget of $800,000, which increased in

1992-93 to $1 million. Emerging from these tentative beginnings, CCOHTA was established as a

nonprofit corporation whose board of directors includes the 13 Deputy Ministers of Health or their

designates.

CCOHTA’S mandate includes the following six

tasks:

■

■

●

■

m

■

to establish a clearinghouse for information on

health care technology assessment;

to analyze, synthesize, and disseminate health

technology information;

to perform an “early warning” function regarding emerging technologies in the health care

system;

to pursue opportunities for cooperative ventures with technology assessment agencies in

Canadian provinces and in other countries;

to establish links with health care organizations, professional associations, health care

providers, and provincial and territorial health

departments; and

to identify areas where information vital to decisionmaking on health technologies is lacking

and to stimulate research in these areas (22).

Initially granted a three-year term, CCOHTA

has recently been reviewed and will continue to

receive financial support from the provincial and

federal governments while also pursuing an expanded role in assessing pharmaceuticals. In the

review CCOHTA was generally commended for

its work to date; as with the CTFPHE, its dissemination efforts were highlighted for attention

(14).

By 1993 four provinces had established a

technology assessment body or group. In 1991

British Columbia established the British Columbia Office of Health Technology Assessment

(BCOHTA), with an annual budget of $350,000.

The BCOHTA is located within the University of

British Columbia and is mandated “to promote

and encourage the use of assessment research in

policy and planning activities at the government

level and in policy, acquisition, and utilization decisions at the clinical, operation, and government

levels” (15). The provinces of Alberta and Saskatchewan are also establishing technology assessment efforts.

In addition to formal technology assessment

bodies, provincial governments, particularly in

Ontario, have turned to university-based centers

for information relevant to policy. In Ontario the

Center for Health Economics and Policy Analysis

(CHEPA) at McMaster University is funded by

the provincial government, the university, and

other sources. In 1992 the Institute for Clinical

Evaluative Sciences (ICES) was established at the

University of Toronto as a joint venture of the provincial government and the Ontario Medical

Association (OMA). ICES is intended to provide

information relevant for decisionmaking to the

joint management committee established by the

provincial health ministry and the OMA. Similarly, in Manitoba the provincial government funds a

university -aftlliated health services research center at the University of Manitoba.

Further complementing these groups is Canada’s expertise in clinical epidemiology and health

services research. Extensive university-based

training programs exist at a number of Canadian

universities, including McMaster, McGill, and

the universities of Montreal, Ottawa, and Toronto.

These programs not only provide training but

have also raised consciousness about the evaluation of health services in medical curricula across

the country and have fostered practitioner recep-
78 I Health Care Technology and Its Assessment in Eight Countries

tiveness to the products of health services research

and technology assessment.

The growing network of technology assessment bodies in Canada parallels a growing demand for such information from a variety of

stakeholders in the health care system. Provincial

governments, faced with rapidly rising health care

expenditures, are interested in anything that can

improve decisionmaking. Despite the politically

charged nature of decisionmaking on health care

in Canada, most parties have accepted that there is

a role for a more dispassionate consideration of

the effects of technologies. The relative freedom

of Canadian technology assessment bodies from

bureaucratic direction and control has made their

products increasingly palatable to both policymakers and stakeholders.

Increasingly, too, the Canadian public is

demanding more information on health technologies. Under the single-payer, publicly administered system of health insurance, increased

expenditures on health care are perceived less as a

transfer from consumers to suppliers than as a

transfer from one area of governmental responsibility to another. Faced with information needs

and public pressure to act, decisionmakers have

frequently turned to technology assessment bodies for input and recommendations.

Physician and health professional organizations, however, have been somewhat wary of

coordinated technology assessment activities. Although individual physicians are involved in

technology assessment as academics, reviewers,

or employees of technology assessment bodies,

professional organizations have only recently begun to see technology assessment as meriting

attention. There are signs that this may change

with a growing interest in quality assessment and

assurance in a general climate of cost concerns.

Quality issues have spawned growing interest in

clinical practice guidelines, extending the

CTFPHE model beyond preventive services. In

1992 the Canadian Medical Association (CMA),

as a leader of the National Partnership for Quality

in Health (NAPAQH) organized a workshop to develop “guidelines for guideline developers.” Despite misgivings about national-level efforts,

participants identified four “action items”:

■

■

●

develop a definition of quality reflecting both

process and outcomes of care,

hold a national workshop to develop a manual

outlining practical methods for guideline development,

establish a network of guideline developers to

foster standardized methods and avoid duplication, and

maintain an updated database of clinical practice guidelines that would be available to practitioners and patients (19,42).

While different from quality assessment,

technology assessment shares a need for information, for synthesis of evidence, and for dissemination (45,82). Potential cooperation between

technology assessment and quality-of-care initiatives may bring physicians more centrally into decisionmaking on the optimal use of health care

technologies.

Technology assessment has not been simply an

active choice on the part of policy makers; rather,

the Canadian health care system has become conducive to incorporating the results of technology

assessment in decisionmaking. Canada’s onepayer system of universal health insurance allows

for rationality in planning and decisionmaking

about health technologies, as provincial governments can exercise a fair degree of control over

budgets and insurable services. In addition, the

public character of the system creates a receptiveness among political decisionmakers for technical

information that can help them avoid the appearance of making difficult allocation decisions solely on political grounds. This receptiveness should

continue to grow in Canada as provincial governments increasingly try to curtail expenditure

growth that results from mounting demands for

health services from an aging population, compounded by poor economic conditions.
Chapter 3 Health Care Technology in Canada (with special reference to Quebec) 179

TREATMENTS FOR CORONARY

ARTERY DISEASE

In Canada coronary artery disease is a significant

cause of mortality and morbidity. Nevertheless,

despite an aging population, death rates fell

throughout the 1980s, as shown in table 3-4

(1 12,1 13). Increasing numbers of hospital admissions for these conditions (and decreased lengths

of stay per admission) suggest that hospital-based

intervention is the major therapy for coronary

artery disease.

Canada’s first cardiac catheterization was performed in 1946 and was followed by the first open

heart surgery in 1968. Percutaneous transluminal

coronary angioplasty (PTCA) was introduced

during the 1980s and has spread rapidly. By 1993,

37 centers were offering open heart surgery—including correction of congenital abnormalities,

valve surgery, and coronary artery bypass grafting

(CABG)—and 78 centers had cardiac catheterization facilities (25). All provinces except Prince

Edward Island have at least one hospital performing CABG and at least one with catheterization facilities. In the smaller provinces these are usually

the same facility.

In contrast, the number of procedures performed in the United States is proportionately

three times greater. The average annual number of

procedures per facility in Canada is roughly 500,

as compared with 200 in the United States, which

has many more facilities for catheterization (24).

Similarly, population rates of CABG are markedly higher in the United States than in Canada.

CABG rates in New York and California were

consistently 25 to 80 percent higher than those in

Ontario, Manitoba, and British Columbia between 1983 and 1989. Three-quarters of the difference between California and the three Canadian

provinces was attributable to higher rates among

elderly Californians, particularly those over 75.

CABG rates were lowest for Americans living in

low-income areas and highest for Canadians living in low-income areas suggesting that Canada’s

universal health insurance reduces the influence

of income on access to services (2).

In Ontario, Canada’s largest province, the number of CABG procedures increased 52 percent between 1979 and 1985. The increase was due in part

to the rapidly increasing proportion of older

CABG patients (aged 65 and up). This expansion

occurred in the absence of data on efficacy or costeffectiveness in this age group. A randomized trial

of this therapy among older patients was advocated (1). Despite these and other studies examining the effects of regionalization and queuing,

rapid diffusion of these therapies, particularly

CABG and PTCA, has occurred with lesser emphasis on scientific data addressing efficacy or effectiveness and with greater emphasis on

consumer and provider demand in light of the perceived efficacy of CABG and PTCA (79,98,101).

National utilization data are difficult to gather

because of provincial jurisdictions, but utilization

data and projections from the province of Quebec

illustrate clearly the rapid expansion of volume of

procedures (table 3-5) (58,63). Angioplasty use

has grown especially rapidly and does not appear

to have led to any clear, stable substitution for

CABG.

In Quebec a number of working groups and reports have studied tertiary cardiac services. In

1977 the government commissioned a report from

a group of physicians that recommended a series

of minimum standards and resources for cardiac

catheterization facilities (90). In 1986 the federal

government drew upon utilization data to estimate

that 1,000 cardiac catheterization procedures
80 I Health Care Technology and Its Assessment in Eight Countries

1980 1989

Death rate (per 100,000) due to ischemic heart disease (ICD

410-41 4)

Female 166 147

Male 245 200

Hospital admission rate (per 100,000) for acute myocardial

infarction (ICD 41 O)

Female 128 139

Male 272 269

Average length of stay for admissions for acute myocardial

infarction (days)

Female 21.4 14.9

Male 15.7 11.7

Hospital admission rate (per 100,000) for other ischemic heart

disease (ICD 411 -414)

Female 303 286

Male 472 515

Average length of stay for admissions for other Ischemic heart

disease (days)

Female 22.7 13.4

Male 13.4 8.8 —

SOURCE Statistics Canada, Institutional Care Statistica Division, HospitalMorbidity 1981, 1989, Statistics Canada Pub No 82-206 (Ottawa 1983

and 1991 ), Statistics Canada, Vital Statistics and Disease Registries Section, Causes of Death, 1981, 1989, Statistics Canada Pub No 84-203

(Ottawa 1983 and 1991)

would be performed annually per 500,000 persons; it then established norms for establishingnew cardiac catheterization facilities (96). In

Quebec this federal initiative was felt to require

supplementation by the provincial government,

particularly in light of the growing role of PTCA

and the desire to ensure both an optimal distribution of resources and equitable access to tertiary

services.

In considering various frameworks for optimizing resource distribution, the government

placed great importance on the availability of cardiac surgery services in facilities offering cardiac

catheterization. This was deemed essential because of 1 ) the logical synergy resulting from having diagnostic cardiac catheterization and cardiac

surgery in the same facility and 2) the potential

need for emergency surgery following cardiac catheterization.

A working document (published in 1988 and

revised in January 1989) proposed a framework

for ensuring access to high-quality cardiac catheterization services while optimizing resources

(57). This framework included a model for projecting future years’ volumes as well as the assumptions that maximal use of a cardiac

catheterization facility would be 1,500 hours

annually and that optimal use would be deemed to

be 85 percent of this time, or 1,275 hours. Furthermore, diagnostic cardiac catheterization was assumed to require one hour of cardiac

catheterization facility time; angioplasty, two

hours. The report concluded with a series of shortand medium- to long-term recommendations regarding the optimal distribution of new services

and assignment of responsibility for certain geographic regions to existing facilities.

Shortly after the 1989 revision was published,

public pressure on the MSSS over waiting lists for

elective cardiac surgery led to the creation of a

working group to address the entire tertiary cardiac care sector comprising both diagnosis and
Chapter 3 Health Care Technology in Canada (with special reference to Quebec) 181

Diagnostic Angioplasty Coronary artery bypass

Year catheterization (PTCA) grafting

1979 7,314 0 1,780

1980 8,377 0 2,166

1981 8,665 0 2,171

1982 9,221 0 2,364

1983 10,366 0 2,940

1984 10,362 351 2,868

1985 10,781 1,033 2,988

1986 11,538 1,589 2,719

1987 12,907 2,195 3,337

1988 13,790 2,812 3,582

1989 13,718 3,110 4,308

1990 15,268 3,681 3,642

a 994-9 5 17,607 5,590 5,282

aProjected

SOURCE Gouvernement du Que'bec, Ministe're de la Sante' et des Services sociaux, “Les Services Tertiaires en Cardiologies, ” rapport du groupe

de travail sur la revascularlsahon coronarlenne, Quebec, June 1990), Gouvernement du Quebec, Ministere de la Sante' et des Services soclaux,

“Gestion de I Accessibilite aux Services de Cardiologie Tertiaire, ” rapport du groupe de travail - document de travail, Quebec, May 1992

treatment of ischemic heart disease (58). After

considering epidemiologic data, projections of future requirements, and available resources for cardiac catheterization, the report reaffirmed the

centrality of the goal of ensuring access to highquality services while optimizing resources committed to this sector. The working group

specifically recognized the “major problem” of

waiting lists for elective cardiac services and

noted that their elimination should be an important consideration in resource allocation. Specific

recommendations regarding optimal resource allocation included 1 ) offering four new cardiac surgery services, 2) establishing angioplasty only

where cardiac surgery facilities were already in

place, and 3) creating a provincial coordination

mechanism to establish priorities for waiting 1ists,

coupled with improving the coordination of services to reduce average waiting time (58).

Following the release of this report, the Minister announced a three-year plan for addressing the

report’s recommendations. This process included

a working group to recommend ways to improve

administration of these services. This group’s preliminary report (issued in May 1992) identified

three solutions to the waiting list problem:

 an increase in resources to more closely approximate demand for these services,

■ a system of four “supraregional” waiting lists to

which persons would be added only after evaluation and assignment of priority, and

● formalizing “interregional corridors” for transferring persons on waiting lists to centers with

resources (63).

The report also included a seven-level priority

scheme for diagnostic cardiac catheterization, angioplasty, and CABG. This scheme is based largely on a classification of angina and left ventricle

ejection fraction combined with results from noninvasive tests to diagnose reversible ischemia. In

addition, the report suggested that waiting list
— —

82 I Health Care Technology and Its Assessment in Eight Countries

CT scanners MRI scanners

Number Number

Province Number per million Number per million

Newfoundland 6 10.6

prince Edward Island

1 1.76

1 7.7 0 0

Nova Scotia 8 8.9 1 1.11

New Brunswick 7 9.7 0 0

Quebec 60 8.7 5 0.73

Ontario 72 7.1 11 1.09

Manitoba 9 8.2 1 0.92

Saskatchewan 6 6.1 1 1,01

Alberta 24 9.4 5 1,96

British Columbia 23 7.0 5 1.52

Canada 216 7.9 30 1.10

SOURCE Canadian Coordinating Office for Health Technology Assessment, Technology Brief, No 53 (Ottawa 1994)

times for lowest priority, elective coronary angiography should not exceed six months.

CETS also reported on the optimal distribution

of cardiac catheterization laboratories (27). Published in 1989, its report stated that centralizing

cardiac catheterization facilities in hospitals with

active cardiac surgery programs would be desirable. Furthermore, the report stated that angioplasty should be used only in hospitals with

cardiac surgery facilities. This report was produced at the request of the Minister for the working group addressing the distribution of tertiary

cardiac services. The findings were retained by the

working group and have had an important influence on its recommendations.

Throughout the 1980s, Quebec faced increasing demand for both diagnostic and therapeutic

cardiac intervention services. Political pressure

on the provincial government led to consultation

and studies and a subsequent series of budgetary

and administrative solutions designed to meet

these increasing demands. Because the government is the sole payer for health services, solutions are proposed with the expectation that the

government will implement them. In this climate

the pressure both to recognize a problem and to do

something about it fosters a demand for rationality

in decisionmaking and, consequently, for technology assessment.

MEDICAL IMAGING (CT AND MRI)

Medical imaging technologies have been particularly prominent in Canadian debates and policymaking on health technologies. Part of this is

undoubtedly due to the capital investment required to acquire and operate these facilities, particularly in the case of CT and MRI. These two

diagnostic modalities draw particular attention in

Canada because of the explicit budgeting undertaken by provincial governments for capital expenditures in the health sector. Each province has

its own version of cost thresholds or categories of

services that require hospitals seeking to

introduce a new service to apply to the provincial

government for funds explicitly tied to the new

service. Even the most efficient hospitals would

be hard pressed to generate sufficient surplus operating funds to acquire CT or MRI equipment

and to cover the operating costs (see table 3-6)

(25).

 Computed Tomography (CT)

The first CT scanner was installed in Canada in

1973 at the Montreal Neurological Institute. This

technology diffused rather rapidly, and 216 scanners were reported to be operating in 186 Canadian hospitals in 1993 (25). The story of CT

diffusion in Canada’s two largest provinces, On-
Chapter 3 Health Care Technology in Canada (with special reference to Quebec) 183

tario and Quebec, provides a number of lessons

for considering expensive new technologies.

The general pattern in Ontario has been summarized as a cycle of reactive, ineffective policymaking by governments punctuated by continued

efforts by hospitals to circumvent policies perceived to be limiting acquisition or diffusion of

CT scanners (41). Responding to requests for

funds for CT scanners in 1973, the provincial government established a Provincial Program Advisory Committee (PPAC) to consider policy on CT

in Ontario. A year later the province first scanner

was installed in Toronto and was treated as any

other capital purchase with depreciation over five

years and operating expenses to be met from the

hospital’s existing budget. Shortly thereafter,

PPAC recommended that the province fund five

scanners, one at each university center. The rapid

development of technology for body scanners further fueled demand for this service among Ontario

hospitals and led to “illegal scanners” as hospitals

affiliated with medical schools purchased scanners without government approval.

Part of the explanation for this appears to be

Ontario’s lack of penalties for hospitals that acquired scanners without approval. The only sanction applied to such hospitals was the

government refusal to allow depreciation allowances or operating costs to be included in the offending hospitals’ annual budgets.

Pressured to legitimize these “illegal” CT scanners, Ontario’s Ministry of Health developed a

three-phase plan for CT services. Phase one covered placement of the initially planned five scanners in university centers. Phase two envisioned a

total of 17 scanners, one for every 500,000 persons. Needs of areas beyond the catchment of the

province’s university centers were to be addressed

during phase three (68).

A succession of policies followed, all quickly

circumvented by hospitals and having little effect

on CT scanner diffusion in Ontario. In 1981 the

province revised its target upward to one scanner

per 300,000 persons. By 1986.42 scanners were

operating, and funding for an additional five had

been approved—surpassing the government’s revised target with one scanner for every 192,000

persons. By 1993 the number of scanners had

reached 72 units and, perhaps, some stability;

scanners are now found in every hospital with at

least 300 acute care beds and a growing number

with fewer (25). The U.S. experience of CT services in private offices beyond the reach of government regulation did not occur to a significant

degree in Canada (9).

Ontario’s experience with CT scanners provides a lesson in how not to establish policies on

technology diffusion and utilization. First, the experts consulted by the governments overwhelmingly represented university-based providers with

a particularly strong interest in acquiring the

technology. This interest (which is perhaps not altogether unreasonable) appears attributable to the

“cutting-edge” mentality of university medical

centers and their differential ion. on the basis of access to technology, from hospitals not affiliated

with university centers. This differentiation is revealed explicitly in the government’s notion that

the five university centers were to have been the

primary target for diffusion of CT scanners.

Second, a consistently reactive policy focus is

insufficient in the face of concerted demand from

hospital administrators and providers for a given

technology. Through the mid- 1970s. minority

governments in Ontario, needing the support of

opposition parties to rule and faced with sluggish

economic growth, may have had limited ability to

establish and enforce policy. The experience suggests, however, that weak policy is of minimal

value.

Last, the diffusion of CT scanners in Ontario

points to the allure of “big-ticket” items for hospital administrators and other stakeholders. A combination of sufficient autonomy and marketing

savvy enabled several institutions to purchase CT

scanners with funds from nongovernment

sources. Nevertheless, community support, both

financial and political, for technology acquisition

left the government unwilling to continue refusing to cover operating costs.

Unfortunately, debate and decisions on CT

scanners relied rarely, if at all, on scientific data
84 I Health Care Technology and Its Assessment in Eight Countries

Examinations per

Year Number of scanners Examinations per scanner 100,000 people

1977 3 3014 144.4

1979 6 4368 414.1

1981 10 3999 625.0

1983 14 4520 978.2

1985 21 4267 1230,9

1987 35 3553 1872.7

1989 44a 3745a 2460.3a

1991 54a 3788a

3034.9a

aEstimates

SOURCE Gouvernement du Que'bec, Ministe're de la Sante' et des Services sociaux, “L’imagerie Me'dicale au Quebec, ” rapport d’une recherche

sur Ie phe'nome'ne de deffusion des technologies medicales, Que'bec, 1986.

regarding the technology’s efficacy or cost-effectiveness. Aside from initial attempts to decide on

a target level of access, the ensuing experience in

Ontario had far more to do with politics, marketing and the clout of University of Toronto teaching hospitals.

The process of diffusion of CT scanning was

slower and perhaps more orderly in Quebec,

where Canada’s first scanner was installed, than in

Ontario. From 1977 to 1985 both the number of

facilities performing CT scans and the number of

scans per facility increased (table 3-7) (55).

The key determinant of the initial diffusion of

CT scanners in Quebec appears to have been the

fact that any such machines would have to be acquired from funds raised by the hospitals themselves, a diffusion policy based on philanthropy

(55). Radiologists would be reimbursed by the

government-run health insurance system, but until 1984/85, the government provided no funds for

equipment acquisition.

The decision to provide such funds in 1984/85

led to the authorization of eight new facilities.

These were distributed so as to offset the concentration of scanners in metropolitan Montreal

and particularly in the teaching hospitals affiliated

with McGill University, which had been most active in community-based fundraising. The goal

was to ensure that CT services would be available

in all university centers and in any region with a

population greater than 200,000. As CT scanning

increasingly became a standard technique, its diffusion accelerated such that scanners are now

installed in almost all hospitals with more than

200 beds. The fiscal attractiveness of a philanthropy-based diffusion policy eventually gave way to

a role for government to address what was perceived to be an increasing lack of equity in access.

 Magnetic Resonance Imaging (MRI)

MRI was initially introduced in Canada as a research tool in 1982/83. At that time two units were

installed in academic centers in Ontario and one in

a similar center in British Columbia. The first

clinical uses of MRI began in 1985; since then, 28

additional units have been installed with at least

one now in all but two provinces. An additional

six units are in various stages of installation (24).

In contrast, there are currently over 1,500 MRI

units in the United States—a diffusion rate that is

roughly sixfold higher on a population basis.

Among the MRI units currently operating,

three are notable for their location in private clinics in the western provinces of Alberta and British

Columbia. Both have been financed by consortia

of private individuals, including physicians who

are theoretically referring persons to these facilities. In Calgary, Alberta, private ownership appears to be due in part to the existence of a waiting

list of about 1,000 persons with nonacute work-
Chapter 3 Health Care Technology in Canada (with special reference to Quebec) 185

and sports-related injuries for the one MRI scanner currently in place there (26).

In Quebec a 1991 internal planning report to the

MSSS, noting that MRI’s “diagnostic superiorit y“ remained unproven, considered MRI a service

appropriate to university centers (59). Projected

demand was estimated to require eight units in the

province, of which three were operating and three

were under construction as of the report’s publication. This view was supported by a subsequent report of CETS on MRI in Quebec (30). This report,

noting that MRI technology was rapidly evolving

and that its superiority remained unproven, recommended that priority for acquisition be given to

university centers with significant caseloads in

neurology and neurosurgery.

CETS identified 55 specific cases in which

MRI’s diagnostic superiority was largely accepted

by the professional community. This tempered

view has contributed strongly to the relatively

slow diffusion of MRI in Quebec. Although some

commentators are troubled by the private clinics

about to open in Alberta, the Canadian experience

with MRI has been generally more orderly than

that with CT scanners. To say that lessons learned

from the CT experience were applied to MRI

would be dangerously optimistic, but several issues deserve comment. First, MRI became available for clinical use in Canada at a time when the

level of concern about health care spending, particularly on technology, was higher than at the

time CT scanners were introduced. In addition,

fairly early in the technology’s life cycle, downward revisions of its promise and advantages over

CT scanning occurred. As cost concerns throughout the health care system increased in importance, this critical reevaluation of MRI’s

capabilities served to temper demand.

Second, just as widespread diffusion might

have been expected during the late 1980s, Canada’s economy plunged into a severe recession, and

apolitical consensus began to emerge that the level of government indebtedness was fast becoming

intolerable. In such an economic and political environment, government receptiveness to highprofile, capital-intensive health technologies that

were not directly life saving was likely to be minimal.

Last, over the past 20 years, a sharper sense of

limits has emerged. In addition to the social and

economic conditions noted above, Canadian expertise and facility with methods for determining

the effectiveness of medical interventions have

grown markedly. This has had both direct and indirect effects on policymaking but would generally appear to have contributed to an environment in

which scientific data have become an increasingly

greater input to policymaking. In the case of MRI,

scientific data on effectiveness have remained sufficiently open to interpretation that they have limited widespread diffusion.

 Overall Experience With CT and MRI

Canada’s experiences with both CT and MRI are

similar in that the technologies were first

introduced in tertiary-care, university teaching

hospitals in large metropolitan areas and then extended to other university centers in smaller urban

areas and finally to regional-level community

hospitals. With MRI, diffusion beyond university

teaching hospitals has yet to occur. The overall

pattern occurred, however, with rather less governmental control in the case of CT than for MRI.

Clearly, too, a philanthropy-based diffusion

policy requiring no decisions on budgets, locations, or contracts is rather more easily maintained

by a provincial government than a series of reactive, lukewarm policy efforts. Nevertheless, equity concerns are likely eventually to require a more

active stance regardless of initial postures.

Although predicting the arrival of new, capitalintensive technologies is difficult, the Canadian

experience with MRI suggests that there is now a

greater role for technology assessment in decisionmaking (at least for such high-profile, bigticket items) than was the case 20 years ago, when

CT scanners first appeared. Whether this policy

activism can be applied to other technologies in

the health care system remains to be seen.
86 I Health Care Technology and Its Assessment in Eight Countries

LAPAROSCOPIC SURGERY

Laparoscopic surgery differs quite markedly from

the other technologies surveyed in this book in

that it is relatively less capital intensive and requires little new infrastructure. In Canada the recent explosive growth in use of laparoscopic

cholecystectomies has occurred with little or no

input from the provincial governments that administer the health care system. To date most laparoscopic surgery has been cholecystectomies,

although rapid expansion in laparoscopic hernia

operations, appendectomies, and thoracic and orthopedic procedures is expected as expertise with

laparoscopic techniques spreads. In the absence of

utilization data for laparoscopic surgery or administrative records as to its diffusion, this section

will focus on Iaparoscopic cholecystectomy,

which has been the subject of much scrutiny in

Canada.

The first laparoscopic cholecystectomy in Canada was performed in 1990 as a result of a community surgeon’s exposure to the technique in Europe

(104). Within two and a half years, all hospitals

with more than 500 beds, 97 percent of those with

200 to 499 beds, and 78 percent of those with less

than 200 beds had adopted this technology (91).

Teaching hospitals were earlier adopters than

community hospitals, but this may simply reflect

bed size, as few community hospitals have more

than 500 beds.

By March 1993 at least two-thirds of the hospitals in all regions of the country were using this

technology. Preliminary cost data suggest that the

average cost per case, based on 1988/89 data, is

$3,437 and $2,605 for open and laparoscopic procedures, respectively. Using these figures and assuming that 88 percent of open cholecystectomies

would be replaced by laparoscopic procedures, total annual savings to Canadian health care systems

are estimated at $36 million (88).

An assessment of laparoscopic cholecystectomy completed in Saskatchewan considered substitution rates of 30 and 70 percent of open

cholecystectomies with laparoscopic procedures.

Both scenarios yielded estimated savings of

approximately $1,000 per laparoscopic procedure

(72). A more recent report using carefully collected prospective study data from a randomized

trial of laparoscopic versus minicholecystectomy

produced average per-patient costs of $3,169 for

minicholecystectomy and $2,889 for laparoscopic cholecystectomy—a savings of approximately

10 percent for the laparoscopic procedure, which

is far more modest than previously estimated (35).

Furthermore, total savings may be reduced if the

number of cholecystectomies increases because

of the diffusion of Iaparoscopic methods (87). Anecdotal observations suggest that indications are

expanding and that biliary tract injuries represent

a growing source of complications in some community hospitals.

It would be comforting to identify a pivotal role

for scientific data on efficacy or effectiveness in

this rapid diffusion, but the Canadian experience

suggests that this diffusion was well under way

before any efficacy data from controlled studies

became available. At a symposium on laparoscopic cholecystectomy in September 1991 (53,84,

100,104,105) only one presenter reported patient

data, a case series of 2,201 patients undergoing laparoscopic cholecystectomy from centers across

the country (84). Another article in the June 1992

issue of the Canadian Journal of Surgery (in

which the symposium papers were published) reported a smaller case series of 258 patients from a

single center (44), including 60 cases reported in

an earlier report (43). All three series stressed the

rarity of complications and concluded that laparoscopic cholecystectomy had become the therapy

of choice.

In November 1992a Canadian group published

the results of a randomized clinical trial comparing laparoscopic cholecystectomy to mini-cholecystectomy (12). Their data demonstrated shorter

hospital stays and convalescence among patients

undergoing Iaparoscopic cholecystectomy. In

addition, patients undergoing this procedure returned to normal activities earlier than those in the

comparison group and had more rapid improvements in post-operative quality of life scores.

Nevertheless, the diffusion of laparoscopic chole-
Chapter 3 Health Care Technology in Canada (with special reference to Quebec) 187

cystectomy was well underway at the time of this

study’s publication.

In the Canadian health care system, technology

diffusion is commonly thought to be under the

control of provincial governments, in view of

their single-payer role. Nevertheless, a fair degree

of flexibility and autonomy remains, particularly

regarding the uptake of so-called medium and low

technologies. Laparoscopic surgery does not require extensive financial or human resources, and

although the instrumentation itself is the product

of intensive technological development, its use requires little in the way of support structures additional to those already in place for conventional

surgery.

As a result, laparoscopic cholecystectomy’s

rapid diffusion has occurred in the absence of specific incentives or disincentives offered by provincial governments. Nevertheless, a general desire

to reduce bed-days and length of stay, coupled

with waiting lists for some forms of surgery, have

created a climate in which both physicians and

hospital administrators face strong pressures to

adopt laparoscopic technology. In addition, factors acting at physician and patient levels accord

with administrative interests and have been collectively responsible for the rapid uptake, consistent with the general experience with medium and

low technologies (13). Foremost among these factors would appear to be a synergy between a redefinition of general surgery in the face of

continuing pressure to specialize, and a demand

among consumers for innovative therapies that

decrease hospital stays and pain. Some commentators have heralded this confluence, noting with

apparent approval the refusal of patients to enter

randomized trials comparing treatments, both surgical and otherwise, for symptomatic gallstones

(52).

Within surgical practice the increasing role for

minimally invasive therapies performed by nonsurgeons has been a cause of concern. Extracorporeal shock wave lithotripsy (ESWL) had been

touted as a non-surgical treatment for symptomatic gallstones. Recent data show costs of lithotripsy

are greater than for laparoscopic removal and recurrence rates are more than 50 percent after

ESWL (35). Laparoscopic cholecystectomy’s

rapid diffusion, due in part to its relatively rapid

learning phase, may be interpreted as an attempt

by surgeons to reposition themselves within an increasingly competitive therapeutic arena.

Strengthening this view, the Canadian Association of General Surgeons (CAGS) proposed

guidelines for laparoscopic cholecystectomy in

1990, two years before the publication of data

from the Canadian randomized trial and concurrently with the first reported Canadian case series.

The CAGS has a structured relationship with the

Royal College of Physicians and Surgeons, and

these guidelines were proposed with a view to influencing training programs and certification. The

guidelines stressed three points:

1.

2.

3.

Only general surgeons experienced with traditional, open cholecystectomy should perform

laparoscopic cholecystectomy.

Training in laparoscopy should be provided to

all interested general surgeons through “appropriate instruction.”

Training programs should be located in university centers across Canada and developed in

coordination with the CAGS to ensure that supervised instruction and practice are part of all

such programs (80).

The Canadian experience with laparoscopic

cholecystectomy indicates that in the absence of

procedure- or technology-specific funding or remuneration features, new technologies diffuse relatively unhindered and in accord with models of

medical technology diffusion (91 ). In addition, receptiveness to stay-reducing technologies among

hospital administrators has favored rapid diffusion. Finally, the impact of consumer preference

appears to be more important in the case of laparoscopic cholecystectomy than in imaging technologies because of morbidity and aesthetic

considerations. In the absence of extensive, wellcontrolled studies, evaluating the long-term impact of laparoscopic cholecystectomy on the

Canadian health care system will be a challenge.
88 I Health Care Technology and Its Assessment in Eight Countries

TREATMENTS FOR END-STAGE

RENAL DISEASE (ESRD)

Therapies for ESRD include dialysis and renal

transplantation; in addition, erythropoietin (EPO)

is marketed in Canada. Both dialysis and transplantation are well established, and Canadian

health researchers have been quite active in investigating these therapies and their consequences.

This work has been facilitated by the Canadian

Organ Replacement Registry (CORR), established in 1981, which has provided valuable information on the natural history of renal failure

treated with various therapies (78). The number of

people with ESRD has more than doubled over the

last decade. In 1991, prevalence of ESRD was 488

per million people, having increased at an average

annual rate of 6.8 percent since 1981. Incidence

appears to be rising in step with the aging of Canada’s population. Between 1981 and 1991, the

annual number of newly diagnosed cases increased from 1,197 to 2,568, outstripping population growth over the same interval (20).

Across Canada, the distribution of primary disease leading to ESRD is relatively consistent. In

1991,2,568 new cases of ESRD were added to the

CORR. The primary diseases causing ESRD

among new cases are shown in table 3-8.

Applying recent prevalence estimates to the entire country yields approximately 13,000 Canadian cases of ESRD. Incidence rates among

aboriginal Canadians have been estimated to be

2.5 to 4 times greater than those among nonaboriginal Canadians, in part because of higher risks

of diabetes, glomerulonephritis, and pyelonephritis (127).

 Dialysis

Just over half of Canadians with ESRD are treated

with dialysis, and just under half of those use

some form of home dialysis, a proportion that has

increased over the last decade because of the increasing use of peritoneal dialysis. Among those

using home dialysis, the proportion using peritoneal dialysis varies from 44 percent in Manitoba

to over 90 percent in the Atlantic provinces; the

Proportion of cases

Primary disease (in percent)

Diabetes

Glomerulonephritis

Renal vascular disease

Pyelonephritis

Polycystic kidney disease

Analgesic abuse

Others

Unknown

23.8%

18,3

17.2

7.9

5.3

1.4

13.4

12.6

SOURCE Canadian Organ Replacement Register, 1991 Armual Report (Don MiIIs, 1993)

Overall, 62 percent of people in dialysis use hemodialysis and the remainder use peritoneal dialysis (62). The proportion of persons with ESRD

receiving dialysis has been decreasing (table 3-9),

coincident with an increase in the number of transplantations (20).

CETS has produced two reports relevant to

ESRD treatment in Quebec. The first of these addressed the reuse of hemodialyzers and concluded

that reuse, if done according to prevailing standards, does not increase the risks associated with

dialysis and presents a valuable opportunity for

more efficient provision of services. This report

served to validate this practice and influence its

continuation. Moreover, significant savings

would result if reuse rates in Canada rose from

approximately 12 percent toward the 72 percent

seen in the United States. Savings for Canada as a

whole were estimated to be between $5.8 and $5.9

million annually, while reuse for all patients in

Quebec would save $2.0 to $2.7 million annually

(1 1,32).

I Transplantation

Renal transplantation is increasingly used in treating ESRD-the number of transplants increased

from 103 in 1981 to 789 in 1991. In 1991,24 centers offered renal transplantation (20). In that same

year the proportion of persons with ESRD in the

three largest provinces with functioning transnational average is approximately 75 percent.
Chapter 3 Health Care Technology in Canada (with special reference to Quebec) 189

Number of Number of

persons with Percentage renal

Year ESRD on dialysis transplants

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

5,576

5,916

6,640

7,305

7,804

8,637

9,303

10,381

11,282

12,067

13,190

59%

59

57

55

55

51

51

50

50

51

52

103

286

422

489

592

749

705

815

789

763

789

SOURCE Canadian Organ Replacement Register, 1991 Annual Report (Don MiIIs, 1993)

plants was 53 percent in British Columbia, 46 percent in Ontario, and 45 percent in Quebec.

Advances in immunosuppressive drugs have

improved patient survival and graft survival

through the 1980s (78). The five-year recipient

survival rate is estimated at 93 percent for haplotype-matched organs from living related donors

and 83 percent for organs from cadaveric donors.

Five-year graft survival rates are 80 and 65 percent

for organs from related and cadaveric donors, respectively (62). While renal transplantation is perceived to be superior to dialysis, expanding

transplantation services is constrained by donor

kidney supply.

In Quebec the first renal transplant was performed in 1958; up through 1990, 2,676 renal

transplantations were completed. Approximately

20 percent of these were performed at one urban

university teaching hospital (62). Waiting lists

and access for persons living in remote areas continue to challenge policy makers.

In 1990 the average waiting time for a cadaveric kidney was 300 days; of 368 persons on the

waiting list, 31 percent had been waiting for more

than 24 months. Waiting times for transplantation

are determined jointly by available resources and

immunocompatibility; hence, most of this group

are waiting for relatively rare, compatible donors

(62).

The second ESRD-relevant report of CETS addressed renal transplantation as part of its overall

examination of organ transplantation. The report

noted that renal transplantation was both an established therapy and the therapy of choice for

ESRD. On the basis of expert opinion, CETS suggested that efficiency and effectiveness would be

best served by requiring that centers offering renal

transplantation perform a minimum of 20 to 25

transplants annually. Recognizing that transplantation services in Quebec are widely distributed,

CETS concluded that although centralization

might be advantageous, many of its advantages

could be gained from better coordination. Quebec

Transplant, the provincial organ procurement organization, was proposed as the best choice for

this coordination role, particularly with respect to

organ retrieval and distribution and clinical research (33).

 Erythropoietin

Erythropoietin (EPO) became available in Canada

coincident with its introduction elsewhere. Canadian investigators staged a multicenter trial of

EPO and have published several other studies on

this technology (18,8 1,99). A study of the cost implications of EPO, published in 1992, used data

gathered from the previously reported clinical

trial (11 1).

EPO yielded a net increase in costs of $3,425

per patient-year of therapy. Varying assumptions

produced a range from a net cost of $8,320 to a net

savings of $1,775 per person year. Costs included

$10,OOO annually for therapy and an additional

$200 for antihypertensive medication; cost offsets

were identified from reduced transfusions, reduced numbers of hospital days for EPO-treated

persons, and reduced months of dialysis treatment

because of increased renal graft survival (111).

In Quebec, EPO’S role in ESRD began with its

manufacturer providing the drug free of charge to

persons with ESRD, thus generating a market and

(in light of its impact) strong demand from recipi -
90 I Health Care Technology and Its Assessment in Eight Countries

Dose July 1991 January 1992 July 1992 January 1993

—

4,000 units $62.13 $62.13 $62.13 $57.00

10,000 146.01 146.01 146.01 133,95

SOURCE Gouvernement du Quebec, Re'gie del’Assurance-Maladle, Liste de Me'dicaments (Quebec, 1991)

ents. Once this program ended, nephrologists and

persons with ESRD appeared in the media, requesting that the government provide this drug.

The government then turned to the Conseil Consultatif de Pharmacologic (CCP) for advice.

In 1991, shortly after pressure had been exerted

on the Minister, budget supplements totaling $3.2

million were announced for hospitals treating

ESRD to defray the cost of EPO. Each center received an amount based on the number of persons

treated there who required the drug.

Prices of EPO are difficult to ascertain, but insured prices in the provincial formulary for EPO

in the treatment of zidovudine-related anemia

among persons infected with human immunodeficiency virus (HIV) are shown in table 3-10 (61).

 Overview of ESRD Policy

The treatment of ESRD has been an important focus of policy makers’ attention, but management

of these programs continues to elude a one-time

“master stroke.” New technologies, particularly

pharmaceuticals (including EPO and new immunosuppressive agents), make long-range planning

problematic. More importantly, the “life-anddeath” nature of ESRD has prompted micromanagement of resources by the ministry in

recognition of the fact that the rapid growth in

numbers of affected individuals is not manageable

by rigid global budgeting. Although limits exist,

particularly in renal transplantation (because of

the vagaries of donor supply), accommodation

mechanisms have been adopted by the health care

system to optimize access to treatment. Yet, given

the increasing incidence of ESRD along with increasing rates of survival, planning and managing

treatments for ESRD will continue to demand the

attention of policy makers.

NEONATAL INTENSIVE CARE

Neonatal intensive care services are distributed

across Canada in rough proportion to the nation’s

16 medical schools. The country’s geography has

dictated the regionalization of neonatal intensive

care services, and several provinces have an explicit regional, tiered structure of centers providing various levels of obstetric and neonatal care.

In Quebec five levels of perinatal care are recognized (table 3-11).

A working group addressing neonatology services in Quebec provided recommendations to the

government in a 1992 report (64). The working

group was established as a result of the health minister’s concern regarding a shortage of neonatology services in Montreal. The group was charged

with responsibility for developing a framework

for decisionmaking on neonatology services in the

province.

The working group noted that vast improvements had been made in care of the newborn but

that demand for increasingly specialized intensive

care was being driven by the need to care for an increasing number of infants with birthweights between 500 and 750 g. After considering existing

services and their utilization, recommendations

were made for additional beds and personnel and

for followup clinics for high-risk newborns.

These were adopted by the ministry.

The working group recognized the difficulty of

estimating future demand for neonatal care, particularly in light of technological advances. A

prime example of such a technology is extracorporeal membrane oxygenation (ECMO). Examining

the decisionmaking surrounding the ECMO center in Quebec offers insights into the role of

technology assessment in policy choices.
Chapter 3 Health Care Technology in Canada (with special reference to Quebec) 191

Number of centers

with obstetrical Number of

Level services NICU beds Services provided

Primary 58 0 Provides services for low-risk deliveries, neither

obstetrician nor pediatrician services

necessarily available.

Secondary 24 0 Services available for moderate-risk deliveries,

including an obstetrician or pediatrician, Iinks

to tertiary centers exist.

Secondary-modified 3 11 Most tertiary care services offered in a hospital

with neither research nor teaching roles.

Tertiary 6 45 Resources for high-risk deliveries and

neonatology subspecialty care.

Tertiary - modified 3 41 Tertiary services plus neonatal surgery and

additional subspecialties.

SOURCE Gouvernemen du Quebec, Ministere de la Sante et des Services sociaux, “La Neonatalogie au Qu'ebec, ” Rapport du groupe de travail,

Quebec, 1992

Three Canadian centers offer ECMO services,

located in university hospitals in Montreal, Toronto, and Edmonton. (A fourth, in British Columbia

may be established shortly.) Each center has pursued a slightly different strategy to finance the

equipment, training, and infrastructure support

necessary to establish ECMO services.

Given the not insubstantial resources required

for ECMO services, a request for funds to establish a new service was initially forwarded to the

Quebec Ministry of Health and Social Services

(MSSS) in 1988. The proposal identified an opportunity to reduce neonatal mortality and morbidity resulting from persistent pulmonary

hypertension of the newborn (PPHN)—and also

to reduce both short-term costs, by shortening intensive care stays; and long-term costs, by reducing morbidity and risks of cerebral and pulmonary

injury (97).

The program’s advocates estimated the potential annual demand to be 30 to 40 newborns in the

province of Quebec. The MSSS responded with

an initial grant of $50,000 for equipment purchase. In 1990 the hospital submitted a further request for funds to establish the clinical service that

was 50 percent lower than the original amount.

This reduction was attributed to a staff reorganization, a lowering of the estimated number of patients, and reduced equipment expenses, as some

of the equipment had already been acquired.

To build support for the ECMO program, offic ials at the hospital needed to balance the need for

sufficient publicity to further their cause with the

need to avoid offending Montreal’s other children’s hospital, whose staff was not convinced of

ECMO’S value. This became particularly important with respect to the issue of treating congenital

diaphragmatic hernias (CDH). Advocates of

ECMO point to its usefulness in newborns with

CDH, arguing that respiratory stabilization prior

to surgery should increase survival. Opinions regarding ECMO were not, however, uniform; physicians at other children hospitals made efforts to

alert key government decisionmakers to the results of treating CDH with immediate surgery

(37).

Further input to the decisionmaking process

came from a CETS report entitled “ECMO: Efficacy and Potential Need in Quebec” (29). Given

uncertain estimates of potential demand, the ministry asked CETS to investigate this technology

and its potential role in the provincial health care

system. The report advised the MSSS on criteria

to use, should the decision be made to establish an

ECMO unit in Quebec. The criteria addressed four

key issues:
92 I Health Care Technology and Its Assessment in Eight Countries

1.

2.

3.

4.

If ECMO services were to be provided, no more

than one center should be opened.

This center should be located in a university

teaching hospital with demonstrated research

capability.

Prior to establishment, the designated center

should submit a research proposal to provide

policy-relevant information for decisionmaking on ECMO’S future in Quebec.

The designated center’s program should be

considered provisional, with continued operation conditional both on satisfactory functioning and on regular provision of the information

identified above.

Ongoing uncertainty regarding potential demand in Quebec led CETS to conclude that

ECMO, if brought into Quebec, should be

introduced for the purpose of evaluation. In this

way, needs for further information and advocates’

desires to establish the service could be addressed

by a single decision.

These efforts culminated in the June 1991 announcement of a budget supplement of $100,000

for the ECMO program at the Montreal Children’s

Hospital. In the first year, 18 children were treated

with ECMO; 11 survived, and one was being

treated at the time of data collection. Evaluation of

the service is currently under way for submission

to the MSSS.

In reconstructing the decisionmaking process,

the role played by a strong incentive to act—

namely, the cost of sending infants to the United

States for ECMO treatment—looms large. In the

year preceding the CETS report, this cost was said

to have reached $700,000 for four children. The

CETS report notes that “the transfer of as few as 3

patients per year for treatment outside the province...would be a significant financial outlay”

(29). Cost estimates vary, but costs concerned all

parties to the decisionmaking process.

The Quebec experience with ECMO reveals

several key themes. First, the role of the technology assessment body appears to have been driven

primarily by uncertainty about demand, efficacy,

and economic concerns about alternatives to

ECMO; establishing an ECMO service in Quebec

offered the chance both to evaluate a new technology and to reduce overall expenditures on neonatal intensive care (through elimination of

out-of-province transfers). Second, the conditions

of the government’s decision to implement a new

service suggest strong influence by the CETS report. Third, the timeframe of decisionmaking was

such that multiple consultations and iterations occurred between the government and the hospital

involved.

As ECMO use increases in Canada, addressing

quality-of-life issues for treated individuals and

their families will become more important. More

generally, a key issue for policymakers in Quebec

and Canada will be the extent to which resources

should be allocated to saving babies with everlower birthweights through technology-intensive

care versus using those resources to prevent prematurity and low birthweight.

SCREENING FOR BREAST CANCER

Screening for breast cancer, primarily involving

mammography and breast self-examination, has

been and continues to be a high-profile issue in

Canada. Both federal and provincial governments

have developed policies and programs and several

reports and resource documents have attempted to

bring scientific data into decisionmaking.

A useful point of departure for investigating

Canadian approaches to breast cancer screening is

the National Breast Screening Study (NBSS).

This multicenter, randomized trial began in 1980

(95); despite some initial difficulties, 89,835

women were enrolled (4). In 1992, the investigators reported their results for women from 40 to 49

years old at enrollment and for women from 50 to

59 at enrollment (92,93). Previous publications

had addressed the operating characteristics of

first-screening mammography and of physical examination, improvements in technical quality,

and the role of nurse-examiners in breast cancer

screening (5,6,7,94). Among the women enrolled

in the NBSS at ages 40 to 49, the strategies

compared were usual care and the screening combination of annual mammography and physical

examination. After a mean followup of 8.5 years,
Chapter 3 Health Care Technology in Canada (with special reference to Quebec) 193

no difference in death rates from breast cancer was

found. The investigators reported increased numbers of node-negative, small tumors in the

screened women compared to the women receiving usual care (92).

Women aged 50 to 59 at enrollment were randomized to either annual mammography and

physical examination or annual physical examination alone. After a mean followup of 8.3

years, no difference in death rates from breast cancer was found; however, as with women aged 40

to 49, increased numbers of small, node-negative

tumors were reported among the women undergoing annual mammography (93).

The NBSS will continue to provide valuable

data for scientists and policymakers. However,

political pressure has required Canadian provincial governments to act prior to the NBSS data becoming available. Breast cancer screening was

discussed at several meetings of the Conference of

Deputy Ministers of Health and led to the publication of a federal report in 1986 outlining desirable

standards for screening mammography, a 1988

federal-provincial workshop, and a December

1988 implementation report in which all provinces agreed to make breast cancer screening a

priority (16,39,70,125).

British Columbia was the first province to establish a formal screening mammography program. Other provinces soon followed suit with

variations on a general pattern of pilot-phase projects with provision for expansion to provincewide programs. Although scientific data clearly

played a significant role in policy formation,

technology assessment of breast cancer screening

approaches in Canada had been fairly small scale.

The 1988 workshop report had provided an preview of the scientific data including the HIP study

and studies in Sweden, Haly, The Netherlands,

and preliminary results from the NBSS

(38,103,1 10,121 ,124).

To date, two technology assessment bodies

have addressed screening for breast cancer. The

Canadian Coordinating Office for Health

Technology Assessment published a brief commentary on a selection of trials of breast cancer

screening programs in 1992 (23). This appears to

have been prompted by a request for information

from one or more provinces. Despite general

agreement on the efficacy and political importance of mammography programs, much heated

debate has continued on the question of who

should be screened and at what frequency.

In Quebec CETS published a report in 1990 entitled “Screening for Breast Cancer in Quebec: Estimates of Health Effects and of Costs.” Drawing

on efficacy data from a number of trials of breast

cancer screening programs, the report concluded

that “there is solid evidence that it is possible to

prolong the life of women with breast cancer

through early detection by periodic screening using mammography, with or without physical examination” (31). The report estimated that

universal participation among women aged 50 to

69 in a biennial screening program would cost

approximately $27 million annually. More realistic estimates of 75 and 60 percent participation

would yield annual direct costs of $20 million and

$16 million, respectively. Estimates of expenditures per life-year gained ranged from $3,400 to

$5,700, depending on participation levels required to realize projected aggregate increases in

life expectancy. Recognizing that mammography

was already in widespread use in Quebec, the report also recommended steps to optimize screening activities already under way, including

possible targeting of mammography to women of

selected ages.

Throughout the last decade, the number of

mammograms performed in Quebec increased,

reaching 337,050 in 1991; however, fully 53 percent of these were for women less than 50 or more

than 69 years of age. Approximately two-thirds of

these examinations were done in clinics and the

remainder in hospitals. Despite this growth, pressure to establish dedicated breast cancer screening

centers rose with the end of enrollment in the

NBSS and the subsequent closure of study centers

in 1987. The health Minister at the time announced that no decision would be made until the

results of the NBSS were available, expected to be

in 1990. Meanwhile, pressure for action grew and

was mirrored by the high priority given to screen-
94 I Health Care Technology and Its Assessment in Eight Countries

ing mammography at the 1988 federal-provincial

conference.

In July 1989 a proposal was made to the government for 37 designated screening centers

across the province to establish a biennial mammography program for women aged 50 to 69.

Costs were estimated at $9 million but would be

offset by savings in breast cancer treatment costs

resulting from early detection and the ending of

screening mammograms described as “unnecessary” in women under 50 years of age. Part of this

proposal directed CETS to examine the evidence

on the efficacy of screening programs for breast

cancer.

CETS released its report in January 1991, making recommendations on reimbursement for

mammography, guidelines for screening programs, and data collection for program evaluation. During the following two months, the

government endorsed the CETS recommendations, and the health Minister, expressing reservations about dedicated screening centers,

advocated optimization of existing services.

A year later the provincial association of radiologists argued that screening mammograms should

be available to women from 40 to 49 years old.

This position generated a great deal of editorial

comment, as it contradicted the views of the ministry and CETS. In June 1992, pressure on the

health Minister increased with the presentation of

a petition from Breast Cancer Action of Montreal

calling for the reimbursement of physicians for

screening mammograms in women 40 to 49 years

old; however, by October this group had agreed

with the idea of focusing on women aged 50 to 69.

In May 1993 CETS published a report on breast

cancer screening in women under 50 years of age

and noted that data supporting a benefit of screening in this group were indirect and weak (34).

However, CETS stated that technological advancements might well shift the balance in favor

of screening women aged 40 to 49, and for this

reason the case should not be considered closed.

CETS concluded its report with an urgent call for

policy on screening mammography in light of the

not insignificant health and financial effects of the

current situation.

Current government policy is to provide a universal mammography screening program for

women from 50 to 59 years old. Younger women

at higher risk because of family history of breast

cancer will have access to screening following

medical referral. This policy essentially follows

the recommendations of CETS and includes provisions for optimization of existing resources, together with coordination and quality assurance

mechanisms.

The Quebec experience with breast cancer provides insights into how technology assessment

fits into a highly politicized health issue. With a

visible and well-organized target constituency,

policy development on breast cancer screening is

far more delicate than on items such as MRI scanners. Various actors in the debate have used media

sources to attempt to strengthen their positions,

thrusting technology assessment into the glare of

public attention.

Technology assessment seems to have weathered this quite well in Quebec, but in a largely

reactive fashion. As technology assessment matures in Canada and is brought to bear on issues of

increasing political importance, its practitioners

may have to ask whether they will need to become

more skilled in media relations and communications and if this will threaten scientific rigor and

credibility. These demands may herald the formation of dedicated communication units or an important role for communications professionals

within technology assessment organizations.

CETS also appears to have played an important

role as an arbiter of sorts, providing the government with advice for policy and political breathing room. As difficult a balance as this role

requires, it is likely to become more frequent as

technology assessment matures.
Chapter 3 Health Care Technology in Canada (with special reference to Quebec) 195

CHAPTER SUMMARY

A decade ago OTA reviewed health technology

management in a number of countries (8). At that

time in Canada, management was marked by a rigid separation of roles: providers stated their needs

and payers (provincial governments) decided

whether to provide the requisite funds. Technology assessment was largely a theoretical proposition.

A decade later, much has changed. Cost concerns have broadened the focus of both groups,

with payers increasingly interested in the effects

of interventions and programs, and providers

more concerned with costs. Evaluation has thus

emerged as a common basis for sharing decisionmaking. Health technology assessment is now established, and its development has been further

encouraged by information needs arising from a

management framework in which providers and

payers both increasingly demand the results of

evaluation.

Several prominent themes emerge from our

survey of health technology in Canada. The first is

that diffusion patterns of technologies within the

Canadian health care system are determined by

the system’s overall characteristics. Provider autonomy and fee-for-service remuneration have

created a system responsive to emerging needs

and emerging technologies, and central control

and global budgeting provide levers for rational

planning. Finally, public financing holds regulation increasingly accountable through the democratic process. Effective control of diffusion

occurs rarely by ‘-magic bullet” but rather by creating a macro-level environment that acts to

constrain micro-level choices.

For example, limiting funds available for acquiring expensive technologies is a macro-level

decision effectively limiting the supply of these

technologies at the provider level. The government does not bar physicians or hospitals from acquiring or using such technologies; rather, it

creates boundaries within which acquisition or

use occurs. In the case of CT scanners, a philanthropy-based macro-level policy acting to slow

acquisition has had the intended effect of slowing

diffusion in Quebec as compared with Ontario.

The Canadian experience demonstrates that

there is nothing magic or sacred about health care

technologies that makes them more or less amenable to regulation than other elements of the system. Instead, the system’s structure creates

decisionmaking schemes and incentives that collectively shape technology diffusion. Only at this

macro level has the Canadian health system been

able to influence diffusion, with greater influence

as the resource intensity of the technology increases. In contrast, the rapid spread of laparoscopic cholecystectomy indicates that the system

offers a great deal of flexibility for adopting less

resource-intensive technologies. By not challenging the boundaries set at the macro level, these

technologies have been free to diffuse unchecked

by measures explicitly directed at them.

Given the need for and impact of a comprehensive strategy, a basic question arises: how did this

framework come to be? The levers of control of

the Canadian health care system have been in

place for over 20 years but have only recently been

used firmly. The spur to action comes from increasing demands for more resource-intensive

services from an increasingly older population,

creating both the need and the incentive to curtail

costs.

In the face of this pressure, a comprehensive

strategy was not implemented all at once; existing

elements of the system including global budgets

and bed controls for hospitals, policies regarding

physician numbers and remuneration, regionalization, capital expenditures, and insured services

provided policymakers with a series of complementary levers. With cost concerns, preexisting

synergies simply became apparent and were more

effectively deployed.

In this vein Quebec may have been slightly

ahead of the rest of the country. A cultural receptiveness to systems planning exists in Quebec that

is less evident in predominantly English-speaking

provinces. Given the strong ties of culture and language among the people of Quebec, the threshold
96 I Health Care Technology and Its Assessment in Eight Countries

for widespread physician resistance may be higher

there than in the rest of the country, where physician migration appears more likely.

Turning to the technologies considered in this

chapter, the ability of the system to temper diffusion may well have been helped by the lack of evidence of adverse outcomes attributable to a

limited supply of health care technologies such as

MRI. For life-saving technologies (e.g., therapies

for ESRD) a hands-off, macro-level approach is

less possible, and specific and sporadic adjustments are made in light of changing needs.

More troubling, the system has also been free

from accountability for the quality of care dispensed. The Canadian model of using system features as levers to control technology diffusion has

been reasonably successful at the macro level, particularly regarding “high-tech” acquisitions, but

does not necessarily result in the greatest efficiency. Thus, a final theme is the challenge, in the face

of continued cost pressure, to design and implement effective mechanisms that will optimize use

and address practice.

The fundamental principles of the Canadian

health care system—universality, portability, and

comprehensiveness—are coming under increasing scrutiny. Global budgeting and acquisition

controls have limited aggregate expenditures, but

some combination of regulation, incentives, information, and education will be necessary to ensure appropriate utilization of technologies.

Addressing this micro level will require new approaches to complement existing mechanisms

and may well include clinical practice guidelines

for practitioners and scrutiny of existing incentives favoring adoption, diffusion, and use of

technologies at the practitioner level.

To date, physician organizations, particularly

the Canadian Medical Association, have attempted to claim guidelines as a matter to be developed within the profession. This appears

consistent with the system’s traditional role definitions. The patience of governments, in their role

as payers, may soon be tested if actual guidelines

continue to diffuse at their current slow rate. Nevertheless, an increasing role for practice-focused

technology assessment appears inevitable.

Changing perceptions of the role of the physician,

coupled with increasing demands by citizens for

both efficiency and high-quality care, cannot help

but promote technology assessment as a vehicle

for resolving the inherent conflict between these

two demands. In this light, technology assess:

ment’s task of bridging science and policy remains paramount; however, increasing emphasis

on communication—particularly new methods of

intervention and incentives for information use,

may well expand current notions of what a

technology assessment body does.

Despite this potential for expansion, practicefocused technology assessment will share with its

procurement-focused counterpart needs for rigorous methods and ongoing vigilance to ensure that

policy-relevant information is produced. As with

procurement, there will be no “magic bullet” to

improve quality of care and user satisfaction; rather, the structural features of the system within

which care is delivered will bean important determinant of its quality. The challenge for technology assessment in Canada is to deliver information

that enhances efficiency and quality in a system

that is based on a balance among fiscal control,

consumer choice, and provider autonomy.

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Chapter3 Health Care Technology in Canada (with special reference to Quebec) 199

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Health Care

Technology

in France

by Caroline Weill 4

OVERVIEW OF FRANCE

F

rance is an industrialized country with a large agricultural

sector. Its population in 1991 totaled 57 million. According to the Constitution of 1958, France is organized as a

parliamentary democratic republic. Separation of legislative and executive powers, multiplicity of political parties, and respect for the Constitution and the Human Rights Declaration are

the guaranties of democracy.

The French Constitution refers to health as a fundamental

right. According to this document, France guarantees to everyone, “especially to the child, the mother and the aging worker,”

health protection.

 Government and Political Structure

The main French powers are the President de la Re'publique,

the Parliament, the government (Conseil des Ministres), and the

Prime Minister. The President, who serves as the head of the

French state, represents the French nation. He is also the chief of

foreign policy and the commander in chief of the French army.

The President is elected through universal franchise (all citizens

vote) for seven years and can be reelected.

The French Parliament is divided into two chambers: the Se'nat

and the Assemb1ee Nationale. Senators are elected by elected

members of local assemblies for nine years. Members of the Assemblee Nationale, called deputes, are elected through universal

franchise for five years.

The Conseil des Ministres executes the laws passed by the Parliament. The Prime Minister is the leader of the government; he is

nominated by the President. The government is responsible to the

Parliament for its policy and programs. 103
104 I Health Care Technology and Its Assessment in Eight Countries

Metropolitan France is divided geographically

into 95 departments (departments) including

four overseas departments. Under the authority of

prefects, the departments administer the local services of most of the ministries. The departments

are grouped in 22 regions, whose prefectural authorities are responsible for implementing the

government’s regional economic development

policy. A total of 37,000 local administrative units

(communes) have wide powers for managing major public services, including health services.

The 1982 and 1983 Decentralization Acts were

intended to confer greater decisionmaking powers

on the lower echelons of local government; general policymaking was to remain the responsibility

of the central government. These acts distinguish

between two types of authorities in each administrative unit: the appointed representatives of the

central government and the elected representatives of the local communities. The former are the

prefets (prefects), of whom one grade has responsibility for the departmental level and another for

the regional level.

The elected representatives of the local communities (communes) are headed by the president

of the assembly, an elected local representative.

The elected councils are the Conseils Municipaux

for the towns, the Conseils Generaux for the departments (i.e., several towns), and the Conseils

Regionaux for the regions (grouping several departments).

The Decentralization Acts transferred to local

elected authorities various functions formerly performed by the central government. Each community is fully responsible for its functions, for

which it raises taxes, and each acts freely without

control from other communities. Generally, the

localities are responsible for public services; the

departements are in charge of social aid, health,

and welfare; and the regions carry out economic

responsibilities, including planning.

Departmental councils are in charge of maternal and child health, immunization activities, and

medical assistance for the uninsured. These councils can issue regulations for the services and residential establishments they supervise. Communal

health services, under the authority of each town’s

mayor, comprise the Communal Hygiene Service

and community health centers and dispensaries

that carry out primary local health care activities

and preventive work.

The central government, through its regional

directorates and coordinated by the regional prefects, establishes and implements rules for public

hygiene. The central government is also directly

in charge of policies concerning mental illness,

drug addiction, and alcoholism. It establishes regulations for social welfare and health insurance,

controls the finances and activities of public hospitals, and is in charge of health planning.

 Population Characteristics

and Health Status

In 1991, 27 percent of the French population was

under 20 years of age and 14 percent was over 65

years. The crude birth rate—which has been decreasing over the past 20 years—was 13.3 per

1,000 inhabitants in 1991 (31).

Since 1980, life expectancy at birth has continued to improve, reaching 77 years in 1991 (for females, 81.1 years, for males, 73 years). Infant

mortality decreased from 10.1 deaths per 1,000

births in 1980 to 7.3 per 1,000 in 1991. The death

rate (standardized) for the entire population fell to

9.2 per 100,000 in 1991, compared with 10.0 in

1985 and 10.6 in 1970.

Five major categories of causes of death account for more than 80 percent of all deaths in

France: diseases of the circulatory system (37 percent), cancer (24 percent), injuries and poisoning

(9 percent), diseases of the digestive system (6

percent) and respiratory diseases (6.5 percent)

(31). In France, mortality differentials among

males indifferent social strata exceed the differentials between men and women (31 ). The categories of people most likely to die prematurely are

(in decreasing order): manual workers, skilled

workers, service personnel, and unskilled workers. The same general relationship is apparent in

mortality differentials among females but is less

marked. Mortality and morbidity also differ
Chapter 4 Health Care Technology in France 1105

among geographical regions; rates are generally

higher in the northern and eastern regions of

France.

The incidence of infectious diseases (e.g.tetanus, diphtheria, poliomyelitis, and tuberculosis)

is verylow. AIDS,on the otherhand, has become a

very serious problem in France, which has the

third-highest incidence and the highest prevalence

in Europe. There were 3584 new cases in 1991

(0.32 per 100,000), and a total of 18,508 cases registered. Disabilities among the elderly are becoming more and more serious problems, given the

increase in the number of people who are more

than 80 years old.

Certain behavioral factors cause health problems (31 ). Smoking rates, for instance, increased

for some time but have now stabilized. A 1991 law

strongly limited propaganda and advertising for

tobacco and has prohibited smoking in public

areas. Fat consumption has increased, but alcohol

consumption (still very high in France) has decreased from 16.2 liters per person in 1983 to 12

liters in 1990. Alcohol-related mortality rates are

significant: the estimated number of deaths due to

cirrhosis and alcoholic psychoses was 14,000 in

1992 and” another 14,000 deaths are attributed to

cancers of the respiratory and digestive systems.

Alcohol-related accidents are estimated at roughly 21 per 100,000 people, more than twice the rate

in the United Kingdom.

THE FRENCH HEALTH CARE SYSTEM

The health care system in France combines freedom of medical practice with nationwide social

security. Every employed person or student, individuals on welfare or retired, and both French citizens and foreign residents benefit from the

system, in which participation is compulsory.

Health care is provided by a range of institutions,

both public and private, and patients have free access to any physician. Patients’ expenses are paid

directly either to the hospital or to the practitioner

by the social security insurance system, or they are

paid by the patient and then refunded.

Universal availability of health care is guaranteed largely by the national health insurance system. In addition, the Social Aid Scheme provides

benefits for individuals not enjoying full social securit y coverage (i.e., people who have been unemployed more than one year and who cannot benefit

from a parent’s coverage). This corresponded to

390,000 persons in 1986, and 550,000 persons (1

percent of the total population) in 1992.

That said, the funding of health-related expenses is a chronic social policy problem in

France. The principle of providing a high standard

of care for the entire population, set against a

background of rising costs and, more recently, decreasing income (due to increasing unemployment), is causing a financial gap that the

government is struggling to close. Health-related

expenditures rose from 6.1 percent of Gross Domestic Product (GDP) in 1970 to 8.9 percent in

1991. More than 75 percent of health expenses are

covered by public-sector mechanisms; the remainder is covered by private individuals or complementary private insurance schemes.

 General Administration

In the field of health care and welfare, treatment

continues to be a central government responsibility. Accommodating the elderly and the handicapped is now the responsibility of the

departments (4). Public and private treatment facilities are opened, expanded, or merged on the basis of a planning tool known as the “health map”

(carte sanitaire), drawn up by the Ministry of

Health in accordance with a 1970 law (modified in

1991). For the major disciplines of medicine, surgery, and gynecology and obstetrics, this map is

based on a list of health care facilities by region

and, within the regions, by “health sector.” Using

requirements expressed in terms of bed-to-population or equipment-to-population ratios, the map

quantifies the needed numbers of beds and of

equipment considered costly (or “heavy”) relative

to calculated theoretical levels.

The 1991 revision of the law transferred to the

regional representatives of the central government

the main responsibility for the health care facility

panning process. (This planning process and the

definition of "needs” are discussed in more detail
. —

106 I Health Care Technology and Its Assessment in Eight Countries

below.) The process does not concern private office-based practice; physicians may establish

practices wherever they choose.

In each department, public hospitals and private facilities operating within the public sector

are administered by the Departmental Directorate

for Health and Welfare (Direction Departementale des Affaires Sanitaires et Sociales) under the

authority of the prefect. The elected president of

each departmental council supervises the day-today administration of the Departmental Directorate for Health and Welfare. At the next level, the

prefect for the region supervises the Regional Directorate of Health and Welfare, which has responsibility for (among other things) regional health

and welfare planning, inspection and management audits of facilities, and regional investment

policy.

The Hospital System

The hospital system is composed of public hospitals as well as commercial and nonprofit private

hospitals. The public and nonprofit private institutions participate in the Public Hospital Service

and operate for the general welfare of the population. Through this service, all patients are accepted into public hospitals at all times (27).

Public hospital management is undertaken by

both elected local authorities and the Ministry of

Health. Public hospitals are run by a board of directors chaired by the mayor; members include

representatives of local communities, Sickness

Fund, and medical and nonmedical staff.

The Ministry of Health is responsible for the

administrative and budgetary supervision of all

hospitals. The Ministry’s departmental representative must concur with every decision of the

board of every public hospital. This is, understandably, a source of constant tension between

local and national views. Public hospitals are generally hospital centers comprising treatment units

(e.g., medical, surgical, obstetric), “mediumstay” centers for patients needing convalescent

care, curative care units (e.g., spas, addiction centers), centers for rehabilitation or treatment of

mental illness, and long-term medical centers for

elderly people who can no longer live independently.

Public hospitals are legally classified in terms

of the size of the populations they serve and the

types of services they provide. The main categories are general hospital centers, specialized hospital centers, regional (teaching) hospital centers,

specialized psychiatric hospital centers, cancer

treatment centers, medium-stay centers (for convalescence therapy and rehabilitation), long-stay

centers, and local hospitals, where local private

physicians have access to beds for their own patients or may treat them there. Regional hospital

centers (27 percent of all public hospital beds)

provide regional coverage and undergraduate

teaching and bring together a large proportion of

specialist care and medical services.

Public hospitals are funded by a lump sum

grant from the central government determined in

agreement with the Social Security bodies under

the supervision of the state (see the section on

Coverage of Health Expenses). But the Social Security entities and not the state provide most of the

financing for hospitals by covering the costs of

their insured. In addition, a hospital may, for its investments, receive grants from the state or from a

local community, and it may takeout financial and

bank loans.

Private hospitals play a major role in the health

care system and account for one-third of all hospital care in France. Some are commercial, others

nonprofit. Private hospitals are particularly important in certain fields, such as obstetrics and

digestive surgery. Physicians in such settings usually work as private practitioners and are paid by

patients on a fee-for-service basis. Like public facilities, private hospitals are controlled by the

health map.

Since 1980, the number of hospital beds and

stays has decreased, and the rate of admissions has

slowed. Present policies favor development of the

long-stay and medium-stay sectors and a reduction in the short-stay sector. The total number of
Chapter 4 Health Care Technology in France 1107

beds is still considered too high (247,813 in 1991,

two-thirds of which were in the public sector).

Physicians practicing in public hospitals are

paid a salary, but to a certain extent they can carry

on part-time private practices outside a hospital.

Other Medical Services

Most doctors practicing in communities provide

their services on a private basis, as do dentists,

ophthalmologists, pharmacists, and allied health

professionals (e.g., nurses, physiotherapists, pediatricians, hearing-aid specialists). Some, however, are employed by the health insurance

system, friendly societies, or official authorities—for instance, health centers whose main

function is to provide health care for people on

low incomes. A large network of public and nonprofit private establishments operate facilities offering specific services, such as special services

for mothers and children.

Health Care Professionals

Between 1981 and 1992, the number of physicians in France increased dramatically, from

108,000 to 155,896 (259 per 100,000 population)

with a disproportionate increase in the number of

specialists. In 1992, specialists accounted for 49

percent of all physicians, compared with 39 percent in 1981. Physicians in private practice represent 80 percent of the total. Since 1985, to limit the

number of physicians, the number of students admitted to medical schools has regularly decreased

(going from 8,500 in 1970 to 3,500 in 1993). Nevertheless, the total number of practicing physicians in France will increase until the year 2010.

Restrictions on medical practice are not

straightforward under the French system. Even if

some of the rising costs of health care may be related to an excess of medical activity, some young

physicians now experience difficulties in seeing

enough patients to make a living. In 1991 a report

of INS ERM (Institut National de la Sante' de la

Recherche Me'dicale, the French equivalent of the

U.S. National Institutes of Health) to the Minister

of Health suggested that some medical practitioners might receive complementary training to become epidemiologists, lawyers, economists,

statisticians, or prevention officers in a renovated

prevention system. This idea has not, however,

been put into action on a large scale.

The number of nurses also increased, from

246,000 to 294,000 between 1979 and 1986, with

a trend toward private-sector employment. A high

turnover rate in nursing stems from increasing dissatisfaction with jobs, position, status, and income (especially in the public sector).

Health care personnel are unevenly distributed

geographically, with a disproportionate representation of medical and allied professions in private

practice in the south of France and the Paris region. Regional differences are greater in the most

specialized professions.

 Payment for Health Care

Health costs totaled more than 573.4 billion francs

in 1991, representing an average of 10,000 francs

($US1,800) per capita and 8.9 percent of the Gross

National Product (GNP). France leads the European Economic Community in its health expenses, which have risen 7 percent annually in

recent years (see table 1- 1). Nearly 97 percent of

this total is spent on medical goods and services; 3

percent is spent on preventive medicine (e.g., industrial medicine, school health services, motherand-child protection).

Hospital care and treatment account for almost

half of the total expenditure, office practitioners

for 30 percent, and medical supplies (e.g., drugs,

spectacles, orthopedic appliances) for 20 percent.

Finally, costs are concentrated on a relatively

small number of people: 10 percent of all patients

account for 75 percent of total expenditures.

The Social Security System

Most of France’s health care expenditures are paid

for through a system of compulsory health insurance within the nation’s general social security

scheme. Health insurance is funded by contributions of both employers and employees. The system is directly managed (under State supervision)

by employers and trade union representatives.
108 I Health Care Technology and Its Assessment in Eight Countries

Contributions are calculated as a percentage of

employees’ salaries and cover the health care expenses of any member of that individual’s family.

In July 1992 the percentages paid by the employer

and the employee were 12.8 percent and 6.8 percent, respectively, of the employee’s salary. Typically the Parliament has not been involved in

payments for health care. Nevertheless, in 1990a

small percentage (3 percent) of the employee’s

contribution (the contribution sociale ge'ne'ralis&e, or CSG) was added to the salary-based contribution. The CSG, being a tax voted by the

Parliament, gives the Parliament the right to discuss health and social security issues.

Since 1988 the National Sickness Fund (Caisse

Nationale d’Assurance Maladie des Travailleurs

Salarie's, CNAMTS), has covered 73.4 percent of

all insured persons’ health expenses. In the event

of hospitalization, whether public or private, the

fund reimburses the hospital directly on behalf of

the insured.

When consulting a doctor, however, each patient must generally pay the fees and then obtain

reimbursement from the National Sickness Fund.

The patient himself is responsible for about 25

percent of the total and is reimbursed for the rest

according to a tariff fixed by agreement between

the CNAMTS and the doctors’ professional

associations. The cost of prescription drugs also is

reimbursed to the patient.

An increasing number of physicians (18 percent in 1985, 28 percent in 1990) have been allowed by the agreement to charge more than the

tariff (de'passement), and a few (3 percent) with

high qualifications have chosen to practice outside the agreement. The latter can charge what

they want, and the reimbursement is close to nothing: however, the patient may receive a partial refund from private insurance. Confronted with a

notable increase in the number of physicians

choosing to overcharge, the government decided

in March 1990 to “freeze” the number of physicians able to do so. After negotiation, this decision

was accepted by the physicians’ representatives.

The costs for which the insured remains personally liable (i.e., the ticket mode'ateur) can be

covered by a private insurance scheme or by a

nonprofit organization directly managed by its

members who traditionally play an important role

in this regard. These organizations are usually

structured to cover individuals in certain jobs or

professions.

The Social Aid Scheme is organized by local

authorities to meet the needs of people of inadequate means. It can either act in lieu of Social Security or complement the latter’s benefits. The

role of Social Aid is now greatly reduced.

Price Setting

Prices for ambulatory care are determined by a

governmental decree after negotiations between

the National Sickness Fund and the national trade

union of physicians. Price setting is based on a list

of medical procedures. The private practitioner

must give the patient a file to be sent to the National Sickness Fund in order to claim reimbursement.

To protect medical confidentiality, medical procedures are not registered individually but expressed

through “key letters” (C for a consultation, Z for

radiology, B for biology, K for surgery, etc.) combined with a coefficient; the key letter corresponds

to a certain price, and the coefficient is a multiplier. The key letter is unrelated to any diagnosis. Unfortunately, one consequence of this system is that

it is difficult to ascertain what medical practices

are actually performed on a routine basis; they can

be classified only in aggregate (e.g., several procedures have the same “290” code).

More than 4,000 procedures are classified under 50 key letters. The list is not frequently or regularly modified, so the valuation of the procedures

is approximate and usually does not represent real

costs. New technologies are classified through

“assimilation” to older, comparable procedures;

which may lead to some highly profitable technologies and other highly under-reimbursed ones.

Updating this list appears to be quite difficult because of the multiple and contradictory goals involved (e.g., health benefits, cost containment,

support of the medical industry). The seeming impossibility of updating the list has been one of the

most evident limits of French health policy since

the beginning of the 1980s.
Chapter 4 Health Care Technology in France 1109

Private physicians’ activities and prescriptions

account for 50 percent of total health care expenditures. The annual growth rate of private office

practice in France was 8.5 percent in 1989 and 7.2

percent in 1990, in contrast with 6.8 percent from

1980 to 1988. Because physicians are paid on a

fee-for-service basis and prices are set by a legal

tariff, it is clear that physicians must increase their

activity in order to increase their personal income;

moreover, overall activity increases as a result of

an increase in the number of physicians. A law

passed in January 1993 was aimed at allowing a

negotiated limitation of this increase. This law defined the principle of an annual financial goal for

the profession as a whole (enveloppe)-which,

according to the law, is to be based on “national

medical references” of practice, taking in to account several factors (e.g., general population

characteristics, the state of medical technology,

the knowledge base in epidemiology, and the state

of medical supplies). The law stresses the responsibility of the National Sickness Fund for the control of rising health costs.

The annual agreement signed at the end of 1993

between the National Sickness Fund and the private office practitioners’ trade unions included

several important clauses, including the use of

treatment protocols, based on fully assessed

scientific literature as rules of practice for private

office practitioners. During the summer of 1993,

the medical board of the National Sickness Fund

devised such rules for 80 well-documented conditions. These drafts were reviewed by experts nominated by the physicians’ unions, and by the

Agency for the Development of Medical Evaluation (ANDEM). These protocols will be used to

evaluate statistically the activity of practitioners.

Practitioners who treat more than 20 percent of

their patients not in accordance with the protocols

risk financial penalties.

To implement these rules, physicians will have

to report (anonymously) details of their activities.

A new database will be created in two steps: first,

prescriptions will be registered openly; later, the

database will include diagnosis-related prescriptions in private office practice. A medical record

(carnet de liaison) will be established for each patient by general practitioners. This file will become the center of a medical information network,

and all patients will carry a summary of their medical records that they will have to show every time

they see a doctor in order to be reimbursed. (Every

physician attending a patient as well as the medical board of the National Sickness Fund will be allowed to review the patient’s medical record.) At

first, only patients over 70 will be involved in this

reform.

Until 1985, hospitals were reimbursed by the

National Sickness Fund on a fee-for-service basis.

For each day spent by a patient in a hospital bed,

the hospital received an amount that was to cover

the average cost for a given medical specialty. As a

result, the hospital’s income was automatically

adjusted for expenses. This method had dangerous inflationary consequences. Since 1984, anew

payment system has been established by the government (initially for the public sector only) based

on an annual global grant for each hospital defined

by the Ministry of Health and allocated to each

public hospital every year for the following year.

The basis for each hospital’s budget has been,

for year 1 (i.e., 1985), the level of its income for

year O; thus, at the start, the most efficient hospitals were penalized. Every year the budget of a

given hospital may increase after a negotiation between the hospital, local Social Security representatives, and state representatives. The budget

reflects the hospital’s activity at the end of the fiscal year plus an amount of money determined

through the application of a “national rate of acceptable increase in expenses” established by the

government after overall prices and wages in the

industry are reviewed.

Each hospital’s annual budget is then submitted

by the director in accordance with government

rules and either approved or rejected by the board

of directors (although rejection is of no particular

consequence if the government representative—

the prefect—approves it). One-twelfth of this allocation is paid to the hospital each month by a

“lead fund” (caisse-pivot), usually the local

branch of the National Sickness Fund. Financial

reparation is made to the different funds involved.
—

110 I Health Care Technology and Its Assessment in Eight Countries

Since 1991 this procedure of payment has been

extended to the private hospitals. Every year, a

“national quantitative goal” is determined according to national agreement; it expresses a level of

activity not to be exceeded during the following

year. In 1992, a maximum, agreed-upon level of

expenses was negotiated as well with representatives of laboratory physicians; negotiations are

ongoing with representatives of radiologists.

Pharmaceutical prices are set by the government after extensive negotiations with representatives of the industry (Syndicat National de

l’Industrie Pharmaceutique, or SNIP). A general

agreement with SNIP is followed by specific contracts with each firm or laboratory. The negotiations focus on several goals, including

rationalization of the use of drugs in France

(which is considered too high), cost containment,

and protection of the French pharmaceutical industry, which is highly competitive (with 80,000

employees and annual sales of 90 billion francs).

Financing the introduction of new technologies

in hospitals is differently regulated for private and

public hospitals. For private hospitals a specific

procedure called the interministerial tariff for

health devices (Tarif interministe'riel des prestations sanitaires, or TIPS) determines the conditions under which hospitals may be reimbursed

following the acquisition of medical equipment or

drugs for individual care. This procedure, based

on a list of prices, is implemented by the Ministry

of Health with input from other officials in other

ministries involved in the setting of prices. Public

Hospitals, in contrast, invest in needed equipment

and drugs by using requests for proposals (when

the amount is over 100,000 francs).

If the equipment to be procured is subject to

premarketing approval, the hospital must go

through this procedure in order to be reimbursed.

In any case, three other conditions must be fulfilled: 1) registration with the pricing list (nomenclature), 2) conformity to legal manufacturing

standards, and 3) an existing set fee for the medical procedure involved. For certain equipment

considered especially costly or of nationwide interest, advance purchasing authorization by the

Ministry of Health is also required (see below).

CONTROLLING

TECHNOLOGY

HEALTH CARE

The regulation of health care technology in France

is different with respect to pharmaceuticals and

equipment or devices. The regulation of pharmaceuticals is based on a time-tested, pre-marketing

approval approach designed to assess the safety

and efficacy of drugs. The regulation of equipment entails approval of the location of services

and pre-market approval of the equipment itself—

two distinct processes. Since 1970, placement of

services have been decided by a planning system

for hospital beds and major equipment that is

aimed largely at guaranteeing equal coverage

across the country. The pre-market approval procedure, which was reinforced in the 1980s, remains weak.

 Regulation of Pharmaceuticals

Control of pharmaceuticals is based on a procedure of “authorization to market” (autorisation de

mise sur le marche', or AMM). Created in 1972,

the AMM procedure controls verification of the

therapeutic value of pharmaceutical products and

their correct use. The companies bear the major responsibility for testing products for efficacy and

safety in fulfillment of the authorization requirements. Until 1992, the AMM process was administered by the Ministry of Health; the minister

himself signed each AMM after reading the findings of the Commission de 1’AMM. After the

AMM is signed, cost-effectiveness is considered

(along with conditions for placing a drug on the

pricing list for reimbursement) by another committee, the Commission de la Transparence.

Since 1980, surveillance of adverse effects of

pharmaceuticals has been part of drug regulation.

Physicians and pharmacists are supposed to report

any unexpected and harmful effects of medications to a network of “pharmaco-vigilance” centers. Warnings and even the withdrawal of a

medication by the Ministry of Health can ensue after advice from the National Pharmaco-Vigilance

Commission. Up to now, however, only a few

drugs have been reported to this Commission.
— —

Despite some red tape, the system for assessing

medication has been considered a model system.

Recently, several experts have pointed out that

there are insufficient funds and staff for implementing the AMM procedure. To solve this problem, in 1992 the government decided to create a

new body, the Agency for Medicine (1’ Agence du

medicament), an independent agency financed by

grants from the government and industry oversee

the AMM procedure. The agency may also receive

private funding. The Agency of Medicine has a

staff of 320 experts, one-third of whom are physicians and chemists. During its first year, this

agency dealt with more than 1,000 authorization

requests. Its board of directors includes, together

with Ministry of Health representatives, individuals from the Ministries of Research, Industry, and

Finance and from Social Security, along with

seven experts (including a representative of industry).

The agency’s director, not the Minister of

Health, signs the AMM for drugs. It is expected

that this new procedure, which involves all the

players, will be more consensual. One of its main

goals is to define the ways and means of its cooperation with the European agency created by the

European Union in London.

Pre-Marketing Approval Process

The pre-marketing approval process (homologation) aims at assuring safety for patients as well as

machinery operators and at assessing new

technologies’ technical and clinical efficacy (25).

(Efficiency prospects, comparisons, or cost evaluations are not part of this procedure.) A manufacturer applies for pre-marketing approval by

submitting results of tests carried out by one of the

official laboratories listed by the Ministry of

Health, as well as clinical trials. The procedure

takes six months on average. Until 1990, the premarketing approval process affected only public

hospitals. Like private clinics, private hospitals

were free to buy any equipment of their choosing.

Since the decree of October 1990, manufacturers have been held responsible for the marketing

of any new technology. As a consequence. preChapter 4 Health Care Technology in France 1111

marketing approval is now required for both public and private medical practice. Only about 70

technologies have in fact been governed by this

procedure to date. These are listed on an official

decree as “technologies implying a risk for the patient or for the user of the machine.”

A National Pre-Marketing Approval Commission advises the Ministry of Health. The 30

members of this commission include 12 representatives from the concerned ministries (e.g.,

Health, Industry, International Trade, Defense,

Consumer Interests, Research) representatives

from Social Security, nine representatives of

stakeholders (e.g., representatives of public and

private hospital associations, industry, insurance

companies), and nine individuals personally nominated by the Minister of Health.

Extension of the pre-marketing approval process to private hospitals and local practitioners,

combined with the temporary consequences of internal administrative organization, has caused

dramatic delays in the system. The National Commission as well as the bureau in charge of the process at the Ministry of Health appeared initially

unable to handle the volume of requests, even

though less than 10 percent of all technologies

were governed by the process. The logistics remain problematic, and manufacturers complain

about the costs and delays involved.

Post-Marketing Quality Control

Since July 1986 a post-marketing procedure has

been established for medical equipment, aimed at

observing the conditions of use and modification

of equipment in order to detect any risk, incidents,

or accidents and, ultimately, to minimize risks.

Users of approved equipment must fill out a form

when taking possession of the equipment and

whenever an incident occurs or may be foreseen.

Inquiries are then held when incidents are reported, with various possible consequences: canceling approval of the equipment either

temporarily or permanently; definition of new

directions for use, modification of norms, setting

up of new trials, etc.
112 I Health Care Technology and Its Assessment in Eight Countries

Although theoretically significant, the system

is of little practical use. Only about 50 forms were

completed in the first year and even fewer thereafter. In 1991 only 19 forms went through the entire

procedure, and half were rejected by the National

Commission.

ii9 Health Care Planning

As noted earlier, the French health care planning

system, based on a national health map, was setup

in 1970 (4,28). The system was modified by the

1991 law on hospitalization to consider the qualitative aspects of medical services. In every region

the health map quantifies equipment and beds required in the future, as evaluated by “need indexes.” In addition, the “regional scheme of

health organization” (SROSS), which is defined

through an extensive negotiation process, is established in every region and qualitatively describe

various common goals for health care and health

equipment supply.

Definition of needs is technically very complex. The definition of needs for beds and heavy

equipment is the technical base for health care

mapping; until 1991, this was the task of the Ministry of Health (though it involved groups of experts at different levels). In its conception, this

procedure aimed at stimulating the reorganization

and equal distribution of health care facilities and

services. It was intended to guarantee the availability of resources for all geographic areas and

population groups during a period when facilities

were being built and technological innovation was

strong.

National bed-to-population ratios for medicine, surgery, and obstetrics, as well as equipment-to-population ratios for some heavy

equipment listed in a national decree, were established as reference points (mostly guided by existing capacities in 1973). A reference health map

was then drawn that described desirable health

care facilities for the entire territory. The document was finalized in 1977 and revised once (in

1980).

In each health sector, the calculation of a needs

index makes it possible to ascertain whether

health care facilities are adequate. When the needs

index shows an excess in existing local capacity,

creation of a new facility is deemed legally impossible.

This process has suffered from a lack of expertise and funding. The reference ratios have remained inexact, having taken little account of

epidemiologic, demographic, and local characteristics. In the case of diagnostic equipment, such as

computed tomography (CT) scanners or magnetic

resonance imaging (MRI) equipment, establishing an appropriate reference ratio based on objective assessments or data has been especially

difficult. The temptation to politicize the process---either by allowing perceived “needs” to

drive the purchase of new equipment or by increasing the size of the population considered in

the equipment-to-population ratio in order to restrict equipment capacities—has apparently been

a problem. Although the system was designed to

guarantee equitable health care across the entire

population, other criteria—such as the balance between the public and private sectors, competition

with other countries, industrial motivations, or

cost containment—have entered into the picture.

Moreover, the intended universality of the approach did not in fact come to pass, as authorization processes differed with respect to requests by

public versus private hospitals.

Ultimately, it became clear that most of the

health sectors were overequipped and that the

health map system was operating strictly as a

quantitative limitation tool. Not only increases in

the number of hospital beds but also the restructuring and reorganizing of existing facilities became impossible. As a result, the law was revised

to allow a more evolutionary approach. In 1991

the health map was extended to cover every

technology and setting necessary to meet the population needs. For example, same-day care (e.g.,

at-home hospitalization and ambulatory surgery),

costly medical activities, and other activities ‘of

special importance to public health are now covered by the health map. Moreover, the authorization process is now the same for private and public

hospitals. The list of activities and procedures
Chapter 4 Health Care Technology in France 1113

governed under the agreement system (hence requiring a specific governmental license) includes

the following:

implementation of services (e.g., opening of

new departments as well as extensions, reorganizations, or conversions) in one of the basic

disciplines, including medicine, surgery, obstetrics, psychiatry, rehabilitation or convalescence care, and long-term care;

heavy equipment, including extra-corporeal

heart-lung machines, hyperbaric chambers, hemodialysis apparatus, blood product separators, centrifuges, cyclotron, nuclear medical

devices, CT scanners, digitalized angiography,

MRI, radioactive monitoring, lithotripsy, and

imaging networks; and

major care, including organ and bone-marrow

transplants, bum treatment, cardiac surgery,

neurosurgery, emergency care and trauma centers, intensive care, radiotherapy, nuclear medicine treatment for cancer, neonatal centers,

chronic renal failure treatment, reproduction

treatment and research centers, and rehabilitation.

The law requires that the Ministry of Health determine national goals for the health system as

well as national need indexes for each program

and each piece of equipment or group of activities,

after being advised by a national committee

(Comite' National de l’Orgunisution Sanitaire et

Sociale). This committee has 40 members, including representatives of the Ministry of Health, two

Congressmen, one representative from each type

of local assembly, and representatives of the different Social Security funds, public and private

hospital unions, various unions of physicians, patients, and health professionals’ unions.

Regional mapping is undertaken by regional

authorities for each of the 247 “health zones”

(which are different from the administrative regions), and SROSS (health and social organization scheme) is designed prospectively for every

zone. (Zones are intended to be internally coherent with regard to medical facilities, economic

and social activities. geography. transportation facilities, and cultural traits.) Regional committees

of representatives work as advisers to the regional

directorates; members are comparable to those of

the national committee at the regional level. According to the law, the SROSS and health map are

designed to fulfill the needs of the population

while taking into consideration local disease patterns, demographic trends, improvements in medical technology, and present available supply.

The 1991 law concerning the authorization process has six main characteristics:

■

■

■

■

■

m

unification of processes for the private and public sectors;

compatibility of individual authorizations with

the goals of the SROSS;

requests for authorization must include a commitment from the applicant regarding the level

of activity involved and future costs to insurance funds;

permits are given for a limited period of time,

and can be revoked;

regular assessments for all permits; and

permitting by the regional prefect, with the exception of permits for certain equipment and

health care facilities listed by special decree, including extracorporeal heart-lung machines,

centrifuges, cyclotrons, nuclear diagnostic

equipment, MRI, organ and bone marrow

transplants, treatment for serious bums, cardiac

surgery, neurosurgery, nuclear treatment for

cancer, and reproduction treatment centers.

Permits are issued by the local representative of

the government for a period of five years or less.

Renewal is subject to the same conditions, including that of evaluation. If fully used by the government, this mechanism might have important

consequences for future technology assessment—

because evaluation is involved at every stage of

the planning process—and for general health care

regulation in France. The system remains quite

new, however. It is too early to evaluate the future

impact of the 1991 law, although it is obvious that

a major attempt to rationalize the health care system and to make it more responsive to the needs of
114 I Health Care Technology and Its Assessment in Eight Countries

the population has been launched, and an important negotiation process has begun at local levels.

HEALTH CARE TECHNOLOGY

ASSESSMENT

Concerns about the quality of health care began

appearing in France in the 1970s (21,32). At the

same time, efficiency issues became central for

the health care financing system due to increases

in health care costs. The deficiency of medical

technology assessment was stressed by the Minister of Health in 1983. At that time, only the director of the Hospitals of Paris benefited from the

advice of a proper, permanent group of experts

(the CEDIT) with respect to purchasing and siting

new technologies. To plan, set tariffs, and perform

quality control responsibilities, neither the Ministry of Health nor the CNAMTS had any means of

evaluating medical practice or medical technology; thus, decisionmaking relied mainly on

negotiations or arbitrary evaluations. A leading

university physician was commissioned by the

Minister of Health to investigate ways of implementing a system that would allow for the development of medical technology assessment at the

national level. His 1985 report recommended the

creation of a multipartner, financially self-sufficient foundation to hold consensus conferences.

The report was accepted, and a contract was

signed by all the partners for the creation of this

foundation. Unfortunately, a change of majority in

the Parliament occurred, and the project was canceled by the new government. Nevertheless, in

1987 the government set up an institution called

the National Committee for Medical Evaluation

in Health Care. This committee involved leading

personalities and ofllcial representatives of the

health care system, but had neither a budget nor an

official schedule. Its task was mainly to discuss

ethical issues and methods of evaluation in health

care and to develop priorities.

In 1989, after the return of a socialist majority

in the Parliament, a leader of the continuing medical education association was commissioned by

the Minister of Health to undertake another study.

His report involved most of the experts in the field

of medical technology assessment. It led to the

creating a national agency to launch medical

technology evaluation as a national project.

The emphasis on technology assessment must

be placed in the wider context of the French government’s concern about a lack of evaluation of

public programs in general during a time of economic difficulties. The need to assess public policies and programs was indicated by several

reports as a much-needed goal. Specific bodies,

including a National Evaluation Committee

(Comite' National de l’Evaluation) and a Scientific Board (Conseil Scientifique de l’Evaluation),

were created close to the Prime Minister, and

some grants were allocated for starting evaluation

projects. (Fifteen projects have been financed by

the National Evaluation Committee, none of them

dealing with health policy.)

This concern about evaluating public programs ‘

reached its zenith in 1990, when reform of the law

on hospitalization was discussed by the Parliament. The new 1991 law finally included not less

than 14 articles treating evaluation as a major

theme—thus lending medical technology evaluation the status of a legal requirement for every hospital manager and for every health care

professional.

This entirely new situation is to be realized

through a new set of norms and practices in the

health care system. Yet this field must be created,

as the law has expressed requirements and goals

but has not defined ways and means. The concept

of evaluation itself remains undefined and health

professionals recognize the need for expert help.

Expertise and training are in major demand. Professional training and seminars offered through

the National School of Public Health, university

courses, use of private experts, and cooperation

with public researchers for specific evaluation

programs are all growing. The years to come will

show if this approach has been successful in building greater expertise into the decisionmaking process.

In 1994, the main bodies involved in health

care technology assessments are as follows:
Chapter 4 Health Care Technology in France 1115

1.

2.

3.

9

the Department of Evaluation of the Hospitals

of Paris, which includes the CEDIT, the oldest

and the most experienced French technology

assessment program, and a new bureau in

charge of evaluation of health care;

ANDEM, a recently created national agency financed equally by the Ministry of Health and

the National Sickness Fund, in charge of developing medical technology evaluation in

France, building adequate methods, assessing

medical practice, and training students and

practitioners; and

a group of institutions inside the Ministry of

Health or close to it at the national or local level, created by the 1991 law to use the concepts

and tools of evaluation as a way of regulating

health care.

Committee for Evaluation and Diffusion

of Medical Technology (CEDIT)

CEDIT is part of the Department of Evaluation of

the Hospitals of Paris, which also includes a new

bureau in charge of evaluation of health care. CEDIT was established in 1982 as an advisory board

for the General Director, mainly to help the Director buy and site new and costly medical technologies.

The General Director, the president of the Medical Council, and any chief physician of a clinical

department or hospital director may ask CEDIT to

investigate implementation of a new technology.

The staff will study the case and present its conclusions to the scientific board, which will make

recommendations to the General Director regarding diffusion, placement, financing, and assessment of the technology.

The staff of the committee includes 10 experts

from various disciplines. Also involved are physicians trained in economics, a hospital manager,

and an engineer. The Scientific Board has 18

members; half are top physicians, and the other

half represent hospital managers of the Hospitals

of Paris.

Methods of assessment include synthesis of

relevant medical literature, consultation with experts, and economic evaluations. Roughly 50

technologies have been investigated by CEDIT

the past 10 years (see appendix table 4-1).

In 1991, CEDIT became a branch of the new

Department of Health Care Evaluation of the Hospitals of Paris. The other branch of this department

is dedicated to the evaluation of health care. Its

first missions have included:

■

■

■

conceiving follow-up tools for topics selected

as indicators of malfunction (e.g., waiting time

in emergency care departments or for outpatient care; drug delivery; surveillance of falls of

patients; surveillance of nosocomial infections; followup of complaints, etc.);

launching multicenter studies on the quality of

health care; and

cooperating on evaluations of the management

of planned and integrated care.

The department also has built a network of

medical practitioners specializing in medical

evaluation. An assessment of its activities will be

carried out after three years.

 Agency for the Development of Medical

Evaluation (ANDEM)

Generally speaking, ANDEM is in charge of leading any program of technology and health care assessment with an impact on public health (with the

exception of pharmaceuticals). ANDEM was established by law in 1989 as a nonprofit, independent association with the following goals:

■

■

■

to develop internal projects in technology assessment,

to validate the methods and means of external

projects,

to disseminate the results of assessments, in

cooperation with concerned professionals,
116 I Health Care Technology and Its Assessment in Eight Countries

Year Topic

1990 ■

1991

1992

1993

■

●

●

●

●

■

■

●

●

■

●

■

●

■

■

Implantable insulin pumps

Cochlear implants

Treatment with intravenous polyvalent immunoglobulins

Treatment of prostatic adenoma by hypothermia

Stereotaxic radiotherapy with gamma rays

High-resolution digitalization of angiographic images and reducing use of film

The digital system for transmission of digital images

Endovascular treatment of intracranial aneurysms by platinum microcoils

Measuring the attenuation of ultrasound by bone

Novacor Phase II

Chronographic diagnosis of endotoxinemia

Ventriculocysternostomy under endoscopic control

High-speed rotational coronary angioplasty (Rotablator)

The treatment of tremors by thalamic

Extracorporeal photochemotherapy

Endovascular hepatic echography

Digital echography

Minitransplants of bone marrow

stimulation

Applications of the Charpak wire chamber in radiology

SOURCE C Weill, 1994

■ to build a resource center of documentation on

French and foreign assessments,

● to build a network of assessment specialists,

■ to develop a proper curriculum for the training

of medical evaluation specialists, and

● to measure the impact of specific assessments

on health professionals and laypeople.

ANDEM is assisted by a scientific council and

is supervised by a board of directors. Its budget,

originally $US1.5 million in 1990, was raised to

$5US million in 1992. (Funds come equally from

the Ministry of Health and the CNAMTS.) The

agency has a full-time staff of 24 people, mostly

physicians, who work with the help of many

scientific experts and health professionals. The

board of directors (whose chairperson is a civil

servant) comprises representatives of the ministries of Health, Education, Research, and Agriculture. Other members are appointed from the

CNAMTS, the National Insurance Fund for nonsalaried physicians, and the complementary insurance Fund. The National Committee for Medical

Evaluation is also represented. Scientific council

members (18 in total) are commissioned by the

Minister of Health and are nominated personally

on the basis of their expertise.

Topics for assessment may be suggested to ANDEM by the board of directors, the scientific

council, or any other partner or professional

group. Selecting and launching an assessment requires the consultation of the scientific council

and the board of directors. ANDEM has produced

syntheses of scientific knowledge on various

technologies and a booklet on the methodology of

consensus conferences. Its resource center for

documentation has become very efficient. Many

expert teams are working in parallel on diverse

fields and topics. A network is being built that

connects private office practitioners interested in

medical evaluation. This network develops methods and research studies in collaboration with university experts. A guide to the methodology of

technology assessment is being prepared for publication.

The topics and technologies studied by ANDEM are shown in table 4-2.
Year Topic

1 990/91 ■

■

■

■

1992 ■

■

●

●

■

■

■

1993 ●

■

■

Prevention of hepatitis C

Heat treatment of prostatic adenoma

Osteodensitometry

Screening blood with p24 antigen to

reduce transfusion-related AIDS

Pre-operative routine testing

Bone marrow transplants

Blood transfusions

Lasers in ophthalmology

Vascular angioplasty

Dental implants

Fetal telemonitoring

Oral Implants

Bone marrow transplants

Endoluminal revascularization of

lower limb arteries

Digestive echoendoscopy

Gynecologic laparoscopy

SOURCE C Weill, 1994

Consensus conferences have always been a major ANDEM concern. A 1985 attempt to create a

federal foundation to promote a national program

of consensus conferences was unsuccessful. Nevertheless, the concept of such conferences quickly

created interest among various specialist societies

and public health professionals. Many such conferences have been held in France with many different sponsors, such as scientific associations,

the National Sickness Fund, the Complementary

Insurance Fund, hospital physicians, and so forth.

“Consensus conferences” came to refer to any

grouping of experts expressing a common point of

view, regardless of their methodologies. This resulted in some confusion between scientific consensus based on a proper methodology and other

types of consensus. Taking as one of its priorities

the need for clearer definitions and guidelines, in

its first year ANDEM published a guidebook used

for validating consensus conferences. It has also

helped organize (and has assisted financially) a

limited number of conferences each year, selected

by the scientific council. ANDEM participates by

Chapter4 Health Care Technology in France 1117

collecting scientific references, defining major issues or questions referred to the consensus panel,

disseminating recommendations, and assessing

relevant medical practices and the impacts of conferences. It can also work as an advisor, or review

various methodological aspects of the process. In

1991, 1992, and 1993, ANDEM was involved in

eight consensus conferences, and it has allowed its

name to be used in connection with eight others

(see table 4-3).

In parallel, ANDEM, together with concerned

professionals, has begun working on developing

clinical practice guidelines. So far, three have

been completed. At the beginning of 1994, the

ANDEM was asked by CNAMTS and the Ministry of Health to validate the “medical references”

in the context of the national agreement with private practitioners’ representatives—a task assumed by the organization’s scientific board.

 The 1991 Law on Hospitalization

The new law is based on the need for evaluation,

respect for patients’ rights, and the concept of universal health care. Evaluation, an important yet

undefined concept, has become through this law a

leading channel for health care regulation, management, and planning in France. New institutions have been set up to implement evaluation

methods in health care management at various

levels: regional evaluation committees and an

evaluation bureau in the Department of Hospitalization of the Ministry of Health.

Regional Committees for Medical Evacuation

of Hospitals (CREMES)

The 1991 law requires all public and private hospitals, “in order to deliver quality care,” to evaluate its activity. This mandate includes evaluation

of medical practices, hospital management, nursing care, and “any activity aiming at providing patients with total care particularly in order to

guarantee its quality and efficiency.”

This new requirement is monitored at the administrative regional level. The CREMES established by law as methodological resources, advise

local authorities on:
118 I Health Care Technology and Its Assessment in Eight Countries

Year Topic

Direct involvement of ANDEM

1991 ■

■

1992

1993

1994

■

■

■

●

●

■

schizophrenia

Methodology endorsed by ANDEM —

1992

Medicalizlng the menopause

Urinary Iithasis. therapeutic

strategies

Monitoring the extension of

non-small-cell bronchial cancer

Prophylaxis of endocardial infections

Diagnosis, prognosis, treatment and

surveillance of polyglobulinemia

Indications for hepatic transplant

Use of red blood cells to

compensate for blood loss during

adult surgery

Long-term therapeutic strategies for

1991 ■

1993

■

●

■

■

■

■

Stopping mechanical ventilation in

the adult patient

Dealing with infertility For whom?

HOW? For what results?

Selective digestive decontamination

during resuscitation

Evaluation of adult ventricular

function at the sick bed

Digestive cleaning during severe

intoxication

Sedation and resucitation, concept

and practice

Sexually transmissible disease in the

woman, the mother, and the child

Predicting outcome in ICU patients

SOURCE C Weill, 1994

●

■

medical and technical implications of the planning process;

methods and results of medical evaluations of

hospital management, technologies, and practices in health care; and

“any question concerning medical evaluation

and databases run by public and private hospitals.”

These committees have not been set up as permanent organizations. They do not have autonomous agendas, permanent staff, or means of

operating routinely. According to the law,

CREMES intervene only if requested by the prefect or the hospitals; they are not supposed to develop independent projects. Thus, their efficacy in

disseminating proper technology assessment

methodologies is unpredictable.

Each CREME comprises 11 members nominated by the local government representative (i.e.,

the prefect) “according to their expertise in the

field of medical evaluation and technology assessment.” CREME members must include two hospital practitioners (one of them from a university

hospital), one physician from a private clinic, one

matron, one public hospital director, one biomedical engineer, and two other individuals commissioned in consultation with ANDEM. CREMEs

are not legally coordinated at the national level

(although such coordination could in theory be

provided by the Ministry of Health to bring about

coherence in methods and projects). A National

College of Experts has, however, been set up for

national issues concerning health care evaluations. In this context, the law has given a more official role to ANDEM, which has a legal mandate

to validate evaluation methods in the planning

process.

ANDEM is thus the methodological support of

the entire system, but its tasks are huge, and it is

hard to predict if and how this system will actually

work. As it stands, each CREME is trying to find

its own way toward fulfilling an imprecise mission; no specific resources, human or financial,

have been dedicated to this task. Moreover,

CREME members are typically local representatives rather than experts in evaluation. Their activity appears to be legally dependent on other local

institutions, as the CREMEs have to be asked by

these groups to work with them.

Evaluation Bureau of the

Department of Hospitals

To implement the 1991 law, a new bureau was

created as part of the Branch of Planning of the

Ministry of Health under the Hospitals Department. This bureau has a large assignment but limited staff, with one public health physician as a

permanent member of the team. The bureau is in
Chapter 4 Health Care Technology in France 1119

charge of defining “adequate and acceptable

methods” for the following:

 evaluating health care organizations policies

with reference to public health goals (to be defined by the National Committee of Public

Health in concert with the Minister);

 assessing the health care system performance

prior to planning at various levels: local, regional, inter-regional, and national;

● stimulating the hospitals to set up programs for

quality assurance with the help of assessment

specialists (partly through the definition of

guidelines).

In June 1993 another bureau dedicated to health

care evaluation was created in the Ministry of

Health under the general director of Public Health.

This bureau is in charge of defining the goals of a

policy of evaluation of medical practice. The staff

is now working on developing its first projects.

 Other Activities

With the new law, a wide field of activity has

now opened for experts. Several groups including

researchers, clinical physicians, medical-school

public health departments, and private consultants compete for evaluation markets.

The Researchers

INSERM, the French national research institute

specializing in biomedical and public health research, established in 1990 a special (but temporary) multidisciplinary committee to undertake

research in health care prevention and evaluation.

This committee may provide grants and contracts,

using research funding or with the financial support of the National Sickness Fund. Epidemiologists, economists, and social scientists are

involved more than ever before in evaluation projects. A new research unit dedicated to health care

economics has been created in Paris and another

unit that evaluates innovation and technologies

has been created in Marseille. The National

School of Public Health, until now dedicated chiefly to management and legal topics, has begun developing research activities in hospital

management and economics, and the quality of

health care assessment.

Physicians

The French Society for Evaluation in Health Care

and Technology Assessment (SOFESTEC) was

created in 1986 as a French version of the International Society for Quality Assurance. Its main

goal is to gather experts in the field from various

institutions to disseminate the methods and results of both French and foreign assessments.

Private Consultants

A number of private consulting companies (especially audit firms) have “applied physicians”

trained in economics, statistics, or informatics and

have set up specialized departments for health

care and hospital management evacuation. They

establish databases, audit hospitals, and report on

medical projects for establishments made legal by

the 1991 law.

Two consulting firms are of special interest: the

Centre National de l’Equipement Hospitalier

(CNEH) and SANESCO. CNEH was until 1990a

semi-public organization with governmental duties in the field of medical informatics and

technology assessment. It has now become an independent, private association whose main clients

are the Ministry of Health and public hospitals.

SANESCO was created in 1989 by the former director of the Hospitalization Department of the

Ministry of Health. Its activities cover technology

assessment, databases, auditing, and prospective

studies. SANESCO also handles logistics for consensus conferences run by the main complementary insurance Fund (Mutualite Francaise).

The Departments of Public Health

of the Medical Schools

Departments in various universities are now

creating courses in evaluation. More physicians

are now trained in such subjects as informatics,

statistics, and economics, and they are obtaining

postgraduate degrees in health care evaluation. At

the same time, hospital informatics and statistics

departments have started developing quality-ofcare assessment projects in connection with clini-
120 I Health Care Technology and Its Assessment in Eight Countries

cians. It appears that the level of expertise in

evaluation methods will increase rapidly in the

health care system.

CNAMTS Medical Board

The medical officers of the National Sickness

Fund (CNAMTS) are now working to change

traditionally control-oriented activities and to develop evaluation projects based on the construction of a medico-economic database. In 1992 the

medical board of CNAMTS carried out a huge

survey of obstetrics; future possible projects include a comprehensive study of anesthesia. In

September 1993 CNAMTS started working on

the establishment of reference protocols (re'fe'-

rences me'dicales) in the context of the annual

agreement with physicians’ representatives. This

project includes reviews of published scientific

literature and negotiations with medical representatives.

It is not easy to evaluate the future developments and impacts of this type of activity for

CNAMTS. This body has been extensively criticized in the past for its preference for control rather than evaluation methods. Considering the

importance of this group of public health physicians in the management of health care in France,

it will be very interesting to see if it can adapt to

new conditions.

TREATMENTS FOR CORONARY

ARTERY DISEASE

A national survey carried out by the National Society of Cardiologists, published in 1991, along

with a report to the Ministry of Health by the General Inspectorate of Social Affairs (Inspection G'ene'rale des Affaires Sociales or IGAS) in 1988,

provide an assessment of the diffusion of coronary

artery bypass grafting (CABG), percutaneous

transluminal coronary angioplasty (PTCA), and

other methods (20). Some of the data, especially

in the IGAS report, are now as old as 1986, and

only some can be updated using the 1990 census

of the Ministry of Health. Anew survey by the National Society of Cardiologists and a CNAMTS

study were carried out in 1992 and 1993, respectively. These studies are part of the negotiation

process for new pricing of cardiology procedures,

however, and their results are not available to

the public.

PTCA was introduced into France in 1978, but

not fully developed until after 1983, when the

guided coaxial system was introduced. PTCA diffused first in teaching hospitals and then mostly in

the private sector, which now appears very active,

despite general dissatisfaction with rate of payment for PTCA. Media coverage was considerable, and patients immediately demanded this

technique-as they still do.

The 1988 IGAS report noted the following:

The treatment of coronary artery diseases has

benefited greatly due to the improvement of

drug treatments, of heart-lung machines, of improvements in surgical strategies and, above all,

of the introduction of PTCA. Treatment using

beta-blockers and calcium inhibitors has now

been improved and is better mastered. Intensive

care through the veins allows for a better response from the patient. Emergency revascularization surgery in the different stages of

1 The case studies, with the exception of the one on neonatal intensive care, are based on previously published literature. As a result, some

of the information may be outdated. More recent data were unavailable when this report was prepared.
Chapter 4 Health Care Technology in France 1121

unstable angina does not exist any more. Now,

surgery is in most cases postponed for scheduled

surgery, and takes advantage of the possibility of

using a membrane oxygenator for extracorporal

blood circulation . ... before, coronary investigations were restricted by the fear of possible incidents with no other possible conclusion than

surgery. Today, PTCA offers a possible treatment to patients over 70, chronically ill patients,

or younger adults with an early diagnosis of coronary stenosis.

As a result, the patient population for PTCA

has increased dramatically, including older and

sicker patients. In addition, coronary artery surgery rates have increased, as has the mortality rate

after bypass surgery (from 1.5 to 2 percent in 1970

to 4-6 percent in 1987). The existing studies show

that the development of PTCA in particular has

led to more angiographic investigations and to

major qualitative changes in cardiac surgery.

Thus, rather than substitution of a new procedure

for an old one, cardiac surgery has been extended

(33).

A Ministry of Health census established that in

1990, there were 73 authorized cardiac surgery

units, 49 in public hospitals and 24 in private clinics. The growth in these units is significant; there

were 44 units in 1979 and 63 in 1987. In 1990, the

total number of centers performing PTCA was estimated at 145 and included 55 private centers,

which revealed a number of PTCA centers outside

cardiovascular surgery units. Hospitals in the

south, southwest, and Paris regions are overequipped, whereas those in the west and north appear underequipped.

In 1986, 27,000 cardiac surgeries were performed; of these, 24,334 involved extracorporal

blood circulation (EBC) and about half of these

(1 1,675) were coronary artery surgeries. In 1990,

according to the Ministry of Health census,

32,702 EBC procedures were performed, an increase of 30 percent.

According to the Society of Cardiologists,

about 20,000 PTCAS were carried out in France in

1990, and 30,000 were performed in 1991. Half

were carried out in the private sector. The procedure is now available to all potential patients. apparently with no waiting list in most regions.

PTCA has replaced conventional bypass surgery

in about half of all cases, but the expansion of indications for the conventional procedure has led to

the general extension of cardiac surgery.

The indications for PTCA have expanded since

1980. Coronary artery dilatation was initially restricted to single, noncalcified proximal lesions

but is now performed in multiarterial lesions, arterial bifurcations, tandem or distal stenoses, and

stenotic bypasses. PTCA also may be offered by

some operators for the elderly or children, but

there is no complete consensus in France on these

patients.

Today, PTCA is considered established; various techniques are available, the “gold standard”

being the balloon. PTCA with the balloon is a perfected technique, involving tools considered completely reliable. After five years, the results for

single-lesions PTCA are the same as those for

conventional surgery.

 Concerns with the Technology

A high restenosis rate with PTCA remains a problem. Researchers are now investigating the possibility of finding drugs to treat cell proliferation.

They are also working to develop intercoronary

support springs, rotary probes to dislodge atheroma plaque, and laser treatment (2).

In 1987, according to IGAS, eight out of 56 surveyed centers had performed more than 30 percent

of the total PTCAS in France. More recently, a

higher level of dissemination has been observed in

smaller centers and in institutions with no inhouse cardiovascular surgery, which has been

considered problematic. This points up the fact

that as the technique is developed, the concept of

“surgical cover” has become followed less rig idly.

 Government Policy

Cardiac surgery units are subject to authorization

by the Ministry of Health, whose policy implies

that every university hospital must have one such

department. Moreover, EBC machines are considered heavy equipment requiring ministerial authorization.
122 I Health Care Technology and Its Assessment in Eight Countries

The needs index for cardiac surgery identifies

the need as one department for every 850,000 inhabitants. However, PTCA is freely diffused, with

no government license or specific price setting. In

particular, there has been no administrative requirement or control to limit PTCA to, or close to,

cardiac surgery units. Setting global policy vis-avis cardiac surgery is not straightforward. Today,

the pricing of PTCA appears problematic; providers believe that the actual price does not take in account the real cost of the procedure. Negotiations

between cardiologists and the Ministry of Health

have been difficult during a time when cost containment receives top priority.

MEDICAL IMAGING (CT AND MRI)

 Regulation

Acquisition of CT and MRI scanners, which are

classified as heavy equipment, is dependent entirely on authorization from the Ministry of Health

or its local representatives. Need for these devices

is evaluated on the basis of an equipment-to-population ratio; if there appears to be no need in a given area, then no hospital in that area, either public

or private, can buy such equipment.

Under the 1991 law, the need for CT scanners is

evaluated locally, whereas for MRI scanners, it is

evaluated nationally (24)—probably because of

the high cost of MRI, which means that government financial support is required to purchase

MRI equipment. Many experts have stressed that

this situation will pose a major obstacle in the

event that a particular region seeks to develop a

coherent policy for medical imaging.

There are no data on the numbers of CT and

MRI scanners in place in France, but only on

the numbers authorized, which may not reflect the

actual situation. For example, the purchase of

a scanner may have been authorized, yet for some

reason the purchase was never made. It also is

possible (even though this would be hard to prove)

that some machines that should be replaced by

a new, approved one are being kept in use by

hospitals.

 Needs for and Distribution of CT

and MRI Scanners

According to the first needs index for CT scanners, one machine was needed for every million

inhabitants. At that time, the ratio was 1:250,000

in the United States and 1:450,000 in West Germany. A modified needs index was published in

1981 allowing one machine per 600,000 to

900,000 inhabitants.

Between 1976 and 1981 the main goal of the

Ministry of Health was to delay the introduction

of foreign CT scanners in France. In fact, the Com -

pagnie Francaise de Radiologie (CRG) was

working on a prototype French CT scanner. In

1976 and 1977 CRG distributed two cranial scanners, but the company underestimated the demand

for CT scanners. The French total body scanner

was ready for marketing only in 1981, which is

when the needs index was modified allowing

more equipment (15).

The distribution of CT scanners accelerated

through annual public programs after 1984, including subsidies from the government to public

hospitals for their purchase. By 1987a new needs

index allowed one machine for every 140,000 to

250,000 inhabitants. By 1992, the authorized ratio

was 1: 122,000. Since the introduction of CT scanning technology in France in 1976, 476 licenses

have been granted: 63 percent to public hospitals,

9 percent to nonprofit hospitals, and 28 percent to

private for-profit clinics. As a result, France has

now attained the population to machine ratio of

other European countries.

The national (authorized) stock of MRI equipment in 1989 was of one for every 850,000 inhabitants, which represented the sixth-highest density

among the industrialized countries. Sixty-six new

imagers were authorized between 1983 and 1989,

74 percent to the public sector. This shows an accelerating trend, confirmed by the current number

of authorizations (103, or one MRI for an average

population of 564,000 inhabitants).

Since 1984, CT scanning has become accessible to the entire French population without waiting. Every teaching hospital has been equipped
Chapter 4 Health Care Technology in France 1123

with MRI. Remaining disparities among regions

reflect no more than existing disparities in the

numbers of hospital beds and of other equipment

in the different regions. The Centre and Pays de la

Loire regions have been for a long time the least

equipped with regard to CT scanners: one machine for every 188,000 people in the Centre region and one for every 225,000 in the Pays de

Loire. For MRI, the Centre region has one machine for every 2,264,000 inhabitants; Picardie

has one machine for every 1,740,000. Conversely,

the Ile de France, Provence-Alpes-Cote-d’ Azur,

and Midi-Pyrenees regions are the best equipped

in terms of MRI and CT scanners, as well as all

other facilities. These are also the regions where

the equipment rates at private, for-profit facilities

are the highest.

The private for-profit sector’s equipment rates

(for CT and MRI scanners) appeared after 1986 to

be somewhat higher than this sector’s level of hospital beds. Indeed, 70 percent of the licenses given

after 1986 for CT scanners and 42 percent of those

for MRI were for facilities in the private for-profit

sector. Recently, traditional private x-ray centers

have begun to transform into autonomous diagnostic centers. This may now be the case for onequarter of those centers that own CT scanners.

The private sector can take advantage of easier

loan conditions (private hospitals do not have to

wait for government agreement ) as well as the feefor-service pricing system, which allows for

quicker profitability. Generally, the greater flexibility of the private sector has become evident

since the 1980s, especially regarding adoption of

new technology. Moreover, after 10 years of cost

containment, the public sector suffers from an increasing lack of skilled medical imaging professionals.

 Concerns with the Technologies

Even if knowledge of medical imaging activity remains incomplete, most experts feel that use of

imaging is excessive in France (16). According to

the Ministry of Health, in the mid- 1980s the private for-profit sector performed 8.500 scans per

year, as opposed to 4,350 yearly in the public sector. According to the INSERM survey, the private

sector in the Provence-Alpes-Cote d’Azur region

performs more than 10,000 scans per year. A

CNAMTS survey of one day of imaging activity

has shown that the private sector, which owns 28

percent of all CT scanners in France, performs

33.5 percent of the procedures. (The reimbursement rate for the procedure was considered too

profitable and was revised downward.)

Medical imaging activity in the public sector

has also increased greatly over the past decade. At

facilities of the Hospitals of Paris, the total number of radiological procedures (key letter Z) increased 13.7 percent between 1982 and 1988,

while payments for these services increased 21

percent. Use of each Hospitals of Paris scanner increased 18.5 percent per year between 1985 and

1988; at the same time the number of machines increased from 10 to 17. Some experts have raised

the possibility of inappropriate use.

New need indexes published in February 1993

greatly increased the allowable number of CT

scanners and MRI in France. After years of restriction (due mostly to the cost containment priority),

this step was taken after intensive negotiations

among the Ministry of Health, CNAMTS, equipment makers, and hospitals. The date of the decision, very close to the elections of May 1993, can

be interpreted as a sign that political rather than

health goals were key.

For CT scanners, the new need index authorizes one machine per 110,000 persons in each

health sector, plus one machine for every 1,500

university hospital acute beds. As a result, 72 new

CT scanners could be purchased in the years to

come, thereby allowing under-equipped regions

to reach the levels of the others (which, with the

saturated needs index, cannot acquire any new

equipment).

Ten regions are now fully equipped for MRI,

but others are waiting for machines. The February

1993 needs index authorizes one MRI for every

600,000 inhabitants, which would allow 18 new

imagers.
124 I Health Care Technology and Its Assessment in Eight Countries

 Government Policy

The policy of the Ministry of Health concerning

CT scanners and MRI has been characterized by a

desire for a rather slow diffusion for several reasons: 1) the technical complexity of defining

needs for diagnostic equipment; 2) the long-range

cost implications; and 3) the duration of the learning curve. The desire to promote French industry

was involved, too, in choices to distribute CT

scanners between 1976 and 1981. The rather slow

equipping of French hospitals was harshly criticized by professionals and the media. Waiting lists

in France were very long, and the more fortunate

patients were for a time sent to foreign hospitals,

especially in Belgium or Switzerland. It was

seemingly very difficult for France to maintain a

level of equipment that was notably inferior to the

level of its nearest European neighborsven if at

that time the French government could legitimately deem the technology not yet fully assessed. Indeed, this situation illustrates one of the limits of

an independent national approach to the diffusion

of medical technology. Although currently the

number and distribution of CT scanners is considered quantitatively satisfactory and possibly overused, medical professionals emphasize that the

quality of the French equipment maybe poor and

en route to obsolescence.

LAPAROSCOPIC SURGERY

The leading role of French physicians in the major

innovative field of coelioscopy (laparoscopy) is

well known in scientific and clinical communities, and is a source of national pride (33). The first

pelvic coelioscopy was attempted in 1943 by Dr.

Raoul Palmer in Paris. In 1973, Professor Bruhat

of the teaching hospital of Clermont-Ferrand carried out the first treatment of an abscess of the fallopian tubes through a coelioscope. The same

year, Bruhat performed the first coelioscopy for

the treatment of an extra-uterine (ectopic) pregnancy. The first treatment of an ovarian cyst was

published by Bruhat in 1976.

In 1980 the first appendectomy using a laparoscope was carried out successfully in Germany.

The “French first” was performed in Lyon in 1983

in the private Clinique de la Sauvegarde. In 1981

Professor Bruhat was the first to attempt use of a

laser in coelioscopic gynecological surgery.

Arthroscopy, a technique imported to France in

1969 remained unusual for many years and was

carried out only by rheumatologists. Orthopedic

surgeons gradually adopted the technique from

1980 on, and it became widely available (especially in the private sector) after 1986. In 1987, a

French doctor carried out the first cholecystectomy through a laparoscope, and the first hyperseIective vagotomy for duodenal ulceration was

carried out by Professor Dubois at the Clinique de

la Porte de Choisy in Paris in 1989.

 Coelioscopy in Gynecology

The diffusion of this technique was stimulated by

Professor Bruhat and his medical team at the

teaching hospital of Clermont-Ferrand (17,19).

Numerous international symposia were held

there, as was the World Congress of Gynecological Coelioscopy in 1989. Clermont-Ferrand took

the lead as a training center, with the creation of a

European certificate and an international training

center for endoscopic surgery. According to the

equipment manufacturers, virtually all public and

private gynecologists, whether or not they are surgeons, are now equipped with endoscopes. Forty

percent are said to undertake surgical laparoscopy.

Gynecological laparoscopic surgery was studied between January 1987 and December 1991

by seven leading French centers (30). The 17,521

procedures followed fall into three categories of

celioscopy:

1.

2.

3.

“traditional coelioscopy,” which includes the

current indications: diagnostic; and “minor laparoscopic surgery” such as minor adhesiolyses, destruction of first-stage endometriosis,

biopsies and treatment of ovarian cysts, tubal

sterilization, and reproduction treatment;

“major laparoscopic surgery,” which includes

procedures that have become “classical:” major

adhesiolyses, destruction of ovarian cysts, and

treatment of extra-uterine pregnancy; and

“advanced laparoscopic surgery,” which defines a field of new procedures: including hys-
Chapter 4 Health Care Technology in France 1125

terectomy, myomectomy, ovariectomy, treatment of prolapsus, cure of incontinence, and

pelvic and para-pelvic ganglion curettage.

(This is the field of “research and future possibility for practice.”)

Activity inlaparoscopic surgery has increased

in the seven centers studied; 52.5 percent of the

17,521 procedures studied were performedduring

the three first years of thesurvey, and 47.5 percent

during the last two years. Advanced surgery accounts for most of this increase,comprising l percent of the indications in 1989 and 10 percent in

December 1991. The rate of incidents leading to

an emergency laparotomy was 3.25 per thousand

(1.7 for diagnostic procedures and 5.3 for surgery). One death occurred during the five years of

the survey.

No administrative obstacle has either hindered

or promoted dissemination of the technique,

which has taken place in departments already

equipped for diagnostic coelioscopy. There has

been no specific reimbursement rate for performing a coelioscopy rather than classical surgery; the

financial scaling incorporates no incentive to

carry out one procedure over another.

According to the experts, a small proportion of

coelioscopic surgery may be performed in ambulatory care facilities, but there are many obstacles

with respect to the internal organization of hospitals, and CNAMTS as well as the Ministry of

Health appear to be reluctant to endorse this practice. They fear that it would result in more procedures with possibly debatable indications and

increasing costs, rather than leading to a substitution of practice.

In the past, gynecological laparoscopic surgery

faced strong hostility from cancer treatment centers and from many academics. The method was

denigrated as a “blind” procedure that could not

provide gynecologists with a proper pelvic and

histological assessment. Recently, however, coelioscopic surgery in gynecology has become quite

fashionable. More surgeons came to this technique after the diffusion of the laparoscopic cholecystectomy technique. French gynecology is

therefore entering a new learning phase that, according to observers, may result in increased surgical risk (although no figures are available to

support this observation).

Laparoscopic surgery in gynecology is a field

of ongoing diffusion. Its indications are increasing, and there is strong acceptance by patients.

With “advanced Iaparoscopic surgery,” a new area

has now opened, following the developments of

digestive laparoscopic surgery. This has fueled a

need for risk-benefit evaluations.

 Digestive Laparoscopic Surgery

This technology (6,33) has been strikingly quick

to spread and has also been the subject of a major

media campaign. (Some media have even called

for’’ the end of surgery.”) The American Journal of

Surgery has called the spread of this technique the

“second French revolution” (9). Interestingly, laparoscopic surgery did not appear first in university hospitals but in two private clinics in Paris (11).

According to digestive surgeons, laparoscopic

cholecystectomy is a consumer-driven technology; some patients are now refusing the classical

invasive procedure. The competition between

digestive surgeons and gastro-enterologists has

also played an important role: digestive surgeons

may regain some of the patients who are drawn toward physicians because of new drug therapies

and, to a certain extent, lithotripsy.

Laparoscopic appendectomy was first performed in France in 1983. Although this procedure is considered efficient, its diffusion remains

rather slow. The classical procedure is considered

satisfactory by both surgeons and patients.

A 1992 unpublished survey exhaustively described the practice of laparoscopic digestive surgery (6). Two-thirds of the relevant facilities in the

public sector and three-quarters in the private sector now perform laparoscopic surgery. The Hospitals of Paris appeared to be slightly behind; in

public hospitals, diffusion of the technique appears greater in university hospitals than in others.

Diffusion occurred particularly early in private

for-profit hospitals, and the smallest of these were

the pioneers; nevertheless, only 55 percent performed coelioscopies by the end of 1992. The
126 I Health Care Technology and Its Assessment in Eight Countries

public sector reached the same level of activity as

the private sector in late 1989. The public sector

nonetheless proved less dynamic, and the lead

continues to be held by the private sector.

In January 1992 laparoscopic surgery in the

public sector accounted for 53 percent of the total

number of cholecystectomies, with a higher concentration in the university hospitals compared to

other public hospitals. A tendency to expand referrals toward treatment of asymptomatic stones

was noticeable. (In December 1991, a European

consensus conference stated that cholecystectomy

is not justified in the absence of specific symptoms.)

By the end 1992, 79 percent of the digestive

surgeons in public hospitals had performed laparoscopic surgery; in one-quarter of the departments, residents could be trained on a routine

basis. Thirty-two percent of the nonuniversity and

46 percent of the university ones were involved in

some trial or register. Seven ongoing studies were

registered by the survey.

In university hospitals, 35 percent of the departments perform laparoscopic appendectomy;

46 percent treat perforating ulcers; 32 percent treat

hiatal hernias; 27 percent perform abdominal vagotomy; and 23 percent perform colectomies (at

least once).

 Concerns with the Technology

For hospitals, the diffusion of laparoscopic surgery creates significant problems because of new

working conditions (6,33). Patients’ stay in the intensive care units is shorter, but the entire stay is

more costly because it involves more procedures.

The large patient turnover creates a burdensome

task for the personnel. Moreover, the equipment is

delicate and carries high maintenance costs. Finally, defining indications, evaluating procedural

risks, and training operating personnel are major

challenges with this technology.

The economic advantages of the technology for

French society at large are linked to the simplicity

of post-operative sequelae, the reduction in hospitalization time, and the more rapid recovery of activity experienced by patients. However, these

benefits are arguably more theoretical than real.

There has been a noticeable increase in tests prior

to actual operations, especially in the areas of cholangiography and ultrasound endoscopy, which

are especially invasive and costly. The widening

of the indications for cholecystectomy is also a

source of increased costs.

Since 1990, laparoscopic cholecystectomies

have been registered by the French Society of

Digestive Surgery. Of 1,200 procedures reported

during one year by 67 surgeons, the figures show

that 8 percent of patients had peri-operative cholangiographies, 8 percent had laparotomies, 6 percent had post-operative complications, 2 percent

had early re operations, and 0.1 percent died (14).

As in gynecology, the method has been diffused

freely without administrative controls or pricing

processes. There were no financial limits, either,

as the endoscope is moderately priced, and can be

easily borrowed by digestive surgeons from gynecologists (or even from manufacturers). Moreover, the equipment has not been subject to

pre-marketing approval. In less than two years, laparoscopic cholecystectomy has become a standard technique. Nevertheless, concerns have been

raised about the quality of the training of surgeons

performing coelioscopies; many surgeons learn

while actually performing the operation.

In 1993 CNAMTS asked ANDEM to study the

risk-benefit ratios of coelioscopy, both in gynecology and in digestive surgery, to help define

proper pricing for the procedures. This assessment

is ongoing.

TREATMENTS FOR END-STAGE

RENAL DISEASE (ESRD)

Since 1990, a national register has been maintained by the National Society of Nephrology with

the support of the Ministry of Health. This register

extended to all of France for the first time in 1991,

and comprises more than 20,000 patients treated

either by dialysis or by renal transplant. Of the 240

existing facilities that provide the treatment, 210

have reported information on their patients.

Fifty-nine percent of ESRD patients are male

and 41 percent are female. Thirty-two percent of
Chapter 4 Health Care Technology in France 1127

the patients were living with a functional transplant, 56 percent had been treated by he modialysis

at a center or by auto dialysis, 7 percent by hemodialysis at home, and 6 percent by peritoneal dialysis. Nearly 40 percent of all patients are retirees;

20 percent are disabled, 20 percent are jobless and

on welfare, 8 percent have full-time jobs, and 4

percent have part-time work. Statistics indicate an

aging population in this program.

The prevalence of patients treated for chronic

renal failure at the end of 1991 was 355 per million

inhabitants; 46 new patients per million inhabitants were treated for the first time. Glomerulonephritis now represents 25 percent of all of

ESRD; renal polycystic disease, 10 percent; and

diabetic renal disease, 7 percent.

“Chronic nephropathy and the pure primitive

nephropathic syndrome” as well as “post-transplant surveillance” are on the list of ailments said

to be “long-term afflictions” for which care is 100

percent reimbursed by the National Sickness

Fund. Moreover, a sick individual can benefit

from state welfare revenues if his or her physical

status leaves him or her unemployable.

 Renal Dialysis

The first French renal experiments date from September 1960. These first trial experiments took

place in high-technology hospitals. The first experiments in at-home dialysis were carried out in

1967 in Lyon. The placement and maintenance of

patients in their homes proved more difficult;

thus, at the beginning of the 1980s, auto-dialysis

was developed for autonomous patients aided by

nurses. As at home, with this technique patients

are responsible for maintaining their own personal

material. This formula rapidly developed, and the

number of patients quickly increased from 760 in

1985 to 2,374 in 1990 (10,34). In 1991 around

4,300 new patients (77 per million inhabitants)

were cared for using the entire gamut of available

techniques; about half were treated outside of

centers.

Renal dialysis equipment requires authorization from the Ministry of Health. Theoretical

needs were established in 1984 at 40 to 45 stations

per million inhabitants. However, the rules have

never clearly fixed actual limits on the zones of the

health map, nor has dialysis outside a center been

considered. Also not considered is the technical

evolution of handling patients (e.g., the wider diffusion of renal transplants due to the use of cyclosporine). In the technical arena, moreover, nothing

determines the working rules of the public sector

nor of dialysis outside the established centers. As

a result, the rules today appear to be singularly obsolete, making any attempt at global policy inefficient. Experts are calling for their modification.

The current state of dialysis in centers is virtually unknown. No precise inventory has been

made of this practice or of patients in residence; an

official census exists only for public establishments. In 1989 there were 116 public centers at

which 937,770 dialysis sessions took place (for

6,011 full-time patients). The situation in the private sector is even less well known. The number

of patients using private establishments is around

9,000 ( 10,34).

 Renal Transplant

Renal transplants were successfully performed in

France in 1951; a year later, the first renal transplant involving a living donor was performed at

Necker Hospital in Paris (5,7). French doctors

continued to be pioneers in this domain: a successful transplant operation was performed on identical twins in 1955, and attempts made with related

nontwin donors multiplied until 1970. Transplants were then practiced by means of initial

grafting, with organs taken from subjects in a state

of brain death; between 1970 and 1986, approximately 13,000 renal grafts were performed. By

1980, France was fifth in Europe with regard to

the number of grafts accomplished, having

slowed somewhat in its advances with this

technology.

As of 1984, the use of the immunosuppressive

drug cyclosporine (undertaken in France as early

as 1981 and diffused by 1984 to all clinical research teams) prompted considerable progress.

Increased activity and interest were supported by

specifically y defined concessions provided by pub-
128 I Health Care Technology and Its Assessment in Eight Countries

lic budgetary allocations for transplants (as of

1986). Surgery and followup care benefits of 100

percent were provided by the Sickness Fund.

Studies have established the cost of this surgery in

France at between $US3,515 and $US3,630, and

the cost of the followup care for an individual between $US6, 150 and $US9,000, depending on the

hospital and region (28).

Between 1977 and 1983, the number of medico-surgical groups practicing transplants (for all

organs) remained at about 35 teams. However, after the diffusion of cyclosporine and the allocation

of public funding, this number rose. There were

44 teams in 1984 and 104 in 1988. Simultaneously, the steadily improving rise in the numbers of

grafts performed was remarkable within every

category of transplant. Between 1984 and 1988,

1,808 renal transplants were performed.

To match donors and recipients, French transplant surgeons have created an interesting organization (13). France Transplant is a nonprofit

association founded in 1969 to:

 ) Develop the deduced organs by their number

and quality; [promote] the use of all those available; promote and coordinate the extraction of

multiple organs; 2) . . . perfect the necessary skill

of extraction of all the various organs; [and] 3) Organize the distribution of the organs according to

ethical and scientific norms, as well as the modes

of distribution proper to each organ on the local,

regional and national level.

This association cooperates with teams receiving authorization to perform transplants as well as

with histocompatibility laboratories. The association functions in a decentralized manner in seven

regions, each of which has a coordinator who informs both professionals and the public at large of

the need for organs and designates local coordinators.

The power of France Transplant remains, however, limited. When an organ is removed from a

subject in a state of brain death, only one kidney is

furnished to the association; the other is assigned

to the team that has removed it. France Transplant, unlike UNOS (its American equivalent),

does not have the legal right to claim the second

kidney. Moreover, some teams have felt that the

system has favored the major Parisian teams. This

has led to discord between the medical groups and

to the creation of regional independent associations (Paris-Transplant and Rhone-Mediterra -

nean Transplant).

The rate of renal transplants remained at about

35 per million inhabitants from 1989 to 1991.

Waiting lists are lengthening; an estimated 4,886

patients were waiting in 1991. (Average waiting

time is estimated at three years.) Long waiting

lists are the result of several factors, including reduced numbers of transplantable organs because

of a reduction in road accident traumas; a seeming

recent reluctance on the part of the French people

with regard to donating organs; and more restrictive ethical rules resulting from various donation

scandals reported by the press.

 Erythropoietin (EPO)

No French company produces EPO, which first

became available in France in January 1989. After

its introduction, public authorities, considering

EPO too costly, sought to restrain its use (the

annual cost per dialyzed individual is as high as

the minimum legal income). Nephrologists protested publicly, as did those doing transplants; and

the public authorities ended up overturning previous restrictions.

According to the national register of chronic renal failure, EPO was used at the end of 1991 in 38

percent of patients treated by hemodialysis in centers or by autodialysis. There are important regional variations, with more than 45 percent of

patients benefiting from EPO in Ile de France and

Aquitaine, as opposed to 16 percent in RhoneAlps. EPO seems to be markedly less frequently

used for patients having peritoneal dialysis (only

22 percent).

 Government Policy

The Ministry of Health is responsible for guaranteeing the equity and general balance of the system, using legal requirements and conditional

financial support to accomplish those ends (26).

By 1986, confronting an increase in transplant activity and rising costs, the Ministry took excep-
tional administrative steps to coordinate diffusion

of transplant activity throughout the country. That

year, a ministerial instruction defined (for certain

categories of grafts) national, quantified objectives as well as a methodology for their implementation. Each transplant unit was to define a

medical goal that integrated an analysis of the current situation, a definition of therapeutic protocol,

and the modes of evaluation to be put into practice. By 1987, a quantitative “balance sheet” and

annual financial scheduling were required from

each transplant unit.

Although newly formed teams were in theory

free to undertake transplants, only the pilot centers

or some of the more “encouraged” centers (i.e., the

allo-graft centers) could benefit from public funding (14 renal grafting centers benefited). The pilot

centers were selected by the Ministry of Health

from among the oldest and most prestigious transplant teams. Their role is now to set norms of practice that can be transferred to the other centers,

which must compete in order to improve their

practice and become pilot centers themselves (as

determined by the Ministry of Health).

As of 1988, organ transplants, in both the public and the private sector were subject to ministerial authorization; any hospital unit that had not

begun a program of organ grafting as of this date

could not begin without authorization.

In 1992, reform of the system of organ and tissue transplants was initiated. Its aims were rationalization, published guidelines, and security. The

Comite de Transparence was formed by a legal order in 1992 to develop requirements for different

associations in the field, to counsel the Minister of

Health, and to identify all cases of malfunction.

The committee chairperson is a state counselor

(civil servant), not a specialized doctor.

Active transplant units (fixed at 40 for renal

units) are defined by a 1992 health map, and

health norms are established for the centers, which

are now required to declare any organizations involved in imports, conservation, and transformation of organs and tissues and to guarantee the

highest quality of technical and human knowhow. Reports from the general inspectorate and

Chapter 4 Health Care Technology in France 1129

the committee cover the scheduling of transplant

activity as well as financial guidelines (e.g., setting of payment rates and payment of costs).

NEONATAL INTENSIVE CARE

Little information exists on neonatal intensive

care in France as it relates to demographic, equipment-related, or technological issues, despite the

fact that Neonatal Intensive Care Units (NICU) require a Ministerial license. Neonatology itself

does not exist in France as a formal specialty, but

pediatricians who specialize in neonatology are

grouped together in a Neonatal Study Group

(Groupe d’EtudesNkonatales, or GEN). Information in this case study derives from private interviews with two leaders in the field and from GEN.

In the Ile de France region, GEN uses its unpublished census on various neonatal services to organize summer shifts of services on a permanent

basis. Thus, the GEN figures give an accurate assessment of the number of beds and units in the

Paris area. In the permanent summer-shift organization, GEN accounts for 196 beds in 15 units.

Only three hospitals have wards exclusively for

neonatology. There is one unit in a private hospital. Most of the beds are in NICUS, but some are

part of general pediatrics.

Most units are costly in terms of both equipment and personnel. The situation has become

more tense recently, particularly in relation to

problems with nursing personnel, which has

meant that beds are unavailable at certain times of

the year, and experts feel that the situation may

worsen in the near future. The NICU population is

now growing as a result of several factors (mostly

connected with improvements in the technologies):

■ increases in birth rates of radically premature

infants (delivery between 33 and 37 weeks)

whose survival was previously impossible;

■ the consequences of medical interventions in

procreation, which lead to an increase in multiple pregnancies (3 percent triple pregnancies

after medical intervention) and ultimately to

very low birthweight premature infants;
130 I Health Care Technology and Its Assessment in Eight Countries

■ the consequences of prenatal diagnosis, leading

to therapeutic in utero care and continued care

in NICUS; and

● complications in pregnancy (e.g., low fetal

growth) leading to fetal problems during birth,

and neonatal emergencies of term infants who

are systematically placed under surveillance

and quasi-systematically resuscitated.

 Concerns with the Technology

Experts emphasize a great disparity in the ways

and means of neonatal services as well as in medical and nursing staffs. The high level of technical

skill, heavy equipment, and burden of care for the

nursing staff in NICUS implies that such units

should be restricted to university hospitals and

carefully assessed by ministerial authorities. Lack

of proper beds for NICUS in university hospitals,

combined with the lack of specific qualifications

for personnel, has meant that new wards are being

created in general hospitals (the smallest with

only three or four beds). Even though GEN experts find these small units insufficient to satisfy

safety criteria and lacking in specialized services

with the proper environment, technology, and

staff, they cannot be closed.

According to GEN experts, the main problem

of the NICUS (other than the absolute lack of beds)

is linked to nursing jobs. NICU nursing is very demanding and not socially rewarding. Nurses

working in the NICUS do not receive career or

salary advantages or professional recognition.

These units must expend increasing energy on

maintaining their nursing personnel, and they rotate shifts excessively.

In May 1991 one expert submitted to the Prime

Minister a report on French problems in bioethics.

One chapter and several appendixes of that report

discuss the question of neonatal intensive care.

The report underlines questionable areas as well

as positive aspects of neonatal resuscitation, and it

raises several ethical questions (23). On the positive side, the report points out that France has a

strong tradition of organizing specialized services

for newborn infant care. Such services are closely

coordinated with centers for prenatal diagnosis,

which can thus anticipate and prepare to receive

newborns with problems. However, on the negative side, France’s infant mortality rate is 7.3 per

1,000, which places it eleventh in the world.

Moreover, although the frequency of premature

births in France has been diminishing (from 7 percent in 1981 to 5 percent in 1991), the rate is not

negligible. The rate of highly premature births

(i.e., delivery after less than 33 weeks) is 0.7 percent of the births, or 5,000 per year, which raises

immense problems for localities treating these infants.

Ethical questions concern, on the one hand, the

problem of resuscitating newborns, and on the

other, the harvesting of organs from brain-dead infants for transplantation. The decision to abstain

from therapy or to pursue resuscitation lies mostly

with physicians rather than parents. Proponents of

resuscitation feel that newborns must be systematically resuscitated if this is possible—a position

that has been a focus of criticism, particularly because the criteria used for deciding on whether to

resuscitate vary with different proponents.

Demand for grafts from newborns-heart and

lungs in particular-has been increasing, and both

harvesting of organs and transplantation require

NICU services. If a baby is alive, it is theoretically

and ethically possible to extract bone marrow for

transplantation to a sibling, but only with the consent of parents and of three doctors not involved in

the operation. Removal of an organ from a deceased child (covered by the Cavaillet Law of

1976) is subject to parental consent as well as that

of the recipient. Above all, the law calls for doctors to take all precautionary measures for the

benefit of the recipient.

 Extracorporeal Blood Circulation

The French technique of extracorporeal blood circulation and artificial lungs in newborns was first

undertaken in 1987. The American technique (extracorporeal membrane oxygenation, or ECMO),

which requires two nurses per patient, appeared

overly burdensome, and the hospital that first used

the technology therefore developed a less invasive

technique: the AREC, a “veino-venous” tech-
nique permitting the ward to perform AREC with

three units for 14 beds using only five nurses (8).

An association known as GRAREC was created to

ensure the dissemination of this particular technique in France and Europe (3). Five centers now

function in France: two in Paris (one with three

machines and one with one machine); one in Line

with one machine: one center and one machine in

Dijon; and two machines in Marseille.

AREC is not subject to specific regulations, reimbursement rates, or analytical accounting. As a

technology within neonatology, AREC receives

financing from relevant administrations (e.g., the

CEDIT in Paris) as a technological innovation. At

present all the French centers use the AREC technique rather than ECMO. This technique is connected to the use of a French invention, a pump

developed by Rhone-Poulenc, readapted, and

now produced by other, smaller companies.

Around 200 French newborns with an estimated 80 percent risk of mortality have been

placed on AREC: the average duration of treatment is five days. A followup of results over two

years demonstrates that 86 percent of the infants

are normal. A frequent complication can be intracranial hemorrhaging due to heparin (1 2).

The AREC technique is less invasive than

ECMO. It uses only the jugular vein and does not

suppress natural circulation inside the lungs. It

also permits much less intensive surveillance. The

expense compared to that of maintaining an average patient in an intensive care unit is estimated to

beslightly lower. An estimate of potential need for

this technique was made by CEDIT and GRAREC

(held to be 40 cases annually in the Paris region, or

about 200 overall in France).

AREC is not considered by all French neonatologists to be a priority but rather one technology among others. Currently, GEN gives most of

its attention to the ethical issues of neonatal intensive care, to problems of the burden of care in the

units, and especially to the status and position of

NICU nurses.

SCREENING FOR BREAST CANCER

In 1982, early screening for breast cancer by mammography was virtually nonexistent in France.

Chapter 4 Health Care Technology in France 1131

Mammographies were exclusively a diagnostic

activity undertaken after the appearance of a

symptom or as a surveillance practice. Between

1982 and 1988, the use of mammography increased rapidly (there were 650 machines in 1982

and about 1,700 in 1988), and the field underwent

a veritable explosion—from 350,000 to nearly

1,890,000 annual tests (about 90 percent of which

were done by the private sector) (22).

In 1988, 60 percent of mammography were

medically prescribed for the purpose of early

detection, but outside organized screening programs, and a considerable number of mammograms still are done outside of formal programs.

In recent years, about 1.15 million exams have

been done annually. Unfortunately, the percentage

of the population screened is only around 8 percent of women aged 45 to 54 and 10 percent for

those between 55 and 64-age ranges for which

epidemiologic studies show that screening is the

most beneficial. A structured national system of

early detection thus appears necessary.

 Government Policy

In 1988 the Ministry of Health entrusted the National Sickness Fund with the responsibility of

setting up and evaluating programs of prevention

and health education. A new financial tool was

founded for the promotion of this mission, with a

specific fund (Fends National de Prevention, d’ Education et d’Inforrnation Sanitaires, or FNPEIS)

managed by CNAMTS. Programs to be funded

are selected by the CNAMTS board of directors

and annually approved by the Minister of Health

(1,29). Some of these grants were dedicated in

1989 to the organization and evaluation of departmental campaigns to reinforce screening for

breast and colorectal cancer in several research de'-

partements.

Programs for breast cancer screening have only

lately seen the light in France. In 1988, before financial action from FNPEIS, eight structured programs were being set up and eight others were

well established. These programs are characterized by enormous diversity within the institutional and financial framework. reflecting the
132 I Health Care Technology and Its Assessment in Eight Countries

organization provided for by the 1983 Law of Decentralization that gives responsibility for cancer

screening and for post-treatment surveillance to

the departments. In conformity with the law, the

screening program provided for and supported by

FNPEIS was organized by departments; local hospitals and local Sickness Funds did not take the

lead but were associated as full partners. A total of

48.5 million francs ($US8 million) or 5 percent of

the FNPEIS budget was dedicated to cancer

screening in 1990. The Ministry of Health intervenes principally to give a technical endorsement

to provide the legal basis for disbursing funds, and

it participates in program followups.

The CNAMTS prevention program is aimed at

women 50 to 69 years old. The strategy is based on

sensitizing practitioners; advertising campaigns;

drafting contracts with radiologists responsible

for examining mammograms; creating contracts

with a center for “secondary x-ray readings;” making contacts with local partners (e.g., departmental leagues for the fight against cancer); and

developing mailing lists.

Women are invited to be screened in a letter

from the local Health Insurance Fund. After the xray is completed, the fee is directly paid by the local fund to the radiologist ($US40 per

examination), so that the service is free to the patient. The radiologist sends the results to a center

for secondary x-ray readings.

Financing is budgeted by size of the populations targeted by each department, which means

(for breast cancer exams) that about 2 million

francs are allocated for every 50,000 people. The

cost of the entire program is estimated at 234 million francs per year, around 100 million francs less

than the estimated cost of the actual (predominantly spontaneous) exams conducted in France

(22).

This program still is defined as “experimental,”

and a “medical, social and economic” evaluation

is required to change its status. In 1992, 20 or so

departments were receiving financing for screening; mass screening, however, has not yet been

carried out.

CHAPTER SUMMARY

Compared with the situation at the beginning of

the 1980s (18), the assessment of health care

technology in France has achieved the status of a

major concern. The 1991 law made extensive use

of the concept of evaluation, associated with notions of quality, management, planning, and costeffectiveness assessment. For decades, French experts have stressed the lack of basic studies of the

decisionmaking process. It is striking that now legal requirements, specific institutions, and public

grants dedicated to evaluation exist at every level

of the health care system and the government.

Public health care managers are learning how

to deal with the new requirements, which are

based on a demand for greater expertise as well as

improved communication and cooperation among

the different actors. Nevertheless, needs for consensus and guidelines on medical strategies as

well as for primary data on diagnosis-related medical activities and prescriptions remain the stumbling block. This is not news to the experts, but it

seems to be widely publicized and accepted

now—in particular by physicians, which makes a

great difference.

Experts feel that medical representatives (if not

the entire medical community) have now become

less reluctant to accept the concept of medical

technology evaluation. Many groups of professionals have for some years been involved in consensus processes or in assessments of some sort.

However, the main change derives from the fact

that physicians’ representatives have negotiated

contracts with the Ministry of Health and the National Sickness Fund that involve medical evaluations and medical guidelines stipulating possible

sanctions for physicians who infringe these

rules—a situation that would have seemed impossible 10 years ago.
Chapter 4 Health Care Technology in France 1133

It is thus fair to say that the need for cost containment (because of the dramatic increase in

health care costs), rather than objective interest in

improving health care quality, has played the major role in pushing technology assessment in

health care into the spotlight. Successive Ministers of Health, calling for reduced health care

expenses, have promoted the concept of “medicalized management of health care,” which implies

that improvement of quality and cost containment

can go hand in hand. The public at large is now

well informed about this concept. Moreover, the

possibility of drastic changes in the health insurance and welfare system is also generally grasped.

The medical community thus cannot remain outside this national debate. Evaluation in health care

is beginning to be viewed by every professional

involved as the key to a stronger position at the inevitable negotiating table.

It must be said too that this now familiar technical debate took center stage at the very moment

when important national debates were occurring

in France about medical ethics and about governmental and physicians’ responsibilities in ensuring health care security and quality after the recent

tainted blood scandal (which led four top physicians and administrators to court and two to jail).

The responsibilities of experts, medical advisors,

practitioners, industry, and the government have

been publicly and dramatically discussed. It is

hard to forecast the historical consequences of

these events, yet it is possible to speculate that the

blood scandal may have opened a new era in

which experts, journalists, and the courts might

play an increased role.

As for the experts, it has been widely noted (especially during the blood scandal) that their

knowledge has not played and generally does not

play (as far as health policy is concerned) the role

it should. Lack of expertise has been pointed out

for many years by different observers of public

health policy. Proposing solutions to this problem

was one of the goals of successive missions on the

development of medical evaluation in the 1980s.

One of the consequences of the blood scandal has

been to drive the government itself toward a better

understanding of the need for expertise to assist

the Ministry of Health. Money and positions have

become available, and a number of new experts

have now started to work in various teams close to

the Ministry of Health.

As for the various media, they had mostly (until

the 1990s) intervened to praise and promote medical innovation and had frequently promoted technologies that were not yet fully assessed.

Journalists are now appearing in a different role,

as protectors of patients against the high risks of

medical technology and poor quality health care.

Apart from the transfusion issue, other medical

and health care issues have been highlighted by

the press (e.g., the unequal and generally poor situation of emergency care).

As for judges and the courts, in 1993 three

high-profile scientists and administrators were

charged for bearing responsibility for the occurrence of 25 cases of Creuzfeld-Jacob disease

among children treated by extractive growth hormone. This decision was publicized as a new

blood scandal—an attempt by the press (and others) to go beyond the limits of the transfusion

issue and to find a new and perhaps more demanding definition of medical and governmental

responsibilities in the diffusion of medical innovations. This new attitude will probably have important consequences for the future of clinical

research and the management of innovation.

Above all, the government now appears to consider cost containment its top priority. The reforms of the 1980s and the 1991 law strengthened

the quality control processes for medical equipment and health care; now the focus at the central

governmental level is on costs.

Compared to the 1970s and the 1980s, the

French health care system is going through a crisis. The longstanding balance among the powers

and parties involved (physicians, industry, Sickness Funds, government, courts, patients, and

press) has become unstable. Quality of care and

excessively rising costs have become open, urgent, and nationwide concerns, and technology

assessment one of the key tools for addressing the

problem.
134 I Health Care Technology and Its Assessment in Eight Countries

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1. Aba16a P., Csaszar-Goutchkoff M., Jouet V.,

Anguil S., Foray C., and Belhadi S., “Evaluation des Campagnes de D6pistage des Cancers

Colorectal et du Sein Pr6vue par les Arr&6s de

Septembre 1989, Juillet 1990 et Avril 1991

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2. Agence Nationale pour le D4veloppement de

l’Evaluation M6dicale, Service des Etudes,

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1992.

3. “Assistance Respiratoire Extra Corporelle, de

la Th60rie ii la Pratique,” La Lettre du GRAREC, num&o sp6cial, N 2 et 3-Mars et Juin

1992.

4. Bigotte, C., Harari, J., and Montaville, B.,

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6. Bouvier V., ● ’Analyse de la Diffusion de la

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France,” ENSP, travail dirigtl par G. de Pouvourville, unpublished, 1993.

7. Cabrol C. (Pr): “Les Greffes,” Editorial-Impact M6decin, Ies dossiers du praticien n168,

1992.

8. Chevalier J. Y., Durandy Y., Batisse A., Mathe

J. C., and Costil J., “Preliminary Report: Extracorporeal Lung Support for Neonatal

Acute Respiratory Failure,” Lancet

335: 1364-1366, 1990.

9. Cuschi6ri, A., Dubois, F., Mouiel, J., Mouret,

P., Becker, H., Buess, G., Trede, M., and

Troidl H., “The European Experience With

Laparoscopic Cholecystectomy,” Am. J .

Surg. 161 (Special Issue): 385-388, 1991.

10. Dixsaut, G., “Situation du Traitement de l’lnsuffisance R6nale par Dialyse en 1992,” Minist?re de la Sante et de 1‘Action Humanitaire,

Direction G6n&ale de la Sant6-Note Inteme,

communication personnelle, 1992.

11. Dubois, F., “Cholecystectomie sous Coelioscopie 330 Cas,” Chirurgie (M6moires d e

l’Acad6mie), &d. Masson, Paris, 116,

248-250, 1990.

12. Durandy, Y., Chevalier, J.Y, and Lecompte,

Y., “Single-Cannula Venovenous Bypass for

Respiratory Membrane Lung Support,” J.

Thorac. Cardiovasc. Surg. 99, 404-409 ,

1990.

13. Ecole Nationale de la Sant6 Publique, “La

Transplantation d’Organes en Europe, Aspects Juridiques, Ethiques, Logistiques et Financiers,” !Mminaire de Recherche ENSP,

1991.

14. Escat, J., “Le Registre des Cholecystectomies

par Coelioscopie de la Soci6tt5 Franpaise de

Chirurgie Digestive,” Paris, Jan. 1991.

15. Fagnani, F., Charpak, Y., Maccia, C., and

Meyer, C., “L’Evolution de la Radiologie

Conventionnelle en France Entre 1982 et

1988,” Revue d’lmagerie Mkdicale 2:

663-667, 1990.

16. Faure, H., and Le Fur Ph, “Evaluation de la

Consummation Radiologique en 1989 ,

Evolution 1974- 1989,” Centre de Recherche

et de Documentation en Economic de la Sant6, 1991.

17. F6d6ration des Gyn6cologues et Obst6triciens

de Langue Fran~aise, 33i~me congr?s, Line,

“La Coelioscopie Op6ratoire, le Point en

1990,” deuxi~me rapport, (Clermont-Ferrand), 5-8 Septembre 1990.

18. Fuhrer, R.

19. Hauuy, J. P., Madalenat, P., Bouquet de la Jolini?re, J., and Dubuisson, J. B., “Chirurgie Percoelioscopique des Kystes Ovariens,

Indications et Limites d Propos d’une S6rie de

169 Kystes,” Journal de Gynkcologie-Obst&

trique et de Biologic de la Reproduction, 19:

209-216, 1990.
Chapter4 Health Care Technology in France 1135

20. Inspection G6nerale des Affaires Sociales,

“La Chirurgie Cardiaque en France, R6sultats

d’une Enqut3e Nationale,” Rapport au Ministre des Affaires Sociales, COI1 Rapports

IGAS, MSAH internal publications, Juin

1988.

21. Lacronique J. F., “Technology in France,” Inter. J. Technology Assessment Health Care

4:385-394, 1988.

22. Le Galas, C., Fagnani, F., and Lefaure C., “Le

Depistage Mammographique du Cancer du

Sein: Explosion des Pratiques, Multiplication

des Programmes,” Bulletin Epidkmiologique

Hebdomadaire, N 1/1990, 8 Janvier 1990.

23. Lenoir, N., and Sturlesse, B., “AUX Fronti?res

de la Vie: Pour une D6marche Franqaise en

Matiere d’Ethique Biom6dicale,” Rapport au

Premier Ministre. Ed. La Documentation

Frangaise. Coil: rapports officiels, Mai 1991.

24. Meyer, C., Lefaure C., and Fagnani F., “L’Investissement en Imagerie M4dicale e n

France: la Mont6e des Technologies Nouvelles,” RBM, Volume 8, Num6ro

6:377-1987.

25. Minist&e de la Sant6 et de l’Action Humanitaire, Direction des H6pitaux: “Guide G6n&al

de l’Homologation des Mat6riels M6dicaux,”

MSAH internal publication, Mars 1993.

26. Ministere de la Sant6 et de l’Action Humanitaire: “Reforme du Syst&me de Transplantation d’Organes et de Tissus, Troisi~me Vole(,”

Dossier Sant6, MSAH internal publications,

4 mars 1993.

27. Minist&-e de la Solidarity, de la Sant6 et de la

Protection Sociale, “L’Hospitalisation en

France, Donn6es et Chiffres Rep2res,”

MSSPS Information Hospitalii3res, Num&o

Sp4cial, edition 1990.

28. Moat(i, J. P., and Mawas, C., “Evaluation des

Innovations Technologiques et D6cisions en

Sant4 Publique,” Editions INSERM, Collection Analyses et Prospective, 1993.

29. Montaville, B., and Lefaure, C., “Le D6pistage du Cancer du Sein en France: Programmed et Projets,” Rapport n 53-INSERM

Unit6 240, 1988.

30. Querleu, D., Chevalier, L., Chapron, C., and

Bruhat, M., “Complications de la Coeliochirurgie Gyn6cologique,” JOBGYiV Vol. 1, No

1, pp.57-65, 1993.

31. Service des Statistiques, des Etudes et des

syst~mes d’information, “Annuaire des Statistiques Sanitaires et Sociales,” Minist~re

des Affaires sociales et de l’integration, la

Documentation Fran~aise, 1992.

32. Weill, C., “National Policies in the Domain of

Medical Technology Assessment,” Assessment ofMedical Inform atics Technology, Proceedings of a joint working conference of the

International Medical Informatics Association, the International Society for Technology

Assessment in Health Care and the Ecole Nationale de la Sant6 Publique C Flagle, F.

Gremy, and S. Perry (eds.) Montpelier, Oct.

22-26, 1990.

33. Weill, C., “Minimally Invasive Therapy: the

French Case Study,” Health Policy 23: 31-47,

1993.

34. Zmirou, D., Benhamou, P. Y., Cordonnier, D.,

Borgel, F., Balducci, F., Papoz, L, and Halimi,

S., “Diabetes Mellitus Prevalence Among

Dialysed Patients in France (UREMIDIAB

study), Original Article,” Nephro/ogy Dialysis Transplantation 7: 1092-1097, 1992.
Health Care

Technology in

Germany

by Stefan Kirchberger 5

OVERVIEW OF GERMANY

T

he Federal Republic of Germany (FRG) is a parliamentary

democracy with 16 states (Lander). The legislative

branch has two chambers: the parliament (Bundestag),

whose members are elected by the people for four-year

terms by proportionate representation, and the Bundesrat, whose

members are nominated by the state governments. The Chancellor, elected by parliament, is the head of government. The President, elected by both federal legislative chambers and representatives of the 16 state parliaments, is the official head of state

but may not interfere with political decisionmaking.

Since the reunification of the former German Democratic Republic (GDR, 16.4 million inhabitants in 1989) and the FRG on

October 3, 1990, Germany has had about 80 million inhabitants

living in an area of about 357,000 km2

. The average population

density is about 225 persons per km2. About 30 million individuals were employed in 1990 and 3.45 million were out of work

in January 1992. A gross national product of 2,426 billion

Deutschemarks (DM) (1990, West Germany only) made Germany the largest national economy within the European Community (EC). Since the reunification, the former East Germany has

undergone a fundamental structural change. The economic collapse of the former socialist countries in Europe cost East German

industry most of its exports. With only a few exceptions, the former state-owned industries did not survive under market conditions. Insufficient reinvestment and modernization during the

time of the GDR ruined the majority of plants.

I f < .

137
138 I Health Care Technology and Its Assessment in Eight Countries

Because West German industry had enough

production capacity to cover the East German

market, there has been little West German investment in the east. As a result, most East German industrial enterprises have been closed down. Even

a prestigious company like Carl Zeiss (Jena),

which specialized in optics, was forced to cut its

workforce from 29,000 to 7,900 and it is still not

clear whether the company can survive.

Industrial decline has caused high unemployment—more than 40 percent in some regions.

Within 18 months after reunification, more than

900,000 people aged 55 to 65 lost their jobs; most

of them are living on social security funds. This

sudden, irreversible termination of working life

will no doubt cause increasing health problems,

especially because unemployment was unknown

in the former GDR (59).

The dramatic economic changes are reflected in

the declining birth rate. At 12.9 births per 1,000 in

1988, the birth rate in the former GDR was slightly higher than in the old FRG ( 11 .0) (60). Since reunification, the annual number of births in eastern

Germany has fallen dramatically, from 200,000 to

about 80,000 in 1992. Such a decline within less

than three years occurred only once before, during

the early years of the first world war. The decline is

explained partly by the migration of about 1.5 million people from the east to the west from 1989 to

1992 (15). This migration, mostly of younger

people worried about the future of East German

industry, will cause considerable structural problems in the future.

HEALTH STATUS OF THE POPULATION

Since 1960, death rates have declined and life expectancy has increased in Germany. In West Germany, life expectancy at birth for women has risen

from 72 in 1960/62 to 79 in 1987; and for men

from 67 to 72 over that period. The lower life expectancy for men is due primarily to traffic and

work accidents. There are no data concerning life

expectancy by social status. The increase in life

expectancy and the decline of death rates reflect a

decrease in ischemic heart disease, cirrhosis of the

liver, and diseases of the respiratory tract (bronchitis, asthma, emphysema). In West Germany,

infant mortality was a relatively low 6.98 per

1,000 in 1990.

Aside from life expectancy, useful data concerning the health status of the population are rare

in Germany. Health statistics are extensive, but

most have serious limitations. For example, there

is only one regional survey with satisfactory data

concerning the incidence of cancer in adults. But

these data cannot be generalized to the rest of the

country because the region (Saarland) and the incidence per age group are too small (60). Similarly, annual statistics published by the Federal

Department of Defense showing the results of

medical examinations of conscripts reveal little

about the health of the general population because

of constantly changing examination and classification criteria (60). Two surveys of hospital-based

diagnoses also have serious limitations. One survey is regional and covers a mainly agrarian state

with a low population density in the north of Germany. It cannot be projected to the entire FRG.

The other survey covers the whole country, but it

is not differentiated by medical departments and

includes only those individuals insured by the local sickness funds. Even though about 40 percent

of the population belongs to a local sickness fund,

most are blue collar workers. Consequently, many

biases exist in the data that make generalization

risky.

The only representative information available

concerning health status is an official government

poll, including some questions about illness, of

between 0.25 and 1 percent of the population that

is done fairly regularly. Since 1974, about 15 percent of those interviewed have identified diseases

from which they suffered. Most frequent were respiratory diseases, circulation disturbances, problems of the muscular and skeletal system, endocrinological and metabolic diseases, and digestive

troubles. The questionnaire does not explicitly ask

respondents to name the kind of disease they suffer from, and it concentrates on illnesses that have

occurred within the past four weeks. The data
therefore must be interpreted cautiously. For example, one consequence of this survey method is

that some diseases, such as cancer or psychiatric

and nervous disturbances, are underreported.

There are also few useful data on the relationship between health status and socioeconomic status in Germany. The scarce research findings

available indicate that differences in health are

linked to working conditions and education (49).

Myocardial infarction, cancer, and cirrhosis of the

liver seem to occur significantly more often in the

underprivileged classes. The literature stresses

that there seem to be few differences by social status in the use of health services for treatment (60).

But preventive services—prenatal care, screening

for cancer, etc.—are used significantly more often

by persons of higher socioeconomic status.

Germany has had virtually no disease-specific

patient registries or reporting system, not (as

claimed by some (39)), because people were reluctant after the Nazi experience to have their

names placed on lists, but simply because for a

long time no one (including physicians) was interested in these data. Extensive data are collected in

many places in Germany, but they are collected

only to answer very specific questions or to satisfy

certain bureaucratic needs.

Health authorities and physicians engaged in

health policy have been aware for a long time that

the lack of data on health status and delivery impedes a rational discussion on the distribution of

scarce health care resources (67). But this awareness has not resulted in better data. The reasons for

this lack of action can be found in the structural peculiarities of the German health care system.

THE GERMAN HEALTH CARE SYSTEM

 Legislation and Financing

Although the constitution of 1918 (Weimarer Verfassung) explicitly defined social rights (e.g., the

right to work), the constitution of the Federal Republic of Germany (Grundgesetz, GG) only establishes a “democratic and social federal state”

(article 20 GG), where “social” rights are to be defined by legislation. Except for prescribed areas of

Chapter 5 Health Care Technology in Germany 1139

federal interest, legislation is under the jurisdiction of the state parliaments. In those prescribed

areas, however state legislation is subordinate to

federal law. These include the areas of epidemics,

university education in medicine, food and drug

control, social security, and since 1972, financing

of hospitals.

Between 1883 and 1889, the time of the German Empire, Germany enacted its basic social security laws: the Health Insurance Act (1883), the

Accident Insurance Act (1884), and the Insurance

for Disabled and the Pension Funds Act (1889)

(75). The purpose of these laws was to ameliorate

the social situation of the working class, thereby

reducing the political influence of the Socialist

Party. These laws were codified into one basic

law, the Reichsversicherungsordnung (RVO),

which came into force in January 1914. Overtime

this law became very complex. Work began to reformulate it in a social code (Sozialgesetzbuch,

SGB) in the 1970s, and in 1989, the reformulated

health insurance law was enacted (SGB V).

The 1989 law determines who can become a

member of a mandatory sickness fund and how

contributions are to be paid. It specifies the entitlements of the insured and regulates the relations between sickness funds on the one hand and

office-based doctors and hospitals on the other.

The law also specifies the tasks of the so-called

Concerted Action in Health Care ( 141 SGB V).

The Concerted Action in Health Care is a committee that advises government on health policy

and health care financing. Created by law in 1977,

it represents organizations “whose influence is so

important that ignoring them would have miscarried political decision” (79). The committee consists of a total of more than 60 representatives of:

the mandatory sickness funds (14), associations of

the private insurance companies (2), physicians’

associations (11 ), the German Hospital Society

(3), the federal association of pharmacists(1), the

pharmaceutical industry (3), unions (6), employers’ associations (6), State governments (16) and

experts (2 or more) from the federal departments

involved.
140 I Health Care Technology and Its Assessment in Eight Countries

The committee meets twice a year and makes

recommendations on how to regulate the remuneration of sickness fund doctors and on cost-containment measures in hospital financing. It also

discusses structural problems of hospital care delivery and possible solutions. The committee is

too large to make decisions easily. It has been assisted by the Board of Experts for the Concerted

Action in Health Care (Sachversttindigenrat fur

die Konzertierte Aktion im GesundheitswesenSVRKAiG) since 1986. This board is made up of

seven independent experts in medical science,

economics, and social science. Its responsibility is

to deliver an annual report analyzing developments in health care delivery and their medical

and economic consequences. The board is also

charged with recommending priorities for health

care needs and the elimination of superfluous supply of health services, taking into account the economics of the health care situation. Because this

task requires a good information base, the board

has taken many initiatives to reorganize health statistics. The board’s annual report is the best information source on German health care and its

qualitative and financial problems.

The most important institutions in the German

health care system are the approximately 1,100

mandatory sickness funds. In 1991, all employees

in Germany who had a monthly income up to

5,100 DM were insured by a mandatory sickness

fund. (This wage limit is modified annually. In

certain cases, persons with higher salaries are also

authorized to be insured by mandatory sickness

funds.) Family members (spouses and children) of

the insured who have no personal income are coinsured without making any contribution and are entitled to the same services. (This is the “solidarity

principle” of social security: a member’s sickness

fund contribution remains the same whether he or

she is single or has dependents or nonworking

family members who are coinsured.) The employee’s contribution, which is independent of individual, medical, or social risk factors, is a

percentage of income. The contribution rate is

fixed annually by each sickness fund according to

its financial needs. Most employees have limited

or no options in deciding which sickness fund they

want to join, leaving them with little choice concerning the level of contribution they have to pay.

(This restriction will be canceled in 1996.) In

1992, the average contribution rate amounted to

12.6 percent, half taken from employees’ gross

wages and half contributed by employers.

About 90 percent of the population are obligatory or voluntary members (or coinsured family

members) of mandatory sickness funds, which

operate as nonprofit statutory corporations. In

addition, 45 private insurance companies offer

health insurance. About 6.8 million people are fully covered by private insurance, which offers

more or less the same benefits as the sickness

funds.

The services to be reimbursed by mandatory

sickness funds are defined by law. They include

medical and dental treatment, hospitalization,

prescribed drugs and other remedies, prenatal

care, and some preventive and screening measures. Most dental prostheses, eyeglasses, and

other prosthetic equipment are reimbursed as

well, with some limits. Table 5-1 shows the

growth of expenditures by the mandatory sickness

funds from 1970 to 1990 (not adjusted for inflation), and table 5-2 gives national spending broken down by source of payment for 1989 in West

Germany. However, because there are no detailed

statistics on total health care expenditures, some

figures in table 5-2 (“employers health expenditures for their employees” and “private households”) are estimated, so the total expenditure of

276 billion DM (about US$l53 billion) is also an

estimated value.

 Health Care Delivery

An essential feature of the German health care delivery system is the rigorous institutional separation of inpatient and outpatient care. Outpatient

care is the task of about 75,000 office-based physicians, the gatekeepers to the hospital sector. With

a few exceptions they have no opportunity to treat
Chapter 5 Health Care Technology in Germany 1141

Year Office-based care Dental care Drugs Hospital care Others Total

1970 5,458 1,708 4,226 6,009 6,448 23,849

1975 11,258 4,129 8,901 17,534 16,348 58,170

1980 15,358 5,517 12,572 25,465 27,044 85,956

1985 19,660 6,656 16,603 35,049 30,736 108,704

1990 24,371 8,172 21,841 44,595 35,295 134,238

‘SOURCE Sachverstandigenrat fur die Konzertlerte Aktion im Gesundheltswesen (SVRKAiG), Jalvesgutachten (Baden-Baden: Nomos Vlg. ,

1992)

patients in a hospital. Inpatient care is provided by

91,895 salaried hospital doctors, who, with a few

exceptions, are not authorized for outpatient treatment.

In 1990,71,700 office-based physicians, mostly solo practitioners, were providing mandatory

sickness fund-covered services. (Only about

3,300 office-based physicians were exclusively

treating privately insured patients.) Sickness fund

doctors must be members of a regional association

of sickness fund doctors (Kassenarztliche Vereinigungen).

These associations, not the individual doctors,

contract with the sickness funds and negotiate remuneration. The associations provide information about the services rendered by their members

to the sickness funds and distribute fees to each

doctor proportional to the amount of services he or

she has rendered. The physicians’ associations

hold the monopoly on outpatient care and have to

guarantee a sufficient supply.

Besides physicians, in 1990 there were about

43,000 practicing dentists in West Germany who

are organized in a similar way. The Federal

Association of Sickness Fund Dentists negotiates

contracts with the sickness funds and distributes

the fees proportional to the amount of services

rendered. In 1990, mandatory sickness funds and

private health insurance companies spent 10.14

billion DM—more than 161 DM per inhabitant,

the highest per capita dental expenditures in the

world.

The number of office-based physicians has

grown rapidly within the past 20 years, especially

the number of specialists (see table 5-3). This increase has caused great debate over how many

doctors are necessary to provide outpatient care.

Until 1960, the mandatory sickness funds were

authorized to limit the number of contracting doctors. But in 1960, the Federal Constitutional Court

(Bundesverfassungsgericht) found that this regulation was in conflict with the constitutionally

guaranteed freedom of occupation. Balancing individual constitutional rights against the social interest in securing the financial stability of

mandatory sickness funds, the Court saw no difficulty in entitling each doctor to obtain a license to

contract with these funds, particularly since the

number of uncontracted doctors was small. Mandatory sickness funds have had to contract with

every office-based doctor who wants to do so;

consequently, the number of office-based doctors

has more than doubled. In addition, about 10,000

physicians a year have wanted to become sickness

fund doctors since the early 1980s. In 1992, the

government enacted a law that will again try to

limit the number of sickness fund doctors in the

coming years.

In 1989, there were 1,735 hospitals with about

452,000 beds for acute care and 1,311 hospitals

with 217,000 beds for chronic diseases (e.g., rheumatism and some psychiatric illnesses) or rehabilitation. More than 11 million people were

referred to a hospital that year with an average

hospital stay of 11.9 days (not including psychiatric departments).

Three different types of hospital ownership exist: public, private nonprofit, and private. Public

hospitals are owned by cities and municipalities,

by counties, and, particularly in the case of psychiatric hospitals, by the states. Some public hos-
142 I Health Care Technology and Its Assessment in Eight Countries

1.

2.

3.

4.

5.

6.

7.

Federal and state budgets

Reimbursement for medical treatment of civil servantsa and medical education

Mandatory sickness funds

Social pension funds

Pensions for disabled persons DM13,084

Medical rehabilitation: DM4,356

Social accident insurance

Inpatient and outpatient care for workplace accidents and occupational diseases

Private health insurance

Employers’ health expenditures for their employees

Wages and salaries for sick workers: DM31 ,620

Private households

Drugs and dental prostheses not reimbursed by mandatory sickness funds

TOTAL

37,891

127,579

19,606

8,559

15,866

46,907

20,339

276,807

a Civil servants are reimbursed for about 60% of their health care expenditures by the state and by private insurance for the rest

SOURCE Statistisches Bundesamt, Statistisches Jahrbuch 7992 fur die Bumdesreputdik Deutschland (Wiesbaden, 1992).

pitals (e.g., military hospitals) are run by federal

authorities. Public hospitals account for 51 percent of all beds. Private nonprofit hospitals, most

run by religious denominations, account for 35

percent of beds. The remainder are private proprietary hospitals, often owned by doctors.

The Hospital Financing Act of 1972 (Krankenhausfinanzierungsgestz KHG) made legislation

on hospital supply and financing a federal task.

The planning of hospital supply was delegated to

the states, which enact an annual hospital need

plan. Except for rehabilitation hospitals and university clinics, which have other resources, a hospital must be admitted to this need plan if it is to

survive financially. Other than initial ownership

expenses, all investments (building construction,

expensive medical equipment, etc. ) in these hospitals are funded by the states, and operational

costs are reimbursed by the mandatory sickness

funds. The sickness funds reimburse the operating

costs on the basis of a per diem rate that the hospital receives for each day of each patients’ hospital

stay. Because hospital income is directly related to

the number of patients and the average length-ofstay per patient, an economic incentive to extend

hospital stays and to treat patients longer than

medically necessary exists. This led to a change in

the financing formula in 1993.

In 1989, about 878,000 persons were employed

in hospitals. Of the 92,000 hospital-based physicians, more than 86,000 (94 percent) were salaried

employees, 28 percent of them in the leading positions of medical director or assistant medical director. Another 47,000 (54 percent) were

furthering their education working as assistant

physicians to obtain specialist licenses. There also

are 5,531 Belegarzte, or office-based physicians

who lease hospital beds to provide their outpatient

clients with inpatient treatment. (Small hospitals

that want to offer a particular medical treatment

but have too few patients to establish a special department are especially interested in leasing beds

to office-based specialists. Some private for-profit

hospitals engage only a few salaried physicians

and nurses to provide basic services and to run the

hospital; the remaining work is done by officebased physicians.)
Chapter 5 Health Care Technology in Germany 1143

General

Year All doctors practitioners Internists Gynecologists Orthopedists Radiologists Urologists

1970 46,302 25,539 5,226 2,613 1,139 878 529

1975 49,928 24,757 6,760 3,534 1,573 988 833

1980 56,138 24,980 8,795 4,808 2,102 1,129 1,208

1985 63,694 27,405 10,203 5,610 2,604 1,216 1,386

1990 71,711 29,834 10,964 6,341 3,135 1,298 1,578

SOURCE Sachverstandigenrat fur die Konzertierte Aktion im Gesundheitswesen (SVRKAIG), Jahresgutachten (Baden-Baden Nomos Vlg ,

1992)

 The Medical Market

To understand Germany’s health care system and

its financing problems, it is necessary to examine

the German medical industry. With about 10 percent of worldwide sales, Germany is the third largest market for medical equipment after the United

States and Japan, and the largest national market

in Europe (table 5-4). In 1991, Biomedical Business International estimated medical equipment

sales in Germany to be about US$10.6 billion. A

sales increase of 6 percent over the previous year

was due to reunification and the investment needs

of the former GDR.

Germany is also one of the most important producers of medical goods. It is difficult to find useful data on production and sales of medical

equipment because the statistics in question are

not sufficiently detailed (e.g., they do not discriminate between lasers used in industrial production

and in medical care). Total sales of the German

electromedical industry in 1991 amounted to

5,854 million DM. Some 3,226 million DM worth

of products were exported and more than 25,000

people were engaged in the production of major

electromedical devices. In addition to the big

firms, mostly organized in the Central Association of Electromedical Industry (Zentralverband

der Elektromedizinischen Industrie, ZVEI), a

considerable number of smaller firms produce

other medical devices, such as endoscopes, hemodialysis equipment, and surgical instruments.

In 1990, world sales in diagnostics—i.e., reagents and instrumentation—amounted to about

22 billion DM. The sales of the German diagnostics industry accounted for approximately 25 percent of this total. German firms had about 900

million DM worth of sales to the German market,

earning another 1.9 billion DM through exports.

German imports of diagnostics from abroad were

approximately 1.75 billion DM (77). That year the

German health care system consumed about 2.65

billion DM of diagnostics—more than 12 percent

of worldwide production.

There are some striking aspects to Germany’s

consumption pattern. The most obvious is in dental equipment and supplies: Germany spends 4.4

times more money per capita than the United

States, about US$17.30, 15.4 percent of total consumption of medical devices and diagnostic products. The differences in per-capita expenditure for

Projected

1991 sales Change from

Country (US$ billions) 1990 (“/0)

Germany 10.6 +6

France 5,4 -1

United Kingdom 4.3 0

Italy 3.9 +1

Benelux 2,7 0

Scandinavia 2.3 0

Spain 21 - 4

Others 2.7 -1

Total 34.0

SOURCE Biomedical Business International Newsletter 14:51 1991
144 I Health Care Technology and Its Assessment in Eight Countries

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990 —

675.7

824.6

983.7

1,123.8

1,289,4

1,477.4

1,590.3

1,763.3

1,936.1

2,108.0

2,425.5

24.411 3.6

35.461 4,3

51.015 5.2

65.517 5.8

73.550 5,7

88.424 6.0

95.754 6.0

06.427 6.0

17.194 6.0

31.735 6.2

41.864 5.8 ——.

SOURCE: Sachverstandigenrat die Konzertierte Aktion im Gesundheitswesen (SVRKAiG), Jahresgutachten (Baden-Baden Nomos Vlg , 1992)

x-ray apparatus and tubes are no less striking: Germany spends US$12.90, less than Japan at

US$l 6.50, but well ahead of the United States and

Canada, with US$8.70 and US$8.90, respectively. The United Kingdom, with US$4.30 per capita, spends only one-third as much as Germany.

These differences in consumption may reflect differences in the structure of health care delivery.

Finally, the German chemical industry is one of

the world’s most important producers of pharmaceuticals. With US$4 billion, Germany was the

world’s leading exporter of pharmaceutical products in 1988. In 1992, about 1,100 firms in Germany with more than 117,000 employees produced

pharmaceuticals valued at 31.16 billion DM.

From this total, drugs valued at about 12.82 billion DM were exported.

In sum, production and consumption of medical devices and drugs are important economic factors in Germany, which must be taken into account

when analyzing health policy or cost containment

measures.

THE COST CONTAINMENT DEBATE

In 1989, total health care expenditure in Germany

amounted to 8.2 percent of gross national product

(US$1,232 per capita), placing Germany seventh

place among OECD countries. The share of gross

national product spent on health care has been almost stable since the middle of the 1970s (60).

(See table 5-5.) Nevertheless, since the end of the

1960s German politicians have talked about the

urgency of cost containment in view of a perceived “cost-explosion” in health care (see e.g.,

66). This dramatic phrase refers to the mandatory

sickness funds’ expenses.

The sickness funds’ budgets as a percentage of

gross national product have remained relatively

stable since 1976, between about 5.6 and 6.4 percent. An increase between 1970 and 1976 was

caused primarily by new social laws that focused

on the sickness funds’ budget (e.g., the Hospital

Financing Act of 1972). The political problem is

caused not by the actual increase in sickness fund

expenditures, but by the increase of the contribution rate as a percentage of income. Industry complains that the costs of social benefits for the

German labor force are the highest in Europe. This

may be true, but the rise in the contribution rate is

due to a multitude of factors, only some of which

can be traced to growing health care costs.

Modernization, rising health care expenditures, and even a slow and moderate increase in

the contribution rates seemed politically tolerable

as long as they coincided with a growing economy

and full employment. But as the share of total

wages relative to the gross national product diminished, the resulting rises in contribution rates

became a central political issue. An all-embracing

coalition of industry, unions, and political parties

advocated limiting or stabilizing contribution

rates.

The idea of easing the financial burden of social

benefits by limiting the contribution rate was uttered first during a time of economic growth. In

1977, the Federal Minister of Labor and Social

Affairs (a Social Democrat), called for the stabilization of contribution rates as part of a cost containment bill. He argued that even with a fixed

contribution rate, revenues of mandatory sickness

funds would rise in proportion to increases in

wages. These annual rises in revenue would enable financing of investments in medical technol-
Chapter 5 Health Care Technology in Germany 1145

ogy as well as rising wages and incomes of health

care personnel. This suggested rate stabilization

was popular with conservative politicians as well,

and it converged with the ideas of an influential

group of economists who called for creating more

market-oriented health care by privatizing some

risks of illness. At the same time, a broad discussion began on the uneconomic structures of health

care delivery and the oversupply of health services

that caused a considerable amount of unnecessary

care to be delivered. One implication of their discussion was that costs could be reduced without

lowering quality or limiting accessibility.

The discussion of how to contain medical costs

continued during the late 1970s and 1980s. Although there was unanimous agreement that contribution rates should be stabilized, the parties

involved did not agree either on the measures to be

taken or on the desired outcome. This was due in

large part to the fact that the argument about the

health care system providing unnecessary services encompassed two different criticisms. Some

critics believe certain kinds of services should not

be reimbursed at all by mandatory sickness funds,

because they go beyond the role of social insurance. Others claim that the amount of diagnostic

and therapeutic activities has expanded not for

justifiable medical reasons, but to serve certain

economic interests. Both of these issues needed to

be addressed.

The political argument about the first issue is

between those who want to reduce the catalogue

of services covered by Social Security by eliminating some minor or traditional services, such as

burial allowances or pharmaceuticals which are

not proven to be therapeutically effective, and

those who want to reduce social security to a level

covering only “basic health care.” Those who take

the former position believe strongly that a social

and democratic state should guarantee every citizen comprehensive health care according to his

needs. The other opinion, enunciated by a prominent health politician, is that state-organized social security should be limited to those services

that are unaffordable for middle class people, i.e.,

high-technology medicine for “severe diseases.”

In the case of hospitalization, patients should pay

a percentage on the level of hotel accommodation,

so that they (if they cannot afford additional insurance premiums) will be encouraged to leave the

hospital as soon as possible. Only pharmaceuticals “with strong and scientifically unquestioned

effects, in particular those with vital indications”

should be covered by mandatory sickness funds

(2). The main idea behind such statements is that

those services that have incremental effects (providing somewhat more care, etc.) and may be

bought by those with more money or a higher level of additional insurance should be privatized.

Reducing the amount of medically unnecessary

procedures is also controversial. While one side

argues that the introduction of market structures

and competition would be the only effective way

to eliminate medically unnecessary procedures,

the other side is convinced that the lack of consumer autonomy in health care requires strict regulation and administrative control instead of a

reliance on market mechanisms.

The idea of basing more health care delivery on

market forces has been stimulated by the American debate on “deregulation.” The German discussion, however, has detached the idea of

deregulation from its original context of eliminating monopolistic pricing by internal subsidy. German deregulators now want to eliminate all

equalization of financial burdens hampering the

establishment of market mechanisms. According

to this view, the Association of Sickness Fund

Doctors prevents price competition in outpatient

care, and the mandatory sickness funds do the

same through income-based contributions that

limit the expansion of private insurance markets

(30,76).

These and other viewpoints characterize the

cost containment debate. For several years, budgeting or other economic restrictions seemed to be

the only way to contain costs, but all the economic

restrictions that have been attempted were effective only for a short time. In 1992, therefore, with

the explicit agreement of the Social Democratic

opposition, the government enacted a law that for

the first time cautiously mandated a different tactic. The Health Care Act (Gesundheitsstruklurgesetz, GSG), which came into effect in 1993, does
146 I Health Care Technology and Its Assessment in Eight Countries

contain rigorous budgeting measures, but most of

them are explicitly provisional, put in place only

for a few years until the intended structural

changes become effective.

I Budgeting Measures in the 1993

Health Care Act

The budgeting measures in the 1993 Health Care

Act are meant to be an “emergency brake” applied

in the midst of economic recession and costly reconstruction of East Germany. An immediate and

serious cut in health expenditure seemed inevitable to the coalition of Christian Democrats and

Liberals as well as to the Social Democratic opposition. The legislature subsequently required

that mandatory sickness funds’ expenses could

not exceed actual receipts for three years. No matter what services were rendered or what drugs

were prescribed, contribution rates had to remain

unchanged. Up to the end of 1995, hospitals,

which had been reimbursed for their actual costs

will receive only a fixed annual budget, and they

face the possibility that their costs will not be covered for the first time since 1972. The sickness

funds doctors’ budget for the years 1993 to 1995 is

limited to an increase of the revenue base of members of the mandatory sickness funds. Furthermore, the law requires that the amount of money

available for prescription pharmaceuticals in 1993

will be no greater than 1991 expenditures.

The law includes strong incentives for officebased physicians not to exceed their budgets. If

they do exceed it in one year, the total amount of

physicians’ fees will be cut the next year. Doctors

are not authorized to make patients bear the costs

of drugs, however. If drugs are prescribed, the patient has the right to reimbursement by the mandatory sickness funds. Doctors are forced to reduce

the number of prescriptions for “medically unnecessary drugs.” This regulation appears to have resulted in a substantial decrease of prescribed

drugs. Finally, because pharmaceuticals in Germany are very expensive (60) compared to other

European countries, manufacturers’ drug prices

(except those drugs for which a reimbursement

rate had already been fixed) had to be lowered by

five percent.

 Interventions in Health Care

Delivery Structure

The 1993 Health Care Act also makes some far-

-reaching changes in the traditional structures of

health care delivery, affecting the roles of general

practitioners (GPs) and specialists, the role of the

hospital, hospital financing, and use of pharmaceuticals.

Germany’s traditional freedom of choice of

doctor meant that people were free to consult any

office-based physician, either GP or specialist.

Specialists, most of whom have more sophisticated medical equipment, cost more than GPs. Experience has suggested that use of this equipment

may be stimulated by economic motives. The last

20 years saw a continuous growth in the number of

oflice-based specialists. While in 1970 about

25,000 GPs and 21,000 specialists offered outpatient care, the ratio was reversed by 1990: 30,000

GPs and 42,000 specialists.

The family doctor has lost much of his importance. Many experts agree that this has caused not

only higher costs, but possibly lower quality of

care. To remedy this situation, beginning in 1996,

the law requires sickness fund patients to consult a

general practitioner before they can be referred to

a specialist. The GP will regain a central role as a

gatekeeper, similar to his colleagues in the United

Kingdom and the Netherlands. To support this

policy change, the remuneration system will be

modified; family doctors will receive a flat rate

per patient and separate fees only in case of special

services.

A longstanding problem in health policy has

been the steadily growing number of office-based

physicians (discussed earlier). Physicians have

compensated for the resulting decline in the number of patients per physician by increasing the

amount of service per patient. In response, the

government decided to limit the number of physicians through the 1993 law. Beginning in 1999,

the number of sickness fund doctors will be lim-
Chapter 5 Health Care Technology in Germany 1147

ited to a proportion of the number of insured individuals. The license to be a sickness fund doctor

will be terminated when the doctor reaches age 65.

This regulation will be paralleled by a reform of

medical education aimed at reducing the number

of medical students and improving the quality of

the education itself. In 1989, the number of slots

for medical students in West Germany was reduced from 11,600 to 9,300. A further reduction to

about 8,000 in both parts of Germany is envisaged

by the 1993 law.

The 1993 law authorizes hospitals to perform

pre-admission testing for three days on an outpatient basis and to continue to treat a patient no

longer confined to bed for up to seven days. Hospitals had asked for such authorizations for several

years. Hospitals may also carry out certain surgical procedures on an outpatient basis. Patients will

be able to choose whether to have these procedures at a hospital or at a physician’s office (remuneration will be the same). While hospitals

hesitated to approve this new regulation, mandatory sickness funds were enthusiastic with the idea

of “fair competition” between office-based surgeons and hospitals in this field.

The most important component of the 1993 law

is the change in the reimbursement of hospitals. A

hospital’s prime cost will no longer be reimbursed

on the basis of per diem charges. For two years beginning in 1993, there will be a fixed budget for

reimbursement of hospitals’ prime costs that will

rise only in proportion to the receipts of mandatory sickness funds. Beginning in 1996, a differentiated system of basic compensation, fixed prices

for special services, and lump sums for the treatment of certain diseases will be enacted. The

prices will be fixed and calculated by region; the

particular circumstances of the individual hospital

will no longer be considered. This regulation aims

at rationalizing the working process of hospitals

and ending outmoded and ineffective working

structures. The idea is that more competition

among service providers will ensure that money is

spent more effectively.

On the pharmaceutical front, the government

will establish an institute to develop a catalog of

drugs that will be paid for by mandatory sickness

funds (Positivliste). The aim is to exclude from reimbursement those drugs that have no or very limited scientific support, drugs with ingredients not

necessary for either therapy or the reduction of

risks, drugs with so many components that their

therapeutic effect cannot be accurately judged,

and drugs that are used only in treating minor

health troubles. The catalog will permit the comparison of pharmaceuticals with the same

biochemically active substances and indications

on the basis of costs per average daily dose so reimbursement amounts can be fixed. The catalog is

to be published in 1996 and revised regularly.

CONTROLLING HEALTH CARE

TECHNOLOGY

 Technology Assessment

Until the end of the 1960s, German society believed strongly in technological progress as an essential basis of economic and social welfare.

There was agreement on the need to close the technological gap with other industrial countries, particularly the United States. All political parties

agreed that promoting technological research and

development should be central task of government. This belief changed rapidly in the 1970s.

Certain consequences of new technologies became obvious and increasingly dominated public

discussion: new technologies were jeopardizing

job security; unforeseen stress factors inherent in

new work environments promoted new health

risks; and, perhaps most important, the ecological

consequences of certain technologies became

alarming. Such misgivings were voiced by new

social movements, citizen committees, and

unions. They initiated a wide range of technology

assessment studies and claimed governmental

subsidies for technology assessment research.

Since 1973, there has been an active discussion

in Germany on whether technology assessment

should be institutionalized in a way similar to the

United States. Several declarations of intent have

been published. and members of parliament and

expert delegations from universities and research

institutes repeatedly visited the U.S. Congressional Office of Technology Assessment (OTA).
148 I Health Care Technology and Its Assessment in Eight Countries

But there was a growing gap between these intentions and the willingness to realize them. At the

beginning of the 1970s, the Germans talked about

establishing an advisory committee to parliament

comparable to OTA in size and aims. In the following years, however, the tasks proposed for the

new organization were continuously enlarged

while the manpower and money envisaged were

considerably diminished. So in 1978, some members of parliament proposed establishing a committee of five experts with an annual budget of 1

million DM, less than 0.015 percent of the federal

government direct subsidies to the research and

development of technology. A prominent social

scientist remarked that the “discussion on technology assessment in German parliament tended to

be more and more ridiculous” (21). Technology

assessment was the hobby of a few members of

parliament while the majority remained more or

less disinterested.

In 1985, the federal parliament established an

official inquiry commission that submitted its report in 1986. The commission agreed on the

necessity of establishing technology assessment

for advising parliament and proposed creating a

commission with 15 permanent members and a

budget of 10 million DM. The Buro Technikfolgenabschatzurgbeim Deutschen Bundestag

was established in 1993 (after a three year probation period) with a budget of “at least 4 million

DM” per year. It has initiated assessments of medical expert systems and the risks and benefits of

genetic analysis in diagnostic testing.

In general, technology assessment is not afield

of programmatic or systematic research in Germany. On the federal level, for example, the Department of Research and Technology has funded a

clinical and economic evaluation of magnetic resonance imaging (MRI), an assessment of the

introduction of mammographic screening, and an

assessment of care for arthritic persons at home.

But the Department concentrates its activities on

promoting technology development—technology

assessment remains marginal.

Another singular example is an inquiry commission on genetic technologies initiated by the

federal parliament (23). Some federal states have

funded studies on special technology assessment

questions, e.g., an assessment of gallstone lithotripsy (43). But compared to other countries, these

remain minor activities. It is no surprise that the

Swedish report on “Health Care Technology Assessment Programs” does not even mention Germany (74).

This neglect of technology assessment in

health care stems from the fact that German health

care delivery is organized on a corporate basis.

Except for areas that are regulated by law, such as

the premarket control of drugs or medical devices,

technology assessment is primarily understood as

a task for the organizations involved. But this corporate structure, with its carefully defined responsibilities and widely diverging interests, has

hampered the establishment of technology assessment as an independent scientific pursuit.

Mandatory sickness funds are primarily financial institutions, with little interest in research

questions, even those with practical consequences. For example, the decision regarding

whether a new form of therapy in outpatient care

should be paid for by mandatory sickness funds

(e.g., acupuncture or MRI diagnostics) has been

delegated to a commission of representatives of

physicians’ associations and mandatory sickness

funds (Bundesausschub Arzte und Krankenkassen). That commission does not require cost-effectiveness analysis or other specific types of

evaluation in making their decisions. If a diagnostic or therapeutic item has any proven benefit,

mandatory sickness funds must pay for it, regardless of its cost. This may explain why mandatory

sickness funds in general do not know how much

they spend for a certain therapy.

Mandatory sickness funds’ associations on the

state and the federal level are more interested in

comprehensive health policy questions. But except for the Scientific Institute of the Federal

Association of Local Sickness Funds, which has

concentrated its recent research activity on the

analysis of drug prescriptions ( Wissenschafiliches

Institut der Ortskrankenkassen (WIdO), there is

no assessment activity.

The association of sickness fund doctors representing office-based physicians are financing a
research institute on the federal level (Zentralinstitut fur die Kassenarztliche Versorgung in der

Bundest-epublik Deutschland) that is promoting

quality research in ambulatory care. The chambers of physicians (representing all physicians)

are promoting research on quality assurance in

hospital care. But here too, technology assessment seems to be of no concern. It seems doubtful

that systematic technology assessment will become a part of German health care anytime soon.

 Drug Regulation

Pre-Market Approval

Drug production and marketing in Germany have

been regulated by law since the end of the 1970s.

Before that time, drugs only had to be registered

before they could be marketed. The 1976 Drug

Law (Gesetz zur Neuordnung des Arzneimittelrechts, AMG), in force since 1978, required the

premarket testing and control of pharmaceutical

safety and efficacy. The reasons for new regulation were threefold:

1.

2.

3.

After 1968, the FRG had become the second

biggest exporter of pharmaceuticals worldwide

(14). The lack of premarket safety controls had

begun to hamper exports more and more. Export-oriented firms were interested in developing regulations similar to those in other

European countries.

Public discussion over drug safety had been

spurred by the thalidomide affair and its long

lasting legal ramifications. It was reinforced by

another dangerous incident with an appetite depressant, which was removed from the market

in 1968.

In 1969, the new coalition of Social Democrats

and Liberals wanted to put in place anew health

policy. The Social Democrats in particular saw

the chance to enact a strict consumer-oriented

drug law.

The first bill on drug safety proposed by the

government provoked a fierce discussion. Its

strict regulation of drug evaluation and safety was

not acceptable to industry. After five years of debate, a law reflecting the pharmaceutical indusChapter 5 Health Care Technology in Germany 1149

try’s interests much more was enacted. The law

had to resolve two problems: how to regulate the

safety and efficacy of new drugs, and how to regulate some 140,000 drugs already on the market.

A mandatory licensing procedure was instituted for new drugs, requiring the manufacturer to

document its quality (chemical composition), efficacy, and safety. Information from clinical trials

that can be evaluated by the Federal Office of

Health (Bundesgesundheitsamt) must be presented. If the Office of Health accepts the drug, its

decision is reviewed by an expert commission of

the Federal Department of Health. If the Department of Health also accepts the drug, a five-year

license is granted. Licenses are renewed on request; in certain cases, renewal requires the

manufacturer to prove that characteristics of the

drug have not been changed. (Homeopathic drugs

need only be registered, not licensed).

There have been two problems with the licensing procedures. First, clinical trials remain the

sole responsibility of industry—the Federal Office of Health has no role. In the course of the parliamentary debates on the law, industry objected

to the planned standards of efficacy that the government first proposed, arguing that these standards would prove so expensive that Germany

would become less attractive to industry, innovation would be impeded, and smaller firms would

be ruined. They then proposed less strict standards, which became part of the law. The law

states that “lack of therapeutic efficacy is indicated only when there are no therapeutic results at

all” (Art. 1 25 (2) Nr.4 AMG). Critics of this part

of the law point out that it shifted the burden of

proof to the Federal Office of Health, which must

prove the inefficacy of a drug. In addition, the government may not insist on double-blind clinical

trials, even in the case of new ingredients (56).

Second, post-market control by the Federal Office of Health is weak because of work overload,

faulty organization, lack of expertise, and a lack of

political support in the face of industry pressure

against gathering this information (38). The Drug

Law itself leaves key judgments to industry and

medical professionals—industry is obliged only

to report “hitherto unknown” or “severe” adverse
150 I Health Care Technology and Its Assessment in Eight Countries

drug reactions. Unlike in other European countries, such as the United Kingdom, physicians and

other medical professionals in Germany are not

obliged to report adverse drug reactions or side effects. As a result, they report these events infrequently (38).

About 12,000 new drugs were licensed between 1978 and 1993. The problem of how to proceed with the 140,000 drugs already on the

German market in 1978, however, proved virtually insoluble. Effective control of safety and efficacy would have required not only an immense staff

of trained personnel but also a considerable

amount of money. So the federal legislature

passed an interim regulation: drugs registered before 1978 could be marketed for 12 years during

which a medical expert committee of the Federal

Department of Health was charged with gathering

information on these drugs in order to prepare a

simplified licensing procedure. At the beginning

of 1993, when the interim regulation and a threeyear extension had expired, about 45,000 “old”

drugs remained in the licensing procedure. This

included 9,000 homeopathic drugs, which need to

be registered, and about 5,000 drugs from the former GDR (28). About 70,000 drugs disappeared

from the market, mostly because the producer did

not ask for approval.

Regulation of Drug Prices and Consumption

Unlike most other European countries, in Germany there is practically no regulation of producer

prices for pharmaceuticals. But the profit margin

in the retail drug business is set by the Federal Department of Economy. As a result, all drugs sold

only by pharmacists (and these alone are paid for

by mandatory sickness funds) have standardized

prices. German pharmacies have traditionally

shunned competition.

With no way to regulate prices or control the

quantity of prescriptions written for patients,

pharmaceuticals are very expensive in Germany.

Mandatory sickness funds cannot negotiate prices

and neither physicians nor patients have an interest in doing so. Price competition has become

somewhat more important only since the early

1980s, as the patents for many drugs expired and

generics came on the market. In 1988, about 20

percent of all prescribed drugs were generics ( 13).

The first attempt to introduce indirect price regulation took place in 1988 ( 35 SGB V) when a law

was passed decreeing that a fixed reimbursement

for certain drugs should be determined by the government. The law’s intent was to standardize and

reduce the amount of reimbursement for certain

drugs that had the same or similar biochemically

active substances. Industry could still choose to

set a price for its product above the federally set

reimbursement, but if a patient chose to buy the

more expensive drug, he would have to pay the

difference between the manufacturer’s price and

the reimbursement amount.

In 1989, a fixed amount of reimbursement was

determined for the first 10 biochemically active

substances, covering about 1,400 drugs. Most

manufacturers reacted with considerable price

cuts, as most of those insured were not willing to

pay more simply for a name brand drug product.

Manufacturers who did not reduce their prices

bore a substantial decrease in sales (13). By the beginning of 1991, the reimbursement level had

been fixed for about 6,400 drugs. The success of

this price-setting measure in lowering drug costs

is not possible to determine because the prices of

most unregulated drugs increased as the measure

was implemented.

Since 1981, the consumption of prescribed

drugs has been analyzed annually by the Arzneiverordnungsreport, a joint research project of mandatory sickness funds, doctors, and pharmacists. It

offers comprehensive information on sales and the

prescription habits of doctors and covers about

2,000 drugs, roughly 90 percent of all prescriptions.

 Medical Device Regulation

Except for technical safety regulations, which

were instituted in 1986, there are no restrictions on

the marketing of medical devices. A series of radiotherapy accidents caused by technical defects

in the late 1970s is what prompted parliament to

discuss extending laws on workers’ protection
and the safety of machines to cover medical equipment. The ruling coalition, however, could not

reach consensus on how to proceed, and safety

regulations did not appear until 1985. The Medizingerateverordnung states that every new type of

medical equipment needs to be licensed. The license is to protect users and patients from safety

hazards, but is not meant to ensure medical efficacy. Industry may ask government to conduct clinical trials with a prototype before granting a

license.

REGULATION OF PLACEMENT OF

SERVICES AND QUALITY ASSURANCE

German policy regarding the distribution of expensive, cutting-edge equipment can best be understood against the background of the rigorous

institutional separation of ambulatory and inpatient care in the German health care system. This

characteristic feature means that ambulatory care

is virtually the monopoly of office-based physicians and that hospitals—apart from training medical students—are prohibited from offering

outpatient care even when the patient has previously been hospitalized. The institutional separation of the two sectors was made law through an

emergency decree enacted by Chancellor Bruning

in 1932, passed after a long, fierce debate between

hospitals and office-based physicians.

What would seem to be a reasonable idea—

treating patients in an ambulatory manner whenever possible and confining them to bed only

when unavoidable—has become an arena for

competition between the two sectors in which

equipment plays a major role. In contrast to the

United Kingdom and other countries, both GPs

and specialists work as office-based practitioners

without any hospital privileges. About 60 percent

of all specialists are office-based, and less than 8

percent of them (the Belegtirzte) are allowed to

treat patients in hospitals.

The amount of inpatient care is determined to a

large degree by the technological equipment that

the outpatient sector has, especially diagnostic

equipment. Hospitals, of course, have the whole

range of medical technology, but hospital specialChapter 5 Health Care Technology in Germany 1151

ists are allowed to treat outpatients only when

there are not enough office-based specialists. For

example, if there are not enough CT scanners

installed in physicians’ offices, a hospital radiologist may obtain authorization to perform ambulatory CT scanning. This authorization is given or

refused by the Association of the Sickness Fund

Doctors and can be canceled at any time.

Since the 1932 decree (confirmed by legislation in 1934 and 1955), the lack of integration between private practice and hospital medicine has

been criticized for lowering the quality of the German health care system while raising its costs. But

until the 1993 Health Care Act, all attempts to

open the hospitals for outpatient care and to allow

the use of hospital equipment for office-based

physicians had failed (34,46). Since most hospitals are public or nonprofit organizations. officebased physicians had argued that opening these

institutions for ambulatory care would be a step

towards the socialization of care or even, in a more

ideological formulation, the first step towards socialism.

(The former GDR had integrated outpatient and

inpatient care by establishing clinics and ambulatory services in close cooperation with hospitals.

However, the Socialist government had eliminated nearly all private office-based medical services. After reunification, most of the clinics and

outpatient services were closed, and the formerly

salaried physicians are now working as private

practitioners. Some health policy analysts question whether this was a wise solution. )

 The Debate On Regulating the

Proliferation of Expensive Equipment

The amount, nature, and placement of acute care

inpatient services are defined by the 1972 hospital

plan of the states. The plan gives the states responsibility for providing a sufficient supply of inpatient care facilities. Therefore, they must develop

and execute an annual regional plan. All hospitals

designated as “necessary” in this plan (including

private hospitals) are entitled to an annual budget

allocation from the states for investments. (Except

for some special hospitals, such as army and uni-
152 I Health Care Technology and Its Assessment in Eight Countries

versity hospitals, the federal government has no

role in hospital financing.) Mandatory sickness

funds reimburse the operating costs. Sometimes

the states delay their grants because of scarce

funds, which leads to lobbying and public pressure by various interested parties.

Because high-technology equipment, especially for diagnosis, can be used in both inpatient and

outpatient settings, regulating only equipment for

the inpatient sector is ineffective at controlling the

supply. Despite legally fixed prices for equipment, the prohibition of advertising, and other restrictions, a sole-practitioner physician is engaged

in private enterprise. While hospitals often wait

for the approval and purchase of costly equipment, office-based physicians had been free to

make their own investment decisions. Both the

Physicians’ Associations and the Hospital Societies pointed out that in times of cost containment

it was obviously not rational to procure the same

equipment twice. But they could not agree on how

to share equipment or how to coordinate investments. Some states and especially the mandatory

sickness funds wanted to end duplication, but they

had no legal basis for interfering with private investment. Federal regulation was not only politically controversial but constitutionally delicate

when it intervened with private investment.

In 1983, alarmed by the rapid diffusion of CT

scanners and the introduction of MRI, the Social

Democratic government of Hessen proposed a bill

in the Bundesrat. According to this bill the diffusion of costly equipment in the outpatient sector

would be regulated by planning the supply and

harmonizing it with the hospital plans of the

Lander. This initiative and a modified one of the

Christian-Democratic government of BadenWurttemberg provoked a three-year discussion

and very strong rejection of the idea by the physicians and their associations—in their view this

was the first step to a “socialist planning economy.” The government was obviously interested in

finding a way to regulate the diffusion of costly

technology, but at the same time it hesitated to intervene in decisions of private enterprise.

Surprisingly, three years later the Federal

Association of Sickness Fund Doctors took the

initiative and proposed a measure based on selfregulation. The Association proposed that Regional Associations of Sickness Fund Doctors and

Regional Associations of Mandatory Sickness

Funds should set out an annual plan detailing how

much expensive equipment in outpatient care was

needed. This plan would be binding for all sickness fund doctors. The sickness funds would not

reimburse any spending on equipment that exceeded the limits set in the plan. In March 1986,

this decree came into force.

Why this sudden willingness on the part of the

Physicians Associations to cooperate? There

seem to have been two reasons. First, the differences in income among various office-based physicians are extraordinary. This was not really a

problem, as long as the total payment the Mandatory Sickness Funds provided to all physicians

was growing rapidly. Even the rapid growth of income realized by the small group of radiologists

operating CT and MRI or by cardiologists with catheterization labs was not seriously discussed. But

in the 1980s, the government not only stressed the

need to stabilize the contribution rates for the sickness funds, but also decreed that the total remuneration for all physicians would not grow faster than

the total revenue of the mandatory sickness funds.

The conflict between the small group of highincome doctors and those whose income was stagnating increased. The second reason seemed to be

the rapidly growing number of office-based physicians. The more physicians who had to share a

stagnating budget, the less income each could expect. By limiting the numbers of costly machines,

the Physicians Association hoped to reduce potential conflicts.

This decree, however, was effective for only

about three years. Some physicians who had purchased medical equipment without the permission

of the Association of Sickness Fund Doctors, and

therefore did not get any reimbursement, went to

court. In October 1990, the Federal Social Court

decided that the decree was a severe limitation on

the constitutionally guaranteed freedom of pursuit

of profession which should not be based on an

agreement between two self-administered associations, but on a law that can be interpreted by the
Federal Constitutional Court. The Court’s decision made the decree unlawful.

The 1993 Health Care Act seems to have solved

the problem. Each state now has to form a commission composed of representatives of hospitals,

sickness fund doctors, mandatory sickness funds,

and state government. The commissions are legally authorized to decide how much costly highlevel technology is necessary and where the

devices should be located, whether in a hospital or

in a physician’s office. If the members of the commission do not agree, the state administration

must decide ($ 122 (revised version) SGB V). It is

too early to judge whether this regulation will remain in force.

 Quality Assurance

At present, quality assurance has almost no place

in German health care except for the laws concerning medical equipment and pharmaceutical products (discussed earlier), and some regulations and

guidelines concerning structural measures (60).1

Regulation of medical education is a federal

task. Once licensed, physicians’ postgraduate

education is assigned to the General Medical

Councils. In 1990, the German Arztetag, the parliament of the medical profession, confirmed

anew its unwillingness to accept government

quality assurance of postgraduate training. No recertification for specialists or updating of knowledge is required in Germany.

The Board of Experts for the Concerted Action

in Health Care (SVRKAiG) has repeatedly called

for better information concerning the real quality

of physicians’ work, saying it is the highest priority for assuring quality in German health care (60).

In a 1989 report, the Board criticized the lack of

Chapter 5 Health Care Technology in Germany | 153

means to assure quality in the processes and results of medical treatment, especially in hospitals.

It also produced a catalog of desired reforms (60).

Some quality assurance activities do exist for

hospitals. Since 1976, a program has been developed for some special problems in general surgery

(63,64) and perinatology; and since 1987, the Federal Ministry of Research and Technology has

been financing a study of quality assurance in cardiac surgery (discussed later). But these initiatives

remained optional for the clinics, and their consequences have never been analyzed.

In 1989, a requirement for the systematic quality assurance of inpatient care was established by

law (S137 SGB V). Hospitals now have to participate in quality assurance measures related to treatment processes and the results of care. Treatment

procedures must be standardized to enable quality

control. According to the law, state associations of

the mandatory sickness funds and the regional

hospital societies are supposed to agree on how to

standardize treatment. But the societies concerned

have so far only agreed on which activities need

quality standards. The divergent interests of the

parties involved has prohibited the consensus necessary to make further decisions. Physicians say

they fear the end of the anonymity of data and the

possibility of lawsuits in cases of treatment failure

(8).2

Physicians are interested in better outcomes,

but in general they are not convinced that quality

assurance measures will help. They also do not favor public discussion of the results of a quality

evaluation. Hospitals fear a one-sided emphasis

on economy by the sickness funds. Because any

advertisements concerning the quality of care are

strictly prohibited, hospitals do not understand

1 These include controls on the quality of laboratory performance in outpatient care ( I I ) and on technical requirements and standards regarding the use of x-rays.

2 This seems to be a spurious argument because quality assurance is not judged on the basis of individual patients’ results. Furthermore, data

protection and the right of control of the individual’s records are well determined by German law. In particular, the anonymity of patients’ treatment data is assured: nobody may look into hospital records except the treating physician. Research using hospital records requires the explicit

consent of each individual patient and the treating physician. A study on quality assurance in American and German hospitals points out that

comparable restrictions do not exist in the United States (26).
154 I Health Care Technology and Its Assessment in Eight Countries

what they could gain by cooperating. While they

recommend the implementation of quality assurance measures, they want the results communicated only to the senior physician and the hospital

owner (Deutsche Krankenhausgesellschaft). The

mandatory sickness funds, however, have to pay

for these quality assurance measures, so they are

quite interested in the results. In their view, economy and quality are two sides of the same coin.

They want information. One cannot accurately

predict whether there will be agreement on this

subject in the near future.

The discussion of quality assurance remains

largely limited to a few experts in Germany. There

are no consumer organizations able to bring this

problem into the political debate, and the media

discuss little more than malpractice problems.

Nevertheless, with the 1993 Health Care Act,

quality assurance has become critically important.

TREATMENTS FOR CORONARY

ARTERY DISEASE

In 1985, there were 70 catheterization laboratories

for adults and 15 for children in Germany. Although they had no waiting lists, they regularly reported that the pressure of patients seeking

treatment urged some laboratories to do more

diagnostic procedures per year than were medically justifiable (31). Although data to support this

are scant, it appears that the need for Coronary

Artery Bypass Grafting (CABG) in the mid- 1980s

was twice as high as the number of procedures performed. At that time, medical journals and other

news media reported stories of patients who were

forced to seek an operations elsewhere, especially

in the United States (1,41).

The number of catherization labs is determined

by the state hospital plans. Of the 222 catheterization labs installed in West Germany in 1991, 211

were operated by hospitals. The number of diagnostic and therapeutic facilities has grown rapidly

since 1986. The current capacity for percutaneous

transluminal coronary angioplasty (PTCA) now

seem to be sufficient. Nevertheless, cardiologists

claimed that the high incidence of coronary artery

disease necessitates adding more facilities (31).

(See table 5-6 for trends in the use of CABG and

PTCA.)

For both diagnostic cardiac catheterization and

PTCA, some sites are much busier than others. In

1990, nearly half of the diagnostic procedures

were performed in about one-quarter of the clinics, and about 20 percent of the laboratories carried out less than 500 catheterizations per year.

The figures for PTCA are similar.

Apparently, the site of diagnosis can influence

whether a patient eventually gets CABG or

PTCA. Patients diagnosed in centers without

PTCA equipment are more likely to get CABG

than PTCA as a therapeutic intervention, while

patients diagnosed at centers with PTCA equipment have an equal likelihood of being referred

for CABG and PTCA.

Percutaneous balloon valvuloplasty was

introduced in 1986. Between September 1986 and

July 1988, the university clinic GroLBhadern

(Munich) performed aortic valvuloplasty on 110

patients (25). In 1990, 473 valvuloplastic interventions were performed within the FRG (32). In

general, this method does not seem to be in widespread use.
Chapter 5 Health Care Technology in Germany 1155

1978 1980 1982 1984 1986 1988 1990 1991a

CABG 3,042 4,887 7,287 10,458 17,489 21,363 26,137 31,338

PTCA 200 500 1,387 2,809 7,999 16,923 32,459 44,050

a 1991 data include the former GDR

KEY CABG = coronary artery bypass grafting, PTCA = percutaneous transluminal coronary angioplasty

SOURCES E Bruckenberger, Dauerpatient Krankenhaus—Diagnosenund Heilungsansatzeze (Frelburg Lambertus Vlg , 1989), U Gleichmann, H

Mannemach, and P Lichtlen, “Bericht uber Struktur und Leistungszahlen der Herzkalheterlabors in der Bundesrepublik Deutschland, ” Zeitschruft

fur Kardiologie 82:46-50, 1993, E Bruckenberger, Bericht des Krankenhauschusses der Arbeitsgemeinschaft der Leitenden Medizinal beamten

(AGLMB) zur Situation der Herzchirurgie in Deutschland (Hannover: Niedersachsisches Sozlalministerlum, 1992)

Cardiac surgery is one of the areas where quality assurance has gained some importance. In

1984, the German Society for Thoracic and Cardiovascular Surgery began to investigate quality

assurance in this field. The aim was to develop

guidelines that could help control quality within

cardiovascular surgery facilities (73). Interested

clinicians in eight facilities discussed and agreed

on a catalog of measurable, quality-relevant

items. More than 480 of these variables describing

preoperative, intraoperative, and postoperative

situations should allow a self-evaluation by the

hospital as well as external comparisons for quality control. Variables concerning the treatment process included loss of drainage blood, new

postoperative arrhythmias, number of days of intensive care, number of infections, etc. On the basis of the data collected within the first three years,

the commission defined quality standards. One recent report said, “The comparison of characteristics in one’s own hospital at various times and

above all with the broad-based multicentric item

can disclose conspicuous features to such an extent that they give rise to interventions demanded

by quality assurance” (73). Organizing an active

follow-up to the development of these standards

seems to be an important and unsolved problem.

MEDICAL IMAGING (CT AND MRI)

As in other countries, CT and MRI have become

prominent in Germany, but traditional x-ray imaging and sonography have maintained a higher rate

of use than in most other countries. In 1990, the

more than 50,000 x-ray machines in West Germany were used for 88.2 million examinations—

more than 1.4 per inhabitant in that year. More

than half of these examinations were of the thorax,

at least partly explainable by the traditional fear of

tuberculosis.

 Computed Tomography (CT)

Compared to most other countries, German health

authorities and sickness funds were caught unawares by the rapid proliferation of CT scanners

during the 1970s. The diagnostic capacity of the

new technology was evident, but at first it seemed

to apply only to neurological problems. Nevertheless, by 1979, 68 cranial CTS were operating in

Germany, a ratio of 1:900,000 inhabitants. The

first body scanner was installed early in 1976 by

the German Center for Cancer Research (Heidelberg), apparently the first one in Europe (27).

Ninety percent of the investment cost (1.8 million

DM) was financed by the Federal Ministry of Research and Technology, the remainder by the Land

Baden-Wurttemberg. The number of body scanners increased even more rapidly than the head

scanners (see table 5-7). Most devices are in the

big cities (Hamburg, Bremen, Munchen, Koln,

etc. (33)), though surprisingly, not in West Berlin,

and most are in the largest hospitals and in the offices of radiologists and neurologists (see table

5-8).

In 1977, prices of cranial CT scanners ranged

from 800,000 to 1.5 million DM and that of bodyscanners from 1.8 to 2.3 million DM. At that time

mandatory sickness funds paid 300 to415 DM for

a cranial scan, depending on the specifics of the
156 I Health Care Technology and Its Assessment in Eight Countries

Region Cranial CT Whole body CT CT per million population

Schleswig-Holstein

Hamburg

Bremen

Niedersachsen

Berlin (West)

Hessen

Nordrhein-Westfalen

Rheinland-Pfalz

Saarland

Baden-Wurttemberg

Bayern

Total

4

3

3

9

2

3

23

9

11

68

3

12

11

2

5

27

3

1

9

9

82

2.71

8.89

4.24

2.78

2.06

1.44

2.93

1.10

0.92

1.98

1.85

2.44

SOURCE. W Pietzsch, and G Hinz, “Erhebungen zur Durchfuhrung der Computertomographle, ” Strahlenschutz in Forschung und Pram

20152-157, 1980

examination. This sum covered material, depreciation costs, and physicians’ fees. Three years later,

in 1980, reimbursement for a cranial tomography

had fallen to 250 to 271 DM and a body-CT examination was reimbursed 300 to 434 DM (66). In

spite of inflation, this amount has remained nearly

unchanged for more than 10 years.

The proliferation of new costly technology had

especially alarmed the states, which were confronted with demands from the hospitals for funds

to invest in new machines. The states passed laws

aimed at establishing a certificate-of-need system

(16). They organized several conferences and discussions, but the states had as much trouble dealing with this new technology as other countries

did. They defined the “necessary” number of examinations and devices arbitrarily. Rather than define the problem as a political one, politicians

demanded “objective” measures of need. But using epidemiological data to find a criterion to limit

the number of “necessary diagnostic examinations” (3,35) did not lead to a solution. There

have, of course, been studies defining appropriate

indications for CT scanning, but these studies are

not suitable for determining the number of devices

needed. Consequently, there has been no realistic

effort to discuss the cost-effectiveness of CT scanning in the health care system and no systematic

assessment of the new technology.

One attempt to regulate the quantity of CT examinations is worth reporting. As mentioned earlier, the Associations of Sickness Fund Doctors

was interested in limiting the continuous rise of

costly radiological examinations. In 1986, some

of these associations informed their members that

for each referral to CT (and MRI) diagnostics they

would have to document the diagnosis and the

foregoing examinations and findings. The goal

was to help improve the quality of diagnosis. But

at the same time, the associations made explicit

the fact that, in view of the limited budget for sickness funds doctors, unnecessary examinations

would reduce the income of all office-based physicians (41 ,44).

Between 1982 and 1986, the number of CT examinations increased by about the same percentage in both the North Rhine and Westphalia

regions. (See figure 5-1.) After Westphalia required the documentation of referrals for CT diagnostics, there was a significant change in the two

regions’ patterns. While in North Rhine the number of referrals rose by about 22,000, it leveled off

in Westphalia In 1987, the rule continued to be
Chapter 5 Health Care Technology in Germany 1157

Number of Number of CTS

Hospitals and physicians hospitals/offices (installed or on order)

Acute care hospitals

<300 beds 1,900 2

300-600 beds 410 20

600-800 beds 65 10

> 800 beds 75 50

Long-term care hospitals 1,250 30

Office based physicians (radiologists/neurologists) 2,400 48

Total 160

SOURCE G Rau, “Aktuelle Versorgungslage, ” Wirtchafilicbe Aspekte der Computerfomograph/e, CT-Symposium am 11-12 January 1979 an

der Deutschen Kinik fur Diagnostik, Hessisches Sozial-mwusterlum (Wiesbaden) and Bundesminlsterium fur Arbeit und Sozlalordnung (Bonn)

(eds ) (lMesbaden, 1979)

effective in Westphalia, but the number of examinations in North Rhine rose again. By 1988,

the obligation to document CT examinations

seems to have become a bureaucratic routine in

Westphalia— the number jumps and continues a

“normal” increase in the following years. It is important to mention that the doctors’ association

only asked for a detailed report and not for a decrease in the number of examinations. One might

reasonably conclude, however, that at least for

two years some unnecessary examinations were

avoided.

 Magnetic Resonance Imaging (MRI)

MRI diffused somewhat more slowly than did CT,

which may be due to its diagnostic value not being

as clear as that of the well-known x-ray technology. It is difficult to determine the exact number of

MRI scanners in operation at a particular time,

however. State ministries and mandatory sickness

funds have published discrepant data on this

point. There are no records of when a machine is

retired from service and data published by the industry do not discriminate between ordered and

installed devices. Nevertheless, table 5-9 provides

an approximate overview of the trends. Nine years

after the installation of the first CT there was already one machine for every 189,000 inhabitants;

in the case of MRI, the ratio was 1:357,000.

In 1986, four years after installation of the first

MRI, 46 MRI scanners were in operation, more

than half run by office-based radiologists. This is

surprising because office-based radiologists depend on patient referrals from other physicians. In

addition, mandatory sickness funds approved reimbursements for MRI diagnostics only in cases

of suspected brain tumor, multiple sclerosis, epilepsy, and tumor in the spinal cord, or syringomyelia—a very small list of conditions. With a

reimbursement of only 470 to 536 DM per examination, physicians could not possibly recover

their investment costs. Obviously, other incentives existed to encourage investment in this

prestigious new technology (48). Hospitals, on

the other hand, have not been confronted with the

problem of profitability. As already mentioned,

hospitals’ investment costs are paid by the state,

and operating costs are paid by the sickness funds

as part of the per diem charges. The Board of Experts for the Concerted Action in Health Care

stated in its 1991 report that oversupply was causing MRI devices in Germany to be used below capacity (60).

Because of the anticipated benefits to diagnosis, the Federal Ministry of Research and Technology has financed several medical and technical

research projects on MRI since 1978 (12,17,20).

In particular, it supported a multicenter study from
158 I Health Care Technology and Its Assessment In Eight Countries

1,000

900

800

700

600

500

400

300

200

100

North Rhine

1981* 82 83 84 85 86 87 88 89 90 91 92

a First SIX months in 1981 = 100

SOURCE S Kirchberger, “Uberlegungen zur Diffusion und Nutzung der Computertomographle inNordrhein Westfalen, ” Medizin Mensch Geselschaft 14:87-95, 1994

1987 to 1989 to evaluate the clinical and economic benefits of this technology (18,19). This document remains the only example of a systematic

technology assessment in Germany.

1.

2.

3.

The MRI study consists of three parts:

An evaluation of MRI as a clinical procedure,

analyzing the whole technical range of devices

in operation in Germany (0.15- 1.5 tesla) and

the different institutional settings (university

hospital, general hospital, office-based radiologist).

An analysis of the economic aspects of running

an MRI within an individual enterprise.

An examination of the effects of MRI diagnosis on health outcomes to determine some of

the overall costs and benefits to the health care

system.

The empirical base for this research consisted

of the records of 21,000 MRI examinations and

much operational data (including personnel involved, transportation costs, time management,

etc.) from 25 different institutions. In addition, the

Federal Ministry did a controlled study of the neurological use of MRI by arranging follow-up examinations of 900 patients one year after their

initial diagnosis.

LAPAROSCOPIC SURGERY

Laparoscopic surgery is among the procedures

that make up minimally invasive surgery (MIS),

which includes: endoscopic papillotomy, percutaneous nephrolithotomy, laparoscopic treatment of

ectopic pregnancy or endometriosis and removal

of ovarian cysts, arthroscopic meniscectomy, laparoscopic appendectomy, colecystectomy, etc.

All have been performed in Germany for several

years.

In 1973, two internists at Munich University

Hospital introduced the endoscopic removal of

bile duct stones in Germany. Percutaneous nephrolithotomy was first practiced at the University

of Mainz in the early 1980s. A gynecologist at the

University Clinic of Kiel has treated tubal pregnancy and ovarian cysts by endoscope since 1970;

in 1982, he carried out the first laparoscopic appendectomy. A practitioner in Boblingen published a record of his first experience with

Iaparoscopic cholecystectomy in 1986 (50). In

1991, he reported on a follow-up study on his first

94 patients, treated between September 1985 and

March 1987, and compared the outcome with 136

patients treated with conventional surgery within

the same period (51 ).
Chapter 5 Health Care Technology in Germany 1159

CT MRI

Year Medical office Hospital Medical Office Hospital

1974 — 3 b — —

1975 3

b

1 5

b — —

1976 1 0

b

30b — —

1977 2 0

b

60b — —

1978 3 0

b

8 0

b — —

1979 4 0

b

110b — —

1980 5 0

b

140b — —

1981 6 5

b

180b — —

1982 85 232 — —

1983 115 250 4 4

1984 140 270 13 8

1985 195 310 21 14

1986 220 315 26 20

1987 235 320 27 29

1988 253 352 34 34

1989 280 370 45 48

1990 334 457 62 58

1991 427 499 112 56

1993 455 590 171 125

a The table shows the number of devices sold Since some are replacements the number of devices in operation i S somewhat lower

b Installations for 1974-1981 are extrapolated from 1982-status in line with CT-market growth Worldwlde

SOURCES Siemens, personal communication, 1994, E Bruckenberger, personal communication, 1994

Unlike the diffusion of certain expensive

technologies, the spread of new procedures with

low costs and routine outcomes is difficult to document in Germany because such procedures require no special reimbursement or licensing

regulations. Nevertheless, endoscopic therapy

seems to have had a considerable impact on German health care.

Used primarily by internists or other specialists

equally familiar with diagnostic endoscopy, MIS

has given rise to a struggle between different medical disciplines. Surgeons interested in endoscopic therapy were often opposed by their surgical

colleagues. Until the end of the 1980s, most surgeons rejected the new methods and condemned

them as risky and even unethical (42). The long-

-lasting hostility of the majority of surgeons is understandable in view of the fact that the new

methods not only required new skills but also

made familiar manual and tactile abilities superfluous.

Hesitation in adopting the new methods

seemed all the more appropriate because per diem

charges provided no economic incentive for

changing conventional practice, although in some

cases, especially at universit y hospitals, there was

pressure from patients who demanded the endoscopic procedure (42). When surgeons became

aware that more and more MIS procedures were

going to be performed by physicians in other disciplines, their opinions began to change. (With

about 70,000 operations per year, cholecystectomy is one of the most frequentl y performed procedures in the FRG. Together with appendectomy

and inguinal hernia, it accounts for nearly 50 percent of all general surgery cases.)
160 I Health Care Technology and Its Assessment in Eight Countries

In 1991, one of the main themes of the 108th

Congress of the German Society of Surgery was

“gentle surgery,” a subject the President of the

Congress characterized as “somewhat fashionable.” At a 1992 meeting on minimally invasive

surgery, it was claimed endoscopic surgery was a

genuine activity of surgeons “because only a surgeon will be able to skillfully control all possible

complications” (78).

The competition between surgeons and other

medical specialists is obvious, as is the lack of

communication between them. For example, the

Department for Internal Medicine in a university

hospital with more than 1,000 beds had been practicing endoscopic papillotomy for several years

when it was astonished to learn that the surgical

department was also performing the same procedure.

The standards of postgraduate training, especially in the case of a new technology, take time to

define. In the case of endoscopic procedures, surgeons and internists have to reach a consensus on

the training necessary. Because endoscopic

instruments and even the necessary imaging technology are generally affordable for most hospitals, there are no financial barriers limiting their

proliferation. Many training centers now provide

workshops on MIS, but demand still seems much

higher than supply. The media recently began to

report not only on the advantages of MIS, but also

on its risks and failures. After performing about

100 endoscopic appendectomies, a hospital in

North Rhine-Westphalia abandoned the method

and returned to conventional surgery because the

outcomes seemed better with the older method (78).

Along with training, the frequency of use of endoscopic therapy is an important indicator of quality. Physicians trained to perform percutaneous

nephrolithotomy (PCN), for example, must practice it routinely in order to retain their proficiency.

Because the technology associated with PCN is

less expensive than that for Iithotripsy, the use of

PCN as a surgical treatment has spread rapidly. In

1987, 85 of 112 urological departments in North

Rhine-Westphalia were using it. But because so

many centers now offer the treatment, the number

of procedures per hospital has diminished. This

development suggests that to promote quality,

centralizing certain services will be necessary. But

at present, neither political nor economic means

exist to cause such a change. Beginning in 1995,

other modalities of hospital financing together

with quality assurance measures might eliminate

some redundancies in the system.

TREATMENTS FOR END-STAGE

RENAL DISEASE (ESRD)

Until the late 1960s, only a few hospitals in Germany offered renal dialysis. Although the number

of patients with renal failure was rising by more

than 2,000 every year (30 to 40 per million inhabitants), only 745 patients received this lifesaving

treatment in 1970. Ten years later the federal parliament stated that the network of dialysis facilities in Germany was sufficient to treat everybody

in need.

Faced with the poor supply of dialysis facilities

in hospitals, Klaus Ketzler, an economist, decided

in 1969 to establish a nonprofit organization, the

Kuratorium fur Heimdialyse (KfH), the purpose

of which was to improve the care of patients with

renal failure. The rapid spread of home dialysis

and dialysis in hospital-associated centers in Germany is largely due to the initiative of the KfH.

In September 1970, the mandatory sickness

funds, which until then had reimbursed dialysis

treatment only in hospitals, were confronted with

a patient claim for compensation for the cost of a

home dialysis machine. The Court of Social Affairs in Berlin found that the mandatory sickness

funds had to pay because the scarcity of dialysis

machines in hospitals allowed only two dialysis

sessions per week, which was insufficient. The

Court argued that:

. . . since technical progress has brought about a

situation where the physician is substituted for

by technical equipment, a new interpretation of

the existing code is required . . . care does not

solely mean physician’s treatment and nursing

. . . but also the availability of an apparatus that

partially substitutes for a physician’s activity

(71).

In other words, dialysis was no longer bound to

hospitals.
Furthermore, the court decision made it possible to purchase the machines at the expense of

mandatory sickness funds. The KfH began to organize an infrastructure of independent centers for

dialysis. Soon afterward, other nonprofit organizations were founded for the same purpose.

Today, the Patinten- Heimversorgung (PHV) and

the Dialyse Trainingszentren (DTZ), nonprofit organizations founded by firms engaged in the dialysis market together with the KfH treat about 50

percent of all dialysis patients in more than 200

centers. About 250 office-based physicians care

for about 30 percent of the ESRD patients. Only

about 5 percent of patients receive home dialysis.

In 1992, the mandatory sickness funds in Western Germany had to pay more than 1.7 billion DM

(about 50,000 DM per patient/per year) for equipment and other costs of dialysis treatment, not including physicians’ fees, travel expenses for the

patients, additional pharmaceuticals, and hospital

treatment, which amount to 170 to 200 million

DM. Germany is by far the biggest market for

dialysis products in Europe with about 24.6 percent of the total, followed by Italy with 16.8 percent and France with 14.3 percent.

The spread of dialysis has been accompanied

by much discussion of its costs. In 1984, a report

prepared on behalf of the Federal Department of

Labor and Social Affairs discussed cost-saving

possibilities (29). Cost-saving was taken up again

by the Board of Experts of the Concerted Action in

Health Care. In its 1988 report, it cast doubt on the

way hospitals calculated the special per diem

charges for dialysis and raised questions about the

considerable variations in cost from hospital to

hospital. In 1987, the cost of hospital dialysis

ranged from 408 to 694 DM, depending on the region and hospital (60). The Board criticized the

dwindling number of patients on home dialysis

and the under-utilization of continuous ambulatory peritoneal dialysis (CAPD), the least expensive

treatment method (60). The most recent discussion of the problem, a 1992 study, stressed that

there are organizational deficits and practically no

competition in dialysis supply (45).

Chapter 5 Health Care Technology in Germany 1161

Year Number of transplants

1977 277

1979 587

1981 762

1983 1,027

1985 1,275

1986 1,627

1987 1,711

1988 1,778

1989 1,960

1 990a 2,358

1 991a 2,255 —

a

lncluding East Germany

SOURCE Kuratorium fur Dialyse und Nierentransplantallon, Jahresbericht, Neu-lsenburg, 1992

Unlike dialysis, the rate of transplants is relatively low (see table 5-10). With 29 renal transplants per million inhabitants in 1988, Germany

ranked eighth in Europe (45). It is not clear why

Germany does not have a higher transplant rate.

Certainly, no lack of surgical capacity exists.

However, unlike other countries, kidney transplants in Germany come almost exclusively from

cadavers (in 1991, there were only 58 living donors), although even this resource is not fully utilized; in a recent year, Germany had more than

8,000 accidental deaths, but only 1,000 pairs of

kidneys were transplanted.

The lack of a law on transplants has been criticized (52), and it is argued that the legal uncertainty hinders hospitals decisions about whether to

perform transplants. The usefulness of enacting a

transplant law has been discussed since the end of

the 1960s. Proponents favor a law that would increase the frequency of “donation” by assuming

that every patient who has not explicitly refused to

donate organs has agreed to make them available

for transplantation. But media reports on the criminal procurement of organs have obviously influenced public opinion. It seems inevitable that
162 I Health Care Technology and Its Assessment in Eight Countries

Year Total viable births Deaths within the first seven days Death rate per 100,000

1975 600,512 6,967 1,160

1980 620,657 3,904 629

1985 586,155 2,217 378

1990 727,199 1,904 262 ——

SOURCE Statistiches Bundesamt, Statististisches Jahbuch 1992 fur die Bundesrepublic Deutschland (Wiesbaden, 1992)

relatives will be asked about the intentions of the

deceased potential donor. Finally, the lack of

transplants has been traced to the fact that hospitals with an emergency station but no transplant

facility are not interested in procuring organs because of lack of personnel. (Transplantation is reimbursed by the sickness fund of the patient who

receives the transplant.)

The fact that the former GDR had a transplant

law that prohibited the removal of organs only

when the deceased had explicitly objected recently revived the discussion. The Federal Department of Justice, however, holds the opinion that

this regulation could not be adopted in the FRG

for political reasons. When the Federal Department of Justice did not enact a transplant law, the

health departments of the Lander organized a conference in 1992. In April 1993, they reached

agreement on a bill that will be enacted soon (24).

In all probability, the Federal Department of Justice will enact a measure in this legislative term

that will prohibit organ sales.

The low transplant rate means that a growing

population needs dialysis. In 1988, the Board of

Experts for the Concerted Action in Health Care

stated that the number of dialysis patients might

equal the number of transplants in 1992 (60). This

balance did not occur. In 1991, the net growth of

patients with ESRD was 54 per million, but there

were only 29 transplants per million. While the

exact number of dialysis patients is unknown, it

appears to have been about 33,000 in 1991.

Erythropoietin (EPO), developed by Genetics

Institute in Cambridge, Massachusetts, in cooperation with the German firm Boehringer (Mannheim), was first used in Germany in 1987. In

March 1987, Boehringer initiated two multicenter

clinical studies to test the value of the drug (6,62),

and since 1988, EPO has been available for use.

Mandatory sickness funds do not know how many

patients are treated with EPO because the costs for

the drug are generally included in the lump sum

paid for dialysis treatment. The official number

registered by the European Dialysis and Transplant Association (EDTA) seems by far too low.

EDTA statistics show that about 45 percent of the

hemodialysis patients receive EPO. According to

the KfH, which treats more than 12,000 patients

with ESRD, costs of EPO treatment amounted to

about 39 million DM in 1992.

NEONATAL INTENSIVE CARE

Starting in the mid- 1970s, perinatal mortality in

Germany diminished considerably (see table

5-11). The rate of newborns dying within the first

seven days decreased from 1,160 to 261 per

100,000 births between 1975 and 1990. The reasons for this decline include the systematic quality

control of hospital care in this field and the continuous expansion of neonatal intensive care units

(NICUs).

The 12,828 obstetric hospital beds in Germany

are found mostly in small facilities close to families’ residences. This in turn means that the average number of births per year per hospital, 500, is

relatively low—much lower than in Sweden or the

United Kingdom, for example. Only 15 percent of

obstetrical departments have more than 900 births

per year. This system of widely scattered small

facilities is supplemented by a well-organized

transportation system that transfers high-risk

newborns to special centers.
During the 1970s, obstetricians established a

regionally organized neonatal emergency service

system, based on five areas of cooperation between neonatology and obstetrics departments

(36):

1.

2.

3.

4.

5.

consulting visits to the gynecological department on request;

regular medical care by a neonatologist (visits,

consultations, etc.);

a neonatologist presence in the gynecological

hospital during regular working hours, with the

neonatologist on continuous emergency call;

intensive neonatal observations; and

neonatal intensive care.

For various reasons, the organization and location of the intensive care units has remained

controversial. Obstetricians are skeptical about

the earl y transfer of high-risk pregnancies to these

centers, and pediatricians are strongly opposed to

the separation of neonatal intensive care units

from the childrens’ hospital. Transporting gravely

ill children can be dangerous, and separating a

mother and child is not at all desirable. On the other hand, in order to operate efficiently, NICUS

must be restricted to relatively few large institutions with large numbers of births. The exact number of NICUS is unknown because there is no

official definition of regular care, intensive observation, intensive care, or clinical supply. Nevertheless, a 1990 survey of all pediatric clinics in

West Germany identified between 170 and 219

NICUS, employing more than 3,300 people. (54).

Of the 1,904 newborns who died during their

first seven days of life in 1990, half weighed less

than 1,800 g. About 36 percent had incurable cardiac defects, congenital malformations, or chromosomal aberrations. The remainder had serious

respiratory problems which might have been successful] y treated by extracorporeal membrane oxygenation (ECMO). However, before 1990, only

the University Clinic of Mannheim had introduced ECMO. Between 1987 and 1990, the Clinic

used the new technology on 13 neonates. In 1990,

it organized the first German symposium on this

subject (40). It was stated that ECMO is no more

expensive than more common therapies, which

Chapter 5 Health Care Technology in Germany 1163

made its slow rate of use hard to understand. By August 1993, ECMO was being performed at two

additional clinics (in Lubeck and Berlin) (54).

In 1975, 26 obstetrical departments joined together to launch a regular survey of quality in perinatology, the Munchener Perinalalstudie (69). In

1986, 826 clinics representing 76 percent of the

total number of births took part. The cooperating

clinics decided to use a standardized procedure to

document all births, based on the assumption that

poor quality care is primarily a problem of insufficient information. This standardized procedure

made it possible to compare the hospitals, as well

as providing a detailed description of the state of

perinatology as a whole. Each cooperating clinic

receives data from all the others, although the clinics are not identified by name in the data. Peculiarities are regularly discussed during meetings and

workshops. This survey has done a great deal to

improve the quality of perinatal care.

For several years an increasing number of publications has raised questions about neonatal intensive care. This followed a long period in which

the prospects for a newborn surviving, the likelihood of handicaps, and their quality of life as well

as the fate of the mother or the family were rarely

discussed. Because of the history of Germany’s

National Socialist “’euthanasia program” (killing

“socially useless” 1ife), nobody dared to discuss

whether there were limits to saving lives in neonatal intensive medicine. This outlook changed only

in the early 1980s. At the 12th German Congress

of Perinatology in 1985, a pediatrician reported

that about 40 percent of the surviving premature

babies who weighed less than 1,000 g at birth had

severe neurological handicaps. He raised the

question of whether the doctor should use all medical means to save these children, and whether parents should have the right to share in the decision.

He stated that doctors should have some guidelines in this field. One year later, a workshop of the

German Society of Medical Law, a society of lawyers and doctors. formulated guidelines, the Einbecker Empfehlung (22,37). These guidelines

were the first attempt to define situations in which

the doctor was not obliged to take all lifesaving

measures: premature and handicapped newborns
164 I Health Care Technology and Its Assessment in Eight Countries

who were unable to survive outside the NICU or

who would never be able to communicate (e.g.,

severe microcephaly, severe brain damage). Beyond that, there is scope for decisionmaking in

cases of newborns with, for example, severe neurological failures or multiple damages which, in

general, severely impair the quality of life. Parents

must be informed of their child’s fate and should

be integrated into the decision process, but they

cannot prevent the doctor from taking lifesaving

measures.

SCREENING FOR BREAST CANCER

One of the legally prescribed tasks of mandatory

sickness funds is to prevent disease by providing

information, medical advice, checkups, and early

diagnosis ($20 SGB V). A program of early diagnosis and prevention of cancer was established in

1970 authorizing mandatory sickness funds for

the first time to pay not only for treatment, but also

for prevention. They did not define precisely

which diagnostic procedures were to be covered,

however. A catalog of procedures was compiled,

and has been modified in succeeding years.

Breast cancer is the second most frequent cause

of death for German women (after myocardial infarction), at 44.1 deaths per 100,000 inhabitants in

1990 (West Germany). The breast cancer screening program consists only of physical breast examination, not mammography. It does not seem to

be very successful, as only 31 percent of the eligible women participate (60), varying by age and

education. Rates have not changed substantially

since 1981. (See table 5-12). Women with more

formal education have a higher participation rate

than those with less.

A 1983 study by a survey institute suggests that

the most important impediment to regular participation in the screening program is lack of interest

by office-based physicians. The survey found that

if physicians offered annual screening to patients

who asked for other services, participation would

probably increase to more than 50 percent.

Mammographic screening is still not part of the

screening program, although mandatory sickness

Age Percent of eligible women participating

30-34 41.9

35-39 43.0

40-44 45.8

45-49 44.6

50-54 38.1

55-59 31.4

60-64 27.8

65-69 18.5

70-74 12,8

75 + 5.2

30 + 30.9

SOURCE. P Robra, “Ergebnisse und Probleme des ‘Gesetzlichen’

Krebs Fruherkennungsprogrammes in der Bundesrepubllk

Deutschland, ” Die Krankenversicherung 3765-69, 1985

funds do have to pay for clinical mammography

when the results of a physical examination are unclear or worrisome. There are between 1,700 (58)

and 1,900 (70) x-ray mammography machines in

Germany. About 40 to 50 percent of mammographic examinations charged to the mandatory

sickness funds’ account are, in fact, not clinical

but screening measures (5). Industry’s estimate of

the sales of x-ray film suggests about 2.5 million

mammographic examinations (clinical and preventive) each year (59).

In the 1980s, many radiologists and clinicians

advocated integrating mammography into the

screening program, but evidence on the usefulness

of unselective screening was considered to be

lacking. The fact that some screening programs

had detected more cases of breast cancer than became manifest within the lifetime of the population was a critical point in considering the risks

and benefits of mammography. As a result, health

authorities hesitated. In 1980, the Federal Chamber of Physicians recommended periodic mammography only for women 50 to 60 years old in

the absence of risk factors (68). Health authorities

later argued that it would be preferable to delay
Chapter 5 Health Care Technology in Germany 1165

unselective mammographic screening until the

findings from different foreign studies had been

published (57).

Since 1989, the Federal Ministry of Research

and Technology has been financing a study to define the conditions for integrating mammography

into the cancer screening program. The study is

expected to:

1.

2.

3.

4.

recommend ways to ensure the quality of devices and procedures, including standardized

documentation of diagnostic findings that

would make them suitable for regular evaluation,

develop an education program,

recommend measures to encourage women to

undergo mammographic screening, and

analyze the economic consequences of the program.

Based on this study, the Federal Commission of

Physicians and Mandatory Sickness Funds will

decide whether to integrate mammography into

the screening program. A pilot study with four gynecological institutions has developed criteria for

judging technical quality, interpretation of the pictures, and organizational structures for quality

assurance. In 1990, the Deutsche Mammographie-Sludie started a regionally limited mammographic screening program for women over 39

(the mean age of participants was 53). Within 18

months, about 22,000 women were examined.

Each mammogram was evaluated twice. Discrepancies in findings seemed to depend on physicians’ experience and equipment.

Forty-four office-based physicians participated

in the program. Reviewing the technical quality of

the exams revealed that about half of the x-ray devices use tubes that, although still meeting standard specifications, should have been replaced.

(Each tube costs about 30,000 DM.) At the beginning of the study, a number of physicians were

given a course where they were asked to inspect

images and present biopsy recommendations. The

course showed that physicians needed further

education and that further education led to improvements. The current problem is how to develop these findings into a strategy that can be

implemented on the federal level.

CHAPTER SUMMARY

Germany has developed a comprehensive health

care financing system based on the Social Security legislation of 1883 to 1889. The basic goal of

the German health care system has been equal access to all medical services for all citizens, regardless of their financial situation. About 90 percent

of the population is insured by mandatory sickness funds, and the rest (mainly self-employed

persons, employees with high income, and civil

servants) are insured privately. Contributions to

mandatory sickness funds are based on income.

The health care package contains most necessary

services except for long-term care.

The federal government sets the legal framework for mandatory sickness funds, determining

who is subject to compulsory insurance, which

categories of services have to be reimbursed, and

what percentage of excess charges are to be paid

by patients. Within this legal framework, most

specific regulations are defined by sickness funds

organizations and physicians’ associations. The

different actors are brought together financially by

the budget of the mandatory sickness funds and

organizationally by the self-governing bodies of

physicians, hospitals, and sickness funds. This

structure means that most health policy decisions

are made through bargaining between large organizations within a legal framework. The limited

integration of the different sectors and the diverging interests of the groups result in a considerable

lack of suitable data for health reporting and evaluation of health services. Growing financial pressures on health care have been accompanied by

many initiatives to improve the information base,

but they have yet to be very successful.

The strict separation of inpatient and outpatient

care has led to competition between the two sec-
166 I Health Care Technology and Its Assessment in Eight Countries

tors, including competition based on the acquisition of medical technology. Self-employed

office-based doctors are free to purchase items as

they choose (except for some of the most costly

cutting-edge technology) because their costs are

reimbursed by sickness funds. Hospital investments are financed by the states, however, which

wield some control over what technologies hospitals may acquire, always under conditions of limited funds. This difference, and the separation of

inpatient from outpatient care itself, is the source

of possibly great inefficiency in the system.

German health policy has gone through three

stages since the late 1960s. For a short time, social

and health policy was dominated by the belief in

modernization by state intervention and regulation. This period began with the Hospital Financing Act of 1972, which first established public

responsibility for a sufficient hospital supply; it

came to an end with the 1976 Drug Law. In 1976,

the sociopolitical cooperation of the ruling coalition of Social Democrats and Liberals was exhausted. Moreover, economic difficulties reduced

the government’s means of financial intervention,

and finally, administrative courts restricted the

government’s ability to regulate, and different interest groups tried to defend their autonomy from

regulators.

As a result, the federal government withdrew

from the field of health policy and reduced its legislative activities to a minimum, leaving most decisions to the self-governing corporations of

physicians’ associations, mandatory sickness

funds’ associations, hospital societies, pharmacists, the drug industry, etc. Laws passed between

1977 and 1992 were aimed primarily at cost reduction, without an accompanying change in

health care delivery structures. Hospitals, however, had no strong representation in the bargaining

process between health care organizations, while

becoming identified more and more as the essential cause of rising health costs. They became the

focus of the cost containment debate.

The 1993 Health Care Act marks the third stage

of the health policy process. Decisionmakers now

realize that budgeting and other cost containing

restrictions may be insufficient to successfully reduce the growth of health care expenditures. The

1993 law’s modifications of the health care delivery structure may fix some obvious deficiencies.

One provision of the 1993 Health Care Act is to

limit the contribution rates of employers and employees to mandatory sickness funds, requiring

cuts in sickness fund budgets. In view of the fact

that all previous cost containment measures were

only successful in the short term, this law is trying

to affect health care and financing structures in

ways that have never been done before in Germany. The 1993 Health Care Act is trying to foster a

market-oriented system by encouraging hospitals

to provide ambulatory surgery and developing a

new hospital reimbursement plan that creates incentives for price competition. (Yet it also

introduces obviously restrictive measures by limiting the number of sickness fund doctors and the

amount of reimbursement for prescribed drugs.)

It is too early to judge what the final result will

be, but clearly the German health care system is at

a crossroads, where the principle of equal access

to services for all citizens maybe sacrificed on industrial and economic policy grounds. In the last

50 years, health care has become an essential field

of industrial activity. Germany is not only a important market, but also an important producer of

medical goods. Federal economic policy is primarily concerned with the well-being and growth

of industry and much less in the quality of health

care. In times of recession and unemployment,

steady contribution rates and an open and growing

health care market are incompatible aims. Equal

access and stable contribution rates require regulating (though not necessarily rationing) medical

services. Such regulation would necessarily delimit the growth in purchases of medical technology. Unregulated growth would be possible only by

privatizing payment for some medical services.

The idea of restricting compulsory insurance to

what is called “basic health care for severe diseases” excludes many needed services and opens

the market for private insurance, which not everyone would be able to afford. Seen against this

background the restrictive measures of the 1993

Health Care Act become comprehensible. In 1960

the Federal Constitutional Court argued that being
Chapter5 Health Care Technology in Germany 1167

licensed as a sickness fund doctor was a precondition for survival as an office-based physician;

therefore, it found that limiting the number of

sickness fund doctors was unconstitutional. A reduction of compulsory insurance to “basic health

care” could provide a source of patients to physicians not licensed by mandatory sickness funds.

So limiting the number of sickness fund doctors

could be brought in line with constitutionally

guaranteed rights.

Limitations on purchases of high-technology

equipment (and drugs) apply only to reimbursement by mandatory sickness funds. Private insurance may expand sales for the medical device and

pharmaceutical industries by removing the existing impediments, thus favoring industry. Ultimately, what may emerge is a two-class health

care delivery system.

Medical technology assessment has almost no

role in the German health care system, despite the

recent establishment of a commission to advise

the Parliament on technology assessment. Even

some of the most basic medical and economic data

needed for technology assessment are not collected in Germany. The number of major assessments that have been done (on a case-by-case

basis) can be counted on the fingers of one hand.

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Health Care

Technology in

the Netherlands

by Michael A. Bos 6

OVERVIEW OF THE NETHERLANDS

T

he Netherlands is a small country in Western Europe, located on the North Sea coastal area at the mouth of the rivers Rhine and Meuse, bordering Belgium and Germany.

The territory of the Netherlands covers 41,574 km2 of

which 7,636 km2 are water. About one-quarter of the country, especially the western part where land has been reclaimed from the

sea since the 16th century, actually lies below sea level. In the

south and the east, some hills rise to a maximum height of 321 m

(above sea level).

In 1992, the Netherlands had a population of 15.1 million inhabitants (table 6-l). Due to high population growth during the

20th century, population density in the Netherlands is the highest

in all Europe: 446 inhabitants per km2 of land area in 1992. The

western part of the country, with the three major cities (Amsterdam, Rotterdam, and the Hague), is the most densely populated.

In 1992 there were 758,000 foreigners living in the Netherlands (5

percent of the population), plus another 650,000 people with a

Dutch passport who were born in another country. Immigration

(1 18,000 in 1992) has been increasing since 1985, and the number

of refugees (22,000 in 1992) requesting asylum for political or

humanitarian reasons is growing.

 Government Structure

The Netherlands has been a kingdom since 1806, first as part of

the French Bonaparte empire (1806-1 813) and afterwards as an

independent state under the royal House of Orange-Nassau. The

hereditary monarch is the constitutional head of state, but the governmental power is executed through a Parliamentary democracy.

The Parliament (Staten Generaal), which represents the people,
172 I Health Care Technology and Its Assessment in Eight Countries

Total population (Jan. 1, 1992) 15,128,604

Males 7,480,111 (49.4%)

Females 7,648,493 (50.6%)

Age 65 years and older 1,960,474 (1 3%)

Net population growth in 1991 118,700

Population growth rate in 1991 0.79%

SOURCE Central Bureau of Statistics, Statistical Yearbook of the

Netherlands for 7993 (The Hague SDU Publishers, 1993)

consists of two chambers. The Second Chamber

(Tweede Kamer), which is politically the more important one, has 150 members who are elected

directly by the people under a system of proportional representation (there are no electoral districts). As a result, in the Second Chamber the

major national political parties are represented.

Since no one party has a majority, a coalition of

several parties is usually necessary to forma cabinet. The government consists of the Queen and the

Cabinet Ministers (under a Prime Minister), who

retain the executive power. The First Chamber

(Senate) has 75 members who are elected by the

Provincial Councils (Provincial Stalen). The two

Chambers together with the government have the

power to legislate. The major role of the Second

Chamber is to amend and approve bills put forward by the government. The First Chamber can

only approve or reject laws that have already been

passed by the Second Chamber-it acts as a “second opinion.”

Provincial Councils are elected in each of the

12 provinces. Each council implements central

state policy on the provincial level and supervises

the day-to-day municipal administration. Each of

the 647 municipalities has an elected municipal

council headed by a mayor. During the last decade, more and more executive administrative

power has been handed over by the central government to the provincial authorities, and the four

largest cities have been given more responsibility

to govern their own internal affairs.

1 The Economy

The Dutch labor force consists of 6.6 million

people (65 percent of all people 15 to 64 years

old). This labor force is on the small side

compared with other European countries (75 percent in United Kingdom, 71 percent in Germany,

66 percent in France, 81 percent in Denmark) due

to the traditionally low percentage of employed

women (about half of women age 15 to 64), but the

number of employed women is now growing fast.

Although the labor force is modest, average productivity per worker is very high.

In general, the Dutch economy is based on free

enterprise, but there is a certain degree of control

and influence from the government, especially in

times of economic recession, when large private

enterprises (sometimes with state participation)

are threatened. In the last decade the economy has

been influenced more and more by the regulations

and forces of the European Community internal

market. Under the current economic recession the

Dutch economy has been weakened by high unemployment (600,000 workers in 1993), but the

Dutch currency1 is among the strongest and most

stable in Europe.

Despite the small percentage of the population

that is employed in agriculture (6 percent), this

sector is of major importance for the Dutch economy. After the United States, the Netherlands is the

second largest exporter of agricultural products.

Industrialization started in the Netherlands

only after World War II, somewhat later than in the

rest of Western Europe. The most important industries in 1993 include (petrochemicals, electronics, and food. They are located mainly in the

south and west of the country. Industry employs

over a quarter of the workforce.

Because of its location at the mouth of the rivers Rhine and Meuse, trade and transport have

been important for the Dutch economy throughout

history. The port of Rotterdam is the biggest in the

world. In the last decades, an increasing propor1 $US 1 = Dfl 1.90 in 1994.
Chapter 6 Health Care Technology in the Netherlands 1173

Rating 1981 1985 1991

Excellent — 32.1 27.2

Good 80.2 50.4 53.7

Reasonable 12.2 10,7 12.1

Precarious 5.6 4,8 4.7

Bad 1,9 1.9 2.2

SOURCE Central Bureau of Statistics, Stistical Yearbook of the

Netherlands for 1993 (The Hague SDU Publishers, 1993)

(ion of the cargo is transported by air, and Schiphol International Airport (near Amsterdam) has

become one of the busiest airports in Europe.

HEALTH STATUS OF THE POPULATION

The Dutch people have a very high standard of

health, both according to their own subjective

standards (table 6-2) and by objective data on vital

health indicators. The good health status of the

population is also reflected by the modest (in comparison to other countries) use that is made of

medical services (see ch. 10).

The favorable figures for the Netherlands are

the result of high standards of living, good nutrition, good sanitary and housing conditions, and

the availability y of reliable drinking water for most

people since the first decades of this century. And

for the last 50 years, the Netherlands has also had

an excellent health care service. As a result, illness

and death are to a large degree influenced by factors related to the affluent society (overconsumption and degenerative disorders) (table 6-3). Heart

disease predominates, but cancer is a close second. Cancer is expected to be the number one

cause of death in the future because of the advancing age structure of the Dutch population. Aging of the population is one of the main concerns of the health care authorities. The proportion

of people over 75 years of age is predicted to grow

from 5 percent now to almost 15 percent in 2010,

increasing the demand for medical services. Although people can stay relatively healthy to an advanced age, the need for homes for the elderly and

care for handicapped people and for psycho-geriatric cases w i 11 grow. Waiting lists are now becoming a visible problem in the Netherlands.

THE DUTCH HEALTH CARE SYSTEM

The Dutch health care system has been described

as a “patchwork quilt”-it has no master plan at its

base. Rather, it is a complicated system that has

evolved from a constant adding and changing of

institutions, regulations, and responsibilities.

This method of evolution is in the best tradition of

Dutch pluralism. Yet, what has emerged over the

years is a system in which high quality health care

is provided with reasonable efficiency, and is

equally distributed over the population (12).

Every citizen in the Netherlands has an entitlement to health care. Since 1983 the Constitution

has contained an article under which the central

authorities are obliged to take measures to promote public health (Article 22). Authorities (central and regional) are assigned the responsibility

of ensuring that the whole Dutch population has

access to high-quality care at an affordable cost

and provided through a system that operates

throughout the country. However, this principle

has not been translated into a “National Health

Care System,” as in the United Kingdom or the

Scandinavian countries. Public health care, the

control of infectious diseases, environmental

protection, and the regulation and recognition of

the health care professions have traditionally

formed part of the activities of the central government. When it comes to the actual provision of

care, the authorities have focused on creating favorable conditions in which the already existing

private sector could expand in the fields of hospital care, nursing care, and social services. Thus,

the Dutch health care system is a mix of public and

private initiatives under the umbrella of the central government.

 Brief History

Before World War II there was no true health care

system in the Netherlands. All care was provided

by private institutions, charities, or municipal organizations. There was no universal health insurance, but many private and public insurance

agencies were operating throughout the country.

In the late 1930s, progressive political and societal circles demanded reform of the health care
-.

174 I Health Care Technology and Its Assessment in Eight Countries

—

1975 1980 1985 1990

Cause of death Male Female Male Female Male Female Male Female

Heart/vessels 43.5 46.2 43.4 46,7 43.2 45.6 38.9 41,4

Cancer 26,9 24.6 29.1 25.0 29.4 25.1 30.3 25.1

Accidents, violence and poisoning 6.2 5.5 5.7 4.8 5.1 3.9 4.6 3.6

Respiratory tract disease 7.6 4.8 7.0 5.1 8.4 6.2 9.4 7.1

Digestive tract disease 2.9 3.4 3.0 4< 0 1.9 4.1 3.1 4.2

SOURCE Central Bureau of Statistics, Statistics Yearbook of he Netherlands for 1993 (The Hague’ SDU Publishers, 1993).

system, but action was prevented by the outbreak

of the war.

After the war the new conservative government, rejecting a national health care system, left

the initiative with private institutions and organizations, and limited themselves to overall control and regulation of hospital building activities

and reimbursement fees. In 1956 new legislation

delegated the principal authority for coordinating

health care to Provincial Health Councils (who

were representatives of the regional private care

organizations).

The 1960s were a period of economic and social expansion in the Netherlands. The private

foundations and organizations that controlled inpatient and outpatient care increased the number

of new facilities, beds, and personnel, but without

any regional or national coordination. The cost increases associated with these developments (and

the resulting disparities and inefficiencies)

troubled the government. However, the government had virtually no instruments for controlling

or guiding these activities. It became clear that

there was a need for legislation and administrative

provisions to control health care.

The Hospital Tariffs Act (Wet Ziekenhuislarieven) of 1965, which regulated price-setting for all

intramural institutions, and the Hospital Provisions Act (Wet Ziekenhuisvoorzieningen) of 1971,

which regulated all building and renovating of intramural institutions, were the first steps. The first

real planning of health care started when the government (a coalition dominated by the Socialist

Party) drew up a Memorandum on the Structure of

Health Care (Structuurnota Gezondheidszorg) in

1974. This document described a coherent and

coordinated regionalized system of health services, built up in stages, which could be directed

and controlled. A major starting point was reform

of the financing structure, under which the public

health system as a whole would be financed out of

general revenues and other facilities out of a separate health insurance scheme.

The strategy and the expectations of the policy

outlined in the memorandum have not been completely fulfilled. The legislation required was

introduced only partially, and was applied only to

a limited extent. Nevertheless, the reforms started

in 1974 did create a more coherent structure for the

Dutch health care system and enabled the government to become a major player.

In the 1980s pressure on the health care system

grew with rising costs, higher insurance premiums, new medical technologies, a growing

range of services, and increasing administrative

costs, all during an economic recession. It appeared that excessive demand for care combined

with an oversupply of care could not be controlled

with the existing system. The elaborate administrative system, inflexible through the large number of rules and regulations, proved incapable of

checking the virtually autonomous growth of the

health care sector.

In 1986 the government published a policy

document, “Health 2000,” which identified future

health problems: aging of the population, growing

dependency on care, consequences of alcohol and

tobacco consumption, the social cost of accidents,

and the predominance of cancer and cardiovascular disease alongside new infectious diseases.

These future health problems could only be met

with new, forward-looking policies, signaling the
Chapter 6 Health Care Technology in the Netherlands 1175

need for yet another major reform of the health

care system (described later).

 Legal and Legislative Background

The legislative structure of the existing health care

system in the Netherlands (until the recent reforms, described later) rests on four pillars: health

care insurance, regulation of health care providers, control of health care costs, and accreditation

of health care professionals.

Health Insurance

A compulsory national health insurance scheme

(originating from a scheme introduced in 1941)

was implemented in 1966, when the Sick Fund

Act (Ziekenfondswet) was passed in Parliament.

Part of the social security system, Sick Fund insurance covers about 62 percent of the population.

Members of the scheme include employees and

self-employed persons whose income falls below

a certain level (US28,500 in 1992) and those over

the age of 65 with no income of their own. Sick

fund insurance covers all acute care provided by

hospitals, general practitioners, and specialists;

all costs of drugs and appliances; and transportation. For all public employees of provincial and

municipal governmental bodies there is a similar

insurance scheme (covering about 6 percent of the

population). The remaining 32 percent of the population is insured through private schemes. Private insurance companies are represented by the

National Society of Private Health Care Insurers

(KLOZ), which participates in health care administration.

The national social insurance scheme is

executed by independent sick funds. All of these

are members of the Society of Dutch Sick Funds

(Vereniging van Nederlandse Ziekenfondsen or

VNZ), which plays a dominant role in shaping

general health care policy. The sick fund scheme is

supervised by the Sick Fund Council (Ziekenfondsraad), representing government, employers,

employees, sick funds, care institutions, and

health professionals. The Council approves arrangements between sick funds and health care

providers, controls and defines the benefit package, and advises the Ministers of Health and of Social Affairs concerning the level of the insurance

premium, which is fixed by the central government.

Neither the VNZ nor the KLOZ has a director

legal role in health care administration or planning

at the national level. However, they represent their

members in the national negotiations over tariffs

and budget guidelines that take place in the COTG

(see below). They also participate in budget negotiations with each hospital, giving them potential influence over the introduction and utilization

of health care technologies—for example, they

may block a hospital’s initiative to introduce a

new technology by withholding financing.

In 1968 another social security law was passed

to cover the costs of “exceptional medical expenses.” This insurance scheme (AWBZ) covers

the most expensive forms of care, including longterm care in hospitals, home care, nursing homes,

homes for mentally and physically handicapped,

and ambulatory mental care. It is compulsory for

all Dutch citizens, and financed out of premiums

under the fiscal system.

Regulation of Institutions

The provision of health care is regulated under the

Hospital Provisions Act (1971), which covers

acute care hospitals, nursing homes, mental health

institutions, and institutions for the handicapped.

Regulation includes the number and location of

the institutions, building and renovation, the number of beds, certain equipment, number of specialists, etc. The capacity of the institutions is planned

and approved by the provincial health authorities,

but legal authorization is given by the central government. The central government provides guidelines to the provincial health authorities to assure

equal distribution and access to care over the

country. One of these guidelines concerns reductions in the number of hospital beds (table 6-4).

Health Care Costs

In 1965 the Hospital Tariffs Act (Wet Ziekenhuistarieven) was passed to control price-setting for

all inpatient care institutions and was later ex-
176 I Health Care Technology and Its Assessment in Eight Countries

Data 1988 1992

Number of hospitals 181 162

General 130 112

University clinic 9 9

Specialized/category 1 42 41

Total number of

hospital beds 68,020 63,744

Hospital days (x 1,000) 18,164 16,986

Admissions (x 1,000) 1,531 1,547

Outpatient visits

(x 1 ,000) 20,119 21,718

Average hospital stay

in days 11.5 10.6

SOURCE Central Bureau of Statistics, StatisticalYearbook of the

Netherlands for 1993 (The Hague SDU Publishers, 1993)

tended to all health care sectors (see table 6-5 for a

breakdown of health care spending by class). The

law is executed by the Central Board of Health

Care Tariffs (COTG). In 1984 a hospital budget

system was introduced; these global budgets,

which are negotiated between hospitals and health

care financiers, also must be approved by the

COTG.

In practice the COTG creates a formula for calculating global hospital budgets, which is used in

local negotiations over hospital budgets in which

the different payers participate. The complexity of

this process is reduced by the fact that each region

usually has one dominant social insurance agency.

The private insurers that operate on a national

scale are represented by a KLOZ negotiator. The

COTG monitors the end results of each local negotiation to see that they are consistent with the

general guidelines.

The Tariffs Act also regulates the total volume

of capital investment in the health care sector.

Hospitals organizations are, in principle, free to

acquire the money they need for building or enlarging their hospital facilities through loans on

the capital market. However, the resulting costs

for interest and depreciation will only be included

in the budget and in the per-day price of a hospital

bed if the hospital can secure a “certificate of

need” from the central authorities. Another form

Expenditure

Sector (in million Dfl) % of total

Hospital care 15,272 27.1

Medical specialists 2,435 4.4

Ambulance

transportation 537 1,0

Mental health care 3,899 6.9

Care for handicapped 4,883 8.6

Care for the elderly 10,568 18,7

Extramural care

(incl. GP’s) 9,664 17.1

Pharmaceuticals 5,466 9.7

Preventive care 763 1.4

Administration 2,845 5.0

Total 56,333 100.0

SOURCE Ministry of Welfare, Health, and Culture, Fiancial Reveiw

for Health Care 7993 (The Hague SDU Publishers, 1993)

of control through this act is on the diffusion of

health care technology. Both buying and use of expensive technology by hospital authorities is dependent on approval to accommodate the extra

cost in the budget.

Certification of Health Professionals

Physicians and nurses must be certified by the

government. A new system for enhancing professional standards and quality control in health care,

a result of the 1994 Medical Professions Bill (Wetsontwerp BIG), is to be introduced over a period

of four years: certification and registration of

nurses and physicians, description of “restricted

medical acts (i.e., restricted to qualified physicians only), and reform of the professional disciplinary law. The volume of physicians is regulated

in two ways: enrollment in basic medical training

is limited by a central government quota at the level of the medical schools; and specialist education

is regulated by the professional specialist organizations.

 Administering the System

Health care administration under the current system in the Netherlands is very complex. It is a

combination of elaborate government regulation
and the provision of care by mainly private health

institutions and practitioners. As of 1994 the government’s agent is the Ministry of Health, Welfare, and Sports.

The government has ultimate control over the

planning of care facilities, the pricing of provisions and the macroeconomy of health care expenditures. It is directly responsible for prevention,

health promotion, health protection, and intersectoral action in the health field. More and more, the

government is striving for a comprehensive health

policy.

The daily provision of health care is mainly in

the hands of hospitals and institutions that have a

private legal status. They originate from private

foundations, charities, etc. Although private they

all function in a nonprofit setting since all reimbursement of health care provisions is centrally

regulated. This means there are nationally uniform reimbursement fees and charges, leaving

little room for free enterprise and market force

competition.

Individual patients are in principle (on the basis

of health care legislation) free to choose their own

physicians and their own hospital; however, since

all referral to specialist care is done by general

practitioners, this choice is limited. Professionals

are free to select treatment for their patients, within the limits set by the insurance packages. Physicians are also free to settle and practice where they

like, although there is more and more regulation in

this respect from regional and municipal authorities.

Chapter 6 Health Care Technology in the Netherlands 1177

Reimbursement of Services

Charges for health care services are uniform

throughout the country. COTG is an autonomous

body that sets out guidelines for the composition

and calculation of charges and tariffs. Representatives of the providers and insurance agencies use

these guidelines as the basis for negotiating the actual charges, which must be approved by COTG.

Before 1984 the health care reimbursement

system in the Netherlands was open-ended. As

part of the cost-containment policy all hospitals

are required to have a global annual budget, which

is calculated prospectively. There is no possibility

of recalculation or compensation afterwards if the

hospital exceeds its budget.

General practitioners are paid on a cavitation

basis for sick fund patients and on a fee-for-service basis by privately insured patients. In general

their fees for sick fund patients and private patients are the same. Specialists are paid exclusively on a fee-for-service basis for all patients (except

physicians in University Hospitals, who are salaried). Specialist fees for sick fund patients are negotiated between the representative organization

of physicians and the sick funds. Specialist fees

for private patients are negotiated with the insurance companies and are usually higher. All physicians’ fees are controlled and approved by the

Minister of Economic Affairs, as part of a general

incomes policy.

 Reform Proposals and Implementation

The introduction of global hospital budgeting in

1984 proved effective in containing the rising

costs. Between 1984 and 1992 total health care expenditures remained stable at 8.3 percent of Gross

Domestic Product (GDP). However, the Dutch

government wanted to introduce further reforms

to impose greater control over health care expenditures, to change the insurance system, and to enhance the efficiency of the system by introducing

a competitive market system. In 1987 a special

committee was asked to produce a blueprint for

comprehensive health care reform and in 1988 it

published its report, Willingness to Change. The

central recommendations for reform were:

1. provision of health care and social care

should be integrated;

2. the efficiency and flexibility of health care

should be improved through the application of

market forces, without sacrificing the principles

of equality and equity; and

3. there should be a shift from government regulation to market regulation and self regulation.

The important innovative element was to be a central health insurance fund, covering the whole

population and providing insurance against more
178 I Health Care Technology and Its Assessment in Eight Countries

than 90 percent of health expenditures. The fund

would receive income-related contributions from

the population and would pay out risk-related premiums to competing sickness funds and private

insurers. There would be sharing in the cost of premiums (no more than 15 percent of the cost) by

consumers to encourage cost-conscious choice of

insurers.

In 1990 the Dutch government started to implement these changes in a somewhat revised form

with less emphasis on market orientation. The

new proposal tries to integrate enhanced efficiency with a more regulated national insurance system based on solidarity. In this approach the

differences between social and private insurance

agencies would disappear and solidarity would be

extended to all insured patients. This has been proposed because under the existing system the high

financial burden on privately insured patients prevents market forces from acting. However, there is

almost no place for competition between insurance agencies in the new scheme. Step-by-step

introduction of the new system was planned over a

period of four years beginning in 1991.

However, it is now becoming clear that such a

system has significant effects on incomes and may

be more costly in the long run; the medical

associations are strongly opposed to measures directed at controlling and lowering the incomes of

specialists. In late 1994 a new government decided not to go forward with all the reforms. There

will not be a national health insurance scheme, but

differences between social and private insurance

schemes will be diminished. Priority will be given

to moving consumer demand for and physician

supply of care toward greater cost-effectiveness.

CONTROLLING HEALTH CARE

TECHNOLOGY

Until the 1980s the Dutch health care authorities

had no clearly defined philosophy of controlling

the development and use of health care technology. In some areas (e.g., drugs) regulation had always been very strict, but in others, such as the

licensing of new medical devices, control was almost lacking. Equipment could be introduced and

become part of established practice without decisionmaking, evaluation, or cost-calculation. The

resulting problems have led to a wide range of regulatory instruments, each developed for a specific

sector, with different procedures and varying degrees of control. Compared to other European

health care systems, the Dutch system is usually

considered to have a high degree of regulation;

coordination, however, is rather poor.

 Research and Development Efforts

In the Netherlands, research and development

(R&D) related to medical technology falls into

four broad categories:

1. University research: basic, strategic, and ap2,

3.

plied research in all fields of biomedical science. University research in the field of

biomedical science is mainly concentrated in

the eight medical faculties, the universityrelated research institutes, and in some of the

technical universities. Overall responsibility

lies with the Ministry of Education and Science, which covers the cost of the research

infrastructure (buildings, facilities, and equipment) and takes on a large part of the R&D

funding. Universities are no longer completely

free to choose their own research areas and

priorities. Since the mid- 1980s the Minister of

Education and Science has successfully implemented a policy of creating centers of excellence (zwaartepunten) to put an end to the

considerable overlap in research efforts.

Nonuniversity related research institutes within the public domain: mainly applied research

under contract to the government, industry, or

societal organizations. Infrastructure and funding is mainly through the Ministry of Education and Science, and other ministries. The

foremost institute with an interest in biomedical technology is the Netherlands Organization

for Appiied Scientific Research (TNO; see below).

[dependent research institutes (not-for-prof

it): basic, strategic, and applied research according to self-chosen mission. Infrastructure

and funding is from their own sources, cover-
Chapter 6 Health Care Technology in the Netherlands 1179

ing such topics as blood transfusion, mental

health, and rehabilitation.

4. Industrial R&D: basic, strategic, and applied

research according to self-chosen mission. Infrastructure and funding is from their own

sources. Since 1986, the Ministry of Economic

Affairs has implemented a policy to stimulate

cooperation between research institutes and industry, with the aim of strengthening the position of the Dutch industry in this area

internationally.

Total expenditure on biomedical R&D in the

Netherlands was Df1975 million in 1991, excluding industrial spending (on which no data are

available). Biomedical R&D is approximately 15

percent of all expenditure on R&D.

An important role in developing and implementing research policy is played by the Royal

Dutch Academy of Sciences (KNAW), an organization with a longstanding tradition of advising

the government and fostering cooperation and

coordination between scientists and scientific

institutes. The KNAW presents a periodic inventory of all biomedical research, judging the quality of the institutes and identifying future research

areas (Disciplineplan Geneeskunde). Also important is the Dutch Organization for Scientific Research (NWO), which does not conduct research

itself, but supports efforts of the universities by

coordination, priority-setting, and funding. NWO

allocates research funds made available by the

government and acts as an intermediary between

the government and the universities. Finally, the

Council for Health Research (RGO) advises the

government on future health research priorities.

The structure for biomedical R&D the Netherlands has always been confusingly complex with

many overlapping organizations and different

funding arrangements. However, for several years

the government has been implementing policies

to coordinate the research efforts of the universities, the independent research institutes, and industry. Factors such as burden of disease in the

Dutch population are used more and more in determining research priorities. Applied research

(including technology assessment) has also been

given a higher priority than in the past.

 Regulation of Drugs and

Biological Substances

Like other countries, the Netherlands regulates

drugs and biologics for efficacy and safety. The

Dutch program follows the usual system of requiring proof of efficacy and safety before the drug or

biologic material can be marketed and used (pemmarketing approval).

From an international perspective, it is fair to

say that the Dutch system for regulating drugs and

biological substances is one of the strictest in the

world. The independent status of the organizations involved helps assure the integrity of these

processes. The system works well in assuring

safety and efficacy of the products on the market.

The Drugs Act of 1963 (Wet op de Geneesmiddelen-voorziening) is the legal basis for the premarket surveillance and approval of dregs. The

pharmaceutical industry itself has the responsibility for establishing safety and efficacy of any new

drug. The law requires them to submit these data

to the Board for the Evaluation of Drugs (College

ter Beoordeling van Geneesmiddelen), an independent body of experts appointed by the Minister

of Health. The Board has autonomous authority to

grant, refuse, or revoke drug marketing licenses,

and its decision is binding. The Board considers

evidence of efficacy, safety, and quality, but does

not consider societal need for the drug. Admission

of a new drug usually leads to reimbursement by

the sick fund insurance agencies. Refusal means

the drug cannot be sold or used in the Netherlands.

All pharmaceutical products, as defined by the

European Community (EC), and pharmaceutical

preparations (medical products marketed in bulk

or without a brand name) are subject to the registration procedure. Since 1978, new drugs that already have been approved elsewhere may be

imported under a simplified procedure (“parallel

imports”). Specialized drugs on the market before

1963 and generic drugs on the market before 1978

usually have not been submitted to careful evalua-
180 I Health Care Technology and Its Assessment in Eight Countries

tion. They are given temporary licenses and will

be assessed during the coming years, mainly by

post-marketing surveillance.

The establishment of the European single market will profoundly influence the drug registration

policy in the Netherlands. Registration through

the Brussels office will mean automatic registration in all member states.

The use of drugs is not regulated, but a committee formed by the Sick Fund Council issues guidelines for their appropriate use. Since 1982 the Sick

Fund Council has published a prescription guide

{Farmacotherapeutisch Kompas) that gives recommendations on the use of drugs based on comparisons of price and therapeutic efficacy of

equivalent products. This guide has been very influential in changing prescribing patterns of general practitioners in the Netherlands, since the

guidelines are linked with payment decisions.

Blood and blood-derived products are strictly

controlled in the Netherlands, regulated by the

Committee for the Regulation of Blood and Blood

Products (Commissie ex artikel 1, van het Besluit

bloedplasma en bloedproducten). Vaccines and

sera are regulated by an independent committee

(Commissie ex arlikel 14 Sera- en Vaccinsbesluit)

that functions in a similar manner to the Drug

Board. Vaccine trials in humans outside the laboratory must be approved by the Committee. As

with drugs, vaccines are monitored after they are

approved for use.

 Regulation of Medical Devices

The introduction of biomedical devices and medical appliances in the Netherlands is poorly regulated. There is no systematic control or uniform

procedure to establish the safety, efficacy, or quality of new equipment. Although the Medical Devices Act (1970) gives the Minister of Health the

authority to evaluate and regulate any device or

medical appliance, this law has not been effective.

Only in cases where problems have arisen (as in

the case of cardiac valve implants and rubber condoms) has the government introduced specific

measures for quality control. But in general any

newly developed medical device can be

introduced without proof of safety, efficacy, or

cost-effectiveness.

This does not mean that no quality control at all

takes place. Some activities are usually carried out

by the health care providers themselves (as the users of the medical devices) or their representative

organizations, on a voluntary basis. Examples of

these activities include the following:

Sterilization equipment: sterilization equipment must be produced according to good

manufacturing standards set by the National

Control Laboratory of the National Institute for

Health and Environmental Hygiene (RIVM).

Electrical safety standards: all electrical devices in the Netherlands must meet minimum

safety standards; however, there are no specific

standards for medical applications, with the exception of cardiac pacemakers. The National

Hospital Institute tries to fill this gap with recommendations for testing and performance criteria.

X-ray equipment: under EC directives, the

Dutch government is committed to developing

standards for x-ray machines and x-ray therapy.

Regulation in this field is rather complicated,

involving a number of advisory boards; licensing is by the Minister for the Environment.

Evaluation of technical performance: some

evaluation of medical devices is undertaken by

the Dutch Organization for Applied Scientific

Research (TNO) at the request of the National

Hospital Institute. However, only a limited

budget is available, and many devices are left

untested. The majority of the technical evaluations of equipment are carried out by the hospitals themselves. The University Hospitals have

put together a working party that will undertake

evaluations and make the results available to

other hospitals.

Planning and Regulation of

MedicalServices

In the 1960s and 1970s the expansion of medical

technology and care resulted in a steady increase

in the cost of health care. The Dutch government
Chapter 6 Health Care Technology in the Netherlands 1181

saw the prolific building of new hospitals and

institutions as one of the main contributors to rising costs. The Hospital Provisions Act of 1971

was introduced both to enable the government to

regulate and coordinate the creation of inpatient

facilities throughout the country, and as a planning instrument. It allowed the government to

create a national network of hospitals and other

health care institutions to ensure maximum access

of the population to medical care. The provincial

health authorities had responsibility for implementing this plan.

Article 18 Regulation

Article 18 of the Hospitals Act relates specifically

to the planning of supra-regional, “high-tech”

medical facilities. The law requires hospitals

wishing to provide specific supra-regional services to seek approval from the Minister of Health

(not the provincial health authorities), much like a

“certificate of need” (CON) system. When the

Minister decides that a specific technology or supra-regional service should be governed by Article 18, the Minister will publish a planning

document (Plunningsbesluit) with general planning guidelines, an estimate of the need for that

service, quality criteria to be met by a hospital, etc.

In order to produce a planning document, the Minister asks the Health Council to report on the

scientific state-of-the-art of the technology, on

safety and efficacy aspects, cost-effectiveness, appropriate USC, and so on.

When a hospital puts in a request for a specialized service under Article 18, the application is

put before the Hospital Planning Board (College

voor Ziekcnhuisvoorzieningen) which evaluates

whether the hospital meets the criteria, what extra

facilities are needed, and what the cost will be.

When a service is approved the cost of the new service is met by an increase in the hospital budget.

Funding of new equipment and technology by the

hospital is usually through loans on the capital

market. The cost of the loan (interest and depreciation) can be included in the hospital budget and is

reimbursed by the health insurers, making it possible for hospitals to keep up (in a reasonable way)

with technological improvements and ensure

timely replacement of equipment.

When Article 18 regulation was introduced in

the 1970s it was used mainly to regulate the diffusion of new expensive technology by limiting the

number of facilities and the number of procedures

(e.g., computed tomography (CT) scanners, cobalt radiation units, linear accelerators, and dialysis machines) and was largely an instrument for

cost-containment. But gradually the central government began to use Article 18 as a real planning

instrument: to ensure geographical distribution, to

promote concentration of facilities, to enhance expertise and quality, and to increase the cost-effectiveness and appropriate use.

Emphasis in the Article 18 program shifted

from controlling the purchase of equipment to

regulating the use of specialized medical services

as a whole. Today even supra-regional services

that use almost no costly equipment (e.g., genetic

screening and counseling and in vitro fertilization) are regulated through Article 18. Since 1984,

when the global budget system in hospitals was

introduced, the government no longer attempts to

regulate the number of treatments or procedures.

(Such regulation is part of the local negotiations

over the annual budget between hospitals and insurance agencies.)

In general, Article 18 regulation has worked

quite well. Most new, costly technologies that

have been introduced over the past 20 years diffusion has been controlled in such a way that oversupply has been prevented and effective use has

been stimulated (table 6-6). Regulation has been

effective because hospitals that break the law are

confronted with severe sanctions; when a hospital

offers a specialized service without obtaining approval, it is considered to be an economic offense.

The hospital may be fined and the new service will

be closed down. Secondly, without approval, the

service will not be reimbursed by insurance agencies and patients will not be referred to that institution. Also, interest and depreciation on capital

loans will not be included in the budget.
182 I Health Care Technology and Its Assessment in Eight Countries

Type of service Year brought under Article 18 Current status —

Radiation treatment 1979 Regulation continued

Computer tomography 1984 Regulation lifted 1988

Renal dialysis 1976 Regulation continued

Kidney transplantation 1976 Regulation continued

Nuclear medicine (diagnostic and

therapeutic) 1984 Regulation lifted 1988

Genetic screening 1984 Regulation continued

Cardiac angiography 1984 Regulation lifted 1991

Interventional cardiology (PTCA,

Implantation) 1984 Regulation continued

Cardiac surgery 1984 Regulation continued

Neurosurgery 1984 Lifted for “simple”

interventions 1991

Neonatal intensive care (IC) 1984 Regulation continued

In vitro fertilizatlon (IVF) 1988 Regulation continued

Heart transplantation 1991 Regulation continued

Liver transplantation 1993 Regulation continued

Lung transplantation 1991 Regulation continued

New candidates for Article 18 regulation:

Allogeneic/autologous bone marrow

transplantation 1994 —

Pancreatic transplantation 1994 — —

SOURCE Ministry of Welfare, Health, and Culture, Financial Review for Health Care 1994 (The Hague SDU Publishers, 1994)

Experience with Article 18 has not been totally

positive. Procedures are rather bureaucratic and

time consuming. In some cases (e.g., CT scanners,

cardiac bypass surgery) diffusion had already taken place before regulation was in operation. Recently the procedure has been adapted to be more

flexible; it can now be applied almost overnight

when the situation requires a rapid response. Also,

regulation can be applied as a temporary measure

(maximum of four years) to control the early

stages of diffusion of a technology. Finally, when

it is considered that a new technology has become

established or has lost its supra-regional function,

regulation under Article 18 can be lifted.

The total expenditure for specialized services

under Article 18 regulation is calculated prospectively every year by the Minister of Health in his

annual Review of Health Care Costs (Financieel

Overzicght Zorg). There is only limited room for

expansion of hospital budgets for these services

(approximately Df125 million), so priorities must

be set.

During the recent debate on health care reforms, the need for and effectiveness of strict regulation by the central government has been

questioned. However, the Minister of Health has

emphasized that Article 18 regulation as an instrument to control the introduction and use of new

technology will be continued under any new system.

Control of Health Technology

Through the Payment System

The major explicit control that the government

and the insurance agencies have over the diffusion

and use of technology is the health care financing

system. The system for global budgeting

introduced in 1984 includes allowance for investment in new equipment and technology, but to a

limited extent. Approval for a specialized service

under Article 18 will lead to a budget increase.

The Sick Fund benefit package includes socalled “closed” benefits and “open” benefits, such

as specialist care. The benefit package covers only
Chapter 6 Health Care Technology in the Netherlands 1183

treatments or procedures considered established

and accepted. Since 1984 the Sick Fund Council

(which develops and controls the benefit package)

has used this system more and more as a tool to

control the introduction and use of health care

technology. Services can be excluded from the

benefit package until efficacy and cost-effectiveness are demonstrated (as in the case of in vitro

fertilization) or the level of reimbursement maybe

lowered (as with CT scanning) when the technology becomes less complex. Some treatments are reimbursed only for specific, limited indications

(e.g., autologous bone marrow transplantation

only for acute leukemia). Using these methods,

the Sick Fund Council has begun to effectively

influence the use of health care technology,

including the “appropriate” use of established

technologies that are already included in the benefit package.

Influence of the Public

The public gets information on new medical

technologies and their assessment mainly through

the media. Television programs in the Netherlands on medical issues are frequent and very popular. However, most of these programs (often

imported from the United States, United Kingdom, and Germany) take a rather uncritical view

of medical technology, sometimes claiming effectiveness where this has not yet been proven. In

more recent years, some series by Dutch producers developed in cooperation with the medical

associations are highly informative, discussing

both pros and cons, and avoiding sensationalism.

One award-winning program presented the medical and ethical dilemmas in liver and bone marrow

transplantation. Another highly praised series discussed the public use and abuse of DNA-based genetic information. Through these programs the

media do influence the demand for some new

technologies (e.g., organ transplantation, in vitro

fertilization (IVF), cancer therapies). The same

holds true for the information that some patient organizations provide to their members. The demand for lithotripsy and erythropoietin grew

significantly after the Dutch Kidney Foundation

informed patients of these developments at an early stage. In 1993 the Minister of Health sponsored

a series of television programs on “making

choices in health care,“ intended to involve the

general public in a discussion on the limitations of

health care.

HEALTH CARE TECHNOLOGY

ASSESSMENT

 Development of Interest

In the Netherlands one institution has traditionally

had an interest in medical technology assessment:

the Health Council (Gezondheidsraad). The

Health Council, established in 1902. reports to the

government on the state of science regarding issues of health care, public health, and environmental protection. The Council evaluates the

efficacy, efficiency, and cost-effectiveness; and

ethical, legal, and social aspects of new medical

technologies including devices, drugs, diagnostic

tools, surgical therapies, and also the health system as a whole. The Council does not carry out or

fund medical research, but uses literature review

(meta-analysis and synthesis of the international

scientific literature), expert committees, and consensus meetings. Although technology assessment had always been used by the Health Council

as a research tool, it had not been an explicit issue

in the policies and decisionmaking process of the

government or the health insurance agencies. This

situation changed in the early 1980s, when both

the government and the Sick Fund Council became concerned about the tremendous development of medical technology and its impact on

health care and society (especially in terms of

cost).

At that time the Minister of Health could control the diffusion of medical technology (to a certain extent) through the use of Article 18, but only

as far as established technologies were concerned.

There was no such regulatory instrument for innovative, emerging technology. At that time, new

technologies automatically y became part of the social insurance benefit package and were reim-
184 I Health Care Technology and Its Assessment in Eight Countries

bursed on the basis that the medical profession

judged these technologies to be useful.

Around 1982 the Sick Fund Council was confronted with patients who demanded that the costs

of heart and liver transplantations that had been

performed abroad be reimbursed by the sick

funds. The debate focused on the question of

whether these procedures should be considered

established or still experimental. The outcome of

the debate was that these therapies were excluded

from the benefit package until they had been formally evaluated. Following this decision, the Sick

Fund Council took the position that the introduction of new technologies into the benefit package

should be more actively controlled.

In 1983 the Council outlined its new policy in a

paper, “Limits to the Expansion of the Benefit

Package.” In the future all major new medical

technologies were to be assessed, regarding efficacy and cost-effectiveness, and were to be admitted to the package according to their priority.

When the annual budget was debated in Parliament later that year, one of the topics was the impact of technological development on health care

in the light of limited money. The spokesman of

the Democrats ’66 Party made a plea for systematic evaluation of new medical technology in order

to be able to make political choices in a more rational way. By 1984 the interest of policy makers in

medical technology assessment had been roused,

but there was still little expertise in the country

and no coherent procedure. This gap has been

filled by practical experience with technology assessment.

 The First Technology Assessments

The year 1985 saw the start of three medical

technology assessment projects: heart transplantation, liver transplantation, and IVF. The initiative was taken by the Sick Fund Council and the

Ministry of Health. Funds came from the Sick

Fund Council research budget and the actual research was carried out by the Universities of

Maastricht (IVF) and Rotterdam (heart and liver

transplantation).

These first projects were full-scale prospective

technology assessments, aimed at evaluating the

medical, social, economic, and ethical aspects of

the technology. The final reports were completed

in 1988 and 1989. Based on these reports, the

Minister of Health and the Sick Fund Council decided to cover heart transplantation and IVF, and

the decision on liver transplantation was held until

further research (on long-term survival) was carried out.

The lack of expertise and experience in medical

technology assessment in the Netherlands led the

Minister of Health to ask the Steering Committee

on Future Health Scenarios (Stuurgroep Toekomstscenario’s Gezondheidszorg, or STG) in

1984 to recommend a long-term policy on medical technology. In its 1987 report (3), the STG

raised the possibility of developing an “early

warning system” for future health care technology. Six areas of emerging medical technology

were described in more depth, looking at their future health and policy implications. The main

policy conclusion was that if the Netherlands

wanted to have greater control over the development and diffusion of medical technology, it

would have to create a coordinated system for

identifying technologies and assessing their benefits, risks, financial costs, and social implications.

Technology assessment could then be a useful tool

in making the necessary choices in a political context of increasingly limited resources.

 Creating a National Fund for

Medical Technology Assessment

The message from the STG was well taken by both

the government and the Sick Fund Council. In

1988 a revolving National Fund for Investigational Medicine (Fends Ontwikkelingsgeneeskunde)

was created by the Minister of Health, the Minister of Science and Education, and the Sick Fund

Council at the level of Df136 million. A standing

committee was given the task of selecting research

proposals submitted by the hospitals (in cooperation with NWO) based on scientific excellence.

Projects may evaluate new or established medical
Chapter 6 Health Care Technology in the Netherlands 1165

technologies, looking prospectively at efficacy,

cost-effectiveness, social, ethical, and legal implications, in view of the policy decisions to be

taken (admission to the benefit package, reimbursement, redefining the established indications,

regulation under Article 18, etc). The Standing

Committee on Investigational Medicine (Cornmissie Ontwikkelingsgeneeskunde) is made up of

experts in medicine, health economics, medical

ethics, health law, and health administration; and

representatives of the ministries, the sick funds,

and the Health Council.

Projects are funded for three years, after which

a report is submitted to the standing committee.

Most assessments take the form of prospective,

randomized trials, with an added component for

cost-effectiveness analysis. Since 1989 more than

80 research projects have been funded for a total of

Dfl 150 million. In 1993 the first projects were

completed and will soon lead, it is hoped, to

policy decisions on those subjects.

Until 1993 the procedure of funding proposals

was essentially a “bottom-up” procedure: projects

for research were chosen by the hospitals themselves. In 1993 the Standing Committee initiated

a “top-down” procedure alongside the existing arrangement. Research groups are invited to submit

proposals for projects selected by the Committee

itself so that areas in which technology assessment has been rather weak can be studied (e.g., in

mental health care, clinical geriatrics, and smallticket routine diagnostic procedures).

Looking back at the start of medical technology

assessment activities in the Netherlands, they can

be considered to have been reasonably successful.

However, procedures are not finally established.

Some important problems remain and will have to

be overcome in the near future, including:

■

●

a need for priority-setting in technology assessment;

a need for more international dissemination of

technology assessment information and cooperation with agencies abroad, to avoid duplication;

■ a need for better follow-up of technology assessment studies to ensure that the results are

taken up in clinical practice; and

■ a need to integrate the technology assessment

approach into the thinking of the medical professional at large.

 New Policies for Medical

Technology Assessment

Medical technology assessment has become an

important health policy issue in the Netherlands in

the 1990s. The government has made the assessment of new medical technologies a key component of its policy to promote the appropriate use of

medical care and to deal with problems of shortage, rationing, and waiting lists. In 1989 a committee was appointed with the task of analyzing

the problems of “choices in health care.” This

committee looked into the different aspects of

making choices on the macro-, meso- and microlevel of health care and presented a strategy to admit medical technologies to the benefit package.

On the one hand, “traditional” criteria such as efficacy and effectiveness were included. On the other hand, questions like “Is a specific type of

care/technology essential to let a person continue

a normal role in society?” and “Can people pay for

this type of care out of their own pocket?” were

considered. To be able to make such choices the

committee has recommended that assessment of

medical technologies be carried out on a wider

scale. The government has stated that this approach will be included in the coming health care

reforms.

In a recent report by the Health Council (21),

titled Medical Practice at the Crossroads. the

Council observed that inappropriate use of both

established and new medical procedures and

technologies is widespread. The report documents

examples from almost all medical specialties. focusing not so much on the efficacy and effectiveness of medical technologies themselves, but

rather on how doctors use the procedures.
186 I Health Care Technology and Its Assessment in Eight Countries

The main conclusion of this report is that large

and unexplained variations in medical practice

point to the inefficient use of resources, which can

no longer be ignored. The report urges the medical

profession to start their own process of critical

self-evaluation (or others will do it for them). The

report recommends that accountability for medical practice based on systematic evaluation should

become routine for doctors. This accountability

can be enhanced by setting up independent quality

assurance committees with the professional organizations. The change of attitude needed in the

medical profession should start from the basic

medical curriculum, according to the report. Finally, the report recommends that formal assessment should be the criterion for admitting new

procedures to established medical practice, and

also that long-accepted procedures should be reevaluated, preferably by the medical profession itself.

This report has influenced the current discussion on evaluation of medical practice and the assessment of medical technology within the

professional bodies in the Netherlands. In 1993

the Sick Funds Council initiated a long-term project to critically evaluate the entire benefit package

in terms of cost-effectiveness and appropriate use.

Through a Delphi-type study (using a large panel

of experts) a first selection of 126 items where

doubt has been expressed on cost-effectiveness or

appropriate use has been made. This list will be

subjected to further critical evaluation on the basis

of priorities.

 Organizations Involved in Medical

Technology Assessment

The Central Government

The Ministries of Health and of Education and

Science are involved in health care technology assessment as cofunders of the Investigateional Medicine scheme. Technology assessment is also

carried out by other organizations at their request.

The Ministry of Economic Affairs has a policy for

promoting the development of medical technoloTechnology assessment (with emphasis on technical performance and good manufacturing procedures) is an important item on the agenda.

The Health Council (Gezondheidsraad)

The Council advises the government on the scientific state of the art of medicine and health care. To

this end it brings together groups of experts on

specific subjects at the request of the Minister of

Health or the Minister of Environmental Protection. Technology assessment has traditionally

been part of the activities of the Council; many reports on specific technologies have been published (e.g., transplantation; diagnostic

technologies such as CT scanners, MRI scanners,

and PET scanners; neonatal intensive care; genetic screening and counseling; cardiac surgery).

Committees are made up of physicians, economists, social scientists, experts in management,

lawyers, and ethicists. The Council has a strong

focus on identifying new technologies before they

come into widespread use. The Council also recommends new emphasis for the Investigational

Medicine Fund.

Sick Funds Council (Ziekenfondsraad)

This Council became involved in health care

technology assessment in the early 1980s. It has

funded most of the early studies (heart and liver

transplantation, IVF, breast cancer screening) and

it plays an important role in the Investigational

Medicine Fund. In 1993 the Sick Fund Council

started a project to review and redefine the criteria

for “appropriate use” of a wide range of established technologies.

National Council for Health Care (/Rationale

Raad voor de Volksgezondheid)

The National Council comprises representatives of health care providers, insurance agencies,

and consumer organizations. It advises the government and the health care community on general

policy issues. Some studies have been done on

medical technology in which the importance of

gy through funding the national industry. technology assessment is stressed.
Chapter 6 Health Care Technology in the Netherlands 1187

National Institute for Health and

Environmental Hygiene (RiVM)

This organization carries out clinical trials of vaccines. It monitors the adverse effects of vaccines

and of toxic substances, and also looks into the

safety aspects of certain medical devices.

Netherlands Organization for Applied

Scientific Research (TNO)

TNO studies medical devices (e.g., filters, laminar flow units), focusing on safety and technical

effectiveness. It also supports studies of medical

technologies and procedures (e.g., thrombolytic

therapy for blood vessel recanalization, extra- and

intracranial bypass operations, and mammography). TNO has progressively become involved in

technology assessment in a broader sense, taking a

lead role in assessing technology for home care. In

1993, TNO formally established a medical

technology assessment program.

Steering Commitee on Future

Health Scenarios (STG)

STG is an independent advisory group to the

Dutch government, installed in 1983 to carry out

scenario studies as an aid to long-term health

policy. It published a study on Anticipating and

Assessing Health Care Technology in 1987 (3),

and has published scenario-studies on accidents,

aging and care for the elderly, drugs, and demographic development and health. In 1993, government discontinued funding of the STG because of

budget cuts. The work of the STG may continue,

using other (presumably private) funds.

National Organizatjon for Quality

Assurance in Hospitals (CBO)

CBO examines quality and medical effectiveness

at the hospital level, and promotes quality awareness by organizing consensus conferences on specific technologies for practicing clinicians.

Council for Health Research (Raad voor

Gezondheidsondetzoek; RGO)

The RGO was created in 1987 to advise the government on the coordination of biomedical research in the Netherlands. In 1988 a report was

published on the importance and coordination of

technology assessment in biomedical research.

The Council makes suggestions for new areas of

technology assessment.

Universty Institutes for

Technology Assessment

Several universities in the Netherlands are developing programs in health care technology assessment. The Institute for Medical Technology

Assessment of the University of Rotterdam

(IMTA) is very active in the field of economic

evaluation and cost-effectiveness (e.g., in the field

of transplantation and bypass surgery). It provides

technical support to many hospitals carrying out

research for the Investigational Medicine Fund.

The Institute of Health Care Economics of the

University of Limburg is also involved in cost-effectiveness studies and clinical trials of vaccines

and drugs. The Institute for Medical Sociology of

the University of Groningen has carried out

technology assessments focusing on quality of

life and social and ethical aspects of technologies.

Other university institutes continue to develop interest in technology assessment.
188 I Health Care Technology and Its Assessment in Eight Countries

TREATMENTS FOR CORONARY

ARTERY DISEASE

 Coronary Artery Bypass Grafting

(CABG)

The first attempts at CABG in the Netherlands

were made in the late 1960s, in the university clinics in Groningen and Amsterdam. At that time

coronary artery disease (CAD) had become the

leading cause of death in the Dutch population.

However, government policy focused on prevention rather than surgical intervention. In 1968 the

Minister of Health asked the Health Council to report on options for preventing and treating CAD.

The Council appointed a large committee which

reported in 1971. One recommendation was to immediately increase the capacity for open-heart

surgery to 1,300 procedures per year, since CABG

had become an established intervention. The government ignored this recommendation, however,

and continued to focus on prevention.

In 1972 the Nieveen Committee repeated its

plea to increase the surgical capacity of the heart

centers, and to bring the capacity to 3,000 operations by 1980 and increase the number of centers

from seven to 11. Although this proposal was discussed in Parliament, no steps were taken to implement it. One reason was that the Minister of

Finance found this masterplan too expensive (the

estimate being around Df125 million). He presented a counterreport estimating the need at a

maximum of 1,200 operations per year, performed

in five centers. The Health Council Committee

reacted furiously to this, saying that the Minister

of Finance had overstepped his competence and

was not qualified in any way to assess the need for

medical treatment.

The real problem was that open-heart surgery

took place almost exclusively in the University

Hospitals, which came under the budget of the

Minister of Education and Science, who paid

practically all the cost: research, medical education, equipment, and a large part of the health care

provided. The social and private insurance agencies paid only for the hospital stay and not for the

medical procedures. If open-heart surgery in these

hospitals was to be increased, the financial burden

for this would fall on other parts of government,

including the Minister of Finance.

By 1974 the whole situation had come to a dead

end. At that time, the Dutch Heart Patient

Association staged a massive demonstration and

even occupied the Parliament building. The Parliament, shocked by the violent actions of the patient organization, blamed the Minister of Health

for the slowness of his decisionmaking. The Minister quickly reached an agreement with the insurance agencies over a reimbursement fee for

CABG that would cover the cost at the University

Hospitals, and announced that he would begin to

increase the capacity for CABG in the University

Hospitals, but not create new centers. The Heart

Patient Association, not satisfied, organized an

airlift in 1976. Patients on the waiting list were

sent for surgery to the United States, London, and

Switzerland, with the cooperation of the insurance

agencies and the heart centers.

In 1976 the Minister of Health visited the

United States and was alarmed at the growth in the

number of CABGS. He observed that U.S. health

authorities admitted that the increase might be due

to an unjustified broadening of the indications for

the procedure. Returning home, the Minister

stated to the press that the estimate of 4,500 openheart procedures might be too high, and that it was

not necessary to increase the number of centers.
Chapter 6 Health Care Technology in the Netherlands 1189

Data 1975 1980 1985 1990 1992

Population (millions)

Number OHO’s

OHO (per million population)

OHO centers

Pop. per center (millions)

Case-load per center

Number CABG

CABG as % OHO

Pop, per center (millions)

Case-load per center

Number PTCA

PTCA (per million population)

PTCA centers

Pop. per center (millions)

Case-load per center

13.7

1,698

124

9

1.5

189

663

39

1,5

74

14.1

4,630

328

12

1.2

386

2,926

63

1.2

244

36

3

2

7

18

14.5

8,532

588

13

1.1

656

6,789

79

1,1

522

2,556

176

10

1.4

255

14,9

11,503

772

14

1,0

822

9,202

80

1,0

657

8,205

550

12

1.2

683

15,1

12,905

854

15

1,0

860

10,325

80

1,0

688

10,521

697

14

1.1

751

SOURCE M Bos, 1994, from reports of the Health Council, 1974-1993

In 1976 the permanent advisory committee on

heart surgery (based at the Health Council) beganwork. They organized a consensus meeting, where

a prominent role was played by eight “foreign experts” (mainly from the United States). The outcome of this meeting was a revised estimate of the

future need for heart surgery (mainly based on

U.S. data, since epidemiological data for the

Netherlands were lacking). The new estimate was

5,500 to 6,500 open heart procedures per year

(4,500 to 5,000 CABG, 1,000 to 1,500 operations

on valves and congenital defects). The government had no option but to expand the number of

heart centers. The decision was made to start two

new centers in general hospitals, with a target of

1,000 procedures each per year.

In the early 1980s the number of open-heart operations expanded rapidly because of the new centers, and the number of operations performed

abroad decreased (table 6-7). In 1984 the Health

Council published a new report on the long-term

development of cardiac surgery. It estimated that

the number of cardiac operations would grow to

12,500 in 1992. The impact of percutaneous transluminal coronary angioplasty (PTCA) was not

calculated, but the Council expected a substitution

effect of 15 percent on the rate of CABG.

By 1984 waiting lists began to grow again. The

Minister of Health hesitated to permit further expansion of cardiac surgery because of financial

constraints within the health care system. Also,

there was some doubt over the appropriateness of

growing referrals for CABG (in view of the fact

that PTCA was also expanding rapidly). Finally,

the Minister of Health gave in to the growing pressure and approved two more centers. Since 1988

the growth rate of the number of heart operations

has slowed, reaching 12,900 in 1992 (figure 6-l).

Government Policies Concerning CAf3G

In the 1980s the government was keen on regulating not only the number of surgical centers, but

also the volume of procedures (in particular, the

number of CABG) through the use of Article 18.

However, it was argued that with the introduction

of the budget system this type of control was outdated. It was felt that the volume of cardiac operations should be agreed on in the negotiations

between hospitals and financing agencies. In 1989

the Minister of Health stopped regulating the
190 I Health Care Technology and Its Assessment in Eight Countries

15.000 

 operated in the Netherlands

 operated abroad via airlift

12,000

I

3,000

lll l o

1970 1975 1980 1985 1990

SOURCE M Bos, 1994, from reports of the Health Council 1970-1993

number of procedures, leaving this to the insurance agencies. Budget control was effective, but

there is still a steady (but modest) increase in the

number of CABGs.

Assessment of CABG

Full-scale assessment of CABG was never undertaken in the Netherlands, although it was recommended by the Health Council very early. The

medical profession relied mostly on the data available from the United States and was unwilling to

start a study in the Netherlands. A limited cost-effectiveness study was performed in the surgical

center in Maastricht. Recently, the Dutch centers

are cooperating in an international multicenter

assessment study, organized by the IMTA in Rotterdam and the RAND Corp., focusing on appropriateness of use. This study is also collecting

information on the effectiveness of PTCA versus

CABG.

 Percutaneous Transluminal Coronary

Angioplasty (PTCA)

The first cardiologist to use PTCA in the Netherlands, in 1980, was Ernst (trained by Gruntzig).

Others were quick to follow, and within two years

all heart surgery centers were using the technique.

By 1984 PTCA was considered to be established

for the revascularization of (uncomplicated)

single-vessel occlusions. When the Health Council reported on PTCA in its 1984 study of heart

surgery, the committee (consisting of surgeons

and cardiologists) was unanimous in its opinion

that around 15 percent of all CABG procedures

could be substituted by PTCA. However, as a

growing number of cardiologists were trained in

performing therapeutic interventions, they attempted more difficult coronary lesions. Also,

more and more patients were treated with PTCA

who were not yet candidates for CABG, but

whose symptoms (anginal pain) were not successfully relieved with medicines. As a result, in the

middle 1980s the number of both CABG and

PTCA procedures increased rapidly, without any

real coordination between cardiologists and surgeons. However, since there were long waiting

lists for cardiac surgery in the Dutch heart centers

at the time, the surgeons were probably relieved

that the cardiologists were taking some of the

workload.

In 1987 the Minister of Health began to regulate heart surgery as well as PTCA under Article

18 of the Hospital Provisions Act. On the basis of

the Health Council report (18) it was assumed that

a maximum of 25 percent of all CABG could be

substituted by PTCA. Following this reasoning,

the growth of CABG was restricted while PTCA

was allowed to expand.

The policy failed because both the surgeons

and the cardiologists expanded the indications and

exceeded the limits set by the Article 18 regulation. Although PTCA has replaced CABG for uncomplicated single-vessel disease, surgeons are

now performing CABG in older patients (up to 85

years), and cardiologists are treating multivessel

disease and patients who are not yet CABG candidates. As a result the numbers of CABG and

PTCA procedures are both approaching 10,000

per year in the 1990s (see table 6-7 and figure 6-2).

Factors in the Diffusion of PTCA

The policy of the Minister of Health was to expand

the number of PTCAS, to facilitate the substitu-
.

Chapter 6 Health Care Technology in the Netherlands 1191

15,000

12,000 )

 9,000

6,000

3,000

0

198081 82 83 84 85 86 87 88 89 90 91 92

SOURCE M Bos 1994 from reports of the Health Council, 1980-1992

tion of CABG by PTCA. To this end, the heart

centers were given an extra budget for PTCA,

while the number of CABG procedures was restricted. The health insurance agencies, which every year prospectively negotiate the number of

CABG and PTCA procedures with the heart centers as part of the next year budget, also favored

the expansion of PTCA. Finally. the media and the

consumer organizations supported the development of PTCA as a patient-friendly procedure.

Consequently, patient demand for PTCA has become stronger. When some hospitals tried to limit

the number of PTCAS in 1990 because of a tight

budget. the court ruled that patients were entitled

to this procedure when there was a proper indication. The hospitals had no choice but to provide

PTCA, and the insurance agencies had to pay for

it.

Evaluation of PTCA has not played any part in

its diffusion. In its 1984 report the Health Council

recommended an evaluation of the proper indications for PTCA and the possible rate of substitution of CABG with PTCA. The Minister of Health

asked the Cardiologists Association to set up the

evaluation. However, such a study could not be organized during the 1980s. Because of strong competition between surgical and cardiolog y

specialties in the field of therapeutic intervention,

surgeons refused to cooperate with cardiologists

to join in a prospective study. Dutch centers are

currently participating in two assessment studies.

Concerns with CABG and PTCA

Both CABG and PTCA are fully accepted in the

Netherlands. The rates for CABG and PTCA are

the highest in Europe (but less than in the United

States). However, neither procedure has been influenced by evaluation. Since there is still considerable overlap in indications for the procedures

(especially for multivessel disease), evaluation is

needed to ensure appropriate use. Also, patient demand and consumer pressure may have led to

some inappropriate use. The Dutch health authorities have stated that they will make further expansion of the number of procedures dependent on the

outcome of the ongoing assessment studies.

MEDICAL IMAGING

(CT AND MRI)

 Computed Tomography (CT)

The case of the CT scanner demonstrates how the

international network of medical professionals

functions (8). Dutch radiologists learned about

CT scanning at the yearly Radiological Society of

North America (RSNA) Congress in the early

1970s. Some of the leading radiologists voiced

strong opinions that the Netherlands should take

part in the clinical development of CT scanning

from the very beginning, and they were successful. In 1975 the Minister of Education and Science

(who was then responsible for the University Hospitals) gave permission for the first brain scanner

to be installed in Amsterdam University Hospital,

with the proviso that the scanner be used for research purposes only. Shortly afterward, a second

scanner was installed in a neurological clinic in

Wassenaar. Before long other hospitals requested

the support of the government to buy CT scanners.

The Minister of Health then asked the Health

Council to report on the state of the art of CT scanning. Specifically, the Council was asked to consider the evidence of clinical benefit of CT and the

necessity of regulating the diffusion process
192 I Health Care Technology and Its Assessment in Eight Countries

through article 18 regulation. The radiological

community stated that this report was unnecessary

because there was enough evidence already of the

efficacy of CT scanners. They increased their

pressure on all parties and were supported by the

national industry (Philips Medical Systems).

They argued that CT should not be withheld from

eligible patients.

The Health Council published its first report after six months (14). The main conclusions were:

1.

2.

3.

4.

CT scanners should be regulated under Article

18 (because of the high cost, speed of technological developments, and special expertise

needed);

CT scanning is of great potential value to neuroradiology (brain/CNS);

the value of CT scanners for other parts of the

body is not yet defined; and

CT scanners should, for the time being, be restricted to teaching hospitals.

Although the Minister of Health had asked the

hospitals not to buy CT scanners while the Health

Council was preparing its report and until a decision was made about further diffusion, eight hospitals were operating scanners by 1977. In the

same year the Health Council published its second

report, calculating the future need for CT scanners

in the Netherlands at 20 to 30 brain scanners and

seven to eight whole-body scanners (one CT scanner per 300,000 to 500,000 inhabitants). The

Council made a strong plea for the hospitals to

join in a study of costs and effects of CT scanners,

and warned that rapid improvements in CT

technology caused scanners to be obsolete in just

two or three years, making careful diffusion even

more important. However, in the following years

the Ministry of Health failed to implement a regulation for CT scanners, and no evaluation was conducted.

In 1979 the Central Board for Hospital Provisions (CvZ) published a plan for the diffusion of

CT scanners, under which each health region

would have at least one scanner (this meant 27

scanners for patient care) and another 10 should be

available for research and teaching. In the same

year the Health Council published a third report

saying that the lack of radiologists and technicians

trained in CT scanning made too rapid an

introduction hazardous. Nevertheless, in the next

years 15 CT scanners were installed, without any

planning or coordination. Some general hospitals

evidently bought scanners because they anticipated future government regulation.

The Health Council published its final report in

1981, concluding that from a medical point of

view there was no good reason to restrict the use of

CT scanners. The need for CT scanners was set at

one per 300,000 inhabitants (50 for the whole

country). In the same year the Ministry of Health

published a temporary decree to regulate CT scanners, to the effect that no more scanners could be

installed by general hospitals until a definite plan

for diffusion was published. By that time 24 general hospitals were operating CT scanners, while

the seven University Hospitals had 13 scanners at

their disposal.

In the next few years, only the University Hospitals (which were exempt from the regulation)

were able to acquire more scanners. Finally, in

1984 (eight years after the first Health Council report), the Minister of Health promulgated a regulation, but it did not follow the Health Council’s

recommendations. The Ministry restricted scanner use to 130,000 scans per year until 1990 (at

4,000 scans per year per scanner this meant 33 CT

scanners for the whole country, or one CT scanner

per 450,000 inhabitants). In fact there were 45 CT

scanners in operation at that time, producing some

160,000 scans per year; all of them were given

permission to stay in operation but only until they

had to be replaced. This policy had the effect that

until 1987 the number of CT scanners remained at

46. This caused a lot of opposition from the radiologists, who held that introducing CT scanners in

middle-size or even small peripheral hospitals

added quality and could be done without extra

budgetary resources (because of substitution).

They were ardently supported in this by Philips

Medical Systems (whose home market for CT

scanners had almost collapsed). In 1989 the Minister of Health gave in and article 18 regulation for
Chapter 6 Health Care Technology in the Netherlands 1193

SOURCE Health Council, AdvisoryReport on Nuclear Magnetic Resonance Imaging Spectroscopy (The Hague, 1984), National Raadvoor

de Volksgezondheld (National Board of Health), Advisory Report on MRI (Zoetermeer, 1993)

CT scanners was abolished. Hospitals now had to

negotiate with the regional insurance agencies to

obtain reimbursement for CT scanning within the

existing budgets. This policy has resulted in an

enormous increase in the sale of scanners (see

table 6-8).

Assessment of CT Scanning

In spite of the 1977 recommendation by the

Health Council to start a program of evaluation

and assessment of CT scanners in the Netherlands

before the technology spread to the general hospitals, such a study was never performed. No initiative was taken by the Minister of Health, but there

also was no real willingness on the part of radiologists, who maintained that the technology had become completely established by 1980. The only

attempt to evaluate the role of CT scanners in hospital care in the Netherlands was by a young radiologist, who in his 1988 Ph.D. thesis looked into

the effect of CT scanners on average inpatient stay

and on the total number of radiological procedures

(4). In hospitals with CT scanners at their disposal, the number of conventional radiological procedures declined, while in hospitals without CT, the

number of radiological procedures increased.

Therefore, CT appears to have had a partial substitution effect. However, the thesis did not determine whether the introduction of CT scanners had

significantly improved the quality or reduced the

cost of the diagnostic process.

Reimbursement for CT Scanning

The initial reimbursement fee (tariff) for hospital services was fixed at Df1400. However, when

the number of scans began to increase rapidly and

CT replaced conventional radiological procedures, the fee was lowered to Df1290. The radiologist can charge an additional fee of Df1100 (for

brain CT) to Df1350 (for high-definition body

CT).

Policies Toward CT Scanners

Government policy during the period of introduction of CT scanners in the Netherlands was focused on limiting the purchase of equipment. CT

scanners were seen as a high-cost technology that

added cost rather than quality. This was at a time

when the health authorities were preoccupied with

increasing health care costs and with instituting

cost-containment measures. Article 18 regulation

indeed resulted in keeping the number of CT scanners stable for several years. However, the government did not account for future increases in the use

of CT scanners, and fixed the number of scans allowed at too low a level. Fierce resistance from the

hospitals and the radiologists led to the regulation’s abandonment.

 Magnetic Resonance Imaging (MRI)

Development of MRI in the Netherlands started

before most Dutch doctors had even heard of it

(8,25). The Philips Co. had begun experimenting

in 1973 with the MR principle in its Physics Labo-
194 I Health Care Technology and Its Assessment in Eight Countries

ratory, following the first studies in 1972-73 by

Lauterbur. By 1980 a prototype was ready and

producing images of the human body. The Philips

Co. was aware of the fact that this new technology

could only be introduced into clinical practice

with the help of doctors, especially radiologists.

Because doctors knew nothing about the technology, and because the machines were too expensive

for hospitals to acquire, Philips installed a prototype in its factory in Best. Starting in May 1981

this machine was made available without cost to

radiologists from four University Hospitals, who

could bring their patients there for MR examination. In this way the radiologists became familiar

with the technology (and spread the word to their

colleagues), and Philips was able to improve its

machine through their clinical experience.

A second prototype was installed in the University Hospital in Leiden in 1982 as a test site for inpatient MR studies. In 1983 the other University

Hospitals approached the Minister of Education

and Science (then solely responsible for these hospitals) to get permission to invest in MR technology. He contacted the Ministry of Health in order to

develop a careful policy for the introduction of

MRI (the failure to regulate CT scanners was still

fresh). The Health Council was asked to report on

the state of the art of MRI and the Minister of

Education informed the university hospitals that

he would take no further steps before a detailed

diffusion plan was on the table. The boards of directors of the hospitals were asked to provide the

necessary coordination. However, their answer

was that they were unable to come to consensus

(because of competition among them over the new

technology). The University Hospital in Leiden

was allowed to continue its experimental MR

studies (paid for by the Philips Co., which had received a subsidy for the development of national

industry from the Ministry of Economic Affairs).

In January 1984 the Health Council presented

its report on MRI (17). This new technology was

considered to be a very promising diagnostic

modality; however, the exact application in medicine was not yet defined. The Health Council proposed that three hospitals cooperate in an

assessment. By mid-1984 the Minister of Education (supported by the Minister of Health) announced his policy: four University Hospitals

(including the test site in Leiden) could operate

MRI, under the following conditions: 1) the four

hospitals would cooperate in a national assessment of MRI, and 2) the cost of MRI equipment

and scans would not be borne by the Minister of

Education, but would have to be covered from the

health care budget. (To prevent general hospitals

from acquiring MRI scanners, the Minister of

Health introduced a temporary regulation under

the new Hospital Budget Law.)

Early in 1985 an agreement was reached with

the sick funds and private insurance companies

that they would pay half the operating cost of MRI

in the four selected hospitals. The other half was

considered to be a research cost to be borne by the

Minister of Education. (This was a breakthrough

in the attitude of the insurers, since before this

they considered all new technologies as “research,” not payable through the health care budget. Two hospitals chose Philips scanners (for

which the Ministry of Economic Affairs paid

them a bonus) and one selected an American Technicare scanner; by 1987 all scanners were in operation.

At the end of December 1987 the MRI

introduction period and policy was evaluated by

an independent analyst at the request of the government. In addition to the evaluation, the analyst

proposed that 14 MR scanners be in place in 1991

(one per million population). Following this report, a group of radiologists (supported by Philips) promoted a plan for a nationwide diffusion of

MRI (in which Philips was to have a monopoly

position) through a nonprofit organization run by

themselves. The government quickly rejected this

idea as too commercial (and in conflict with European Community free market principles).
.— —

Chapter 6 Health Care Technology in the Netherlands 1195

Year New MRI’s per year Cumulative number Remarks

1982 1 1 First test-sale In Leiden

1983 0 1

1984 0 1 Health Council report 3 MRIs

1985 2 3 4 hospitals selected, regulation

1986 2 5 Start assessment study

1987 0 5 Government policy on MRI evaluated

1988 0 5 Assessment study completed

1989 2 7 8 new MRIs approved

1990 7 14 Regulation abolished

1991 6 20 —

1992 7 27 National Board of Health report

1993 9

36a 80-90 MRI’s needed in 2000 —

a

lncluding 3 replacements—33 in operation

SOURCE National Raad voor de Volksgezondheid (National Board of Health), Advisory Report on MRI (Zoetermeer, 1993)

By 1989 the assessment in the four University

Hospitals was completed. On the basis of the positive outcome, the government gave permission for

six more scanners (four in university hospitals and

two in national oncology centers). Extra money

was provided to these hospitals to finance the

scanners. However, a growing number of regional

general hospitals also requested permission to operate MRI. In 1991 the Minister of Health decided

to end restrictions on the diffusion of MRI, and

freeing hospitals to acquire scanners provided

they could cover the cost from the existing budget.

The reason behind this decision was that so-called

“low-budget” MR scanners (0.5 Tesla) had come

on the market and were replacing (in part) conventional x-ray and CT scanners. From 1990 to 1993

another 26 scanners were installed and 14 hospitals decided to make use of a mobile MRI system

(leased by a for-profit company) (see tables 6-9

and 6-10). In 1993 the future need for MRI (to the

year 2000) was calculated by the National Health

Care Board at 80 to 90 scanners (32).

Reimbursement for MRI

Hospitals must negotiate the reimbursement for

MR scans (based on substitution within the budget) with the insurance agencies. In the beginning

there was no special reimbursement fee for MRI,

but radiologists and hospitals charged the same

amount as for CT scanning. When the fee for CT

was lowered, a separate MRI fee of Df1865 was

agreed on by the insurance agencies (Df1750 for

the hospital services and Dfl115 for the specialist

fee).

Assessment of MRI

Because of the unfortunate experience with the

introduction of CT scanning, the health authorities in the Netherlands emphasized from the start

that MRI should be evaluated. Formal assessment

was to be a precondition for further diffusion. The

first assessment by the four University Hospitals

was very limited in scope (not a true technology

assessment), focused mainly on the efficacy of

MRI, the established and emerging indications.

and possible substitution for other diagnostic procedures. Later assessments (32) have looked into

the cost-effectiveness and appropriate use of MRI.

The Role of Philips

The introduction of MRI in the Netherlands was

influenced by the interests of Philips Medical

Electronics, by far the largest medical equipment

company in the Netherlands. Philips has contributed to the early introduction and diffusion of new

diagnostic technologies, including digital x-ray,

CT scanning, MRI. and angiography. The company has usual] y invested in test sites in major hospi -
196 I Health Care Technology and Its Assessment in Eight Countries

Data 1987 1990 1993

Number of MRI in operaton 5 14 33

MRI per million population 0.3 0.9 2.2

Number of scans per year 7,000 14,000 40,000

Average number of scans per MRI per year 1,400 1,000 1,200

Inhabitants per MRI (millions) 2.8 1.1 0.5

SOURCE Nationale Raad voor de Volksgezondheld (National Board of Health), Advisory Report on MRi (Zoetermeer, 1993)

tals. Although the home market is rather small

compared to worldwide sales (85 percent of imaging equipment is exported), Philips needs highquality academic and regional hospitals in the

vicinity of its research laboratories as partners in

technical development. This was particularly true

in the case of MRI (Philips needed to have MRI

machines installed in a clinical setting for further

development). Ordinarily, protection of the national industry is not practiced in the Netherlands

to such an extent as in other European countries,

but in the case of MRI, Philips was supported by a

large grant from the Ministry of Economic Affairs. Other MRI companies have objected to the

virtual monopoly of Philips in the early MRI sales

in the Netherlands.

Policies Toward MRI

The Ministers of Health and of Education and Science were determined to avoid the type of situation that arose over the introduction and diffusion

of CT, (34) when too strict regulation created a

stalemate. With MRI, the introduction and first

phase of diffusion went satisfactorily. The decisionmaking process took less time than with CT

and there was constructive cooperation with the

medical community. By 1990 the government as

well as the radiologists considered MRI to be a

standard diagnostic procedure, so strict regulation

was not necessary.

 Concerns About CT and MRI

In general, the use of radiological diagnostic procedures in the Netherlands is modest compared to

other countries (27,35). Both the government and

the hospitals have taken initiatives to limit and,

where possible, push back the number of unnecessary x-ray procedures (e.g., routine pre-operative

x-rays), both to save money and to diminish radiation exposure of the population (35). The

introduction of new diagnostic procedures, however, presents at least two problems. If the new

technology has an “add-on” effect and does not

substitute for existing procedures, it will add costs

to the health care sector. If it makes use of ionizing

radiation, it will result in a higher exposure rate to

the population, which may be a risk to health.

CT scanning contributes relatively highly to

radiation exposure. The recent increase in the

number of CTs in the Netherlands (which has been

only partial substitution) may thus have had a negative effect. MRI on the other hand, does not use

x-ray. Thus it may be advantageous to let MRI

substitute for a large part of all examinations currently performed with x-ray (conventional x-ray,

angiography, CT, e(c). From the quality point of

view this poses no real problem, since MRI has

shown to provide, in many cases, superior information. Such a policy, however, would mean

that the number of conventional radiological devices (including CT) would have to be reduced. In

1992 only 25 percent of the 30,000 MR scans in

the Netherlands substituted for other radiological

procedures. It has been calculated that the substitution effect could be at least 50 percent. This

would mean that in the coming years 50 CT installations (or 150,000 scans per year) would have to

be replaced by MRI. Since most of the CT scanners in the Netherlands have been acquired in recent years, one may doubt whether hospitals and

health care financiers will agree to such a policy.

Another concern with MRI is the low caseload

in most hospitals (in 1993, an average of 1,200
Chapter 6 Health Care Technology in the Netherlands 1197

scans). The cost of an MR scan has been calculated to be competitive with CT assuming a caseload of 2,500 to 3,000 scans per year. This should

correct itself if the substitution of MRI for other

radiological procedures continues to increase.

LAPAROSCOPIC SURGERY

The first laparoscopic surgical treatment

introduced in the Netherlands was probably laparoscopic appendectomy, which has been performed by the surgeon de Kok since 1971.

Although the new technique was successful (de

Kok has performed more than 1,500), it never became popular with other Dutch surgeons. Only recently, since the successful introduction of

laparoscopic cholecystectomy in 1990, has laparoscopic appendectomy become somewhat more

popular.

The story is similar for Iaparoscopic surgery in

gynecology. In 1979 Ijzermans (in Eindhoven)

treated endometriosis and removed ovarian cysts

through the laparoscope. For 10 years he was almost alone in this field. Colleagues began to show

interest only after the publicity for laparoscopic

cholecystectomy. In 1989 Ijzermans organized a

symposium on the subject, and about eight hospitals are now treating endometriosis laparoscopically. Laparoscopic removal of ovarian cysts has

met with little enthusiasm, however, perhaps because the procedure is technically difficult and because there seems to be consensus in the

Netherlands that removal of early ovarian cysts is

unnecessary.

Another development of minimally invasive

surgery in urology is percutaneous nephrolithotomy (PCN), or the Iaparoscopic removal of kidney

stones, which was introduced around 1980 (26).

By 1985 all university urology departments and

the majority of peripheral centers had adopted the

technique. However, in 1984 shock-wave lithotripsy was introduced, and, after a difficult start,

expanded rapidly. The diffusion of PCN slowed

down. Today, because of the relatively low price

of Iithotripsy equipment and the availability of

more than 10 machines in the Netherlands, most

urologists prefer ESWL over PCN for treating

smaller stones (up to two cm diameter). PCN is

performed for larger stones. Conventional open

surgery has become obsolete.

In 1990 laparoscopic cholecystectomy was

introduced in Eindhoven by van Erp, who had

been trained by Dubois in France. Two other surgeons soon followed. But other surgeons were not

very interested in the new method, perhaps because it takes longer than conventional surgery.

However, after van Erp appeared on television,

patients started to demand the new procedure. By

May 1991 about 60 hospitals were doing this procedure routinely, but mostly in small numbers.

Reasons for the slow diffusion include the limited

supply of operating laparoscope and the budgetary constraints in most hospitals. In spite of these

problems the technology continues to diffuse rapidly.

Reliable evidence of efficacy and effectiveness

of laparoscopic procedures was lacking at the time

of its introduction in the Netherlands, and this situation has not really changed. Some controlled

trials have begun (funded by the Investigational

Medicine Programme run by the Sick Fund Council) to assess cholecystectomy, treatment of bladder tumors, and appendectomy.

 Factors in the Diffusion Process

The introduction and development of laparoscopic techniques in the Netherlands, as elsewhere, has

been very much the work of a few innovative surgeons. They saw the positive side of these techniques (less trauma to the patient, shorter

hospitalization, quick rehabilitation), although

they may have been technically more difficult,

time-consuming, and costly in the beginning. In

most cases it took several years before fellow surgeons ventured to follow their example, forced

into action by public demand (informed by the lay

media) for the new procedures. In general, however, the diffusion of laparoscopic surgery in the

Netherlands has been slow (at least in comparison

to that in the United States, Germany, and France,

for example), with the exception of Iaparoscopic

cholecystectomy and percutaneous nephrolithotomy (2).
—

1981 Health Care Technology and Its Assessment in Eight Countries

Some other factors that have slowed down the

diffusion are:

1. budgetary pressures on hospitals, which make

them reluctant to undertake new, capital-intensive procedures or treatments that require extra

time or personnel;

2. financial incentives for hospitals, which make

shorter stays unattractive;

3. lack of reimbursement of anew procedure (seen

as “experimental”);

4. lack of training in minimally invasive techniques to bring skill to acceptable levels; and

5. conservatism among many surgeons.

On the other hand, there are also factors at work

that facilitated the diffusion of laparoscopic surgery:

1. media reporting, raising patient demand and

physician interest;

2. commercial pressure and information (equipment manufacturers);

3. convincing evidence on effectiveness for some

new procedures, in some cases acquired

through controlled trials in the Netherlands;

and

4. the availability of appropriate training with respected physicians.

 Policies Toward Laparoscopic Surgery

There has been striking lack of interest and action

among policy makers at all levels with regard to laparoscopic surgery. This noninvolvement has lead

to the absence of any regulation and has certainly

not been an impeding factor. Interest from the insurance agencies might have been expected, since

most Iaparoscopic procedures are claimed to be

more patient-friendly and cost-saving in the end.

However, no attempt has been made to facilitate

the diffusion of new techniques by financial incentives or arrangements. On the contrary, most of

the existing budgetary and reimbursement procedures work against their adoption

 Concerns with the Technology

Policymakers have recently begun to appreciate

the far-reaching implications of laparoscopic surgery. While patients may profit from procedures

that cause less trauma and disability, the potential

for overuse of these procedures is great because of

commercial promotion by the industry and consequent patient demand, even in the absence of evidence of effectiveness. The new procedures also

have important implications for physicians. The

new techniques have begun to change patterns of

practice where treatment is now provided by specialists who were traditionally diagnosticians.

Also, most practicing surgeons have had no formal training in using these techniques. Finally,

hospital administrators are concerned since laparoscopic surgery (minimally invasive surgery in

general) is changing the organizational structure

of the hospital through more outpatient treatments, day surgery, shorter hospital stays, and

new equipment used outside the operating theatre.

Eventually more than half of all surgical interventions may be done with minimally invasive techniques.

TREATMENTS FOR END-STAGE

RENAL DISEASE (ESRD)

When Kolff developed his artificial kidney in the

Netherlands during the late 1940s he found little

recognition for the innovation in his own country.

Unable to get funds for further research and development he left the country in 1950 for the United

States where he devoted himself to the perfection

of the artificial kidney and other bioengineering

projects. Soon after, dialysis for acute kidney failure became a standard treatment around the world.

In 1963 chronic intermittent hemodialysis,

made possible by Scribners new shunt system,

was introduced in the Netherlands in the university hospitals of Leiden, Utrecht, Amsterdam, and

Nijmegen. Selection of patients was very strict, as

the treatment was not covered by insurance and

hospitals had to pay for it out of their own funds
Chapter 6 Health Care Technology in the Netherlands 1199

—.Number of patients 1970 1975 1980 1985 1990 1991 1992-.—

On dialysis

——.

400 1,050 1,468 2,386 3,042 3,203 3,318

With functioning graft — — 891 1,665 2,725 2,890 3,131

Total number of RRT — 2,359 4,051 5,767 6,093 6,449

Total per million population — — 166 279 387 409 430

New patients on dialysis

per year — — 523 672 965 1,041 1,088

New patients per million

population — — 37 46 65 70 72 - — —

SOURCE M Bos 1994 from Renine Foundation Statistical Reviews

Dutch nephrologist then formed a pressure group

to persuade the government and the insurance

agencies that dialysis could no longer be seen as

experimental. Finally, in 1967 dialysis became a

reimbursed part of the social insurance benefit

package. The Dutch Kidney Foundation grew in

1968 out of this pressure group of nephrologist,

joined by the dialysis patients. This organization

has been powerful and effective in the diffusion of

renal replacement therapy, promoting dialysis and

transplantation and supporting the hospitals with

funds for research and patient care facilities.

The first kidney transplant in the Netherlands

took place in 1966 in the University Hospital in

Leiden, using an identical twin donor. The first

transplants with a cadaveric organ followed in

1967, in Leiden and Amsterdam simultaneously

(using two kidneys from the same donor). At Leiden University the immunologist van Rood had

perfected typing and matching human tissues on

the basis of human leukocyte antigens (HLA) and

made the system usable for routine clinical transplantation. He later advocated matching cadaveric

donor kidneys to recipients on a European scale,

from which sprang (in 1967) the Eurotransplant

organization, the first exchange program of its

kind in the world, Today, Eurotransplant is responsible for the matching and exchange (through

its central office in Leiden) of all cadaveric donor

organs in the Netherlands, Belgium, Luxembourg, Germany, and Austria, resulting in more

than 5,300 transplants a year (9).

Other factors have also influenced the development of kidney transplantation in the Netherlands.

In 1976 several private organizations (Eurotransplant, the Kidney Foundation and the Red Cross)

joined forces to promote organ procurement,

introducing a national donor card system. A Task

Force was founded in 1980 with the goal of stimulating public support for organ donation through

information and media campaigns. The number of

donated organs increased significantly after the

first transplant coordinator was appointed at the

University Hospital in Groningen in 1979. There

are now 11 regional transplant coordinators. The

insurance agencies have agreed to reimburse the

cost of organ removal to the donor hospitals, thus

breaking down one of the important barriers that

prevented hospitals from cooperating with the

transplant centers.

Tables 6-11 and 6-12 show the diffusion of dialysis treatment and kidney transplantation in the

Netherlands. Table 6-13 presents some basic data

on the current status of ESRD patients and services.

 Policy Actions Concerning Dialysis

and Transplantation

During the early years of renal replacement therapy the Dutch government and the health authorities played a very modest role. Almost all actions

to promote dialysis and kidney transplantation

were taken by individuals and nonprofit organizations, such as the Dutch Association of Dialysis

Doctors (DGN), the Dutch Kidney Foundation,

Eurotransplant, and the Renal Patients Association (LVD). They not only made possible the first
200 I Health Care Technology and Its Assessment in Eight Countries

Kidney transplants 1970 1975 1980 1985 1990 1991 1992

Patients on waiting list 275 480 464 977 1,343 1,412 1,434

Number of transplants 54 193 239 332

With cadaveric donor

442 474 527

50 191 236 289 406 431 445

With living donor 4 2 3 43 36 43 82

Transplants per million

population — 13.7 16.8 22.8 29,8 31.8 35.1 —— .

SOURCE M Bos, 1994 from Eurotransplant Foundation Annual Reviews

facilities for treatment, but also financed dialysis

centers, facilities for home dialysis, specialist

training for nephrologists, and education of the

public through mass campaigns. Eurotransplant

has built an extremely effective national and international network for matching donor organs

with recipients. The Kidney Foundation finances

almost 75 percent of all scientific research on

kidney disease in Dutch institutions.

Despite a need for legislation recognized in

1968, the government has failed to get a bill on organ transplantation through Parliament (a draft

was presented in 1991). In practice, a system for

organ donation based on “opting-in” (explicit

consent) has been adopted, whereby permission

for removal of organs is given either by the deceased (carrying a donor card) or by the next-ofkin. The recent Bill on Organ Removal is also

based on the opting-in principle, although the

Council of Europe advocated an opting-out system based on presumed consent in 1978 and most

European states have adopted this type of law.

Since renal replacement therapy is expensive,

health authorities have sought to control its diffusion. Since 1979, Article 18 of the Hospital Provisions Law has required hospitals to get

authorization from the Minister of Health to provide dialysis and kidney transplantation. The

policy pursued by the Minister is to concentrate all

transplants in a limited number of centers in order

to assure a high level of quality----only eight university hospitals have been licensed so far (with an

average case-load of 60 transplants per year).

Dialysis facilities are present in 55 institutions

(hospitals and free-standing dialysis units) with

an average of 13 dialysis units and 63 patients

each. In the early years the government promoted

hemodialysis at home (being less costly and allowing the patient more freedom). However, since

1985 the emphasis has shifted to continuous ambulatory peritoneal dialysis (CAPD) which now

accounts for 28 percent of all dialysis.

 The Role of Technology Assessment

In 1972 and 1978 the Dutch Health Council published reports on dialysis and kidney transplantation that were influential in instituting regular

financing for these therapies. A 1986 report

looked into the cost-effectiveness of different renal treatment modalities and also presented a

mathematical model to predict inflow and outflow

of patients in renal replacement therapy. This report was the basis for a Planning Document published by the Minister of Health in 1987. The

latest report by the Health Council, published in

1992, studied the effect of recent developments in

renal therapy on the use of different treatment alternatives. A National Registry for Renal Replacement Therapy, founded in 1986, collects and

analyses complete statistical data on dialysis and

transplantation (33).

 Concerns with the Technologies

The main concern today is with the shortage of donor organs for transplantation. The gap between

the number waiting for transplants and the number

of transplants is widening. Although there are

enough potential cadaveric donors to fulfill the

need, only a fraction are actually procured because

many brain-dead patients are not recognized as
Chapter 6 Health Care Technology in the Netherlands 1201

been completed (28).) A clinical trial is under way

to establish the optimum dosage of EPO.

Patients on dialysis 3,473

on hospital dialysis 2,410 (69%)

on home dialysis 104 (3%)

on CAPD 959 (28%)

Number of dialysis centers 53

Number of people per dialysis center 0.3

Number of dialysis units 680

Number of transplant centers 8

Number of people per transplant center

(millions) 1.8

SOURCE Renine Foundation, Annual Statistical Review 1993 (Rotterdam Foundation for the Registration of Renal Replacement Therapy, 1993)

potential donors and because many families (up to

40 percent) refuse permission for removal. Pending legislation and educational campaigns may

improve this situation.

 Erythropoietin (EPO)

EPO was introduced to the Netherlands about

1990, following FDA licensing in the United

States. The introduction was negotiated between

the Association of Dialysis Doctors and the Sick

Fund Council, resulting in prompt coverage by social health insurance. The cost is included in the

overall dialysis fee (Df100 per dialysis treatment)

and is included in the hospital budget (prospective

calculation) but with the possibility of a correction

afterwards. In the Netherlands, 60 to 65 percent of

all dialysis patients get EPO (higher use by patients on hemodialysis than on CAPD). Use is

limited to patients with nephrogenic anemia (because of chronic dialysis) and transplanted kidney

patients with deteriorating kidney function.

There was no formal assessment of EPO preceding its introduction. The results of U.S. clinical trials have been accepted as conclusive.

Discussions were held between the Sick Funds

Council and a Dutch technology assessment center concerning the possibility of carrying out a

prospective cost-effectiveness analysis, but the

coverage decision was made while these discussions were still ongoing. (Nonetheless, one has

NEONATAL INTENSIVE CARE

Between 1900 and 1940 infant mortality declined

in the Netherlands by half because of better hygiene and nutrition, but there was little improvement in perinatal mortality during the first month

of life. In the late 1940s, pediatricians became involved with obstetric care resulting in the creation

of a specialized neonatal ward, situated between

the obstetrics and pediatrics departments. In 1968,

the University Hospital in Leiden was the first to

start such an “intensive care” facility. After 1970

neonatal intensive care improved again through

the introduction of controlled ventilation, making

it possible to save extremely premature babies.

The development of modem, sophisticated

neonatal care around 1970 led to the establishment of regional neonatal intensive care units (NICUS) in the seven University Hospitals and some

pediatric hospitals. By 1978 there were 31 fully

equipped intensive care beds available. However,

the very success of neonatal care created its own

problem: because more and more peripheral hospitals referred their premature babies to the university centers, there soon was a serious shortage

of NICU facilities. In 1974 the Dutch Pediatric

Association formed a committee to report on the

need for NICUS and their optimal organizational

structure. The Committee’s recommendations (in

1975 and 1978) led to some improvement in the

quality of the care and better regional referral arrangements, but could not resolve the capacity

problems. The continuing shortage in the university centers led to the establishment of man y small

facilities in regional hospitals, a development

which was not supported by the university neonatologists who believed that it compromised the

quality of care.

In 1979 when the situation had really become

critical, the Minister of Health asked the Health

Council to assess the scientific development of

neonatal intensive care and report on the future

need for facilities. In its report (16) the Health

Council recommended the following:
202 I Health Care Technology and Its Assessment in Eight Countries

1978 1981 1987 1989 1991 1992

Approved ICU centers 7 7 – 8 10 10 10

Number of IC beds 31 32 47 88 98 144 a —

Centers without approval 8 8 14 24 20 12

Number of IC beds 17 17 17 — — —

a

This number Includes both Intensive and high care beds, according 10 a new definition used by the Health Council

SOURCE Health Council, Report on Neonatal Intensive Care, publication 1982/20 (The Hague, 1982), Ministry of Health, Planning Document

Neonatal Intensive Care (The Hague, 1993)

1. neonatal intensive care should be restricted to

10 fully equipped supraregional centers,

2. the future need (1 985-90) for neonatal intensive

care in the Netherlands was calculated to be 140

beds and 228 high-care/medium-care beds,

3. the minimum size for a center should be 10 intensive care, 12 high-care and 10 medium-care

beds, and

4. neonatal intensive care should be concentrated

in these 10 centers by means of legal regulation, by applying article 18 of the Hospital Facilities Act.

In 1983 article 18 regulation came into force

but the Ministry of Health did not publish a planning document until 1987 (Planningsbesluit Neonatologie) in which the 10 centers were actually

named. Between 1986 and 1991 the Minister of

Health made development of these NICUS one of

his priorities, approving new facilities and increasing the budgets of the centers. During these

years the capacity of the NICU centers had almost

doubled (tables 6-14 and 6-15) but it was clear that

the shortage was not resolved. The Minister again

asked the Health Council (in 1989) to report on the

future of intensive care. Their 1991 report contained a survey of NICU facilities in the Netherlands, which showed that the demand for care was

growing (in part because of an increase in the multiple birth rate since the 1970s) (7). It also contained an assessment of NICU effectiveness (in

improving survival and preventing handicaps).

The need for NICUS was estimated to be 165 to

202 beds in the 1990 to 1995 period, to be located

in the existing 10 centers. The Minister of Health

acted quickly: in January 1993 a new Planning

Document was published that set the future need

for NICU at 168 beds. Peripheral hospitals that

provide NICUS on a small scale but have not been

authorized under article 18 will have to terminate

this care (though some are allowed to continue until the capacity in the 10 centers is fully realized).

 Factors in the Diffusion of NICUS

The development and diffusion of NICUS has

been influenced to a large extent by the concern of

university pediatricians and neonatologists with

the quality of perinatal care. They took the initiative in the early 1970s to set up regional NICU

centers and make arrangements for referral. They

promoted the concentration of neonatal care in a

limited number of centers.

The idea of concentration was adopted by the

central health authorities, who used existing legal

instruments to bring it about in the face of significant opposition from the peripheral hospitals with

small NICUS (one to four beds). Between 1987

and 1993, the Minister has made the development

of NICU centers one of his priorities in intramural

care and pumped extra money into centers. In doing so, he was supported by the Minister of Education and Science, who shares responsibility for the

university hospitals and provided financial support to build extra NICUS. The efficiency of NICU

centers has increased since 1987, when a computer network was installed that enables referring

hospitals to judge the availability of NICU capacity in the individual centers at any time.
Chapter 6 Health Care Technology in the Netherlands 1203

Number of patients treated in

approved centers 2,372

non-approved centers 667

abroad 20

Total 3,059

Number of patients who died in

ICU (%) 418 (17.61XO)

Total number of IC-days 49,168

Average stay in NICU (days) 16.1

Percent of all live-born children

treated in NICUS 1.62

SOURCE Health Council, Report on Neonatal intensive Care, publiccation 1982/20 (The Hague, 1982), Ministry of Health, Planning Document Neonatal Intensive Care (The Hague, 1993).

 The Role of Technology Assessment

Technology Assessment has played an important

role in the development of NICUS. The two reports issued by the Health Council were the basis

for the policy pursued by the Minister of Health

(16,22). Another influential report was the POPS

study (project on preterm and small-for-gestational-age infants) conducted by a group of pediatricians from Leiden University Hospital (1983 to

1987). They followed 1,338 children with a birthweight below 1,500 g for a minimum of three

years. Survival, risk of perinatal mortality, quality

of life, and risk of handicaps were assessed and

compared with historical controls (born 1979 to

1983). The initial results show a significant increase in survival without a rise in the handicap

rate (36). As yet no cost-effectiveness study of

NICU. has been conducted in the Netherlands.

 Extracorporeal Membrane Oxygenation

(ECMO)

In 1990 ECMO was introduced in the Netherlands

in the neonatal clinic of the Nijmegen University

Hospital, after several years of animal experimentation (10). Although the first treatments

were successful, there was doubt over ECMO

long-term results (11 ). The Health Council, in its

1990 annual report (20) found that although immediate results were favorable (more than 80 percent survival), ECMO ha d significant

complications, and about 10 percent of the survivors showed mental and physical disability. Experience with ECMO in older infants was also very

limited. The Council voiced the opinion that

ECMO should be considered as “experimental

therapy” and recommended its use only in cases of

neonatal respiratory failure in selected NICUS.

The Council strongly recommended a prospective

technology assessment.

These recommendations were followed by the

Ministry of Health and the university hospitals. In

1991, four centers applied for funding of an

ECMO technology assessment project from the

Investigational Medicine Fund. Subsequently

two centers (Rotterdam and Nijmegen) were selected. Preliminary results of their study (non randomized, with conventionally treated historical

controls) have been reported. They found significant y better survival for neonates with serious respiratory distress and no difference in short-term

morbidity in ECMO-treated babies at a cost of

Df153,500 per baby.

In 1993, the Minister of Health restricted the

use of ECMO by applying Article 18 regulation

(already in force for NICUS) (29). For the duration

of the technology assessment study, the use of

ECMO is restricted to the two centers involved in

the clinical trial. Expansion to other centers depends on the outcome of the assessment. The preliminary estimate of need from the Dutch ECMO

trial is a minimum of 24 patients per year, which

may increase to 45 to 50 patients per year, based

on the U.S. and U.K. experiences.

SCREENING FOR BREAST CANCER

Breast cancer accounts for one quarter of all cancer deaths in Dutch women. Breast cancer incidence increased from 50 per 100,000 in 1960 to 96

per 100,000 in 1989 (although much of this increase is probably an artifact of screening). As early as 1974 some hospitals introduced screening

mammography for breast cancer (in place of selfexamination). organized in cooperation with regional cancer centers. Experience with this

method was described in a 1974 report by the
204 I Health Care Technology and Its Assessment in Eight Countries

Health Council (13). In 1977 the Minister of

Health asked the Health Council to look into possibilities for a national screening program for

breast cancer. The Council reported in 1981 and

again in 1984, describing the experiences with

breast cancer screening in Nijmegen, Utrecht, and

Leiden (15). These hospitals used different age

criteria (over 35 years, over 50 years) and different

screening intervals (one, two, or three years). The

Health Council concluded that there was insufficient epidemiological data available to decide

what was the most relevant age group and time interval. Also, there was uncertainty as to the logistical and financial consequences of nationwide

screening. At that time there was little experience

with screening studies in general in the Netherlands. The Council recommended that a cost-effectiveness study of the possible alternatives be

conducted.

In 1986 representatives of the Ministry of

Health and the Cancer centers visited Sweden to

study the ongoing screening program there (1).

Also in 1986, the European Community convened

an international working party on early detection

of breast cancer to discuss issues such as the relevant age groups (consensus reached on 50 years

old and over), the best screening interval (consensus reached on two years), and who should do the

screening (professional radiologists or radiography technician—no consensus reached).

The Health Council published its final report in

1987 ( 19), recommending mammography screening for women 50 to 70 years old, at an interval of

two years, by radiologists. The organization

would be the responsibility of the regional cancer

centers. Before screening started, education

would be organized for general practitioners

(GPs) and the public. An essential issue was continuous quality assurance of the screening program, to be carried out by an independent body. In

1987 the National Health Care Board (NRV) made

recommendations on logistical aspects of the

screening program.

The Sick Fund Council took responsibility for

introducing nationwide screening in 1987. The

program was to be paid for out of the Exceptional

Medical Expenses Fund, a national insurance program. The Sick Fund Council asked the Institute

for Medical Technology Assessment (IMTA) of

the Erasmus University in Rotterdam to study the

costs and effects of breast cancer screening (23).

In its first report (23) IMTA calculated the cost of

preventing one case of death from breast cancer by

screening as Dfl 100,000; the cost per life-year

saved was put at Dt19,700. It was also calculated

that half the cost of the screening program could

be earned back by saving on extra diagnostic and

therapeutic procedures (as a result of early detection of cancer). IMTA calculated it would take

seven years to introduce an effective nationwide

screening program (completed in 1995).

Guidelines for mammography screening were

introduced by the National Organization for Quality Assurance (CBO) in 1988 as the result of a consensus conference. Finally, the Sick Fund Council

appointed a National Coordination Committee in

June 1988, after which the screening program

started.

 Factors in the Diffusion

It was of some importance that several Dutch University Hospitals already had some experience

with mammography in the early 1970s. But models for a nationwide screening program were taken

from the Scandinavian countries, since there was

very little experience with mass screening in the

Netherlands. Although the central government

was interested in starting a mass screening program, it was the social insurance programs (represented by the Sick Fund Council) that took

decisive action. The cost-effectiveness study by

IMTA was very influential.

 Current Status of the

Screening Program

In 1989 the first phase of the screening program

began. The organization was carried out by the

nine Basic Health Services, in cooperation with

the Regional Cancer Centers. Each regional

screening program will be evaluated before it

starts, including logistics, costs, and assessment

aspects. Furthermore, in each region a screening

information system has been set up. with the rele-
Chapter 6 Health Care Technology in the Netherlands 1205

vant population data. By 1993 the screening programs were operating in five regions; by the end of

1994 all regions will have begun.

IMTA published a first evaluation of the

screening program for breast cancer in June 1992

(24). The following indicators of effectiveness

have been developed to assess the Dutch screening program:

■

●

●

m

■

a high response in the relevant age-group (more

than 70 percent of women 50 to 70 years old),

a high predictive value of a positive screening

result (more than 40 percent confirmed),

detection rate of at least 6.0 per 1,000 women

screened,

high specificity of mammography (greater than

99.1 percent),

earlier tumor stage treatable with surgery, and

possibilities for breast-sparing treatment.

In 1992 the first two screening regions were

evaluated, with the following results:

9 a response in the first round of 79 percent,

predictive value of screening test of 57 percent,

detection-rate of 6.6 breast cancer cases per

1,000 women screened,

detection in early tumor stage (most tumors half

the size of those found without screening), and

most tumors were operable (38 percent had radical surgery, 51 percent had breast-sparing operation, 11 percent had lumpectomy).

In conclusion, it can be said that the first screening programs did well, when effectiveness is considered. However, these results are not yet proof of

the value of mass screening.

It was also found that the screening programs

had some adverse effects, that were not anticipated (5). The following problems were observed:

● an extra psychological burden on women,

 a relatively long period of uncertainty,

■ increasing waiting time for the results of mammography, and

■ an increase of diagnostic procedures and consultations with specialists.

CHAPTER SUMMARY

The Dutch health care system developed to its current form after the second World War. The main

characteristics are: a mixed system of social and

private insurance, almost complete coverage of

health risks by insurance, and a high quality of

care to which all citizens have equal access. Control and regulation of health care technology by

the central government is an important feature of

the system. Assessment of health care technology

is becoming more important in decisionmaking.

 Ways To Control Health Care

Technology

In the Dutch health care system, control of health

technology is effected in three major ways:

1. Before 1983 (introduction of the global hospital budget), health technology was controlled

almost exclusively by the central health author2.

ity. Regulation was mostly through direct legislation, requiring approval or certification by the

Minister of Health. In some cases the authority

to control health care services was handed

down to the regional health authority, but general guidelines for planning by the provinces

were laid down by the government. In other

cases (as with drugs, vaccines, and blood) control was referred entirely to an independent

body.

The second instrument of control over health

technology, which has increased in importance

since 1984, is the admission of new technologies to the social insurance benefit, which is the

responsibility of the Sick Fund Council. By admitting or excluding specific technologies

from the benefit package, the Sick Fund Council controls the reimbursement of health services.
206 I Health Care Technology and Its Assessment in Eight Countries

3. The adoption of a global budgeting system for

hospitals and other health care institutions in

1983 introduced a powerful instrument of control over health care technology. Annual budgets are prospectively negotiated between

health care providers and regional insurance

agents, and approved by the Central Tariffs

Board. Budget arrangements include the expected volume of specific health technologies.

In this way caps can be put on, for example, cardiac surgery, radiation therapy, or the number

of CT procedures.

 The Success of the Control

Mechanisms

Control of health care technology by direct legislation has been most successful in the field of

drugs and biologics. The strict legal system of premarket approval by independent boards has proven to be effective, rapid, and flexible. Quality

standards are very high and adverse effects are

monitored closely. Least successful has been regulation of the introduction of medical devices. Although relevant legislation is on the books, there

is no effective system of approval for the admission of new medical devices.

Regulation of health care technology by the

central government has been most successful in

the field of “high-tech” services using Article 18

legislation. Early experiences (in the 1970s), for

example, with the introduction of CT and cardiac

surgery, were not very successful because the procedure was too slow and bureaucratic, and often

diffusion was well under way before control became effective. Later on, when the government

used Article 18 regulation in a more global sense

(regulating only the number of hospitals using the

technology and not the number of machines and

the volume of procedures), this method of planning became more effective. The main purpose of

using Article 18 regulation today is to concentrate

certain technologies in a limited number of centers. The relative success of Article 18 regulation

(when compared to CON type regulation in other

countries) is dependent mainly on two factors.

First, hospitals that break the rules and provide

services without approval are confronted with severe sanctions. Second, the planning document

that is the basis for approving specific t ypes of services is usually very explicit as to the number of

centers, quality standards, and other requirements.

Control of technology through defining the

benefit package has proved to be very effective in

a number of cases (e.g., IVF, bone marrow transplantation, heart and liver transplantation). The

Sick Fund Council has widened its span of control

and has become involved in technology assessment through this mechanism. Introduction of the

hospital budget system has had an enormous effect on the introduction and use of health care

technology in general: autonomous growth has

been curbed to a large extent and cost containment

on the macro-level became feasible.

The relative success of regulating and planning

health care technology in the Dutch system relates

to the fact that the three instruments described

above are used in conjunction so that the effect is

reinforced. For instance, the budget system may

be a powerful instrument to control hospital

spending, but it is not a very good instrument in

itself for planning specific services. In combination with Article 18 regulation however, the bud--

get system is very effective in controlling the

diffusion of expensive health services.

Apart from these regulating mechanisms,

health care technology assessment has become an

increasingly successful tool to control the

introduction and diffusion of health care technology. It has been demonstrated in recent years that

formal assessment has made it possible to influence the diffusion and use of a number of new

medical technologies. The use of prospective, randomized clinical trials and cost-effectiveness

studies has been an important aspect of these endeavors. The structure for a more systematic

technology assessment approach is now being developed, especially through the Investigational

Medicine Fund. Both the government and the insurance agencies are taking part in this program.

However, participation from the medical profession is still limited. In the coming years, policy
Chapter 6

should be directed at involving clinicians to a

greater extent by integrating technology assessment methods, information, and results into daily

medical thinking and practice (by education on

different levels). Also, there is a need for prioritysetting in assessments and for cooperation in international efforts.

 Changing Policies for Controlling

Health Technology

The health care reforms that have been introduced

recently in the Netherlands will have some effect

on the way health services and technologies are

planned and controlled. In general, the role of the

central government will become less pronounced.

The Minister of Health will have global control

through formulating general guidelines and quality criteria (through the new Health Care Quality

Act), but planning will depend on the results of negotiations between health care providers and financiers. Also, the medical professions are

expected to exercise more self-regulation.

The central government will continue the planning of specific “high-tech” medical services

through Article 18 but the focus will be on controlling the introduction and the first phase of diffusion. Once new technologies become generally

accepted, the central government is less active in

regulating them and more interested in promoting

their appropriate use. Technology assessment and

control of the benefit package are becoming more

important instruments in this respect.

However, the Dutch health care system is going

through a process of major reforms, which will affect all participants. In the new situation, possibilities and responsibilities for assessment health

care technology will probably have to be redefined.

REFERENCES

1. Andersson, I., Aspergren, K.. Janzon, L., et

al., “Mammographic Screening and Mortality

from Breast Cancer. The Malmo Mammographic Screening Trial.” Z3rit. Med. J .

297:943-8, 1988.

Health Care Technology in the Netherlands 1207

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

Ban(a, H.D. (cd)., Minimally Invasive Therapy in Five European Countries, Health Policy

Monographs, vol. 3 (Amsterdam: Elsevier,

1993).

Ban(a, H. D., and Gelijns, A. C., Anticipating

and Assessing Health Care Technology, (vol.

1 -8), Report from the Steering Committee on

Future Health Scenarios (Dordrecht: Martinus Nijhoff Publishers, 1987).

Bameveld Binkhuysen, F. H., The Effectivity

and Medical Eflciency of Radiology Stressing Computed Tomography, PhD thesis

(Utrecht: University of Utrecht, 1988).

Boekema, A. G., et al. “The First Experience

with Breast Cancer Screening in the Enschede

Region,” Ned. Tijdsch~ Geneeskd. 136:

1757-1764, 1992.

Central Bureau of Statistics, Statistical Yearbook of the Netherlands for 1993 (The Hague:

SDU Publishers, 1993).

Duivenboden, Y.A. van, Merkus, J. M., and

Verloove-Vanhorick, S. P., “Infertility Treatment: Implications for Perinatology.” Euz J.

Obstet. Gynecol. Reprod. Biol. 42:201-204,

1991.

Dutre, M. A., The Introduction and Diflusion

of Expensive Medical Technology in the

Netherlands, PhD thesis (Rotterdam: Erasmus University, 1991 ).

Eurotransplant Foundation Annual Reports

(Leiden: Eurotransplant, 1991, 1992, and

1993).

Festen, C., “ECMO Bij Pasgeborenen,” Ned.

Tijdsch~ Geneeskd. 134:364-366, 1990.

Geven, W. et al.. “Twee Geslaagde BehandeIingen Met ECMO Bij Pasbegorenen Met

Emstige Ademhalingsproblemen,” Ned.

Tzjdschn Geneeskd. 134:2200-2202. 1990.

Groot, L. M. J., “Medical Technology in the

Health Care System of the Netherlands.” The

Management of Health Care Technology in

Nine Countries, H.D. Banta, and K. Kemp K

(eds.) (New York, NY: Springer Publishing

Co., 1982) pp. 150-166.

Health Council, Advisory Report on the Earl~’

Detection of Cancer (The Hague. 1974).
208 I Health Care Technology and Its Assessment in Eight Countries

14. Health Council, Advisory Reports on Computer Tomography (The Hague, 1976, 1977

and 1981).

15. Health Council, Advisory Reports on Screening for Breast Cancer (The Hague, 1981 and

1984).

16. Health Council, Report on Neonatal Intensive Care, publication 1982/20 (The Hague,

1982).

17. Health Council, Advisory Report on Nuclear

Magnetic Resonance Imaging and Spectroscopy (The Hague, 1984).

18. Health Council, Report on Cardiac Surgery,

publication 1984/18 (The Hague, 1984).

19. Health Council, Advisory Reporton the EarZy

Detection of Breast Cancer Through Mass

Screening (The Hague, 1987).

20. Health Council, Annual Report on Health

Care (Jaaradvies Gezondheidszorg 1990)

(The Hague, 1990).

21. Health Council, Medical Practice at the

Crossroads (The Hague, 1991).

22. Health Council, Report on Intensive Care for

the Newborn, publication 1991/06 (The

Hague, 1991).

23. INITA, The Costs and Effects ofMass Screening for Breast Cancer (Rotterdam: Erasmus

University, 1987 and 1990).

24. HUTA, National Evaluation ofBreast Cancer

Screening in the Netherlands (Rotterdam: Erasmus University, 1992).

25. Kassenaar, A., NA4R in Nederland: Rapportage van het evaluatie-onderzoek naar de

introductive van NMR in Nederland (Ministerie van Onderwijs en Wetenschappen, 1987).

26. Kirchberger, S., The Di@sion of Two

Technologies for Renal Stone Treatment

Across Europe (London: King’s Fund Centre,

1991).

27. Lavayssiere, R., “Mission Sur l’Imagerie

Medicale,” (Paris, 1989).

28. McNamee, P., van Doorslaer, E., and Segaar

R. “Benefits and Costs of Recombinant Human Erythropoietin for End-Stage Renal Failure, a Review,” Int. J. Technology Assessment

Health Care 9:490-503, 1993.

29. Ministry of Health, Planning Document:

Neonatal Intensive Care (The Hague, 1993).

30. Ministry of Welfare, Health, and Culture, Financial Review for Health Care 1993 (The

Hague: SDU Publishers, 1993).

31. Ministry of Welfare, Health, and Culture, Financial Review for Health Care 1994 (The

Hague: SDU Publishers, 1994).

32. Nationale Raad voor de Volksgezondheid

(National Board of Health), Advisory Report

on MRI (Zoetermeer, 1993).

33. Renine Foundation, AnnuaZ Statistical Review 1993 (Rotterdam: Foundation for the

Registration of Renal Replacement Therapy,

1993).

34. Straten, G. F. M., “Besluitvorrning Over CT

en MRI,” Medisch Contact 50:1513-1515,

1991.

35. Valois, J. C., “De Nederlandse Radiodiagnostiek in International Perspectief,” Ned.

T~dschn Geneeskd. 134:1097-1 101, 1990.

36. Verloove-Vanhorick, S. P., and Verwey, R. A.,

Project on Preterm and Small-for-Gestational-Age Infants in the Netherlands 1983, PhD

thesis (Leiden: Leiden University, 1987).
Health Care

Technology in

Sweden

by Egon Jonsson and H. David Banta 7

OVERVIEW OF SWEDEN

s

weden is the largest Scandinavian country, similar in size

to California, with 8.7 million people concentrated mainly in the coastal regions and the south. Sweden is 1,500

miles long, and its northern part is above the Arctic Circle.

Stockholm (the capital) is on the east coast roughly midway between north and south at the level of southern Greenland. Because

of the Gulf Stream, the climate at this level of Sweden is relatively

mild. The second-largest Swedish city, Goteborg, is situated further south on the west coast.

Winter snowfall in the southern part of the country is moderate,

but the north has a severe winter climate dominated by snow and

dark days. Northern summers have 24 hours of daylight and the

famous midnight sun. Sweden’s countryside is dotted with about

100,000 lakes, and forest covers about half the surface of the

country. The north is dominated by a long mountain range, while

southern Sweden is rather flat.

The Swedish population is relatively homogeneous; however,

there are almost 1 million immigrants living in Sweden, of whom

the great majority are Finns, Yugoslavs, and Greeks. Immigration

accounted for 45 percent of the total population increase between

1944 and 1980. Every eighth child born in Sweden today is of foreign extraction, and foreign nationals constitute 5 percent of the

workforce.

The Economy

Despite Sweden’s size and geographic diversity, it is largely urban and highly industrialized. Agriculture provided employment

for 80 percent of the population 100 years ago, but now accounts

for only about 3 percent of the labor force. Eighty-three percent of 209
210 I Health Care Technology and Its Assessment in Eight Countries

the population lives in urban areas, and the three

largest cities have more than 30 percent of the population.

The country’s economy combines capitalism

and socialism. Private companies account for 80

to 90 percent of Swedish industry. In terms of employment, however, industry accounted for only

20 percent in 1990, as compared with 30 percent

in 1962. Structural changes in industry in the last

20 years include decreased shipping and steel and

textile manufacturing and increased engineering,

chemical, and forestry products. Simultaneously,

an expansion of the public sector has taken place,

so that close to 40 percent of the workforce in 1992

found employment there.

A high percentage of the Swedish population

(51 percent) is in the labor force (45). Eighty percent of women from ages 16 to 65 years old and 90

percent of those from 25 to 54 are gainfully

employed. The female workforce, together with

the aging of the population, imparts a great demand on health services (as working women are

less able to be caregivers). Unemployment has

been kept artificially low, but it rose to more than 4

percent in 1992 and is still increasing.

Sweden has one of the world’s highest per capita incomes. The Swedish rate of gross national

product (GNP) growth kept pace with that of

Western European countries during the 1982 to

1990 period; however, Sweden’s balance of payments has gradually worsened since 1984. Roughly 40 percent of Sweden’s output is exported; 70

percent of its trade is with European countries. Recently Swedish companies have merged with both

European and American firms.

Until 1991, the Swedish tax system was characterized by very high rates and a narrow tax base; in

that year, a new system was introduced, under

which national income tax is applied only to high

incomes, and the marginal tax is reduced to a maximum of 50 percent. Local income tax is about 30

percent. Most goods and services are subject to

value-added tax of 18 to 25 percent.

The high tax rate pays for extensive health and

welfare benefits. All Swedes have compulsory

health insurance that covers all health care, including outpatient and hospital services (except

for some co-payments for physician visits), home

care, long-term and nursing care, and all equipment and aids for the disabled and handicapped. It

also covers most of the costs of dental care and

prescribed pharmaceuticals.

 Government and Political System

Sweden’s internal development has occurred in an

atmosphere of tranquility unknown to most Western nations. The country has been neutral since the

Napoleonic Wars. Although Sweden has not

fought in a war since 1812, it maintains a modern

army with compulsory military service. Its tranquility manifests itself in the stability of the political system, with almost 50 years of nearly

continual rule of the Social Democratic Party during the twentieth century. (Since 1991, however, a

coalition of nonsocialists has been in power.) The

Swedish bureaucracy is noted for its stability and

effectiveness. Governance in Sweden occurs

largely by social consensus.

Sweden is a constitutional monarchy in which

all federal political power rests in an elected parliament, whose 349 members are elected directly

for three-year terms by proportional representation. The government consists of 13 ministries.

Laws are administered by about 100 central agencies and 24 county administrations. Local units of

government are the 24 counties (km) and the 289

municipalities.

Responsibility for health care has rested almost

completely with the county councils for the last

100 years. Recently, however, the municipalities

have begun to play an increasing role. Basic

education and training of doctors and other health

personnel is the responsibility of the central government.

For several hundred years before the current

system was developed, health care was delivered

by a combination of state, parish, and church hospitals and a system with district physicians

employed by the central government. County

councils were established and given increasing jurisdiction over acute care hospitals in 1864;

eventually, their responsibility for health care

grew so that by the 1960s, it included psychiatric
care and ambulatory services. The county councils have the right to levy local taxes, most of

which are income taxes that cover health care.

Members of the councils are publicly elected every third year, at the same time as national and municipal elections.

HEALTH STATUS OF THE POPULATION

Swedes have one of the highest life expectancies

in the world, closely following Japan and Iceland

(44). Sweden also has the oldest population

among OECD countries and has experienced a

rapid change in its citizenry’s age structure. In

1970, persons over 74 years old constituted only 5

percent of the population; that share rose to more

than 7 percent by 1985 and is expected to exceed

11 percent by 2025 (21). The greatest increase is in

the very elderly group, those over 85 years of age.

In many countries, health status is related to socioeconomic status. This problem is not as

marked in Sweden (65); nonetheless, certain occupational categories, low-income groups, single

people, immigrants, and the unemployed do have

a lower health status than others(41 ). The fact that

health status differences among different socioeconomic groups are small in S weden may well be

a consequence of persistent efforts to achieve equity through a general welfare system (41).

Infant mortality in 1989 was 6 per 1,000 live

births, placing Sweden in third place globally (behind Japan and Finland) (33). An increasing number of extremely premature babies are being born,

many of whom survive.

The main causes of overall mortality are (as in

most countries) cardiovascular diseases and cancer. Ischemic heart disease and lung cancer are

leading causes of premature deaths for men.

Among women, premature deaths are mainly due

to breast cancer and other nonspecified tumors

and ischemic heart disease. The predominant

cause of death among children and teenagers is

accidents.

Figure 7-1 shows the relative burden of the

most important disease groups in Sweden. The parameters used for measuring disease burden are as

follows:

Chapter 7 Health Care Technology in Sweden 1211

●

■

●

prescriptions that indicate both drug consumption and physician contact (in or outside hospital) (1986);

sick days (1983);

individuals receiving (disability) pensions

(“sick pensions”) because of sickness per year

(1986) (both sick days and new cases of sick

pension indicate not only the disease burden

but also the burden on professionally active age

groups); and

mortality (in 1986).

In only a few cases do disease burdens vary by

gender. Sick pensions due to cardiovascular disease occur more than twice as frequently among

men than women; the opposite is true for rheumatic diseases. Males dominate the “intoxication/violence” group by a ratio of 2 to 1.

A comparison of the two most important disease groups, rheumatologic and cardiovascular

diseases, illustrates how the chosen parameters reflect different aspects of the disease burdens. A

high mortality rate in a disease group (e.g., cardiovascular diseases) is connected with a heavy load

on hospital care. Sick days and cases of sick pensions reflect the fact that the age group involved is

professionally active and that the disease causes

morbidity rather than mortality. They also denote

a system with favorable conditions for economic

compensation. During the 1980s, Sweden experienced an increase from an average of 18 days to a

total average of 25 days of absence from work

annually per insured person (41 ). Women, especially in the age group over 50 years, account for

most of this increase.

During the 1980s, mortality among adults from

25 to 64 years old decreased (44). Most prominent

was the decrease in mortality from accidents and

from cardiovascular diseases; however, the male

mortality rate in this group still is twice the female

rate. In this age group, cardiovascular problems

account for 45 percent of male and 25 percent of

female deaths, whereas cancer accounts for 25

percent of male and 51 percent of female deaths.

Alcohol-related diseases rose during the 1970s

but remained constant during the 1980s. Mortality

in the age group over 65 years of age also de-
212 I Health Care Technology and Its Assessment in Eight Countries

60

40

20

0

60

40

20

0

Pharmaceutical prescriptions

% of total for each item

In De En Ur Ga NS IV On Me Re Rh Ca Ot

Disability payments (new cases)

0

/0 of total for each item

In De En Ur Ga NS IV On Me Re Rh

De = dermatology Ga = gastrointestinal

1

Ca Ot

Days of work missed

0

/0 of total for each item

60 -

40-

20-

0

r

—

In De En Ur Ga NS IV On Me Re Rh Ca Ot

Causes of death

40

20

0

% of total for each item

60

In De En Ur Ga NS IV

In = 

infection Ur = urogenital IV = intoxication/violence Re = respiratory

On = oncology Rh = rheumatology

En = endocrinology NS = neurology/sensory Me = mental disorders Ca = cardiovascular

—

Re Rh Ca Ot

Ot = other

SOURCE SCB, Health in Sweden (Stockholm Statistics Sweden, 1989)
Chapter 7 Health Care Technology in Sweden 1213

creased during the last century, mainly because of

decreases in coronary heart disease and stroke.

Generally, Swedes are very concerned about

their health and about illness prevention. In certain indicators of life style, Sweden (in comparison with the other Nordic countries of Denmark,

Norway, Finland, and Iceland) rates lowest in

smoking, low on alcohol consumption, and is in

the middle on fat consumption (42).

Prevention in the Swedish context includes not

only medical care but also media information and

various restrictions imposed on the population.

(One effect of active information campaigns is a

load on the health care system, especially primary

health care.) Preventive measures have been taken

against such factors as poor eating habits, physical

inactivity, tobacco smoking, alcohol and drug

consumption, sexually transmitted diseases (including AIDS), poor work environments, and

pollution. Maternal and child health care—including several programs for prevention of disease during pregnancy, childbirth, and early

childhood—have been strong features of the

Swedish health care system since the 1940s. Several screening programs for both children and

adults have long been in use; some, such as

screening for congenital diseases, dental health

for children, and breast and cervical cancer screening for women, are almost compulsory.

The government established and funded several institutions years ago with the mandate to combat certain public health problems—in particular

occupational diseases. In 1992 a Public Health

Institute was founded and funded generously to

promote healthy life styles. This new institute is

establishing professorial chairs for new public

health research institutions throughout the country and is also running large-scale media programs

to promote healthy life styles and prevent diseases, particularly from smoking and alcohol

abuse. Sweden has tried for years to limit alcohol

abuse by restricting sales to special state-owned

shops with limited hours. However, this measure

has not prevented alcohol abuse from being a serious problem in Sweden. Rules against smoking

indoors in public places (including hospitals) are

becoming increasingly common.

THE SWEDISH HEALTH CARE SYSTEM

 Constitutional Basis and Legislative

Background

All Swedish citizens are entitled to health and

medical care, regardless of where they live or their

economic circumstances. Health care is considered a public sector responsibility.

The Swedish health care system is decentralized. Before the 1970s, with the exception of the

creation of medical regions in 1958, few major

structural changes had been made in the system

since the transfer of health care administration to

the county councils in 1864. In the twentieth century, Sweden concentrated on developing universal financial coverage and providing personnel for

its costly, complex system of state-operated hospitals.

Private health care plays a minor role in Sweden. Although practitioners increased substantially in numbers during the last decade, most

physicians (about 90 percent) are still employed in

the publicly run hospitals and within the primary

health services (13). Although hospitals were

public and the population was largely covered for

hospital care through sick funds, out-of-hospital

care was often not covered until 1947. In that year

the National Health Insurance Act, covering physician services, outpatient services, and drugs,

was passed by the Parliament. The national health

insurance program was implemented in 1954 after

a period of careful planning. In 1958, Swedish

counties were organized into seven medical regions, creating intercounty cooperative clusters

envisioned as necessary for efficient delivery of

specialized services. (Box 7-1 shows some important milestones in Swedish health care.)

In 1961 a comprehensive plan was introduced

to increase medical manpower by expanding medical education. New hospital positions were

created for medical school graduates. By 1970 the

center of gravity of the medical profession had

shifted sufficiently toward salaried

reform making virtually all doctors

the state, unthinkable in 1948, was

little resistance.

service that a

employees of

effected with
214 I Health Care Technology and Its Assessment in Eight Countries

1862

1928

960

963

967

970

975

980

982/83

983

985

991

992

993

County councils formed

County councils given statutory responsibility for acute care

Private beds retired from public health services and county councils become formally responsible

for outpatient care at hospitals

County councils take over district medical service

County councils take over mental hospitals

Public health services established a uniform patient fee; employed physicians receive fixed salary

Private physicians given opportunity to join insurance plan; reimbursement regulated

County councils given responsibility for vaccination programs

County councils take over two remaining state teaching hospitals

County councils given full statutory responsibility for planning all forms of health care

County councils given control over reimbursement and practice rights of private physicians

Opportunity for pilot projects that place primary care under municipal control

Municipal responsibility for health care of elderly (ADEL reform)

Opportunity for pilot projects to coordinate financing between social Insurance and health care

SOURCE Committee on Funding and Organization of Health Services and Medical Care, Three Models for Health Care Reform in

Sweden (Stockholm Ministry of Health and Social Affairs, 1993)

Medical and social services were combined

into the National Board of Health and Welfare in

1968. Even before this time, however, the central

government had begun to transfer services to the

counties. In 1961 responsibility for district doctors was transferred to the counties; in 1963 responsibility for mental hospitals was transferred

(19). Subsequently, responsibility for university

hospitals, public dental services, and services for

the mentally handicapped was also given over to

the counties.

The Health and Medical Services Act of 1983

finalized formal decentralization, giving the 24

county councils and three large municipalities

further responsibility for the health of their inhabitants (including preventive care and rehabilitation). The money transferred from the central

budget to the councils became a lump sum.

Each county has a politically elected council,

but in negotiations with the central government as

well as with employees’ organizations, they tire

organized in the Federation of County Councils

(FCC). The FCC has a (politically elected) board

and a well-staffed central office. During the development of the current system for health care administration the central government has been

responsible for research and development as well

as for the education of physicians. For historical

reasons, most of the education of other health care

personnel rests with local authorities, counties, or

communities.

Under the Health and Medical Services Act the

councils are required to promote the health of residents in their areas and to offer them equal access

to good medical care and to transportation in case

of disease. The councils plan the development and

organization of all needed health care. The legislation provides for the protection of each patient’s

integrity, including the right to be informed about

his or her state of health and about available investigative procedures and treatment. Special regulations cover the protection of patients’ identities in
Chapter 7 Health Care Technology in Sweden 1215

file handling and in various registers. Somatic patients are free to discontinue medical treatment.

(The rules for psychiatric patients are dealt with in

separate legislation.) The National Board of

Health and Welfare supervises all health care personnel, and any misconduct is investigated by the

National Medical Disciplinary Board.

Private 8,400 7,800

 Administration

The administration of Sweden’s health care system has several levels and branches. The state is

responsible for ensuring that the system develops

efficiently and according to overall objectives, in

the context of the goals and constraints of social

welfare policy. The Ministry of Health and Social

Affairs (Socialdepartementet) is at the first level

below the government, and parliament and is concerned mainly with outlining guidelines for health

care, social welfare services, and health insurance.

At the second level are a number of relatively

independent administrative agencies. The National Board of Health and Welfare (Socialstyrelsen)

is the central supervising authority for health and

social services. In addition to a central office, it

has about 10 county units, all with the following

three well-defined tasks:

1. supervising, following up on, and evaluating

developments in all areas of health and social

policy;

2. acting as a center of knowledge in the realm of

social policy; and

3. acting as an expert body for the government.

The Federation of County Councils plays a key

role in health policy and structural and manpower

issues. Other central supervising authorities

(mainly for health protection) include the National Environmental Protection Board, the National

Board of Occupational Safety and Health, the National Food Administration, the National Institute

of Radiation Protection, the Chemical Inspection,

the National Drug Institution, and the Institute of

Forensic Medicine.

The Swedish Council of Technology Assessment in Health Care (SBU), funded by the central

government, reviews and evaluates information

Bed-days

Public 35,600,000 29,000,000

Private 2,800,000 2,500,000

Physician visits

Public 18,900,000 20,200,000

Private 2,900,000 4,600,000

SOURCE Federation of County Councils, Statistical Yearbook for

County Counccils 1994 (Stockholm, 1994)

on the medical, economic, and ethical impacts of

new and existing health care technologies. The

Swedish Planning and Rationalization Institute of

the Health and Social Services (SPRI), owned in

common by the central government and the

county councils, works on planning and efficiency

measures and special investigative tasks. It also

supports research and development in health care

administration. Other agencies include the National Corporation of Swedish Pharmacies (Apoteksbolaget), which purchases and distributes

drugs; the Medical Products Agency (Lakemedelsverket), which is responsible for drug control

and registration; and the National Social Insurance Board (Riksforsakringsverket), which is responsible for the central administration and

regulation of the national health insurance system.

(Table 7-1 illustrates some recent structural

changes in the health care system with respect to

hospital beds, bed-days, and physician visits.)

 Financing

The national health insurance system is a statecontrolled and supervised financing instrument

designed to create equity in health care. Financed

by the state and by employer contributions, the

system is administered by regional social insurance offices (Allmanna forsaking skassor). Payments for medical care, dental care, and hospital
216 I Health Care Technology and Its Assessment in Eight Countries

0/0 in 1970 0/0 in 1992

United Kingdom 87 83

Sweden 86 88

The Netherlands 84 73

France 75 74

Germany 70 72

Canada 70 72

United States 37 44

SOURCE Organisation for Economic Cooperation and Development, OECD Health Data a Software Package for the International

Comparison of Health Care Systems (Pam, France Organisation for

Economic Cooperation and Development, 1993)

treatment are made directly from the social insurance office to the concerned health care administration or individual practitioner.

Patients pay fees for each contact with the

health care system. The fee, set by each county

council, varies from SEK50 to SEK130 ($US5 to

15) per physician visit in outpatient care up to a

maximum of SEK 1,600 ($ US200) within 1 year,

after which any health care service (except dental

care) is free of charge during the subsequent year.

This co-payment, which is the same for everyone,

is kept by the county council. Consultation with

private practitioners is reimbursed, and the patient

pays between SEK120 and SEK200 ($US15 to

25) depending mainly on the specialty of the physician. Similarly, pharmaceuticals are reimbursed. The patient pays a maximum of SEK120

($ US15) for the most expensive medicine and

SEK 10 ($US 1.20) for every additional medicine

on the same prescription.

About 88 percent of health services in Sweden

is publicly financed. Over the last 20 years, only

minor changes have occurred in the proportion of

public financing of health care in Sweden (which

also is the case in other Organisation for Economic Cooperation and Development (OECD) countries). (See table 7-2.)

Health care costs in Sweden have increased

rapidly in recent decades. The annual rate of increase was limited to about 1 to 2 percent during

the 1980s. Since 1990, however, the volume of

health services has decreased, and the costs in real

terms have decreased by about 1 to 2 percent annually. Costs are expected to decrease further in 1994

by about 3 percent (13).

In 1960 the costs of health care amounted to

about 3 percent of gross domestic product (GDP),

as compared with 8.5 percent in 1989 (18,34). In

1991 the total costs of health care amounted to

SEK120,582 million ($US 16,750 million), corresponding to per-capita spending of almost

$US2,000. (See table 7-3 for distribution of

costs.)

The costs are financed approximately as follows: county councils, 60 percent; state subsidies,

16 percent; state funds, 12 percent; national health

insurance reimbursement, 8 percent; and patients’

fees, 4 percent. The general state subsidies are intended to level out differences in income between

the county councils and include funds for education, research, and psychiatry (18).

 Organization of the System

The health care system has several levels, the uppermost being the Federation of County Councils.

The system has regional, county, and local levels,

each of which is described briefly below.

Regional Level

Sweden is divided into seven medical care regions, each with a population of 11.5 million and

comprising about three counties. These counties

share one or more regional hospitals that are affiliated with a medical school and function as research and teaching hospitals. Among the

specialized services that these institutions provide

are neurology, radiation therapy, thoracic surgery,

neurosurgery, pediatric surgery, and certain types

of cardiac care. Some specialized services are provided on an interregional basis. (Thoracic surgery

departments, for example, are located only at the

four largest regional hospitals.)

County Level

Counties have an average population of 300,000,

usually sharing one highly specialized central

hospital with 15 to 20 specialties, and one or more

district hospitals with at least four specialties
Somatic short-term care 33

Long-term care 14

Psychiatric care 8

Total 55

Outpatient Care

Primary care 14

Hospital outpatient care 7

Psychiatric care 2

Total 23

Drugs 10

Self-pay 12

Total 100

SOURCE LKELP 92 Report No 3, The Federation of County CounCiIS, 1992 (In Swedish)

(e.g., internal medicine, surgery, radiology, and

anesthesiology).

Local Level

At this level are the primary care districts with at

least one local health care center for outpatient

care and at least one nursing home for long-term

care. At the health centers, care is provided by district physicians, district nurses, and midwives (if

necessary as ambulatory care in the patient’s

home). The primary care districts also offer clinics

for child and maternity care, and they operate

screening and vaccination programs. Other

branches of primary care include school health

and industrial health services.

Because most medical care in Sweden is delivered by the hospitals, which are operated by the

county councils, it is the counties that actually invest in new medical technology and decide whether to adopt a new technology. In addition, the

budgetary authority of the counties constrains the

services offered by the hospitals. Thus, physicians

have less freedom in Sweden than they do in other

Western countries to adopt services and to purchase equipment.

Chapter 7 Health Care Technology in Sweden 1217

In theory, the four hospital tiers provide a clear

hierarchy for acquisition of sophisticated new

technologies. The regional hospitals come first,

followed by the lower tiers. At each tier a service

is provided only if there is a sufficient population

base for it. (The case of computed tomography

(CT) scanning, described later, will clarify how

such decisions are made.) Rarely needed procedures are concentrated, and more experience with

such procedures on the part of medical practitioners brings better results.

Each county’s autonomy is somewhat limited

by financial negotiations with the central government. Their freedom of choice also is constrained

by cooperative agreements with other counties to

provide specialized services on a regional basis.

The objective of the regional system of medical

services has been to ensure that specific types of

services are delivered at the level (local, county, or

regional) at which they can be provided most efficiently. In six of the regions, the university hospital, partly staffed by the medical faculty of the

university, is the hospital responsible for highly

specialized care in the region. The seventh region

(Orebro) has no university, but its regional hospital is almost as well equipped for high technology

as the university hospitals. Up to now, counties

have had agreements with the regional hospitals

and the other counties within the region concerning economic and administrative details of the delivery of highly specialized care.

 Public Policy Concerns

In the early 1980s the Swedish economy slowed,

which raised concerns about the high costs of

health care. National caps have been put on county

council taxes several times, constraining the rise

of health care costs and also slowing medical

technology diffusion.

Apart from economic pressures, the main

weaknesses of health services in Sweden are considered to be (18):

■ lack of integration of health and social services

and health insurance (especially sickness benefits, early retirement pensions, and occupation-
218 I Health Care Technology and lts Assessment in Eight Countries

■

●

●

al injury insurance) and, within the health

sector, of primary and hospital care;

failure of general practitioners to act as “gatekeepers” for primary care, which results in a

high proportion of direct referrals to hospitals;

emphasis on institutional care, which may not

always be effective and efficient;

limited choices for patients; and

insufficient incentives for health personnel to

improve the productivity and efficiency of the

health sector.

Although the level of public confidence in the

health care system still is high, the system is generally considered to be somewhat rigid, and the

level of patient orientation is viewed as being too

low. With the growing concern regarding health

care priorities, the focus is increasingly on protecting the most vulnerable groups, such as the elderly.

The demand on health care services is steadily

increasing not only because of the growing numbers of elderly persons, but also as a result of medico-technical advances that allow treatment of

conditions that were once untreatable. These factors, together with demands for restraints on public spending, encourage reforms.

 Reform Proposals and Implementation

Sweden’s entire system of well-defined responsibilities for health care, with agreements on how

money should flow and how patients are to be taken care of, is now under debate. To some extent

this debate is due an imbalance between costs and

resources, and to some extent it is due to decreased

confidence in the system. Many new ideas are being tested, most of them originating in the United

States or the United Kingdom. A political consensus now exists on reforming health services during the 1990s. Changes are certainly going to be

introduced, probably of different types and with

different goals in different counties (67). Common themes, however, are increased patient

choice, reallocation of responsibilities and freer

market mechanisms, competition, improved levels of service, and less bureaucracy.

A parliamentary committee was appointed in

1993 to review options for health care financing

and organization. This committee was asked to

consider three alternative models for the Swedish

health system: 1) a continuation of the current system of financing, 2) a system in which primary

health care providers become the budget allocation mechanism by buying services for their patients, and 3) a private insurance system.

The committee has responded with three models for health care reform (11 ). The first is based on

the idea that within all county councils, there

should be a separation of purchaser and provider

roles, with a greater emphasis on reimbursement

based on performance. The second model, described as the primary care model, involves transferring responsibility for health services from

county councils to municipal councils. The assumption is that bringing services and political accountability closer to the citizens would mean that

primary care would receive a higher priority. Under the new system, patients are allowed free

choice of primary care center or doctor and of hospital, even across the county borders. The idea is

to introduce an “internal market” with a “purchase

and sale” situation in order to generate competition, based on the theory of incentives for improving productivity and efficiency (18). The third

model is described as compulsory health insurance, which requires the replacement of tax financing with a system of social insurance. This

would lead to a separation of insurers and providers (25).

The committee’s report compares the strengths

and weaknesses of these three reform models

based on criteria focusing on equity and on continued public revenues as the main source of financing of health care, along with increased freedom of

choice and democratic influence. Although the

introduction of business concepts into health care

might sound attractive in theory, reality may produce substantial challenges, such as caring for elderly people with a mix of somatic and social

problems.

It is assumed that reform will entail greater

needs for central follow-up and evaluation, with
an emphasis on cost-effectiveness. Any new approach will also have to include monitoring and

evaluating goal achievements; comparing inputs,

expenditures, and results in different places and

for different activities; and observing and evaluating the content and quality of various activities.

Quality assessment and quality assurance are likely to become important tasks for, say, the National

Board of Health and Welfare. At present, quality

assurance activities are very “soft” and hardly affect professional functioning—a situation that

seems certain to change in the future.

 The Role of the Public

Politically speaking, if a new technology is cost

effective at the central hospital level, the county

council and taxpayers both have a role in deciding

whether to acquire it. This does not always lead to

cost-effective decisions, however. Swedish citizens (like those of other countries) resist the closure of local hospitals and often promote new

technology for reasons of local pride. Still, the

close link between citizens and resource decisions

helps ensure that the public feels committed to the

health care system. Although Sweden has one of

the highest levels of per capita expenditures on

health care in the world, these amounts have been

clearly promoted by popular political choice.

As patients, Swedish citizens pay little for their

health care services, and price is therefore not a

mechanism for limiting the demand for such services. A major constraint on demand is the fact

that patients often are forced to wait for services

simply because the supply is insufficient. Physical

queues are often necessary for preliminary consultation. Once a referral to a specialist is made,

there is another wait before a consultation. If a

nonemergency procedure (e.g., a surgical procedure) is recommended, there is a further wait.

Waiting time has fallen dramatically since

1991, when the government explicitly guaranteed

services in another hospital or a private hospital

for patients with certain conditions who had been

waiting longer than three months. Services covered by this guarantee include coronary artery disease surgery, hip joint and knee joint replacement,

Chapter 7 Health Care Technology in Sweden 1219

cataract surgery, gallstone surgery, hernia surgery,

surgery on prolapsed uterus, treatment for incontinence, and hearing aid tests. A national fund was

created to finance these procedures. As a result,

there has been a rapid increase in the number of

these surgical operations and there are now essentially no waiting times for them. Their increase

certainly points to an expansion of indications,

and concern is growing about the possibility of inappropriate procedures.

Constraints on the supply of services are successful because Swedish patients are collectivism

in their orientation. The deference that Swedes

display to government decisions reflects their

confidence in the civil service and respect for government policies. Planners’ efforts to control the

dissemination of health care technology are greatly assisted by this tendency of Swedish citizens to

cooperate with their government (19).

CONTROLLING HEALTH CARE

TECHNOLOGY

 Research Policies

Although the central government is explicitly responsible for all research, some counties (especially those connected with regional hospitals or

with a stronger economy) also support research

activities, particularly those aimed at improving

the content and quality of health services (67). The

central state budget includes resources for university-based research and education, and medical

faculties have been relatively well funded. The

preclinical departments have especially large and

well-educated staffs, and laboratory research activities in Sweden are generally considered to be excellent. The clinical institutions are not as well

supported by the state budget, partly because of

the dual responsibility for operating the university

hospitals, which have small academic staffs responsible for research and education of both medical students and some paramedical personnel, and

large, nonacademic staffs employed by the county

for patient care. For along time all academic activity was concentrated in the university hospital,

with its specialized beds and large outpatient de-
220 I Health Care Technology and Its Assessment in Eight Countries

partments. During the last decade all universities

have created special departments of primary care

(sometimes called general medicine) headed by a

professor and other staff. All academics must take

part in research; the unwritten rule is that such activities should constitute about 20 to 25 percent of

academics’ time (the rest being divided between

teaching and medical service).

The main source of research support is the

Medical Research Council (MRC). Most of the

MRC’S research funding goes to university preclinical departments, but some also is directed to

clinical departments, primary care, or social medicine. During the last decade, the MRC has appointed special committees for health services

research and technology assessment. It was partly

through the initiative of the MRC and its technology assessment committee that the Swedish

Council on Technology Assessment in Health

Care (SBU) was created (see below). Other governmental research bodies—such as the Social

Research Council (SFR) and the Council of Research (FRN)—also play a role in formulating

government policy toward biomedical research.

In addition, clinical research is supported by several large private foundations.

Sweden invests heavily in health-related research, primarily basic biomedical research. According to a study sponsored by the U.S. National

Institutes of Health in 1980, Sweden invested the

highest amount of public funds per capita in

biomedical research and development in the

world, with the United States a close second. Sweden also has an active pharmaceutical industry

with relatively heavy investments. In 1993,

approximately 50 percent of health-related research was financed by government and the other

50 percent by industry.

Sweden also has explicit policies, as already

noted, to encourage certain types of research that

can improve Swedish health services. The development of health care technology assessment is

one example. However, there is increasing concern that clinically oriented research, which is

supported through clinical activities, is losing financial support under health care reforms. This

problem has been noted by the Parliament, which

is investigating the situation.

 Medical Education and Employment

Policies

The central government plans carefully to match

physician training programs with current and anticipated needs. In recent years the policy has been

to increase the number of Swedish physicians specializing in long-term care and psychiatry. Positions for specialists trained in the use of

technology-intensive techniques has been relatively constrained. Most recently, however, the

government has taken measures to further restrict

admissions to medical schools and has initiated a

thorough evaluation of medical education.

Once physicians are educated, the National

Board of Health and Welfare can decide to a large

extent where they will work, through its allocation

of medical posts. Until recently, the Board determined the number of positions in different specialties throughout the system. This not only had

an affected the control of health care technology

but also helped ensure geographic access for the

entire population. Recently, however, this policy

was changed; determining the number of positions for doctors is now the responsibility of the

county councils. Because the total number of phy -

sicians is still decided by the central government,

count y councils are limited in this respect. A similar system is applied to nurses, who represent a

greater proportion of hospital personnel in Sweden than inmost countries. (Nurses are trained to a

high level and perform a variety of tasks ordinarily

reserved for physicians in other countries.)

As with other functions, the central government has announced that it wishes to decentralize

the administration of universities and schools for

higher education. It is anticipated that the local

governing board of universities will decide most

of its activities by itself, adhering to certain standards of quality (67). One possibility is to create

local foundations to run the universities. Many

would welcome such a decentralization of policymaking, but others are concerned about loss of
uality in both education and research. In any

event, it seems likely that the future will see

marked alterations in the administration of education and research in Sweden.

 Regulation and Control of

Pharmaceuticals

Sweden has a well-organized central agency for

the control of pharmaceuticals, the National Pharmaceutical Board, which became an independent

institution in 1990. The agency has a reputation

for high scientific competence and integrity, similar to that of the U.S. Food and Drug Administration (FDA) or similar bodies in the United

Kingdom or Australia. When new medicines are

registered—after thorough scrutiny of efficacy

and safety—their price is agreed upon by the Pharmaceutical Board and the manufacturer or distributor. The drugs are then sold through the state

monopoly (Apoteksbolaget), mostly on the basis

of physicians’ prescriptions (68).

Swedish patients have enjoyed an unusually favorable subsidy with regard to prescription medicine. The patient pays only a nominal amount,

slowly increasing from SEK15 to SEK120

($ US2.50 to $US 15), for all prescriptions written

at the same time by the same physician. This situation has led to patients’ requesting their doctors to

write many prescriptions at the same time, in order

to increase the amount paid by the government.

During recent years, some restrictions have been

introduced both regarding the amount that can be

prescribed (only a three month supply) and the

type of pharmaceuticals affected (e.g., vitamins

and cough medicines are no longer part of the

scheme).

Anew bill is being discussed to decrease subsidies for medicines. The government has suggested both that the patient will have to pay a

certain sum for each prescribed drug and that only

the cheapest drug of the same kind will be subsidized. This would increase the amount that the patients must pay while decreasing government

costs for drugs, now more than SEK1O billion.

This bill is being resisted by both patients’ organizations and the pharmaceutical industry.

Chapter7 Health Care Technology in Sweden 1221

There are only a few pharmaceutical enterprises in Sweden. Most medicines used are imported through subsidiaries of large international

companies. The few Swedish companies are,

however, quite successful and have considerable

presence in the international pharmaceutical market. Part of this success is due to unusually good

cooperation between university and industry research. (Highly qualified industrial researchers

are appointed as adjunct professors, and this cooperation has stimulated research in both industry

and the universities.)

International pharmaceutical companies frequently conduct early clinical trials in Sweden.

Since the early 1980s, a clear agreement between

the pharmaceutical industry and the FCC has

established rules for clinical studies with new

drugs. This agreement has been important for the

trials’ financial support as well as for patient safety and an improved image for the pharmaceutical

industry.

 Regulation of Medical Devices

In contrast to pharmaceuticals, medical devices

have been much less regulated. Except for legislation on the control of sterilized disposable, the

electrical safety of certain devices, and radiation

safety, Sweden has had few legal rules to control

the diffusion and use of medical devices. The

main responsibility for this task has rested with

health personnel. Since 1976, however, the National Board of Health and Welfare (NBHW) has

had an advisory committee composed of representatives of the county councils, research institutes,

and industry to monitor issues of the safety of the

medical devices. All accidents and most major

problems related to medical devices must be reported to this committee, which has in turn issued

regulations and recommendations on safety.

In effect since 1993, new legislation has placed

on industry the main responsibility “safe and appropriate” medical devices. The NBHW supervised the implementation of this legislation,

which is part of a general harmonization of Sweden’s rules with the policies of the European

Union. The new legislation requires that produc-
222 I Health Care Technology and Its Assessment in Eight Countries

ers of medical devices report malfunctioning

equipment and enables the NBHW to request

technical changes in the equipment or to stop the

use of such devices.

 Payment for Primary Health Care

In 1993 the central government introduced a radically new policy for paying for primary health

care services. The new model features several

characteristics of the United Kingdom’s system of

general practice—mainly a voluntary listing of

the population with preferred providers (called

“house doctors”) at outpatient settings, and a per

capita allocation of the primary health care budget

according to each provider’s population size (a

minimum of 3,000 people). This model is expected to increase patients’ choices of providers

and to encourage competitive behavior within the

publicly operated health system. A potential problem with this change is that there are essentially no

incentives for cost-effective medical procedures

or for the provision of preventive measures in the

new model. On the contrary, the model may encourage overtreatment.

Quality Assurance

The National Board of Health and Welfare

introduced a special program for quality assurance

in 1991. Several organizations, including SPRI,

have begun concentrating on research in this area.

A committee on collaboration and coordination

among national health care organizations, colleges for the medical professions, and nursing colleges has been established to promote

quality-related activities. In late 1991 this council

asked the medical colleges to develop specific

quality indicators for each specialty, which began

to be available in 1992. Their purpose is to encourage departments to monitor their own performance continuously. Indeed, quality committees

are becoming common in hospitals. (All hospitals

have questionnaires to assess patient satisfaction;

however, quality audits are still being developed.)

The effects of all these activities related to quality

of care is not yet known.

HEALTH CARE TECHNOLOGY

ASSESSMENT

Sweden was one of the first countries to become

involved in the assessment of health care technology. A study of CT scanning was carried out in the

early 1970s (see below); even before this study,

the National Board of Health and Welfare asked

some prominent physicians to evaluate particular

technologies to determine if they were “consistent

with proven scientific knowledge and good experience” (68). Over the last 15 years, formal assessments have been increasingly accepted in Sweden

and are carried out in many institutions.

 Swedish Council on Technology

Assessment in Health Care (SBU)

Through the combined efforts of the MRC, politicians in the government and Parliament, assisted

by the Board of Health and Welfare and SPRI,

SBU was created in 1987. Its basic purpose was

intended to update the Swedish government and

the county councils with respect to scientific information on the overall value of medical technologies, especially new technologies (16). Cost

containment was never the main aim, as it has

been in other countries; the government did not

wish to slow the introduction of new medical

advancements. SBU was envisioned as an organization that would both assess important technologies and serve as a coordinating body for

activities in Sweden. The idea was to give the

SBU three years to see if creating a more permanent organization would be sensible. The desired

outcome was the reorienting of policy and practice

in constructive directions (67).

The board of the SBU was made up of representatives of important organizations in health care. It

was envisaged that the board would have enough

competence to select suitable fields for assessment as well as suitable methodologies. At the end

of the trial period, SBU was producing high-quality reports from an international perspective and

had already had important effects on clinical decisionmaking. Independent reviewers proposed that

the SBU be set up as an independent authority fi-
Chapter 7 Health Care Technology in Sweden 1223

nanced by the state. The government accepted this

proposal and presented a bill to Parliament for approval; thus, the permanent Council began to

function in 1992 with a budget ofSEK12 million

($US1.5 million).

The SBU depends on specialists working in the

health services, mostly those outside university

centers, to ensure contact with problems encountered in the daily routine of medical services (67).

The SBU’s studies are not merely technology assessments but also analyses of the nature of particular problems in Swedish society and evaluations

of context and technology from diverse standpoints (including social and economic). Several

SBU reports discuss the problems of assessment

and propose methods for solving them

(22,53,54,62). The SBU has also published a report recommending priorities for assessment (54).

The first SBU technology assessment concerned preoperative investigations in elective surgery (55). The study team reviewed the literature

and concluded that there was little justification for

routine use of preoperative x-rays, electrocardiograms, or laboratory tests. A survey of practice revealed considerable variations in the use of such

tests and an economic analysis showed that the

cost for complete preoperative investigations in

Sweden totaled SEK726 million.

The SBU recommended that preoperative routines not be used in the absence of specific indications. An extensive “marketing” effort was used to

convince surgeons and anesthesiologists of the

wisdom of these recommendations. Follow-up

surveys of practice were done in 1990 and 1991 to

evaluate the impact of the report. The evaluation

in 1990 showed a significant decrease in routine

preoperative testing that continued in the 1991

measurement. The actual savings, apart from the

increase in quality of care, were SEK50 million

per year, or five times the SBU’S yearly budget at

that time.

Another full-scale assessment concerned the

problem of back pain (56). Most commonly used

treatments were found, through a literature review, to be either ineffective or unproven; however, early movement and rehabilitation were found

to have a positive impact on recovery. Moreover,

the SBU report found that back problems were related to both physical and psychosocial working

conditions. The report recommended a cautious

approach to diagnosis and treatment, and more research on the efficacy of proposed treatments. It

also recommended systematic approaches to

changing individuals’ working conditions so as to

reduce the problem of back pain. Extensively publicized, this report led to a renewed discussion of

the disorder throughout Sweden. Its impact is

presently being assessed. Other SBU reports have

dealt with stroke (59), percutaneous transluminal

coronary angioplasty (58), magnetic resonance

imaging (57), and early detection of diabetic retinopathy (60).

Several large projects are currently under way

at the SBU. One is a thorough evaluation of the

treatment of mild to moderate hypertension. Although many expert committees have made recommendations concerning this condition, the

literature has never been examined to evaluate results in relation to resources needed for different

types of patients. The study has already raised serious questions about the efficacy of treating mild

to moderate hypertension.

Another large project concerns the rationale for

radiation treatment of cancer. A Swedish working

group of oncologists, economists, and experts in

critical assessment is working to evaluate the voluminous literature on efficacy and cost-effectiveness. In addition, an extensive survey is being

carried out to document the radiotherapy situation. Because this is a sensitive field, an international expert group has also been appointed to

assist in preparing the final report. In addition, the

SBU is studying the appropriateness of coronary

artery bypass surgery (CABG) in Sweden, using

methods developed by the RAND Corp. (10,69).

Once an SBU report is completed, it is distributed to decisionmakers, clinicians, nurses, and administrators within the health care system. The

SBU has also begun publishing a newsletter that

covers not only SBU studies but also national and

international assessment activities. Furthermore,

each year the SBU arranges at least one major conference introducing or concluding an SBU proj-
224 I Health Care Technology and Its Assessment in Eight Countries

ect. It also organizes courses, seminars, and

lectures by foreign experts.

During 1992 and 1993, when questions arose in

Sweden concerning the benefits of psychiatric

care, the SBU reviewed psychiatric procedures in

Sweden and estimated the total costs for medical

care for mental illness. The Parliament showed

considerable interest in this area and gave the SBU

additional funding to investigate mental health

technology. In 1993 the SBU began to organize a

large study of the use of psychotropic drugs to

treat psychosis.

The growing visibility of the problems of

health care evaluation, along with the SBU’S

work, has given the field of technology assessment in health care a high profile in Sweden. In

1993 the Parliament discussed the possibility of

setting aside 1 percent of national health expenditures for health services research, including

technology assessment.

The main problem for health care technology

assessment in Sweden is the large number of

technologies needing assessment and rationalization. In response to an SBU survey of practitioners, administrators, politicians, and patient

organizations on new and existing technologies

needing assessment, 1,800 responses were received. Relatively few technologies can be scrutinized as carefully as CABG or CT scanning, and

relatively few can be controlled directly by the

system. Hundreds if not thousands of technologies remain unevaluated and uncontrolled.

 Consensus Conferences

Consensus conferences have been organized in

Sweden since 1982, following the model developed at the National Institutes of Health (NIH) in

the United States (7). A conference on total hip replacement was held a few months after an NIH

conference on the same subject. As of 1993, about

15 conferences had been held. Consensus conferences are organized and supported by the MRC

and SPRI; the subjects they address are of importance to the county councils and are selected by a

special MRC subcommittee.

Although the Swedish conferences follow the

NIH format closely, they also have a different

scope. In the United States conferences focus on

the safety and efficacy of a technology. In Sweden

this focus is retained, but the conferences also try

to address questions of health care organization,

cost-effectiveness, and social and ethical considerations.

An evaluation of the Swedish program of consensus conferences was undertaken in 1985 and

1986. Separate reports described how the consensus statements were reached and were received by

physicians (29) and by politicians and administrators (6). More than half of the latter indicated that

they had found the statements of one or more conferences to be of practical value; in some cases, the

statements had a direct effect on political decisions. The physicians’ evaluation studied the effects of conferences on hospital-based physicians

in supervisory positions within relevant clinics.

Awareness of particular consensus conferences

was high. According to about 10 percent of the respondents, a consensus statement had changed

clinical practice. Most physicians said that there

was no change because the consensus statement

reflected clinical practice prior to the conference

(29). With the further development of health care

technology assessment in Sweden, the MRC is reducing its support for consensus conferences. Although consensus conferences played an

important role in demonstrating the need for

technology assessment in health care, the MRC

feels that this activity has become less important—particularly because of the establishment of

SBU.

 Swedish Planning and Rationalization

Institute (SPRI)

SPRI has a very broad mandate to study issues of

health care, including such issues as resource use,

the diagnosis-related group (DRG) system, health

economics, the use of computers in medical decisionmaking and administrative purposes, planning of health services, and quality of care. SPRI

was involved in technology assessment very ear-
Chapter 7 Health Care Technology in Sweden 1225

ly, particularly through studies on CT scanning

(described below); and gradually developed a

more comprehensive program for technology assessment. Nonetheless, technology assessment

was considered insufficient, and this situation led

to discussions about a new agency—which in turn

resulted in the creation of the SBU. SPRI subsequently refocused its attention on quality assurance; however, it continues to undertake ad hoc

studies of technology, mostly in collaboration

with the Nordic Evaluation of Medical Technology (NEMT).

 Nordic Evaluation of Medical

Technology (NEMT)

NEMT consists of staff from four Nordic institutes: SPRI, the Danish Hospital Institute, the

Finnish Hospital League, and the Norwegian Hospital Institute; there is also Icelandic representation. NEMT generally produces one report every

other year. These reports are usually surveys of existing practice in the countries in a particular area

of medicine and diffusion of technologies in that

area. Recent reports have dealt with magnetic resonance imaging, prostate cancer, and coronary

artery bypass surgery. NEMT is currently conducting a study of the diffusion, use, and effective

monitoring of treatments with anticoagulants.

 Center for Technology Assessment

This center, which is located at Linkoping University, was established with the financial support of

the local county council in the mid-1980s. It has

been particularly active in studying the cost-effectiveness of pharmaceuticals (8,30) and has also

participated in primary data collection, as in a randomized study of renal lithotripsy (9). The Center

has developed into an independent research institute; currently, its main areas of research are economic assessments, technology diffusion, and the

use of technology by the disabled.

TREATMENTS FOR

CORONARY ARTERY DISEASE

Beginning with Lindgren’s stellate ganglion resection experiments in the late 1940s (31), Sweden was at the forefront of experimental surgical

techniques to relieve angina pectoris. Four fully

equipped thoracic surgery clinics were established in Sweden in the 1950s. Activities were

dominated initially by lung surgery for tuberculosis and carcinoma of the lung and subsequently by

operations for congenital heart disease and heart

valve problems.

Nonetheless, when coronary artery bypass grafting (CABG) was introduced in various Western

countries, Sweden approached the new procedure

with considerable caution, although experts on an

advisory body of the National Board of Health and

Welfare agreed that the bypass procedure was consistent with proven scientific knowledge and good

practice. It was instituted on a small and experimental scale in 1973 and 1974 (66).

The central question for Swedish planners concerned how to implement the technology. Specifically, the issue became choosing the appropriate

tier of the hospital hierarchy for introduction of

CABG (19). CABG requires enormous ancillary

support, including intensive care units, heart-lung

machines, and blood gas monitoring. The sites for

CABG were thus predetermined, as the location of

the thoracic surgery departments had already been

established.

Introduction of CABG was slow. (See table

7-4.) In 1977 only about 220 CABG operations

(about 27 per million Swedes) were performed: by

1979 that number had increased to 404 (50 operations per million inhabitants). At the same time
—

226 I Health Care Technology and Its Assessment in Eight Countries

Year

1977

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

CABGs

220

404

503

727

836

1,236

1,574

1,970

2,313

2,774

3,518

3,946

4,329

4,642

6,286

PTCAS

—

—

—

—

3

46

74

165

282

465

654

858

1,098

1,774

2,760

SOURCE T Aberg, The Development of Thoracic Surgery Duringi

the Last 40 Years (Stockholm SBU (in press), 1993 in Swedish)).

the World Health Organization (WHO) had stated

that the theoretical need for CABG was about 150

per million people (70). One limiting factor was

the number of intensive care beds available to the

thoracic surgery clinics. Another was a change in

the heads of the cardiothoracic centers (all the

chief surgeons retired within a period of 5 years).

When the U.S. Veterans Administration (VA)

trial was published in 1977 (36) showing the clear

benefits of CABG, Swedish thoracic surgeons and

cardiologists attempted to treat only the most

promising candidates with CABG and to treat the

remainder with drugs. The Swedish level was seen

as being too low, and plans were made to increase

the numbers incrementally, in order to approach

the WHO recommended level of 150 per million.

The expansion was too slow, however, and long

waiting lists developed. Private centers were established to meet some of the need; the public sector also responded, and the number of centers was

gradually increased to the current number of eight.

Percutaneous transluminal coronary angioplasty (PTCA) was introduced in Sweden in 1982

and has gradually diffused into practice. However,

it was adopted later and at a slower rate in Sweden

than in other industrialized countries (58). At

present there are about 25 PTCAS per 100,000

population in Sweden, as compared to about 70

CABGS per 100,000. The total direct costs of all

CABGS is about six times that of PTCAs. Both

CABG and PTCA procedures continue to increase

in frequency because of their diffusion to counties

where the demand still is not satisfied, expanding

indications for revascularization, and the availability of resources from the Guarantee Fund,

which applies to both procedures. Because surgical backup for PTCA is necessary, its diffusion

has been limited to the eight centers performing

CABG. There are no specific policies concerning

PTCA; however, the regional structure, the limited number of surgical centers, and financial

constraints have certainly slowed its diffusion.

Other factors are medical concern for the high rate

of restenosis, insufficient assessment of both

PTCA and CABG, and cost concerns (58), along

with a struggle between radiologists and cardiologists over control of PTCA (2).

Despite the slow implementation of CABG,

there were no active protests from either patients

or physicians until the mid- 1980s. By 1985, waiting lists were more than one year in Stockholm,

Uppsala, and other sites. An evaluation sponsored

by the MRC showed that patients were dying

while on the waiting list (2); indeed, the mortality

rate could be 10 percent per waiting year. Patients

began to complain, and a 1987 report from an expert group highlighted the issue of waiting lists

(15).

The Ministry of Health took the initiative of developing a “guarantee” that a patient on the waiting list for three months could go anywhere in the

country as a priority case. Up to that time, patients

were largely confined to their own catchment area,

and counties were reluctant to send patients to

another county. Waiting time is now seldom more

than six weeks, and death of patients on the waiting list is rare. (The evolution of the waiting list is

shown in table 7-5.)

The Ministry of Health also appointed a group

of experts to develop national indications for

CABG (probably setting an international precedent). An expert group appointed by the National

Board of Health and Welfare reviewed the need for
Chapter7 Health Care Technology in Sweden 1227

Waiting for

Diagnostic

Year workup Operation

1987 2,000 750

1988 NA 1,150

1989 2,566 1,529

1990 2,903 NA

1991 1,756 1,243

1992 1,521 915

1993 1,346 827

KEY NA = not available

SOURCE T Aberg, The Development of Thoracic Surgery During

The Last 40 Years (Stockholm SBU (in press), 1993 (in Swedish)

CABG and PTCA in 1987 (39). The group concluded that the combined need would be 6,500

procedures in 1992, at a time when the total was

about 4,000. Because of these reports, additional

resources were made available, leading to a rapid

increase in the number of procedures, particularly

PTCA. These increases are still continuing. (See

table 7-4.)

Despite these reports, the costs of CABG were

of little interest until the development of private

sector clinics paid from public funds. The public

sector then stimulated studies of the procedure’s

costs in public hospitals and sought ways to improve its effectiveness while reducing costs.

Today, the average cost of a CABG procedure in

Sweden is about SEK125,000 ($ US15,000).

In 1992 SBU published a comprehensive report

on PTCA that also considered alternatives, including newer technologies. One of the main conclusions of the report was that:

The paucity of methodologically strong comparisons, particularly the virtual absence of

RCTS comparing PTCA, CABG, and medical

treatment, severely limits informed clinical

practice and policymaking concerning the management of coronary artery disease (58).

In 1993 SBU reviewed the appropriateness of

CABG in Sweden using the RAND method (10),

with support from the MRC, the county councils,

and the National Board of Health and Welfare and

the full cooperation of thoracic surgeons and cardiologists. Because of the failures of PTCA (primarily the problem of restenosis), there has been

considerable interest in the newer technologies for

opening coronary arteries, including laser

technologies, stents, and rotational atherectomy.

These devices all are considered experimental

(58) and are used in only one of the centers for thoracic surgery.

Although Sweden’s “wait-and-see” approach

to new technology avoids costly mistakes, slow

implementation of a new and beneficial technology means that many deserving candidates cannot

receive the procedure. This case illustrates once

more the collectivism orientation of Swedish patients and their willingness to trust their government’s decisions. Despite CABG’S SLOW

implementation, there were no active protests

from either patients or physicians until the 1980s.

Patient and provider protests and political actions

are now more frequent than they were in the past.

MEDICAL IMAGING (CT AND MRI)

 Computed Tomography (CT)

In general, the field of diagnostic imaging has not

been the subject of specific policymaking in Sweden, with the exception of assessments of CT

scanning and MRI. Hospitals have been free

(within their restricted budgets) to purchase diagnostic imaging equipment as they deemed appropriate.

The CT scanner was introduced in Sweden in

1973, the same year that the United States acquired its first scanner. By May 1978, however,

Sweden had 1.6 scanners per million people,

whereas the United States had 4.8 per million

(19). This is surprising, considering that Sweden

had originated the specialty of neuroradiology and

was a leader in radiology and radiotherapy. (The

diffusion of CT scanning is shown in table 7-6.)

Planners in Sweden did not view the introduction of CT scanning as a simple case of adding

another machine. They viewed CT as a technology that would partially replace the functions of

other diagnostic modalities. which could there-
228 I Health Care Technology and Its Assessment in Eight Countries

Year CT scanning MRI

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1

3

6

11

12

15

16

18

22

33

36

41

48

56

77

85

91

97

104

115

12oa

2

2

5

5

7

9

11

18

22

34

4 2

a

aEstlmated,

NOTE. Figures represent the accumulated number of units installed

SOURCE Swedish Council on Technology Assessment in Health

Care (SBU), MRI--Magnettc Resonance Imaging (English language

summary). Stockholm, 1992

fore be allocated fewer resources. The problem

was thus ensuring that CT scanners were not

installed beyond the point of diminishing returns

in terms of the diagnostic examinations they replaced. Therefore, when the first head scanner was

installed by the Karolinska Hospital in Stockholm, an evaluation was immediately mounted to

rationalize further purchases.

The evaluation team weighed the costs of the

head scanner against those of cerebral angiography and pneumoencephalography at various levels of examination. The basic question was this:

How many angiographic and pneumoencephalographic examinations would have to be replaced at

a given hospital by CT scanning for the costs of

the scanner to be justified economically? Only

equipment, hospital, and personnel costs were included in the analysis, although other costs and

benefits (including medical and psychological

value of the innovation) were listed.

The cost-effective level of installation of CT

scanners was determined to lie somewhere between the levels of the regional and central general

hospitals (27,28). Some of the large central hospitals did almost as many brain examinations as the

smallest regional hospital did; thus, the evaluation

did not recommend which institutions should acquire CT scanners. Rather, it published charts that

county councils could use to graph specific levels

of usage of angiography and pneumoencephalography at a given hospital in order to determine

whether replacement of these modalities with a

CT scanner would be appropriate.

The success of the Swedish evaluation was

probably due in large part to its timeliness. The

county councils needed information to help their

decisionmaking, and the information arrived on

time and was credible. Most Swedish hospitals

waited for the report and followed its recommendations. Only two scanners had been installed in

Sweden at the time the report was released; by December 1978, Sweden had eight head scanners (all

but one at regional hospitals) and six total body

scanners (two of which were located at the largest

central hospital). The county councils expected

the CT scanners to pay for themselves; thus, the

hospitals received only a small additional budget

when they purchased a scanner.

In 1985, a consensus conference on stroke was

held in Sweden (35). Based on the economic consequences of missing a diagnosis of stroke, the

consensus panel suggested that all hospitals

should have CT scanners. This report led to an increased diffusion of CT scanners in the late 1980s.

The importance of CT scanning for this indication

was further emphasized in an SBU report in 1992

(57).

 Magnetic Resonance Imaging (MRI)

MRI was introduced to the world market in 1978,

and the first MRI scanner was introduced in Sweden in 1984 and installed in the Academic Hospi-
tal in Uppsala (23,52). Diffusion in Sweden was

slower than in some other countries. By mid- 1992

nearly 20 hospitals had installed MRI scanners.

Future plans indicate that between 30 and 40 hospitals hope to have access to this technology within a few years.

The first technology assessment of MRI in

Sweden was performed by SPRI in 1984 (49). Although it essentially described only the state of the

art, this report immediately led to an unusual

policy measure adopted by the Federation of

County Councils, which stated that a moratorium

should be placed on MRI until a thorough assessment of the first installed machine had been performed. This initiative did not stop some hospitals

from acquiring MRI, but it certainly slowed diffusion during the following years. By 1990, however, the number of MRI units per population had

caught up with the diffusion rate in most other European countries, in part as a result of the assessment of the first installment. (See table 7-6.)

In 1990 the NEMT program, representing the

five Nordic countries, carried out a comprehensive evaluation of radiology in those countries.

SPRI also studied the numbers and utilization of

MRI in the Nordic countries in 1990 (50). These

reports did not specifically affect policy or practice but focused attention once again on diagnostic

imaging.

In 1992 SBU published an assessment of MRI

in the context of diagnostic imaging, especially

CT scanning (57). It included, in addition to a description of clinical aspects of MRI and a comparative analysis of the sensitivity and specificity of

competing modalities for diagnostic imaging, a

thorough literature review, studies of diffusion

from an international perspective, surveys of perceived need and current examination practices,

cost calculations, a cost-effectiveness analysis,

and description of technical aspects of MRI. The

report showed that:

■ diffusion of MRI in Sweden was relatively

slow,

● there was little evidence to support a speedier

diffusion,

Chapter 7 Health Care Technology in Sweden 1229

many hospitals had plans to acquire MRI within

the next few years, and

although MRI could replace many conventional diagnostic procedures, the cost would be

much higher with no clear evidence of superiority in diagnostic accuracy except in a limited

number of cases and indications.

The future potential of MRI, both in research

and clinical practice, was clearly acknowledged in

this analysis, but the report concluded that CT

scanning will remain the most important diagnostic measure for diseases of the brain for the foreseeable future. Recognizing the potential of MRI,

SBU stated that its role and limintations would not

be completely determined during this decade in

part because of a lack of “rigorous scientific studies which compare the results of MRI examinations with other imaging techniques. Likewise, no

published study verifies the cost effectiveness of

MRI in relation to other techniques,” (57). In addition, the report stated that the possible long-term

risks of placing the body in strong magnetic fields

are unknown. Although MRI can reduce the need

for some other examinations, such as CT scanning, angiography, arthroscopy, and ultrasound,

the report demonstrated that total net costs following the introduction of MRI would increase considerably.

This report was cautious in its attitude toward

further MRI installations, pointing out the financial costs and the need to consider the existing capacity of diagnostic imaging (primarily CT)

before purchasing an MRI scanner. Many hospitals are still adopting a wait-and-see attitude.

LAPAROSCOPIC SURGERY

The laparoscope has been used in Sweden since

the mid- 1960s, mainly in diagnostic gynecology

(20). The performance of Iaparoscopic cholecystectomy in France in 1987 and 1988, and the reports of Dubois and coworkers (12) were of

considerable interest in Sweden. Several surgeons

from Gothenberg visited France in 1990 to learn

about this procedure, which they then introduced

in Sweden. It spread rapidly, fueled by media re-
230 I Health Care Technology and Its Assessment in Eight Countries

ports and patient demand, as in other countries. By

1991, 68 percent of surgery departments either

were providing laparoscopic cholecystectomy or

intended to begin (26). Other applications of laparoscopic surgery have spread more slowly.

Interest also has been increasing in laparoscopic treatment in gynecology. Beginning with sterilization via laparoscope in the early 1980s, the use

of treatment laparoscopy has gradually spread.

Puncture of ovarian cysts is diffusing currently.

Since the late 1980s laparoscope have been used

in gynecology to remove ectopic pregnancies and

blocked tubes or ovaries. During the early 1990s

innovative procedures spread widely through gynecology in Sweden. Although these procedures

have been found to take up to 100 percent more

time than traditional procedures, they are considered cost effective because of the patients’ rapid

return to normal functioning. Normal recuperation time in gynecology with these procedures is a

few days compared to 2 to 4 weeks with traditional

procedures (12).

To encourage less invasive surgery, a special

fund was set up by the health insurance funds in

1991 to encourage services associated with shorter periods of sickness. Most of the 65 hospitals in

Sweden that provide laparoscopic surgery received funds for acquiring the equipment, the total

cost of which was SEK40 million ($US4 million).

SBU recognized the potential of less invasive

surgery in 1990 and commissioned a review of the

literature on all specialties of medicine and surgery. Although this review was not published,

support was obtained from the European Commission to study the cost-effectiveness and the

diffusion of 10 types of minimally invasive therapy (MIT) in five European countries, not including Sweden (4). Information collected on the

diffusion of these procedures demonstrated that

Sweden was one of the earliest innovators in this

field in Europe.

Since 1990, SBU has continued to monitor developments in MIT in general and laparoscopic

procedures specifically. In 1992 SBU carried out a

survey of laparoscopic surgery in Sweden, focusing on five conventional surgical procedures that

could be replaced partially by Iaparoscopic procedures. (See table 7-6.) SBU estimated that about

25,000 conventional operations could be replaced

by laparoscopic technique each year, which would

reduce the number of bed-days by about 32,000

and the number of days of sick leave by about

210,000; the cost savings per year thus could be

about SEK200 million per year if such replacements were actually to occur (61).

The laparoscopic technique for cholecystectomy is now well established and seems to be the

first option for this condition in Sweden. A recent

survey showed that 70 to 75 percent of all cholecystectomies are performed by laparoscopic technique (24). Early enthusiasm for laparoscopic

surgery led to the belief that within a relatively

short time, about 70 percent of all conventional

surgical techniques would be replaced by the laparoscopic technique. (See table 7-7.) However, applications of laparoscopic surgery in fields other

than cholecystectomy (e.g., appendectomy and

inguinal hernia), have been slow because of concern about complications. The general feeling in

Sweden is that estimates of the efficacy of other

procedures seem to have been too optimistic (24).

The use of laparoscopic technique for several indications is thus viewed as appropriate only within the frame of a randomized controlled trial.

Laparoscopic surgery is not subject to other

specific policy measures in Sweden. Because of

budget constraints and the regionalized system,

therapeutic laparoscopy is found primarily in larger hospitals, but it also has spread to smaller hospitals. The main concern with these procedures is

the expansion of indications and the growing

number of surgical procedures. Concern is also

growing about potential future needs for reoperations because of increased risks of complications

that may result when surgeons have a less complete overview of the operating field than they do

with conventional operations. Several random

ized controlled trials are underway in Sweden to

establish whether these and other concerns are

valid. In addition, a National Register of Laparoscopic Surgery established in 1993 is monitoring

the volume, complications, and certain technical

aspects of the procedures.
Chapter 7 Health Care Technology in Sweden 1231

Procedure procedures bed-days

Gallstone 5,000 10,000

Gallbladder 1,000 7,000

Appendicitis 8,600 8,600

Hernia 10,000 0

Other 1,400 5,600

SOURCE Swedish Council on Technology Assessment in Health

Care (SBU), “Medical Science and Practice” (Newsletter), No 1-2,

1993, (in Swedish)

TREATMENTS FOR END-STAGE

RENAL DISEASE (ESRD)

Renal dialysis was introduced to Sweden in the

early 1960s; by the end of 1965, six of the approximately 40 centers in Europe treating patients with

ESRD were in Sweden (5). Both dialysis and

transplants were performed in Sweden quite early

in their development. The Swedish program has

emphasized transplants; in 1980, Sweden was one

of only six countries in which more ESRD patients had had transplants than were on dialysis.

Treatment of ESRD became a policy issue by

1965 because of a shortage of hemodialysis services in the Stockholm region. In 1966 an ad hoc

committee investigated the issues and presented a

proposal with estimates of the need for hemodialysis and the organization of renal medicine.

(Transplant services were also dealt with, but

more superficially.) In 1967 the National Board of

Health issued national ESRD policy recommendations stating that hemodialysis should be provided at the regional level only and that transplant

surgery should be concentrated in two or three regional hospitals (37). This report was followed by

a 1970 policy document stating that renal medicine and hemodialysis services should be regarded as regional services (i.e., each regional

hospital should provide treatment for the entire

population with chronic renal failure in its region). This policy document also recommended

that renal transplant be a “multiregional specialty”

(i.e., four regional hospitals should serve the population of specific catchment areas made up of two

or three regions) (48).

These reports led to a strong debate within the

community of nephrologists in Sweden. Regional

medical services committees, which had authority

for planning ESRD services, did not uniformly

endorse the centralization of hemodialysis services. Several hospitals already had started decentralized units and refused to close them. By 1975

most health care regions had two or more decentralized units; after that year, the Board made no

efforts to stop this development (5). Transplants,

however, did become a multiregional service.

The cost-effectiveness of ESRD services has

always been an issue. The 1970 policy recommendations presented cost estimates and predictions;

since then, although many studies have been carried out and conferences held, the government has

not pursued the issue of the economic consequences of the ESRD program (5)-perhaps because ESRD was introduced during a period of

economic expansion. Care for a dialysis patient in

Sweden costs about 2 million SEK per year

(US$250,000).

By 1970, Sweden had the highest rate of patients receiving ESRD treatment in the world, (5)

and has continued to have one of the highest treatment rates. It is estimated that a 70 percent increase in the ESRD population will occur between

1990 and 1995 (from 1,500 to 2,400) because of

the aging of the population (40) and improving

survival rates (32).

Despite the high overall provision of ESRD

treatment and high proportion of transplanted patients, several national goals have not been met.

Large and persistent variations in the provision of

ESRD treatment are still seen. The high reliance

on hospital hemodialysis and the limited use of

home dialysis are also considered unsatisfactory

(5). There are currently about 400 beds for dialysis

at 40 different hospitals. About 75 patients are on

hemodialysis at home, and 325 are treated with

peritoneal dialysis. Dialysis is also quite common

in the elderly; more than 30 percent of dialysis patients were 70 years or older in 1990 (40).
232 I Health Care Technology and Its Assessment in Eight Countries

 Erythropoietin (EPO)

EPO was marketed in Sweden beginning in 1989.

It was subject to evaluation for efficacy and safety

(like any other drug), was approved for the specific indication of anemia in renal insufficiency, and

was then paid for exactly like any other pharmaceutical product. Any physician may prescribe

EPO, the diffusion of which has been extraordinarily rapid; the number of doses rose by 50 percent during the 1991 to 1993 period. EPO’S cost to

the health services was SEK78 million in 1992

(more than $US1 million per million people). All

other Scandinavian countries have lower volumes

and lower average costs for EPO (although this

high volume and high cost has not been an issue in

Sweden to date).

A 1990 doctoral dissertation stated that people

were dying because of lack of dialysis in Sweden,

especially among the elderly population. Publicity on this issue led the National Board of Health

and Welfare to issue a quick “alarm report” on this

issue. The Board was unable to confirm that

people were dying; however, it recommended that

the county councils improve their planning processes for ESRD treatment, especially dialysis.

NEONATAL INTENSIVE CARE

Specialized clinics, fully equipped for neonatal

intensive care, appeared in Sweden during the

1960s and gradually spread. Neonates are cared

for in all of the 43 departments of pediatrics in

Sweden, which include some degree of intensive

care. Many high-risk pregnant women are referred

to regional hospitals before delivery. Modem respiratory care, including ventilator therapy for

newborns, has spread into the seven regional hospitals and to eight of the central county hospitals.

There are currently 15 hospitals throughout the

country with close to 100 beds for specialized neonatal intensive care for about 130,000 newborns

per year. An estimated 500 to 600 babies per year

are ventilated in these neonatal intensive care

units (NICUS). The technology of neonatal intensive care has dramatically improved survival for

the pre-term newborn; also, the technology has

paved the way for increased clinical understanding of several essential physiological and pathogenic phenomena.

The organization of neonatal intensive care has

developed along similar lines in most hospitals.

NICUS are run by pediatric specialists, with one

exception (in Gothenberg) where the clinic is under the supervision of specialists in anesthesiology. The Swedish system developed without

national concern for its role and place in the overall structure of Swedish health care; nevertheless,

NICUS have mainly been concentrated in the large

regional and central district hospitals. They have

developed with the close collaboration of obstetrics and pediatrics departments.

Improved care for very pre-term infants at extremely low birth weights has gradually become a

subject for professional as well as public concern.

The discussion has centered around ethical dilemmas, the limits of neonatal intensive care, the costs

and benefits of this service in general, and issues

of staff competence and experience and questions

about the geographical distribution of the resources—particularly of new and improved medical technologies.

In the 1980s the National Board of Health and

Welfare established an advisory committee of experts in perinatology to monitor developments in

this field. This committee arranged a conference

in 1989 at which it reviewed recent evidence on

neonatal mortality and morbidity, with particular

reference to prognostic factors and potential development of handicaps in premature infants.

Other available epidemiological evidence in this

area was also reviewed, as were legal, ethical, and

economic issues (38).

●

Among the facts presented were the following:

the evidence of a significant increase in survival

because of NICUS is overwhelming;

parallel to this development, with many more

healthy newborns surviving, the incidence of

neurological diseases (and particularly of multihandicapped individuals) among newborns

could be seen as increasing;

establishing a firm prognosis at an early stage

in the neonatal period is difficult;
Chapter 7 Health Care Technology in Sweden 1233

● cesarean sections for very pre-term deliveries

bring significant increased risks for both postoperative complications and pregnancies at a

later stage; and

● the relationship of costs and benefits seems reasonable in comparison with other expensive

medical procedures.

The conference concluded that although it is

not possible to predict prognoses in individual

cases, there is a practical need to establish a limit

of at least 25 weeks of pregnancy, after which (in

principal) obstetric interventions should be considered. Regarding the newborn infant, a more individualized approach was recommended. The

majority of the neonatologists thought it correct to

take an initially open but wait-and-see attitude toward ventilator therapy in some instances; a minority thought that initially very active treatment

is always justified. All agreed that it is ethically

defensible to discontinue treatment of very severely injured newborns. Furthermore, a national

study was recommended to investigate the incidence, mortality, short-term and long-term morbidity, and prognostic factors for neonates below

1,000 grams. (This study is in progress.) Finally, it

was recommended that a national register be established for all pre-term newborns under 1,000

grams to monitor and define prognostic factors in

the neonatal period.

The conference’s recommendation limiting

most intervention to pregnancies of at least 25

weeks has had an impact on medical practice in

Sweden. This recommendation has been subsequently supported by evidence from clinical studies (17).

 Extracorporeal Membrane Oxygenation

(ECMO)

In 1991 a state-of-the-art conference on NICUS

was organized by the Sweden Medical Research

Council. The proceedings, published as a supplement to the International Journal of Technology

Assessment in Health Care (46), pointed to many

research questions, including the need for controlled studies of continuous positive airway

pressure (CPAP) and ECMO. A comprehensive

policy-oriented assessment of NICUS in Sweden

is now underway, sponsored by the National

Board of Health and Welfare. Preliminary results

point to an uneven distribution of resources, overcapacity in the number of beds, and a potential

relationship between volume of services and

health outcomes for newborns (17). Of special

concern are various aspects of quality of care,

which may well be related to professional competence and experience.

Introduced in Sweden in 1991, ECMO is available in two hospitals. There is no randomized controlled trial for ECMO and its potential

alternatives, such as the new generation of respirators, including the high-frequency oscillation

ventilation (HFOV) system.

The demand for treatment with ECMO is generally considered to be satisfied by the existing

two centers. Because there are very few cases per

year with indications for care using this technology, treatment with ECMO is a marginal issue.

Neonatal intensive care has not been a visible

policy issue in Sweden, nor have NICUS been assessed comprehensively. However, as noted earlier, improved care for very pre-term infants has

gradually become an issue—as has its costs.

SCREENING FOR BREAST CANCER

Clinical examination, using mammography for

specified indications, was introduced in Sweden

in 1964. About 10 years later, it was available all

over the country. Clinical trials of screening for

breast cancer began as early as 1966, using physical examination and thermography as the screening methods. Mammography screening in

Sweden began in one region of Sweden in 1974;

by the end of the 1980s, it had covered almost the

entire country.

The target population for screening varies from

county to county, with some counties supporting

screening beginning at age 40 and others proposing that screening begin at age 50. The total target

population is 1.5 million women; probably more

than 50 percent are actually screened.

The first randomized, controlled trial (RCT) of

screening mammography (in women over 40) in

Sweden began in 1977. The results, reported in
234 I Health Care Technology and Its Assessment in Eight Countries

1985 (64), confirmed the findings in the Health Insurance Program (HIP) study in the United States

of a reduction in mortality from breast cancer of

30 percent, but later analysis revealed that the

benefit was restricted to women between age 50

and 70 at the start of the trial. (63). The results of

this RCT were based on a small absolute number

of deaths. Of the 135,000 women in the age group

from 40 to 74, there were, after screening every second year, 86 deaths in the screened group as

compared with an expected 118. This has raised a

concern about the relationship of the costs to the

benefits of mammography screening.

A second RCT in Sweden was completed in

Malmo in 1988 in women aged 45 to 69. This

study, however, could not confirm a statistically

significant reduction in mortality from breast cancer in the screened group. After 9 years of screening 20,000 women every second year, there were

63 deaths from breast cancer in the screened group

compared with 66 in the nonscreened group (3).

Two more RCTS of mammography screening

are ongoing in Sweden (in Stockholm and Goteberg). As a result of the first study, the National

Board of Health and Welfare recommended in

1985 that all county councils in Sweden introduce

mammography screening for all women aged 40

to 74. Since then, most county councils have gradually expanded mammography screening.

Two technology assessments of screening have

been carried out in Sweden. The first, performed

by a parliamentary committee in 1984, examined

screening programs for cancer for both effects and

financial costs, finding that there was a benefit

from mammography screening (47). The second

assessment, performed by SPRI in 1990 (51), reviewed the incidence, prevalence, and other epidemiological data on breast cancer in the country,

analyzed the results from mammography screening programs in different countries, and included

cost analyses of different options for screening as

well as a cost-effectiveness analysis of the first

trial in Sweden (showing a cost per year of life

saved of about SEK75,000 or $US1O,OOO in 1993

dollars, and a total cost of about SEK500 million,

or about $US8 million per million people, to

screen the total target population). The report concluded that ongoing monitoring of mammography screening is crucial.

There are several current concerns. First, as

screening has been gradually introduced, radiologists and technicians have shifted to breast cancer

screening, which has led to waiting lists and delays for other radiology services. Second, the

specificity and sensitivity of mammography

achieved in the RCTS are difficult to achieve in

routine practice. Finally, and perhaps most significantly, various important aspects of screening for

breast cancer by mammography have been neglected, such as the large number of false positive

findings, the need for an effective and efficient follow up, and delays from suspicion of malignancy

to final diagnosis.

CHAPTER SUMMARY

From a macroeconomic perspective, it can be said

that the health sector in Sweden is consuming a

considerable share of society’s resources; employs a relatively high proportion (10 percent) of

the workforce; maintains the health of Sweden’s

productive capacity; constitutes the basis for the

industrial development of pharmaceuticals, medical equipment, and devices; and has the potential

to grow exponentially. The health sector consumes about 8 percent of Sweden’s GDP, determines a substantial portion of sick leave and early

retirement, plays an important role in the export

and import of medical goods, and greatly influences social policy making.

Regulation and planning have played a significant role in the Swedish health care system, but

less direct controls, such as planning for personnel

needs, have perhaps been more important. The regionalized system that has evolved precludes

many of the problems of duplicated and underused technology that have troubled other coun-
Chapter 7 Health Care Technology in Sweden 1235

tries. The system also encourages geographically

and financially based access to services, even

though limited resources do result in waiting lists

and other restrictions.

Despite the generally high level of public satisfaction with the Swedish health care system,

change is under way. With decentralization, the

public is increasingly involved in decisionmaking. One result, already discernible, is growing

pressure for choice-of physician, of institution,

and of treatment procedure. Increasing patient

choice must, however, be coupled with increasing

responsibility. The public must have a sound basis

for making reasonable choices in health care. Up

to now, relatively little has been done to ensure

that this is the case.

During the past decade or so, Sweden gradually

developed a greater commitment to health care

technology assessment. At the time of an earlier

review sponsored by the U.S. Office of Technology Assessment ( 19), there was no organization in

Sweden dedicated to such assessment. A number

of such institutions now exist (including SBU at

the national level) and are engaged in this vital activity. In addition, the importance of health services and clinical research is being recognized as

crucial for improving the system’s quality.

Technology assessment is increasingly visible to

policy makers, and its proposed extension to psychiatric care and social services is an indication of

its growing acceptance.

The government currently is considering a proposal for a comprehensive assessment of the need

to strengthen applied clinical research and possibly to earmark a percentage of the health budget

for this purpose. (A figure of 1.5 percent of the total health budget has been discussed.) The pressure to do so came first from the technology

assessment community, with increasing support

from clinicians experiencing difficulties in financing clinical research as a result of the many

ongoing experiments with a “free market” in

Swedish health care. Substantial support for the

proposal and for technology assessment in health

care comes from a parliamentary committee that is

developing guidelines for priority setting in health

care and that sees the need for assessments of clinical practices.

The main achievements of Sweden’s system for

health care technology assessment are the development of a well-organized, respected government body for assessment and the spread of the

idea of technology assessment throughout the

medical profession. Sweden has been successful

in institutionalizing health care technology assessment in its health services not only because

such activity comports with the national character

but also because technology assessment has never

been viewed as threatening by Swedish health

care professionals. Cost containment depends on

budgets; hence, technology assessment has had a

more positive slant: to ensure that beneficial and

cost-effective technologies are diffused rapidly

into the system.

Technology assessment in health care was

introduced as an activity with two objectives: on

the one hand, to speed the diffusion and use of

medical technologies with proven safety, efficacy,

and effectiveness to ensure broad and equitable

access to the technology; and on the other hand, to

monitor technologies that have not yet been scientifically assessed whose policy implications are

not yet fully understood so that potentially harmful, useless, or less effective technologies can be

phased out and replaced. Thus, technology assessment in Sweden has by no means aimed solely at

cost savings. This is a particularly sensitive issue

in Swedish health care, both for the general public

and for the medical profession, which have experienced more than a decade of reductions in the

volume of health services as well as seemingly

endless experiments with measures to control increasing costs.

Technology assessment in health care was also

introduced with strong support from the clinical

scientific community. When SBU was established, the government intentionally selected

individuals who represented respected researchbased institutions to constitute its board and expert group (about 20 people). SBU is not seen as a

separate institution that criticizes professionals; in

fact, prestigious specialists carry out the SBU
236 I Health Care Technology and Its Assessment in Eight Countries

studies. Swedish specialists are highly motivated

to improve the quality of their care, and SBU is

seen as a positive source of help. Thus, although

SBU is active in advising policymakers, it is seen

as a constructive addition by health care professionals.

For its part, SBU has concluded that successful

assessments must meet certain requirements, including the following:

■

✘

●

m

m

■

assessments must result from a strong interest

among policy makers and/or clinicians;

data on the technology in question must be

available, preferably from methodologically

rigorous studies, and especially from randomized trials;

to ensure integrity, all related studies, including

clinical and economic studies, must be identified and thoroughly reviewed, with the committed involvement of expert professionals;

assessments must be scientifically and clinically credible and presented in a logical manner;

assessments must be presented so that they are

accessible to the medical profession, policymakers, and the general public;

results must be accompanied by clearcut policy

options or straightforward recommendations;

and

a strategy for strong, long-lasting marketing efforts on different fronts should accompany the

results.

Perhaps the greatest single problem with health

care technology assessments in Sweden is the

large number of unassessed technologies—including, according to one SBU survey, about 400

new technologies. Even if more money were

available, there is a limit to the number of research

sites and well-trained researchers that Sweden can

develop in a relatively short period of time. The

only solution is international collaboration.

Swedish experts participate in a variety of international activities and are attempting to contribute to the development of permanent

international structures for sharing information

and coordinating activities. Increasingly, too, experts from other countries actively participate in

technology assessment projects in Sweden. Although practical problems need to be overcome

for such international structures and cooperative

networks to be effective, this is considered a high

priority in Sweden.

The experience of health care technology assessment in Sweden shows that it is possible to

identify technologies needing assessment and to

assess them in ways that affect their adoption and

use. These lessons will surely be applied more intensively as the health care system evolves.

Finally, as SBU has come to realize, dissemination is time consuming. Assessment results need

to be marketed both to professionals and to the

public. The results do not necessarily affect everyday clinical practice. Although the best clinical

departments are responsive to assessment results,

ordinary practitioners may not follow SBU recommendations. (This problem is heightened by

Sweden’s size and areas of sparsely populated territory.) Better methods of dissemination are needed in conjunction with methods of quality

assurance.

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1.

2.

3.

4,

5.

6.

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Chapter7 Health Care Technology in Sweden 1237

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21. Gerdtham, U., “The Impact of Aging on

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Imaging (MRI) Diffusion,” Int. J. Technology

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24. Haglund, V., personal communication, 1994.

25. Ham, C., “Reforming the Swedish Health

Services,” Bri~. Med. J. 308:219-220, 1994.

26. Hjelmqvist, B., “Laparoscopic Cholecystectomy in Sweden, 1991 ,“ Nordisk A4edicin

106:256-257, 1991 (in Swedish).

27. Jonsson, E., Studies in Health Economics

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28. Jonsson, E., and Marke, L. A., “CAT Scanners: the Swedish Experience,” Health Care

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29. Johnsson, M., “Evaluation of the Consensus

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Health Care 4:89-94, 1988.

30. Levin, L. A., Betablockers as Prophylactic

Treatment After Acute Heart Infi-action - A

Macroeconomic Analysis (Linkoping: Center

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31. Lindgren, I., “Angina Pectoris: a Clinical

Study with Special Reference to Neurosurgical Treatment,” Acta Medica Scandinavia,

(Suppl.), 1950.
4

238 I Health Care Technology and Its Assessment in Eight Countries

32. Lindholm, 13., Plan for the Kidney Clinicalat

the Huddinga University Hospital in 1993

(Huddinge: 1993) (in Swedish).

33. Liu, K., Moon, M., Sulvetta, M., and Chawla,

J., “International Infant Mortality Rankings:

a Look Behind the Numbers,” Health Care

Financing 13:105-1 18, 1992.

34. LKELP 92, Report No. 3, The Federation of

County Councils, 1992 (in Swedish).

35. Medical Research Council (MRC), Consensus Statement on Stroke (Stockholm: SPRI,

1985).

36. Murphy, M., Hultsren, H., Detre, K, et al.,

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Engl. J. Med. 297: 621-627, 1977.

37. National Board of Health and Welfare

(NBHW), On the Organization of Care for

End-Stage Renal Disease. Dnr L 696/65

(Stockholm, 1967) (in Swedish).

38. National Board of Health and Welfare

(NBHW), Babies with Extremely Low Birthweight, conference proceedings. (Stockholm,

1990) (in Swedish).

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(NBHW), Coronary Artery Disease; Surgical

Treatment, PTCA, Thrombolysis, Prognosis

1990 (Stockholm, 1990) (in Swedish).

40. National Board of Health and Welfare

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(in Swedish).

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(NBHW), public health report, Stockholm,

1992.

42. NOMESCO, Health Statistics in the Nordic

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Development, OECD Health Data: a Software Package for the International Comparison of Health Care Systems (Paris, France:

Organisation for Economic Cooperation and

Development, 1993).

44. SCB, Health in Sweden, (Stockholm: Statistics Sweden, 1989).

45. SCB, Statistical Yearbook of Sweden, (Stockholm, 1994).

46. Sedin, G., “Neonatal Intensive Care, State of

the Art,” Int. J. Technology Assessment

Health Care 7:( Supplement 1), 1991.

47. Socialdepartementet, Screening for Cancer

DsS 1984:3 (Stockholm: 1984).

48. Socialnytt, State of the Art on Care for EndStage Renal Disease—A Survey, PM 2/70

(Stockholm, 1970) (in Swedish).

49. SPRI, Magnetic Resonance Imaging, Issues

of Costs and Benefits (Stockholm, 1984).

50. SPRI, Magnetic Resonance Imaging, Spri report 279 (Stockholm, 1990) (in Swedish).

51. SPRI, Mammography Screening, Costs and

Benefits (Report 298) (Stockholm, 1990).

52. Steinberg, E., Sisk, J., and Locke, K., “The

Diffusion of Magnetic Resonance Imagers in

the United States and Worldwide,” Int. J.

Technology Assessment Health Care

1:499-514, 1985.

53. Swedish Council on Technology Assessment

in Health Care (SBU), Assessment of Medical

TechnologyThe E@cacy of Health Care

(Stockholm, 1988).

54. Swedish Council on Technology Assessment

in Health Care (SBU), Medical Technologies

in Need ofAssessment (Stockholm, 1989).

55. Swedish Council on Technology Assessment

in Health Care (SBU), Preoperative Routines

(Stockholm, 1989).

56. Swedish Council on Technology Assessment

in Health Care (SBU), Back Pain - Causes,

Diagnosis, Treatment (Stockholm, 1991).

57. Swedish Council on Technology Assessment

in Health Care (SBU), AIR] - Magnetic Resonance Imaging (Stockholm, 1992) (English

language summary).

58. Swedish Council on Technology Assessment

in Health Care (SBU), Percutaneous Transluminal Coronary Angioplasty, PTCA

(Stockholm, 1992).

59. Swedish Council on Technology Assessment

in Health Care (SBU), Stroke (Stockholm,

1992).
Chapter7 Health Care Technology in Sweden 1239

60. Swedish Council on Technology Assessment

in Health Care (SBU), Diabetic Retinopathy -

Importance of Early Detection (Stockholm,

1993).

61. Swedish Council on Technology Assessment

in Health Care (SBU), “Medical Science and

Practice” (Newsletter), number 1-2, 1993 (in

Swedish).

62. Swedish Council on Technology Assessment

in Helth Care (SBU), Presenting the Swedish

Council on Technology Assessment in Health

Care (Stockholm, no date).

63. Tabar, L., Day, N., et al., “The Swedish Town

County Trail of Mammographic Screening

for Breast Cancer: Recent Results and Calculation of Benefit,” J. EpidemioZ. Community Health 43: 107-114, 1989.

64. Tabar, L., Faberburg, C., and Gad, A., “Reduction in Mortality of Breast Cancer After

Mass Screening with Mammography,” Lancet 2:829-832, 1985.

65. Vagero, D., and Lundberg, O., “Health Inequalities in Britain and Sweden,” Lancet

2:35-36, 1989.

66. Wennstrom, G., personal communication,

Oct. 24, 1977.

67. Werko, L., “Health Care Technology in Sweden,” Health Care Technology and Its Assessment, An International Perspective, H. Il.

Banta HD and B. Luce (Oxford: Oxford University Press, 1993: pp. 197-203).

68. Westerholm, B., “Assessment of Drugs in

Sweden,” Int. J. Technology Assessment

Health Care 2:673-681, 1986.

69. Winslow, C., Kossecoff, J., Chassin, M., et

al., “The Appropriateness of Performing Coronary Artery Bypass Surgery,” J. A.M.A.

260:505-509, 1988.

70. World Health Organization, Long-Term Effects of Coronary Bypass Surgery: Report of

a Working Group (Copenhagen: WHO Regional Office for Europe, 1978).
Health Care

Technology in

the United Kingdom

by Jackie Spiby 8

OVERVIEW OF THE UNITED KINGDOM

T

he United Kingdom, with a total population of 48.2 million in 1992, consists of four countries: England, Wales,

Scotland, and Northern Ireland. Geographically, it consists of one large island and numerous smaller islands

covering 94,500 square miles. Although physically small, its

position at the northwest coast of Europe has meant that it has

been able to maintain independence as an island and establish

close relationships with Europe and with North America. The

United Kingdom is essentially an industrial and trading nation;

most of its working population is engaged in manufacturing and

commerce.

 Government and Political Structure

The United Kingdom has a constitutional monarchy, and one sovereign body governs all four countries. The central government

takes its authority from the two-tiered Parliament (the House of

Commons and the House of Lords). The Prime Minister is the

leader of the party with the majority of Members in the House of

Commons. Government departments and ministries are headed

by Secretaries of State or Ministers, a subset of whom form the

Cabinet. All departments and ministries are led by individuals

from the majority party in Parliament, so there is no separation of

the executive and legislative branches of government. The departments and ministries also have permanent secretaries and other executives who assist these Secretaries and Ministers.

Northern Ireland has regional independence but not a federal

relationship. Wales and Scotland have a degree of administrative

devolution that is of limited significance, although it has led to —

some differences in how health services are organized. 241
.

242 I Health Care Technology and Its Assessment in Eight Countries

HEALTH STATUS OF THE POPULATION

Despite an increasing emphasis on prevention, the

United Kingdom continues to compare poorly in

health status to most of its European neighbors.

Death rates for ischemic heart disease in England

and Wales are just over 300 per 100,000 male population aged 45 to 64; in contrast, West Germany

has a rate of approximately 250 and France, 100.

The rates of Scotland and Northern Ireland are

even higher than those of England at 450 and 400,

respectively. This pattern is similar for breast cancer.

The main causes of death in the United Kingdom have remained stable, with the major burden

resulting from coronary heart disease (CHD) and

cancer. Stroke is also a major health problem, accounting for 6 percent of health service spending.

The health of newborns has been continually improving; the infant mortality rate fell from over 10

per 1,000 live births in 1982 to 6.5 in 1992. Although the progress is encouraging, infant mortality is still higher than it is in several European

countries, such as Sweden and Denmark.

Smoking remains the single most important

cause of preventable disease and premature death

in England, but some trends are improving. Adult

smoking rates are falling; in men, this is reflected

in a reduction in lung cancer. The epidemic in

women (who have generally taken up smoking

more recently) is still rising. Rates of smoking

among children are not falling quickly enough,

and efforts are being made to stop children from

smoking.

Sexual health has also become a focus of national and public health policy, with two primary

areas of concern. First is the rising level of conceptions, especially among young teenagers. Second

is the increase in AIDS cases, mostly in and

around London and mainly homosexual men.

However, the highest proportional rise in AIDS

cases is among heterosexuals.

Britain remains low in the level of expenditure

on health services. In Europe it ranks only above

Greece, Portugal, Spain, and Ireland in the level of

expenditure per person.

 National Targets for lmproving Health

A white paper entitled “The Health of the Nation,”

published in 1992, set forth the government’s

strategy for improving health (18). It established

the following targets for CHD and stroke:

●

●

●

to reduce death rates for both CHD and stroke

in people under 65 by at least 40 percent by the

year 2000 (baseline 1990),

to reduce the death rate for CHD in people aged

65 to 74 by at least 30 percent by the year 2000

(baseline 1990), and

to reduce the death rate for stroke in people aged

65 to 74 by at least 40 percent by the year 2000

(baseline 1990).

For cancers:

to reduce the death rate from breast cancer in the

population,

to reduce the incidence of invasive cervical cancer by at least 20 percent by the year 2000

(baseline 1990),

to reduce the death rate for lung cancer in people

under the age of 75 by at least 30 percent for

men and by at least 15 percent for women by

2010 (baseline 1990), and

to halve the annual increase in the incidence of

skin cancer by 2005.

For mental illness:

 to improve significantly the health and social

functioning of mentally ill people,

● to reduce the overall suicide rate by at least 15

percent by the year 2000 (baseline 1990), and

● to reduce the suicide rate of severely mentally

ill people by at least 33 percent by the year 2000

(baseline 2000).

For HIV/AIDS and sexual health:

to reduce the incidence of gonorrhea by at least

20 percent by 1995 (baseline 1990) as an indicator of HIV/AIDS trends, and

to reduce by at least 50 percent the rate of conceptions among the under- 16 population by the

year 2000 (baseline 1989).
Chapter 8 Health Care Technology in the United Kingdom 1243

For accidents:

■ to reduce the death rate for accidents among

children under 15 by at least 33 percent by 2005

(baseline 1990),

■ to reduce the death rate for accidents among

young people aged 15 to 24 by at least 25 percent by 2005 (baseline 1990), and

■ to reduce the death rate for accidents among

people aged 65 and over by at least 33 percent

by 2005 (baseline 1990).

 The Patient’s Charter

The Patient’s Charter, published in 1991 by the

Department of Health, articulates numerous rights

and standards, many of which have existed since

the establishment of the National Health Service

(NHS) (15). The Patient’s Charter provides a

yardstick against which performance is based. It

gives patients the right to:

receive health care on the basis of clinical need,

regardless of ability to pay;

be registered with a general practitioner (GP);

receive emergency medical care at any time

through a GP or through the emergency ambulance service and hospital accident and emergency department;

be referred to a consultant (acceptable to the patient), when a GP deems this necessary and to

be referred for a second opinion if the patient

and GP agree that this is desirable;

be given a clear explanation of any treatment

proposed, including any risks and alternatives;

have access to health records and know that

those working for the NHS have a legal duty to

keep the contents confidential;

choose whether to take part in medical research

or medical student training;

be given detailed information on local health

services, including quality standards and maximum waiting times;

Source 0/0 of total

National Exchequer (general taxation) 83

National Insurance Fund 14

Other sources (charges, land sales,

etc.) 3

SOURCE C Ham, The NHS—A Guide /or Members and DirectorsO(

Health Authorities and Trusts (Birmingham National Association of

Health Authorties and Trusts, 1993)

be guaranteed admission for treatment by a specific date no later than two years from the day

when the patient is placed on a waiting list; and

have any complaint about NHS services investigated and receive a full, prompt, written reply

from the chief executive or general manager.

One of the most important elements of the drive

to improve the quality of care has been the policy

of reducing waiting times for treatment. No patients wait more than two years for treatment. In

1993 a guarantee was introduced that no one

should wait more than 18 months for a hip or knee

replacement or a cataract operation.

THE BRITISH HEALTH CARE SYSTEM

Introduced in 1948 by the Labor Party, the NHS is

based on the principle that everyone is entitled to

any kind of medical treatment for any condition,

free of charge. The NHS is not insurance-based

but is funded primarily from general revenues (see

table 8-1 and figure 8-l).

There are nearly 980,000 staff employed in the

delivery of health services. In the fiscal year April

1993 to March 1994, the total expenditure was set

at 29.9 billion. 1

In England the Secretary of State for Health is

responsible to Parliament for the provision of

health services. In Scotland, Wales, and Northern

Ireland, the respective secretaries of state assume

the responsibility. The relationship between the

1 Exchange rate in mid. 1994: $US 1.4410 1.00.
.

244 I Health Care Technology and Its Assessment in Eight Countries

Department of Health Policy Board

NHS Management Executive

I

Special health Regional health NHSME outposts

authorities authorities

District health / Family health

authorities service authorities

I

I - L

DMUS (directly I I

managed units) GPs GPFHs Trusts

I

I

Community health councils

SOURCE J Spiby, 1994

Department of Health and the NHS has its origin

in a series of acts, starting with the National

Health Services Act (1946) and consolidated in

the National Health Service Act (1977) and the

NHS and Community Care Act (1990) (13,14).

 England

In England the secretary of state is assisted by the

executive at the Department of Health. The Policy

Board sets the NHS’S strategic direction. Chaired

by the Secretary of State, it has these members:

health ministers,

the Chief Executive of the NHS Management

Executive,

the Permanent Secretary of the Department of

Health,

key individuals from outside the Department,

including two regional chairpersons and top

business people, and

the Chief Medical Officer and Chief Nursing

Officer.

The NHS Management Executive (NHSME) is

responsible for achieving the strategic goals set by

●

the Policy Board It is chaired by the Chief Executive of the NHS, and its members, drawn from

NHS and business, lead various directorates. Both

the Secretary of State and the Chief Executive are

accountable for the prudent administration of

funds to the Public Accounts Committee, which

oversees public expenditures of Parliament.

The Department of Health is staffed by permanent civil servants (of whom the permanent secretary is the head) and many other staff drawn from

within the ranks of health care professionals, particularly doctors and nurses (about 4,500 staff in

all). The Department provides:

■

●

advice to the Secretary of State and answers to

questions of Members of Parliament on all aspects of the NHS, with a particular emphasis on

political considerations, and

a range of professional advice to the Secretary

of State to guide policy development with reference to national and international issues and

taking into account broad political considerations.

Department of Health officials and NHSME

staff have both formal and informal arrangements

to ensure complementary activities. Day-to-day

activity is managed by a range of agencies on their

behalf (as shown in figure 8-1).

 Wales, Scotland, and Northern Ireland

Responsibility for health care in these three countries rests with the Welsh Office, Scottish Office,

and Northern Ireland Office, respectively. In

Wales the Secretary of State is assisted by the

Health and Personal Social Services Policy Board

and the Executive Committee. There are nine district health authorities and eight family health services authorities that increasingly work together.

In Scotland the Secretary of State operates

through the Scottish Home and Health Department and a Chief Executive. There are 15 health

boards responsible for family health services as

well as hospital and community services. In

Northern Ireland there are four health and social

services boards covering social services as well as

health care.
Chapter 8 Health Care Technology in the United Kingdom 1245

 Health Policy

The Department of Health is concerned with both

health and health care. Policies for improving the

quality of health care are centered on the Patient

Charter, which is part of a wider governmental initiative to raise the standards of public services.

The Department is also responsible for social care

and seeks to improve services through policies set

forth in a 1990 white paper entitled “Caring for

People” (12). Local authorities are the lead agencies for community care (often used as a synonym

for social care) and are expected to work closely

with NHS authorities to ensure that a comprehensive range of services is available. One of the aims

of policy in this area is to shift the provision of services away from residential care to supporting

people in their own homes.

The three key priorities for NHS in 1994 and

1995 include:

 implementing “The Health of the Nation, ”

■ developing the Patient’s Charter at national and

local levels, and

■ ensuring high-quality social care.

A fourth priority is to achieve greater health

care efficiency and effectiveness through sound

use of resources and development of effective organizations.

 The Health Care Purchaser-Provider

Relationship

Since April 1991 and the introduction of the NHS

and Community Care Act, there has been a philosophical and practical change in the way NHS is

managed (14). Health authorities have been given

specific responsibility for identifying their population’s health needs and for using public money

to buy services under a specific contract so as to

meet those needs. Responsibility for providing

services rests with hospitals, GPs, and other providers, such as community units. Providers can

now obtain funds only by contracting with purchasers.

The purchaser-provider separation has accelerated changes that were already under way and has

stimulated new changes, including:

greater accountability for service provision, as

the required service is more carefully specified;

more emphasis on quality issues and on patients’ rights, including the introduction of audit systems;

more involvement of patients in specifying requirements; and

a degree of competition between providers and

the use of outside agencies to provide certain

services, particularly in nonmedical areas.

The Purchasing Chain

The Regional Health Authority is a statutory body

responsible for strategic planning and monitoring

of the activity of purchasers as well as for allocating resources on the basis of an agreed-on formula. It also has a range of other enabling functions.

The District Health Authority (DHA) is a statutory body whose main function is to assess the

health needs of the resident population and to purchase services to meet those needs. In England its

key priorities for 1993/94 were as follows:

■ to embrace a wider role as champions of health

in the local community,

to develop strong alliances with other agencies

(e.g., social service departments, Family

Health Service Authorities (FHSAs)), and

to set an example as an employer by looking after the health of its staff.

Top priorities for action include implementing

the “Health of the Nation,” ensuring high-quality

health and social care in partnership with local authorities, and developing the Patient’s Charter.

FHSAs are statutory authorities that continue

to plan and manage the development of services

provided by GPs, family dentists. retail pharmacists, and opticians, all of whom are independent

practitioners. In some places DHAs and FHSAS

are forming health commissions for joint purchasing. A formal merger of the two organizations

would require legislative change, which is expected in 1996.

GP Fundholders are larger GP practices—

those with 7,000 or more patients. They may become purchasers for a 1imited range of services

(11 ). They may purchase all investigative ser-
246 I Health Care Technology and Its Assessment in Eight Countries

vices, community nursing and community psychiatric nursing, some outpatient and therapeutic

services, and, most notably, a limited range of specified acute procedures (costing no more than

5,000).

DHAs and GP Fundholders place contracts

with providers to deliver service, containing details on the volume and quality of service to be delivered for a price. DHAs and GP fundholders

may place contracts where they choose. A contract

may be with any trust, private or voluntary provider, or other directly managed units; however, these

will take into consideration historic patterns of referral, access to services, and the wishes of GPs

and patients. It is therefore the responsibility of

purchasers to decide (within their financial allocation) what services patients will receive.

Trusts

Trusts are accountable to the Secretary of State

and vary in the range of services they provide.

Their performance is monitored (although not

managed) by the NHSME via one of seven outposts. Most outposts span two regions and are separate from the regional function.

NHS trusts are self-governing units with their

own boards of directors, and they are operationally independent of the district health authorities.

They make decisions on how to deliver service to

achieve the highest quality. The trusts are free to

determine their own management structure, to

employ their own staff, and to set their own terms

and conditions of service. They are also free to acquire and sell their own assets, to retain surpluses,

and to borrow money subject to annual limits.

Each trust is required to prepare an annual business plan articulating its proposals for service development and capital investment, and showing

support from purchasers for the development.

Each trust also prepares and publishes an annual

report and accounts.

Contracts or Service Agreements

All providers now work on contract. As the trusts

are completely financially independent. they can

survive only if they undertake procedures for

which they have a contract. (As these are not legally binding, they are officially termed “service

agreements,” but are commonly referred to as contracts.) If trusts undertake work for which they

have no contract, they will not normally receive

payment. This is of particular importance in nonemergency surgery, where the maximum number

of operations is usually stipulated.

Most trusts obtain the majority of their work

from the local DHA by which they were previously managed. However, there is no rule stipulating

locales from which their patients should come,

and DHAs are free to place contracts where they

like. Certain historic patterns of patient referral

are being broken down, particularly those involving referrals to inner London teaching hospitals

for relatively routine conditions. Providers (if

they have extra capacity) may try to persuade distant purchasers to buy their services, but cannot always generate extra business because purchasers

tend to have little uncommitted money.

 NHS Management Reforms Planned

for 1994 to 1996

A series of changes in the NHS management in

England were announced in October 1993 by the

Secretary of State for Health. Subject to consultation, the new structure will be put into place by

1996; some preliminary changes were due for implementation by April 1994 (21).

Initially, mergers will reduce the number of

RHAs from 14 to eight. Legislation will then be

introduced to abolish the RHAs altogether, replacing them with eight corresponding regional offices of the NHS Management Executive. Another

aim is to enable DHAs and FHSAs to merge,

creating stronger local

quires legislation.

Provision of Funds

Public expenditures on

purchasers; this, too, rethe NHS are determined

by the Public Expenditure Survey Committee, on

which the NHS is represented by the Department

of Health. The process begins each summer, and

final figures for the next financial year are agreed

on in the fall.
Chapter 8 Health Care Technology in the United Kingdom 1247

Patient group or

service type f million 0/0 of total

Acute care hospital 6,717 45

Elderly 1,868 13

Other hospital 1,764 12

Mentally III 1,133 8

Maternity 816 6

Other community 927 6

Admlnistratlon 775 5

People with learning

disabilities 746 5

SOURCE C Ham, The NHS- A Guide for Members and Directors of

Health Authorities and Trusts (Birmigham National Association of

Health Authorities and Trusts, 1993)

In 1993/94 spending on the NHS was set at

29.9 billion, or 12.25 percent of total government expenditures. Although this proportion has

increased over the years, at 6 percent of the United

Kingdom’s gross domestic product, health care

still accounts for a smaller part of the economy

than it does in most developed countries. The primary source of NHS funding is general taxation.

Salaries are the biggest single budgetary item

in a service with 980,000 staff members, including 500,000 nurses and midwives, 53,000 doctors

and dentists, 160,000 administrative and clerical

staff, and 145,000 ancillary workers (1992 figures). Workers in primary care who are selfemployed, including 30,000 GPs and 15,000

dentists, are covered separately.

The NHS produces an annual report on expenditures. Table 8-2 shows the proportions of expenditures on hospital and community services by

patient group in 1990/91, indicating the priority

given to acute care and the importance of services

for the elderly.

Distribution of Funds

Spending on health services in different parts of

the country has historically been unequal. From

the mid- 1970s until 1991 a formula was used to

redistribute resources gradually. The main change

has been the movement of resources from the

southeast, particularly London, toward the north

and, in each region, away from the large teaching

hospitals and conurbations.

Funding is now allocated on the basis of the resident population of a health authority and not, as

before, on the catchment population (i.e., patients

who come to be treated in the district hospitals).

This is called resident/capitation-based funding.

Health authorities are allocated resources on the

basis of a formula that takes into account the size

and structure of the population, the pattern of illness, the number of elderly people, and certain

geographical considerations. Consideration is

now being given to including so-called social deprivation factors, which will give some districts

more money for growth and development.

Sources of Funds for Providers

Most of the funds for activities in a provider unit

come from the Exchequer through contracts with

DHAs and GP fundholders (11). Most capital

funds are obtained as part of the business planning

process and according to agreed-on external financing limits for each trust. Although trusts can

in theory borrow money on the open market, the

interest rates are always higher than those available from the central government. Partnerships

with private companies are encouraged for some

capital projects.

Private patients provide a small but important

part of the income of units. For these patients,

units are free to price services as they like. They

are able to offer private patients treatment and facilities in any part of the hospital but are increasingly developing separate rooms and sometimes

whole buildings for them. In 1992, private patients generated 12,771 million in revenue.

Almost all hospitals have some charitable

trusts, usually accumulated over many years from

donations. In long-established hospitals, particularly those with a famous name, these funds can be

sizable, and special trustees are usually appointed

to administer them. Such funds area useful source

of money for staff facilities, research, and equipment.
248 I Health Care Technology and Its Assessment in Eight Countries

Public Organizations

Community health councils (CHCS) are charged

with representing the local community’s interest

in the health service. They are an important source

of public information and a channel for consultation, representation, and complaint. There is usually one CHC in each district, made up of 18 to 24

lay members, a chairperson, and a paid officer (or

secretary).

The basic duty of each CHC is to review the operation of the health service in its district and make

recommendations on such matters as the Council

thinks fit. The CHC’S main functions are to consider complaints, visit NHS premises, serve as a

forum for consultation on the planning of local

health services, provide information on local services, and monitor the quality of services through

surveys and other means.

Consumer interests are also represented by

community health councils in Wales. They are

represented by the local health councils in Scotland and by the health and social services councils

in Northern Ireland.

Although not directly concerned with individual patients, two influential bodies outside the NHS

carry out audits of its performance:

The National Audit Office carries out studies,

particularly ones concentrating on value for

money, which are regularly used by the Public

Accounts Committee when investigating the

NHS’S performance.

The Audit Commission, established in 1982,

looks at local government activity. Its powers

were extended in 1990 to cover the NHS, and

its governing body includes ministers. The

Commission appoints auditors to look at areas

in which there is significant variation in performance. It attempts to spread good practice and

has produced a number of influential reports.

Impact of the Reforms

One of the key changes that has resulted from the

separation of purchaser and provider roles is that

GPs have started to work much more closely with

the DHAs. With GPs responsible for referring patients to hospitals and DHAs responsible for placing contracts, it is essential that there be a

continuing dialogue between the DHAs and the

physicians on which hospital and community

health services should be purchased and where

contracts should be placed.

As a result of this developing dialogue, service

provision has shifted toward primary care. There

has also been a change in the balance of power between GPs and hospital consultants, which has

forced hospital doctors to pay greater attention to

GPs and to be more responsive to their demands.

Consultants in some districts now hold their outpatient clinics in GP offices rather than in hospitals.

Some of the most significant changes resulting

from the reforms have been pioneered by GP

fundholders. The first wave of fundholders included many of the best-organized GP practices,

and these GPs have used their new powers to improve the services they deliver. The result has been

a shift in favor of GPs and greater accountability

of hospital doctors to purchasers.

The NHS trusts have also used their freedom to

improve the quality of care, including steps to reduce waiting times, provide greater flexibility in

clinic hours, and improve arrangements for patient appointments. Of particular importance has

been the ability of trusts to run their own affairs

and make decisions more quickly than in the past.

No national blueprint for reform has been set

forth by the Department of Health and to a large

extent implementation has been characterized by

“learning by doing.” In this sense the development of NHS as an organization depends on actual

implementation experience and cannot be predicted in advance. This observation applies particularly to the evolution of the internal market.

There was little competition in the first year of the

reforms, as the main emphasis was on laying the

basic building blocks of change. In 1992/93 purchasers were more active in switching to alternative providers, and such switches caused financial

problems in a number of hospitals, especially in

London. (The future of health services in London

has been the subject of a special inquiry (45).)
Chapter 8 Health Care Technology in the United Kingdom 1249

It is not clear how ministers will respond to the

emergence of losers in the internal market. The

logic of the reforms is that competitive incentives

should be used to reward providers who are efficient and to penalize those who are not. The difficulty with this approach is that the NHS’S

founding principles, such as access and equity,

may be undermined if people have to travel further

for treatment as a result of the closure of hospitals

that fail to compete successfully. Ensuring that

people who have the poorest health receive the

treatment they need remains a continuing challenge. For this reason the market must be managed

to diminish the risk of gaps in service provision or

unplanned interventions.

CONTROLLING HEALTH CARE

TECHNOLOGY

There is no overriding legislation to control the

purchase and use of health care technology in the

United Kingdom. The regions, districts, and

FHSAS are allocated budgets annually. The regions maintain some control over major capital

schemes or purchases, whereas the trusts and GPs

control decisions at the local level—in collaboration, at varying levels, with the DHAs and

FHSAS. The Department of Health is often involved in the development of new technologies at

an early stage, but its involvement is variable, as is

its level of control. Pharmaceuticals are the only

area in which there is a clear process for controlling introduction; otherwise, the mechanisms of

control vary considerably.

In recent years the need to control the introduction of new technologies has become more widely

appreciated. This is due mainly to the fact that the

health care budget is already under heavy pressure

from the growing elderly population, and also to

an increased awareness of the need to ensure that

health care technology is effective and offers justifiable additional health gains and minimal side

effects.

 Development of a National Policy

In 1988 the House of Lords Select Committee on

Science and Technology. in its “Priorities in Medical Research,” stated that coherent arrangements

were lacking by which the NHS could articulate

its research needs and ensure that the benefits of

research were translated systematically and effectively into service. The Committee was particularly critical of the way in which public health

research and operational research (i.e., research on

the organization and management of health services) had been relatively neglected. It suggested

a marked increase in funding for this area.

In response the government created a senior

post of director of research and development to

head the NHS Research and Development Division and to sit on the NHSME ( 16). A research and

development strategy was launched in April 1991

as the first stage in creating an R&D program in

the NHS. This R&D program emphasizes evaluation of the quality, effectiveness, and cost of health

care methods and research into the delivery and

content of health care. It also seeks to influence

biomedical research not only by expecting NHS

priorities to be taken into account when planning

future programs but also by expecting the practical implications of major research discoveries to

be anticipated early.

To ensure integration of R&D with NHS commissioning, the regions were given responsibility

to commission and manage regional R&D programs and also to help ensure that 1 ) the results of

good research are used to full effect, and 2) the regions promote a dialogue between the local research community and purchasers. During 1992

the regions developed their own R&D plans and

appointed staff to oversee their programs. In the

first round, the staff were mainly clinicians; therefore, some of the impact on NHS activity (as opposed to biomedical research) has been lost.

However, to ensure that the strategy is close to

NHS’S R&D needs, a Central Research and Development Committee (CRDC) was set up to review R&D of relevance to NHS’S work and to

identify areas where further work would be of value. The committee brings together senior NhS

managers, leading research workers from universities and elsewhere, lay members, and others

with experience in industry. The work that it identifies as a priority will either be funded centrally or
250 I Health Care Technology and Its Assessment in Eight Countries

by the regional health authorities and postgraduate hospitals.

The lack of real controls on medical technology

and the role of technology assessment became apparent during the development of the R&D strategy. Early on, the Department of Health’s director

of R&D set up a health technology group to prepare a report on methods for assessing the effects

of health technologies. Among the main points of

the report are:

the range of possible outcome measures by

which health technology effects might be assessed should always be considered explicitly;

existing evidence on the effects of health technologies should be reviewed systematically

and the results disseminated in forms that a

wide range of decisionmakers, including patients, can understand. If the evidence is strong,

means should be used to ensure that it influences practice;

there should be a systematic information system for disseminating the results of technology

assessments;

every effort should be made to assess the effects

of new technologies before decisions are made

on whether they should be used within the

health service;

multidisciplinary research centers, each focusing on a priority area, should be established to

assess the effects of health technologies; and

there should be training and a career structure

for those who wish to specialize in technology

assessment (17).

The report was considered by the CRDC, and in

February 1993 a Standing Group on Health

Technology was established. This Standing

Group established six advisory panels to consider

primary and community care; acute care; pharmaceuticals; diagnostic and imaging technology;

population screening; and R&D methods. Following consultation with NHS and other interested bodies, each panel put together a list of its

top 20 priorities, which was published in December 1993.

The Standing Group’s key tasks are to:

identify and rank technologies in need of assessment;

identify and rank the need for R&D of technology assessment methods, especially in cases

where diffusion of a technology must be controlled until more information becomes available; and

identify emerging technologies likely to have

major implications for the NHS.

The R&D strategy, the Standing Group and

associated infrastructures are major steps toward a

rigorous national process. To date, however,

technology assessment has been seen mainly as a

source for R&D monies rather than a means of

finding answers that will actually inform clinicians or managers. To address the ongoing need

for practical information for short-term use, three

units have been set up to handle existing research

data. The Cochrane Centre was established in Oxford to undertake systematic analysis of clinical

trials; a center in York will commission expert research reviews; and health care effectiveness bulletins, produced from Leeds, are already offering

useful overviews of technology assessments (38).

The York unit will also concentrate on the systematic transfer of this and other research information

to users and will help develop skills for transferring research information to decisionmakers.

Figure 8-2 shows how a technology assessment

problem is “managed” such that useful information is provided to NHS.

 Regulation of Pharmaceuticals

The pharmaceutical industry, often depicted as a

bastion of the free market, is in fact heavily regulated. A maze of rules has been created by separate, often isolated, government departments. The

finance division pursues policies separate from

those of its pharmaceutical price regulation

scheme (PPRS) colleagues and often, it seems,

with little liaison with officials of the Department

of Trade and Industry, which pursues its own antitrust and balance of trade goals.
Chapter 8 Health Care Technology in the United Kingdom 1251

I Problem I

I

Filter:

known solutions to problem

Filter:

solutions sought through

research in progress

Problems presented to

Medical Research Council,

Economic and Social Research

Council, charities

Research commissioned by

Department of Health,

NHS, or both

I New R&D work I

I

I

Information transfer I

Information vehicles

E&cl 9 “

Contracts Patient information

I Routine use

1

Measurement of results

SOURCE M Peckham, 1994, in R Smith, “Filling the Lacuna Between Research and Practice An Interview with Michael Peckham, ” Br. Med. J.

3071403-1409, 1993
252 I Health Care Technology and Its Assessment in Eight Countries

Safety and Efficacy

In the United Kingdom, voluntary regulations for

pharmaceuticals emerged in the 1950s. Following

the failure to prevent the teratogenic effects of thalidomide taken by pregnant women in the early

1960s, the 1968 Medicines Act created the Committee on the Safety of Medicine (CSM), which

advises on the safety, quality, and efficacy of new

medicines. This act also established the Committee on the Review of Medicines (CRM) to review

the safety, quality, and efficacy of existing products. A licensing system was created to regulate

clinical trials, marketing, the manufacture and distribution of products, and advertising and promotion.

The process of licensing a New Chemical Entity (NCE) has become long and expensive. Animal

toxicity tests, if acceptable, are followed by clinical trials on human subjects. The company can

then apply for a product license, without which the

NCE cannot be marketed. This process may take

10 to 12 years from the time that the compound is

patented.

If a new drug has potential breakthrough effects

(e.g., for treating AIDS), a fast-track route can be

found; however, this is rare.

Patent legislation rewards producers of innovative drugs by giving them monopoly power; without this incentive, R&D investment would

probably be reduced. The legislation governing

NCES has eroded patent protection and reduced

the duration of monopoly power (hence profits).

In addition, the licensing rules raise costs, and together these factors may well diminish drug companies’ R&D investments.

Regulating Prices and Profits

Since 1957 the prices and profits of the U.K. pharmaceutical industry have been regulated by the

government and the PPRS. Each year, the Department of Health assesses firms’ profitability in

relation to targets set to ensure that costs, profits,

and prices are reasonable—that is, in the range of

17to21 percent. If a firm’s return exceeds this figure, it may be required to repay money to the Department. If returns are less, applications can be

made for a price increase. The Department also

limits aggregate expenditures on sales promotion

to 9 percent of total sales revenue.

PPRS is a voluntary agreement that the House

of Commons Public Accounts Committee reviews irregularly and for which there is no other

public review. The scheme is directly affected by

cost containment mechanisms. If cost-reducing

activities are successful within NHS, a firm may

be allowed a price rise via PPRS.

User Charges

Prescription charges were abolished in 1965 but

reintroduced in 1968 (with extensive exemptions). Since then the charge per item has risen

from 13 per item in 1968 to 4.75 in 1994. This

is well over five times the general price level increase; however, the revenue obtained has decreased as a result of increasing numbers of people

who are exempted from payment (52 percent were

exempt in 1969, 85 percent in 1991).

Generic Prescribing

Prescribing of generic alternatives to brand-name

drugs becomes possible when an NCE goes out of

patent. Generic prescribing is strongly encouraged, and recently several campaigns and official

reports have put pressure on GPs and FHSAS to

increase the level of generic prescribing. In 1979,

approximately 29 percent of prescriptions were

generic; this had risen to 40 percent by 1990, and a

target of at least 50 percent has been set in many

regions. An educational program for the general

public is under way to explain why the government promotes generic prescribing.

Limited List

In 1985 the range of drugs prescribable under

NHS was limited by the Department of Health. No

longer prescribable were medicines for which

over-the-counter alternatives were widely available. The government claimed that in the first

year, 275 million was saved by this mechanism.

The aim of the limited list is to force consumers of

all ages to pay for some medicines and to ensure

that expensive drugs are not prescribed unneces-
Chapter 8 Health Care Technology in the United Kingdom 1253

sarily. The limited list was extended in 1994 to include drugs such as those for hay fever and

duodenal ulcers.

Prescribing Analysis and Cost Data (PACT)

PACT and similar systems used in Scotland and

Northern Ireland are an attempt by the Department

of Health to disseminate information on prescribing behavior to GPs to increase their awareness of

costs. The feedback system began in 1988; since

then, there have been some changes in prescribing

patterns, although it is difficult to know whether

they are due to PACT. Capacity to use the data has

been increasing; all FHSAS are directly on line to

the Prescription Pricing Authority, which downloads PACT data monthly.

Indicative Prescribing Budgets

The indicative prescribing scheme, introduced in

1991, aims to build on the PACT system to improve prescribing and reduce drug expenditures

(10). RHAs receive an annual block allocation to

cover the cost of all prescriptions dispensed within their FHSAS. Initial allocations reflected historical spending patterns but are increasingly moving

toward a weighted cavitation basis. FHSAS then

set indicative prescribing amounts for each GP

practice based on factors such as existing costs,

number and age of patients, local social and epidemiological factors, morbidity, and special circumstances. If a GP overspends the indicative budget,

the FHSA medical and/or pharmaceutical adviser

offers advice on how costs might be reduced. The

budget is not a firm cap however, and FSHAS have

no executive powers to penalize GPs. In the wake

of a recent Audit Commission report, it is anticipated that the budgets soon will be cash limited.

 Regulation of Medical Equipment

In comparison with pharmaceuticals, the control

of medical equipment is minimal. In the Department of Health a fairly complex set of machinery

supports and tracks new developments and advises scientific and supplies officers; this is not,

however, the same as control. In certain extreme

situations, a warning hazard note can be produced

by the Department, and particular equipment is removed. The scientific and technical division of

the Department is mainly responsible for producing this information. Its work covers technical

quality (i.e., whether the equipment does what the

manufacturer says it will do), reliability, and mechanical and electrical safety for the patient and

operator. This work rarely includes analysis of

cost-effectiveness or an understanding of the impact of the equipment on organizations.

The Department of Health also regulates the

introduction of equipment through its role in financing high-cost technology. These so-called

pump-priming funds are used to support an industry introducing equipment that is deemed necessary by the NHS. Two or three items might be

purchased to help the sales take off, especially if

the Department has previously supported this development through its R&D program.

In the past there was a clear procedure for the

purchase of new equipment: it was purchased with

funds from a regional capital budget against

which districts bid for their local hospitals. Many

regions devolved a portion of this budget to districts in order to purchase smaller pieces of equipment.

Eighty percent of this equipment budget is usually required for replacement purposes, and only

the remainder is available for new developments.

The key decisionmakers in both the district and

the region are managers and clinical advisory

committees. The system tends to be somewhat arbitrary and is frequently based on a “he who

shouts loudest” principle rather than a systematic

analysis of need.

With the introduction of the split between purchasers and providers, the relationship for capital

development is purely a matter to be worked out

between the provider and region or NSME outpost. The use of non-NHS monies for capital is expected to extend as the trusts become more

familiar with the use of private financing mechanisms.

At present, trusts make bids to the region or

outposts in their annual business plans for specific

capital development. The control of large pieces

of equipment and the implications of developing
254 I Health Care Technology and Its Assessment in Eight Countries

new technology have become more apparent to

providers as these costs are included in their full

costs and called “capital charges.” These charges

are passed on to the purchasers; institutions with

excessive building capital or equipment thus have

higher costs within their contracts.

 NHS Supplies Authority

In 1991 the Department of Health reversed its previous policy of devolving the purchase of medical

supplies (ranging from catering to expensive

scientific equipment) and established a central

NHS Supplies Authority. This change resulted

from a report by the National Audit Office that

was critical of NHS buying. It stated that the considerable bulk buying power of the NHS was not

being fully utilized because of lack of coordination and that many opportunities for more cost-effective purchasing were being missed. The main

focus of the report was more cost-effective buying.

The Supplies Authority provides a central,

coordinated policy for buying supplies. It has six

divisions, with the national headquarters concentrating on key commodities such as food contracts, medical and surgical items, and x-ray

equipment. The Authority also undertakes research into market requirements and has a small

R&D program. This new development is rather at

odds, however, with the establishment of trusts

and the independence of providers. At present, it

is expected that the trusts will be encouraged, but

not required, to use the purchasing power of the

Authority.

 Control of Provider Locations

In the past the Department of Health and the

RHAs had strong control over the placement of

providers through a regional planning tier or specific, centrally promulgated regulations, concerning where GP practices could be sited. With the

introduction of the internal market, it was anticipated that this regulatory planning function would

be removed, and placement of providers would be

subject to market forces.

It has become clear, however, that at present the

government is uncomfortable with allowing trust

hospitals to close merely because of market

forces. The mode of control or “market management” is still under discussion. Theoretically, if

purchasers do not place a sufficient number of

contracts with a provider to ensure its continued

existence that provider should close. In reality,

while some are closing or unifying with adjacent

units, no major hospital has yet closed.

In central London the government has determined that it is unhappy letting the market control

the siting of providers. It has chosen to set up a

central review body (the Tomlinson Review) that

has clearly identified where teaching hospitals

should be merged or where specific providers

should close. These decisions have been much debated, and considerable lobbying has been undertaken. Some, though not all decisions have been

overturned by the Secretary of State.

 Regulating the Placement of Services

The role of districts in purchasing health care

based on assessed needs provides a major impetus

for technology assessment. For the first time,

managers and public health physicians are working together to assess the literature on effectiveness of health care procedures, including

cost-effectiveness.

The Department of Health has responded by

commissioning a series of bulletins on the effectiveness of health service interventions for decisionmakers; the first editions were published in

January 1992. These bulletins are specifically oriented toward health authorities rather than clinicians.

The need to purchase effective health care

packages is also promoting interest in service

evaluation, and research on local health services is

increasing rapidly. At present the main effect of

districts as purchasers is to reduce support for expensive technologies with little proven effectiveness. This potential conflict between teaching

hospitals and their clinicians and the purchasers

has not been resolved, nor have explicit mechanisms of control been established.
Chapter 8 Health Care Technology in the United Kingdom 1255

Districts are increasingly including GPs in this

process as part of the advisory mechanism for purchasing services. This is a new role for GPs; some

relish it, but others find it unacceptable either because they do not consider it is a good use of their

time or because they have qualms about taking on

even greater responsibility y for what they consider

to be management.

The role of the DHAs in determining where resources are allocated has become increasingly explicit, as they have lost their direct management

role. This explicitness, inevitable with the NHS

reforms, is proving difficult politically; previously, the long waiting list dealt implicitly with excess demand. Consumer expectations have also

risen, and the conflicts between resource availability and patient need and demand are making

the role of the DHA purchasers increasingly difficult.

 Control of Use

Within the new purchaser/provider system, use is

determined through the contract between the

DHAs and their providers. The level of refinement

of this contract is very limited at present, and utilization is measured by numbers of consultant episodes, which means that the emphasis is on

inpatient activity and events rather than on individual patients. This is obviously not adequate,

and better information systems are being developed (though not quickly enough for current requirements).

On the whole, most districts are signing contracts with providers which aim to reduce the level

of activity in acute hospitals, either because of

limited funds or because of policies that aim to

shift activity from hospitals to the community.

Demand is continuing to rise, and hospitals are

seeing an annual increase of 2 to 5 percent in activity. This conflict between increased patient demand and reduction of activity levels in purchaser

contracts can be seen clearly in districts in the

south of England, where budgets on the whole are

being decreased. In some hospitals, only urgent

work is done near the end of the financial year to

ensure that activity is kept within the agreed contract and that budgets are not exceeded. Such restrictions are not acceptable to the government,

however, and providers are being required to pace

their activities throughout the year.

 Utilization and Quality Control

The contracts set with providers by DHAs cover

not only activity and finance but also aim to identify key quality measures. At present, the main

emphasis in contracting is on activity and money.

(This is due to the newness of the system rather

than to a policy decision.) The level of detail and

type of quality measures to be identified by the

districts still are being developed. Clearly, the emphasis should be on outcome measures and expectations for the health of the population. As

these are frequently difficult to identify and measure, process and structural measures probably

will be used.

 The Role of the Private Sector and

Consumers

The private sector accounts for a small percentage

of health care spending in the United Kingdom,

most of which is funded through health insurance

companies. There are clear rules as to which

technologies are paid for under which policies; for

example, cosmetic plastic surgery is not reimbursable. There is no published information on how

these guidelines are determined. With increasing

medical care costs, insurance companies are

introducing cheaper policies that limit what can be

provided.

A major part of the NHS reforms was a commitment to the role of the consumer in decisionmaking. The 1991 Patient’s Charter sets out

clearly, for the first time, the public’s right to

health care and to national and local charter standards, which the government intends to see

achieved. This greater emphasis on the role of the

consumer will no doubt increase actual patient

questioning of medical practice, as well as interest

in consumers’ views by policy makers and others.

The growing role of the consumer in technology

assessment can be glimpsed in the inclusion of

consumers in the planning of a few major random-
256 I Health Care Technology and Its Assessment in Eight Countries

ized controlled trials (e.g., trial of chorionic villus

sampling).

HEALTH CARE TECHNOLOGY

ASSESSMENT

The United Kingdom has along history in some of

the methods of technology assessment, such as

randomized controlled trials and the development

of health economics, but this has not been in a

coordinated policy context. Interest in technology

assessment has been slowly increasing because of

pressures resulting from the costs of new technologies, increasing recognition of the potential dangers of new developments, and perceptions of

more organized activity abroad. Originally, the

main pressure for technology assessment came

from those parts of the research community undertaking this work, including the King’s Fund (a

charitable health policy organization), health

economists, the media, and some parts of the medical profession. More recently, however, pressure

has come from NHS managers (including doctors), public health medicine, and purchasing authorities.

Raised within the context of the national R&D

strategy, research dissemination and organizational issues (e.g., linkages between research and

clinical practice) have become very significant.

The report of the Standing Group also outlined the

need for a career structure to encourage individuals in technology assessment. Problems in recruiting and retaining personnel had been a particular

problem in health service research. The report argued for health technology assessment to be

funded from public monies and coordinated by the

national R&D strategy; to this end the funding

mechanism itself was said to need clarification.

The report also identified problems in organizing

multicenter studies of major diseases. Finally, the

report identified problems in undertaking proper

randomized assessments resulting from litigation

with regard to informed consent, corporate indemnity, and costs of treatment. These obstacles,

stated the report, must be acknowledged more explicitly and overcome. The full impact of the

Standing Group has yet to be fully felt, but it is

clear that the importance and relevance of technology assessment to the NHS has been firmly established. Outside the research community, this is not

yet the case.

 Technology Assessment Entities

The Medical Research Council (MRC) and the

Standing Medical Advisory Committees

The Medical Research Council plays a key role in

British medical research activities. It has been

dominated by biomedical research and has been

less interested in health services research or in the

wider issues related to medical technology. After

the publication of the House of Lords report, the

appointment of a Director of Research and Development at the Department of Health, and a new

Secretary at the MRC, change has accelerated.

There appears to be a more positive attitude toward health services research and applied clinical

research, as evidenced by the new board structure,

which includes a fourth board for health services

research, public health, and epidemiology.

Relations between the MRC and the Department are governed by a concordat that acknowledges the strong role of the latter in health services

research. A report is also being considered by the

MRC board that proposes that the MRC take a

more active role in evaluating procedures (including consideration of economic, quality-of-life,

and psycho-social issues).

Questions on such developments as neural tube

defect screening or heart transplants are likely to

arise in discussions between the Chief Medical

Officer (CMO) and the medical profession. The

CMO may then seek advice from the Standing

Medical Advisory Committee (SMAC). For major issues a specialist SMAC subcommittee may

be set up on an ad hoc basis to study the subject.

Once the subcommittee has prepared a report and

its recommendations are accepted by SMAC, a

Health Circular on the subject may be sent out to

NHS management. Such circulars provide advice

on whether, to what degree, and how a service

should be provided. In the final analysis, however,

decisions are made by regions and districts. In
Chapter 8 Health Care Technology in the United Kingdom 1257

some circumstances, such as heart transplants,

some central funds may be provided, but this occurs only for quite exceptional developments.

The Audit Commission

The Audit Commission is an independent body

that audits the public sector. It has recently developed its work in health matters and has reviewed

services such as those for day surgery, AIDS prevention, and bed utilization. Because it has access

to all health authorities, it could potentially have a

considerable impact on the use of medical

technology.

King’s Fund

One of the main proponents of technology assessment in Great Britain during the 1980s was the

King’s Fund, both behind the scenes and in the development of the U.K. Consensus Development

Programme. The latter has now ceased, but as districts and RHAs authorities have come to recognize their need for assessment data, the method

has been adapted to local circumstances.

Clinical Standards Advisory Group

The Clinical Standards Advisory Group (CSAG)

was established in 1991 as part of the NHS Act to

advise the health ministers or health care bodies

on standards of clinical care, and access and availability of services to NHS patients. Most of the

members are nominated by the Royal Colleges

and faculties relating to medicine, nursing and

dentistry, although the CSAG is funded by the Department of Health. Its initial work has covered

the following:

m

●

access to and availability of selected NHS specialist services,

clinical standards for women in normal labor,

standards of clinical care for patients admitted

to hospital urgently or as emergencies. and

standards of care for people with diabetes.

This body represents anew venture in developing and assessing clinical standards, and its success is still not assured-especially as it is

advisory rather than mandatory. It produced a series of reports in March 1993 covering neonatal

intensive care, cystic fibrosis, childhood leukemia, coronary artery bypass grafting, and angioplasty. There was no consistency in the methods or

use of objective data in these reports. Their effects

are difficult to assess but generally appear limited

(4,5,6,7).

Medical Audit

A key part of the NHS reforms is encouraging all

doctors to undertake medical audit, which includes the “systematic, critical analysis of quality

of medical care and treatment, the use of resources, and the resulting outcome and quality of

life for the patient.” New monies have been released by the Department of Health for the development of medical audit, and in the fourth year of

this initiative, a large number of clinicians are involved at some 1evel. Much of the activity is focused on collecting data, but in some centers

clinicians are now looking more critically at their

work and judging it against agreed-on standards.

This initiative, along with management changes

that are encouraging doctors to be more involved

in management issues, is forcing the professions

to consider evidence on the costs and effectiveness of clinical procedures.
258 I Health Care Technology and Its Assessment in Eight Countries

TREATMENTS FOR CORONARY

ARTERY DISEASE

Coronary artery bypass grafting (CABG) was developed in the United States in the late 1960s but

was not introduced in the United Kingdom until

the mid-1 970s, probably because of financial

constraints. Percutaneous transluminal coronary

angioplasty (PTCA) was introduced in the early

1980s.

Because CABG requires relatively expensive

equipment, it developed at the teaching institutions where capital monies were more accessible

and medical staff sought to be at the forefront of

medical expertise. The most well-endowed regions tended to be those in the London area; they

had the greatest number of teaching and postgraduate institutions.

By 1982 the CABG rate was 107 per million

population. This overall rate disguised a 12-fold

variation among regions, from 21 to 263 per million. The rate of CABG rose steadily to 212 per

million in 1986 and 278 per million in 1990. The

extent of inter-regional difference fell, but there

remained a fivefold difference: 97 to 466 per million in 1990. The most active regions were consistently in the southeast and in areas with a

concentration of teaching hospitals. This increase

in surgery was accompanied by a slow increase in

cardiothoracic surgeons.

The differences among regions are mirrored by

variation in utilization rates among districts within regions, most marked at the earlier stages of diffusion. Not surprisingly, uptake has been higher in

districts with hospitals that provide the service, or

where a local cardiologist is associated with a

surgical unit, and not necessarily those with the

greatest need. As this variance became well documented, attempts were made to redress the balance. However, change was limited until the NHS

reforms in 1990 when districts were funded according to their population size and characteristics

rather than the facilities available in them. More

recently, a further inequality has been reported:

women have been shown to be less likely to receive surgery than men (32). Lower rates of surgery in the United Kingdom compared with the

United States reflect a higher threshold for surgical intervention and greater dependence on medical treatments (based on a review of a region in the

Midlands). This difference in threshold also

serves to reduce demand in regions where levels

of service provision are lower.

 Funding Mechanisms and

Changes in Control

Before the 1991 NHS reforms, CABG and PTCA

were designated “regional specialities” and were

funded by means of top-sliced allocations from regions. Now that districts have become responsible

for purchasing these services, those districts with

high levels of activity are beginning to question

their spending levels and the relative efficiency of

the service. Although the purchasing function is

still relatively new, providers are beginning to see

the impact of the reforms and to perceive the market as a form of regulation. It is unlikely that there

will be a strong increase in CABG and PTCA activity unless it is achieved through an increase in

efficiency. More emphasis will be put, however,

on developing protocols and agreeing on criteria

to establish appropriate use of these procedures.

This process began with a report in a series of epidemiologically based needs assessments commissioned by the Department that stated:

. the use of CABG for disabling angina not responding to medical treatment is based on evidence derived from sound RCTS,
■

■

Chapter 8 Health Care Technology in the United Kingdom 1259

the use of CABG for other indications and angioplasty for disabling angina not responding

to medical treatment is based on fair evidence

based on the opinions of experts and indirect

evidence, and

the use of CABG or angioplasty for other indications is based on poor evidence derived

from opinions and indirect evidence (26).

Services in London

The Department of Health’s “Report of an Independent Review of Specialist Services in London”

(19) is part of a fundamental review of health care

in London. The report suggests that the “ideal

model of tertiary cardiac services consists of three

equally important and interrelated parts,” high

quality clinical, diagnostic, treatment, and rehabilitation services; R&D to improve cardiac services and their delivery; and staff teaching to

ensure current knowledge.

It was felt that none of the 14 London centers

providing adult tertiary cardiac services met these

criteria in all respects. There was a clear case for

rationalization to create fewer, larger and stronger

centers. The report proposed that nine units are required in London, with additional units elsewhere

in the southeast and further afield.

The changes proposed are being hotly debated

by each center and are unlikely to happen without

political commitment. If they do, the likely outcome will be a more equitable distribution of services rather than any major increase in overall

activity.

 Department of Health Targets

In 1984 the King’s Fund held its first consensus

conference in London on CABG. It concluded that

in the United Kingdom a realistic target for CABG

should be 300 operations per million people. Despite various criticisms of the process, this target

was endorsed in 1986 during a ministerial announcement at a Tory- sponsored conference by

the government; it later found its way into central

planning guidelines. The setting of such a clear

guideline is unusual and reflects the influence of

the consensus conference and the evidence published by a health economist from York University

who showed that CABG is a cost-effective procedure when analyzed according to the concept of

quality-adjusted life years (QUALYS) (47). Although this methodology has since been severely

criticized, it still plays a strong role in priority setting. This conference also established the credibility of CABG as an effective procedure.

The Department of Health monitors the level of

CABG procedures but has not enforced a limit on

them. Uptake of CABG and PTCA initially reflected the willingness of teaching hospitals and

regions to invest in capital and staff to support

them. Suggested appropriate levels of CABG and

PTCA have had only a limited impact on activity.

The Department is currently reviewing whether

numerical targets are the best way to improve

quality and quantity. Consideration is also being

given to setting up a comprehensive, randomized

study to identify which patients are most appropriate for CABG, PCTA, or medical treatment.

 Clinical Standards Advisory Group

A review was conducted in 1993 by a working

party of CSAG which concluded that “regional

utilization rates are associated with the availibilit y of consultant and nonconsultant staff in regional centres,” and are also affected by varying

patient expectations. In contrast, district utilization rates “are associated with the availability of a

local cardiologist and the proximity of a regional

center, and inversely associated with the mortality

from coronary heart disease” (4).

The review expressed concern about long waiting times (particularly for CABG) resulting from

lack of funds. CSAG’S report recommended that

every district conform to national targets and aim

to achieve a minimum level of 300 CABG procedures per million population within the next three

years, with a review of the target possibly by

another consensus conference. The report also

proposed that a target for PTCA be set. To date,

these recommendations have not been followed.
260 I Health Care Technology and Its Assessment in Eight Countries

 PTCA Update

By 1985, 15 hospitals had performed about 1,600

PTCA procedures, a rate of 29 per million population. At that point there was some questioning of

the clinical effectiveness of the procedure, but as

clinicians became more experienced, its routine

use became established. The use of the procedure

spread rapidly during the late 1980s so that by

1991, 53 (44 NHS and 9 private) centers had

treated 9,933 patients (a rate of 174 per million

population). This rapid rise has been enabled by

the relatively low capital outlay required for

PTCA equipment. In some regions debate has

been heated as to whether angioplasty should be

undertaken in hospitals without backup cardiothoracic surgery facilities because of the risk of

perforated blood vessels during angioplasty. The

increase in rates also reflects a 43 percent increase

in the number of consultant cardiovascular physicians, from 223 in 1980 to 323 in 1990-again

with a preponderance in the southeast. A greater

proportion of these physicians are able to perform

PTCA as younger staff trained in the new technologies become consultants. A recent report of the

Royal Colleges of Physicians and Surgeons has

recommended a level of 300 angioplasties per

million population.

MEDICAL IMAGING (CT AND MRI)

 Computed Tomography (CT)

The first clinically useful CT scanner was developed at EMI’s Central Research Laboratory in

Britain in the late 1960s, with funding from the

Department of Health. The advantages of this

brain scanner were quickly recognized; the competing technologies of cerebral angiography,

pneumo-encephalography, and isotope scanning

were more invasive, riskier, and more uncomfortable for the patient. Early evaluations were mainly

clinically based. During the mid- 1970s, the Department of Health formulated a policy that every

region should have a least one brain scanner located in a neuroradiology center. By mid-1977

there were 30 brain scanners in the United Kingdom, and others were on order (41). Here, clearly,

at least in the initial phase, the Department controlled the introduction of the technology.

As the use of brain scanners increased throughout the NHS, EMI and others in the field were proceeding with the development of whole body

scanners. Interestingly, the clinical evaluation of

whole body scanning took a different path from

that of the brain scanner. In the case of the latter,

the Department maintained a high degree of control over the initial evaluation, and additional machines were not bought until the Department was

satisfied (although as the clinical advantage was

quickly recognized this process was not particularly delaying). With the body scanner, evaluation

was much more complex because so many different organs were involved, other acceptable techniques were available for use in diagnosis, and the

effect on patient management and on the final outcome was not obvious. Even more difficult was

the ever-developing state of other technologies

against which whole body scanners would need to

be compared.

A reduction in the Department budget made it

impracticable to buy enough scanners for a thorough exploration. Very early on, various philanthropists and private institutions had purchased

body scanners for the NHS or for use in private

hospitals, and these were not subject to the Department’s control (41).

The Department decided to evaluate the scanner by bringing together all the users to discuss

their studies. This mechanism proved unwieldy

and was soon superseded by a committee of experts that aimed to analyze all the available data

from users in Great Britain and abroad in an attempt to 1) determine the scanner’s emerging

place in medical care and 2) encourage research

where there were gaps in evaluation. No major,

randomized controlled trials were initiated, however. In retrospect, the committee’s impact was

limited (42).

 The Role of Charitable Funds

and Clinicians

The diffusion of CT scanners occurred exceptionally quickly, especially considering the initial
Chapter 8 Health Care Technology in the United Kingdom 1261

high cost of each machine. Although Britain was

the country of origin of the technology and had the

first brain scanner in action, the first commercial

scanner was installed in the United States. By

April 1977, 11 EMI whole body scanners were

installed or on order in the United Kingdom (41),

only 3 of which were bought with NHS funds. The

others were donated by rich individuals, charities,

or endowment funds.

Early on, fundraising events for scanners became common. The prime movers were consultant radiologists, but they rapidly involved the

public, encouraging support for this “high-tech

magic machine.” The manufacturers also played

their part in ensuring that radiologists were aware

of the developments. The collaboration of interested c1inicians and the public proved to be a powerful agent for diffusion.

When diffusion results from non-NHS funding

without central controls, machines are sited according to resources, not clinical need or capacity.

And non-NHS funding also means that ongoing

maintenance of the equipment may not be funded

through private donations. Today, institutions are

wary of such gifts. In the 1970s, however, hospitals had yet to experience decades of reducing

budgets. The first time this problem was discussed

publicly was in Leeds, where the CHC questioned

the Area Health Authority for accepting a body

scanner from a group of businessmen. As with

most other technologies, most early scanners were

placed in the south of England, particularly in the

London area.

 Utilization

CT scanners are now available in almost all radiological departments. As they are relatively inexpensive (no more costly than other major pieces of

equipment) and funding is through the hospital

major capital budget, acquiring them is relatively

easy. They are also considered by most managers

to be an essential part of any hospital diagnostic

capacity. Numerous evaluations of their use for

particular conditions have been done, but in general use is widespread among all specialties with

little consideration of appropriateness or cost effectiveness. One area of particular debate has been

the use of brain scans for patients with stroke. The

1988 King’s Fund Consensus Statement suggested that CT be used for limited indications;

more widespread use would have considerable resource implications.

In 1985, a review of the use of CT in the management of cancer concluded that despite a paucity of information “reported studies [of CT in

patient management in oncology] indicate that CT

directly alters clinical decisions in 14-30% of patients” (24). There has been no coordinated national evaluation or technology assessment

following the Department’s initial control of—

and involvement in the evaluation of—brain scanners.

The University of York Centre for Health Economics (one of the major health economics departments in the country) produced a user-guide

for individuals and groups concerned with planning for, and management of a CT scanner in a

District General Hospital in 1987 (25). It raises

key questions such as, “Will CT replace existing

forms of examination?” and “What impact will

CT have on the demand for other related services

in the hospital?” However, as it is not a standard

DH document but emerges from a research organization, its impact and subsequent use has been

limited.

 Magnetic Resonance Imaging (MRI)

The dissemination of MRI, like CT, depended primarily on the availability of resources. The initial

seven units were supported by the Department of

Health and MRC. Trials were set up to evaluate

MRI’s clinical applications and the Department of

Health/MRC Coordinating Committee on Clinical Application of NMR Imaging commissioned a

cost-benefit study that also included collection of

data on costs and throughput at other centers in an

attempt to forecast likely implications of the adoption of MRI for the NHS. This part of the work

proved to be of limited success; several units declined to be involved, which was inevitable in an

environment where management research is considered to be a hindrance.
—

262 I Health Care Technology and Its Assessment in Eight Countries

Published in January 1990 (48), the committee’s report held that for the applications studied,

“MRI is no more cost-effective than existing diagnostic techniques.” It also stated that the perceived

diagnostic and therapeutic impact of MRI does

not necessarily imply a positive effect on the final

outcomes for patients:

Direct cost of MRI is much greater than that

of CT. This is partly due to higher initial capital

cost, but mainly due to lower throughput of patients in MRI. MRI is more cost effective if used

as the first investigation of choice. However

where CT is the only scanning modality there is

no strong case for investing in MRI.

At the same time, a significant study was being

undertaken within the West Midlands Regional

Health Authority, funded by its Health Services

Research Committee (43). As the service was already up and running, it was not possible to do a

randomized controlled study. The report published in December 1990 determined that MRI did

confer additional benefits in terms of diagnostic

impact, mainly by turning a provisional diagnosis

into a “diagnosis unknown.” MRI also proved to

be excellent at improving the accuracy of the site

or location of an already diagnosed condition. In

terms of value or benefit to the patient, however,

the results were less obvious. This report further

concluded that MRI was an additional cost to each

patient and that it tended to be used as an additional means of investigation rather than to replace existing modes. When introducing such expensive

services, clinical audit should be established to

ensure maximum cost-effectiveness.

Neither of these reports was adopted by the Department of Health, and both were published by

research units rather than by the Department or

any organization with authority; thus, they have

had little effect on controlling diffusion. The West

Midlands work does not appear to have had any

impact on policy (44). MRI adoption has been

limited, mainly due to resource constraints rather

than determination of need, especially as the NHS

reforms have introduced capital changes that

mean that the cost of expensive equipment is to be

included in providers’ prices to purchasers. A

more recent review of clinical uses of MRI completely ignores the two earlier studies and is generally positive about MRI’s success for a range of

clinical conditions (l).

A report produced by the Royal College of Radiologists in 1992 identified 90 MRI units (37).

This report advised that MRI be available to all

teaching and district general hospitals with

approximately four MRI units per million population, or 225 units in total. This considerable increase is unlikely to occur on grounds of cost

rather than appropriateness.

LAPAROSCOPIC SURGERY

Because of the range of technologies encompassed in this category, the introduction of laparoscopic surgery provides different examples of the

factors that help and hinder the diffusion of new

technologies. The development of laparoscopic

techniques in the United Kingdom is generally unstoppable; it is occurring across most medical specialties. Laparoscopic surgery has blurred the

differences between surgeons, physicians, and radiologists; has supported reductions in lengths of

hospital stay and requirements for hospital beds;

and has made surgical treatment for many patients

a short-term and relatively pain- and scar-free experience.

 Early Diffusion

The early introduction of laparoscopic surgery occurred because of a few product champions that,

like their first wave of followers, were sited in

general hospitals, not only in teaching or academic centers. This is because most of the techniques

did not require particularly expensive capital outlay, and in surgery, innovation occurs equally in

nonteaching and teaching centers.

Laparoscopic cholecystectomy has diffused

quickly throughout many surgical units within the

last three years (box 8-1 ). Uptake has depended on

local factors, and without any centralized planning there is wide variation in availability.

The private sector has been more easily able

than the public sector to respond to the potential

savings of laparoscopic surgery through shorter

lengths of stay and increased patient satisfaction.
Chapter 8 Health Care Technology in the United Kingdom 1263

Laparoscopic treatment of endometriosis and removal of ovarian cysts

● Used and developing, evidence on cost-effectiveness and outcomes insufficient.

■ Diffusion via a small number of enthusiasts.

● No central support, attractive to consumers.

■ Not in position to replace conventional treatments.

Laparoscopic appendectomy

 Not routine; routinely used by only one surgeon.

Laparoscopic cholecystectomy

 Since 1991, actively supported by surgeons and patients.

● Extends operation time and queries as to outcomes, especially among inexperienced practitioners.

■ Diffusion well en route.

Arthroscopic knee surgery

● Accepted practice but therapeutic application unevenly spread.

● No national policy, but national conferences have played key role in diffusion.

● Underfunding of orthopedics has led to shortage of equipment and facilities.

■ Value of arthroscopy as diagnostic procedure accepted, but use as treatment resisted, especially by older

surgeons (33).

SOURCE J Spiby, 1994

More recently, however, several private insurance

companies have become concerned about the outcomes of certain procedures (e.g., laparoscopic

uterine removal, laparoscopic cholecystectomy)

and have banned activity until the results of longer

term studies are available. Within the NHS this

has not happened, as currently there are very limited mechanisms (except for peer pressure) to prevent surgeons from undertaking different

techniques.

 Cost Pressures and Policy

One of the main forces for the development of laparoscopic procedures has been increasing pressure on health care spending. Reduced lengths of

stay in surgery has been seen as essential. There

has also been considerable political impetus to reduce waiting lists, which has led NHS managers

to concentrate on supporting initiatives that appear to reduce the need for costly overnight stays.

The assumption that laparoscopic surgery will

achieve cost reductions is not, however, well supported by research evidence; in general, the costs

and benefits have been poorly studied. Early results of studies of long-term outcomes of some laparoscopic procedures show, in some cases, that

laparoscopic procedures delay rather than avert

open surgery, and some have higher levels of complications. Some procedures takes two or three

times longer to perform than conventional surgery

(2).

The Department of Health has been noticeable

for its lag in developing policy on laparoscopic

surgery (33). The Department appears to have

considered developments within the NHS to be

well ahead of central thinking and policy.
264 I Health Care Technology and Its Assessment in Eight Countries

However, concern about the lack of evidence

on efficacy and cost-effectiveness have led to support for several RCTS funded through the national

R&D strategy. The results of these trials may or

may not be timely enough to influence the diffusion of the more popular technologies.

 Continued Diffusion

Patient preference has played a strong part in the

development of laparoscopic surgery, as patients

are able to return to normal life so much more

quickly and suffer considerably less pain (33).

More recently, however, concerns have been expressed by GPs about the relentless push to discharge patients early after surgery and the lack of

backup for complications. This problem will need

to be addressed if laparoscopic surgery becomes

the norm.

In general, the product champions and early innovators have been younger surgeons at the beginning of their careers and possess the necessary

skills for laparoscopic surgery. For the next stage

of innovation, older surgeons and those who are

less innovative will have to develop the necessary

skills. This problem has not been addressed until

recently, and most hospitals have had to rely on retirement to achieve change. Some older surgeons

were willing to consider the new techniques, but

they have found it difficult to obtain training, and

they are unlikely to acquire the skills from junior

colleagues.

In November 1992 the Department’s Management Executive announced that in collaboration

with the Wolfson Foundation, it was funding three

minimally invasive surgical procedures units.

Centers in Scotland, Leeds, and London have

been designated as training centers, and surgeons

will start to undergo “retraining” shortly. This is a

unique initiative, as the need for acquiring new

skills to cope with new technologies has been frequently discussed but never positively addressed

before.

TREATMENTS FOR END-STAGE

RENAL DISEASE (ESRD)

Despite the fact that it is a relatively uncommon

condition, ESRD and its different forms of treatment were extensively (and often emotionally)

discussed in the United Kingdom during the

1980s and early 1990s. This attention results from

the fact that untreated patients die and treatment

costs are high, particularly as patients need treatment for the rest of their lives. Patient survival for

all age groups has improved consistently over the

last 15 years, as have levels of service.

 International Comparisons

The United Kingdom has long been regarded as a

laggard in its level of treatment of ESRD, even

when compared with countries with similar per

capita health expenditures; however, far more patients are being treated than 10 years ago. Nonetheless, compared with Europe and the United

States, relatively fewer elderly patients are accepted, reflecting the lower priority accorded to

ESRD in the Britain.

 Pattern of Diffusion

The United Kingdom has one of the lowest

nephrologist to population ratios in developed

countries (20). This is also reflected in the number

of hospital centers for renal replacement therapy

(RRT). Many of the existing centers were setup

through a system of central planning in the 1960s

(3). In the 1970s NHS established a few new centers at a time when facilities were mushrooming in

other parts of Europe. British centers tend to be

centralized in teaching hospitals.

Between 1980 and 1987 the number of UK

RRT patients doubled from 128.6 per million population to 267.6, but the gap between the United

Kingdom and other countries narrowed only

slightly (see table 8-3). This low level of provision

reflects the low level of spending generally on

health care and the tight constraints that central

control have placed on capital spending on new

units and ongoing expenditures for a high-cost
Chapter 8 Health Care Technology in the United Kingdom 1265

Year United Kingdom Germany (FRG) France Italy —

1980 24.9 46.7 41.6 37,7

1983 33.4 55.8 44.3 45,5

1985 43,1 59.4 42,9 46,8

1987 50.8 84.9 58.1 48.8

SOURCE N B Mays, Management and Resource Allocation m End Stage Failure Units, A Review of Current Issues (London King’s Fund, 1990)

treatment. Spending has been low despite the relatively high level of public discussion and relatively well-organized lobbies both of patients and

professionals.

 Selection of Patients

A result of the low level of service available is the

careful selection of patients for ESRD treatment.

In general, rationing is achieved by preferentially

treating younger, fitter patients with dependent

children. Diabetic patients are also less likely to

receive treatment because of the reduced success

in their outcomes. This selection appears to be due

to some level of gatekeeping by GPs. In a 1984

study, GPs were more likely than hospital physicians and nephrologists to assume that treatment

was not appropriate for the elderly and other higher risk patients and did not refer such patients,

instead treating them conservatively (3). The reduction in referrals to treatment is also related

to the low level of nephrologists, who are sited

mainly in the renal units rather than in district general hospitals.

Despite increases in the numbers of patients receiving ESRD in the 1980s, a survey in 1990 concluded that there was still under-referral of

patients suitable for treatment (20). The authors of

the survey estimated that the incidence of ESRD is

78 per million population, and that only 55 per

million were being treated.

 Variations in Treatment Rates

Within the United Kingdom there is a marked

variation in ESRD treatment rates between regions (see table 8-4), due primarily to the availability y of facilities. This variation can also be seen

within regions where the uptake is higher by the

populations living closest to the units (8). In the

North West Thames region a new peripheral unit

was established to provide a local service for

people not close to a teaching hospital. Even then,

within a few years the population closest to the

unit was more likely to receive care than those further away.

Regional differences can also be seen among

the different treatment modalities favored by

units. East Anglia’s renal replacement therapy

program has long been dominated by renal transplantation at Cambridge, and continuous ambulatory percutaneous dialysis (CAPD) has been little

needed. However, in the Oxford region, transplantation has grown more slowly, and home hemodialysis has played a major role, heading other

methods of dialysis. These differences reflect a

number of interacting factors: the preexisting pattern of dialysis provision, treatment, and selection

policies of individual units and consultants;

policy decisions of the RHAs; the degree of population dispersal; and the availability of different

types of resources, including the domestic circumstances of patients (which affect their ability

to cope with different modalities).

 Cost-Effectiveness of Different

Treatments

Care of ESRD is significantly more expensive per

patient than many other diseases. Dialysis is expensive primarily because it is needed for a long

period of time. The most cost-effective option is a

successful transplant, but the costs of a graft that

fails in the first year are considerable and comparable to the costs of hospital hemodialysis.
266 I Health Care Technology and Its Assessment in Eight Countries

Region 1984 1988

‘Northern 40.6 58.5

Yorkshire 34.2 44.2

Trent 40,4 49.1

East Anglia 40,5 65.0

NW. Thames 30.6 49.7

NE. Thames 30.3 61.1

S.E. Thames 47.5 76.1

SW. Thames 25.3 23.3

Wessex 27.9 44.8

Oxford 37.5 50.4

South Western 32.6 51.2

West Midlands 26.3 52.0

Mersey 31.3 34.6

North Western 31.5 83.8

Wales 34.3 66.4

Scotland 38.2 62.8

Northern Ireland 20.1 42.5

Isle of Man 33.3 40.0

United Kingdom (total) 33.8 55.0

SOURCE N B Mays Management and Resource A/location in End

Stage Failure Units, A Review of Current Issues (London King’s

Fund, 1990)

In 1990 the Department of Health estimated

that the first year of hospital hemodialysis costs

the NHS 16,500; home dialysis, 13,000; and

CAPD, &14,000. In general the United Kingdom

has a pattern of modalities that reflects a policy to

invest its limited resources for ESRD (approximately 0.6 percent of the annual budget of a typical RHA) by giving greater priority to home

dialysis and, recently, to CAPD than do many other countries. This was not necessarily a planned

strategy was compelled by the strict control exercised in the NHS over the opening of new renal

units. Heavy emphasis has also been placed on

achieving a high level of transplantation, not only

because it is a low-cost option but because it so

dramatically achieves a better quality of life.

Much work has been done to increase the harvesting of cadaver kidneys by developing increased

awareness in medical staff of the need to request

the use of organs, and by appointing regional

nurses who are responsible for ensuring that hospitals are prepared to maximize the availability of

organs.

During the 1980s, in the absence of major capital schemes for renal services in many regions,

units responded in a variety of ways to increased

demands. These include:

■

■

■

development of minimal care dialysis with

shorter treatment times and more shifts;

setting up satellite units, managed by a parent

unit;

growth of CAPD, generally considered a cheaper form of treatment, with the advantage that

patients can quickly and easily be trained to

treat themselves at home; and

an increase in transplant rates, which has greatly helped reduce the required increase of dialysis programs.

CAPD has released units from the existing

physical space constraints in the hospital and has

allowed revenue to be converted directly into

additional patient acceptances. With respect to

transplants, minimal care and satellite units were

often set up because of physical space constraints

as well as the desire to improve geographical accessibility for distant patients. The service is primarily concentrated in regional centers; however,

despite the fact that satellite units have proved to

be a cost-effective means of providing dialysis,

they have not developed as quickly as might have

been expected.

 Erythropoietin (EPO)

Erythropoietin for renal patients arrived at a time

when the increase in demand and the lack of additional resources for ESRD services were posing

major problems. EPO’S efficacy has been generally accepted, but what has been challenged is the

level of effectiveness for the considerable cost.

Health economists have led the debate, questioning the widespread use of the drug. Units limited

in their resources have had to ration its use to those

most at risk of anemia due to contraindications to

transfusion. More recently, units have found a

funding loophole and have asked GPs to prescribe
Chapter 8 Health Care Technology in the United Kingdom 1267

the drug, as well as other dialysis-associated drugs

and consumables, from the budget for primary

care drugs, which is separate from hospital budgets and at present is not cash limited. Many GPs

have felt unhappy about taking clinical responsibility for a drug with which they are unfamiliar,

but faced with a patient who will not receive treatment if they do not prescribe, most have reluctantly agreed to do so. However, it is expected that the

funding mechanism will be changed in 1994 and

such off-loading will not be possible, thereby increasing the pressure on renal units budgets.

 Role of the Private Sector

The development of renal services has been assisted by the private sector since the mid- 1980s.

Commercial companies moved from supplying

dialysis units and, in some cases, helping units

with financial information and stock management

to directly providing dialysis treatment. The first

private dialysis units were set up in Wales in 1985

as part of a program to increase the supply of dialysis services. Main renal units remain solely on

NHS, but subsidiary care centers were contracted

to the private sector. The experience has been successful, but surprisingly (considering the general

changes in NHS), subsidiary care units have not

developed to any major degree elsewhere.

NEONATAL INTENSIVE CARE

Services for neonatal care received their first official support in the United Kingdom in 1961, when

the Joint Subcommittee and Standing Maternity

and Midwifery Advisory Committee recommended the creation of a comprehensive program

for the care of neonates. In the same year the Central Health Services Council argued that special

care facilities would reduce neonatal mortality.

Before 1961, services had developed mainly

where there were enthusiasts in teaching hospitals. The development of the service was promoted by professionals, and there was little

scientific evidence for their claims that neonatal

mortality would be reduced or that reductions

seen at that time were related to spec ial care facilities.

In 1971 the Sheldon report advocated a two-tier

system of service provision, with 1 ) special care

units in each district for low-birthweight babies

and those with illnesses unique to the newborn,

and 2) neonatal intensive care units (NICUs) that

would provide higher level care at specialist

teaching hospitals (39). As well as centralizing expert care, the latter were regarded as a prerequisite

for training doctors and nurses in the special care

required by the sickest neonates. There was at the

time some suggestion that such centralization

would increase the risk of infection or the possibility of over-aggressive treatment, but this was

not investigated in any serious manner—probably

because those doing research in the area were

mainly proponents of the service. The consensus

was that each region should have one to three NICUS: these should be sited where the high-risk obstetric service was sited and where specific

expertise in neonatal intensive care existed.

Three reports of the Social Services Committee

during the 1980s (5) recommended the addition of

a third tier to neonatal services, such that all districts would provide short-term care backed up by

subregional facilities at larger maternity units and

a regional specialist perinatal center. The service

by then was well established, although in most regions the actual distribution of services and level

of expertise available depended on local circumstance rather than careful planning. Two explanations for this can be put forward: first, the lack of

hard evidence on the service; and second (and

more likely), the establishment by younger pediatricians of one or two cots in smaller hospitals in

order to create a local service and provide an extra

professional challenge for themselves and other

staff. Several regions produced planning guidelines that they backed up with resources, but subsequent reviews found that small local services

with one or two cots were being set up by clinicians despite these guidelines (29).

 Policies and Diffusion

During the 1980s the main policy thrust was toward improvement in neonatal services. These

services were singled out by the Royal College of
268 I Health Care Technology and Its Assessment in Eight Countries

Physicians in 1988 and the National Audit Office

in 1990 as an area for improvement, and the

NHS’S Chief Executive made it a priority in 1990

for regions and districts to review their maternity

and neonatal services with a view to further reductions in mortality (31 ,36).

In England between 1980 and 1986, the number of cots for neonatal intensive care more than

doubled, and birthweight-specific perinatal and

neonatal mortality fell in all categories of birthweight. There were, however, a few skeptics who

had reservations about the rapid growth in neonatal services, doubting that neonatal intensive care

was a determinant in the reduction in neonatal

mortality. Concern was also expressed about the

high cost of these services and the long-term

health outcomes. By this time it was deemed unethical to undertake a randomized trial, and advocates of NICUs cited experience abroad and expert

opinion rather than data. Typically, the discussion

centered on the lack of services and problems in

obtaining a cot for all the babies who required this

level of care.

In an attempt to address these criticisms, one

region, Trent, undertook a prospective study examining the short-term outcome (survival to discharge) of all infants who required admission to a

baby care unit. They showed that infants of 28

weeks’ gestation or less who received all their perinatal care in one of five large centers (each providing more than 600 ventilator-days per year)

had significantly better survival than infants

treated throughout their entire course at one of 12

smaller units (22). These differences occurred despite the elective transfer of many of the sickest infants from smaller to larger units. Differences in

survival between more mature infants were not

significant.

The National Perinatal Epidemiology Unit in

Oxford, which has been central in developing an

understanding of technology assessment and the

relative valid it y of different types of c1in icaltrials,

raised questions regarding the interpretation of the

results and implications for policy (30). It suggested that biases may have affected the results,

and that the differences in mortality might have

been in part the result of differences in unmeasured risk factors; moreover, a decision to transfer

all babies might not reduce mortality but instead

increase the mortal it y rate for admissions to the referral units as they take in higher risk babies. The

outcome was that the case for regional NICUS was

not made, but policy continued to support them.

Throughout the development of neonatal intensive care, the argument for it has been that it reduces neonatal mortality. Little or no reference

has been made to its impact on morbidity. Concern has been expressed about the possibility of an

increased level of severely mentally and physically handicapped children, but little epidemiological evidence has been forthcoming. Recent work

indicates that increasing numbers of preterm infants survive without (major) handicaps but with

more subtle long-term problems, such as learning

difficulties and lower school grades. The chief implication of such information is the need to press

for better obstetric care so as avoid the necessity of

neonatal intensive care.

 Financing NICUS and the NHS Reforms

Until the 1990 NHS reforms, the responsibility for

financing and developing neonatal intensive care

had belonged primarily to RHAs. The NHS reforms aimed to devolve responsibility to the districts for such services so that their relative

importance would be assessed against the total

needs of the population. This change created major concern among those involved in the service,

who feared that centralization would be eroded

(34). It was felt that the reforms might encourage

the establishment of small, less well-equipped NICUS, with few if any effective constraints or controls over those providing neonatal care. This

concern was reiterated in a House of Commons

Health Committee report in 1992, which stated

that “we are not persuaded that the establishment

of contracts for regional services for perinatal and

neonatal intensive care can be left to market forces

and audit. ”

The service became one of the first to be reviewed by the Clinical Advisory Group set up by

the Secretary of State. Its report on neonatal intensive care concentrated primarily on access, as had
Chapter 8 Health Care Technology in the United Kingdom 1269

so many of’ the previous official reports on this service. Overall. it was felt that contracting had not

significantly affected the service. There was still

considerable variation across the country in the

service provided, and in some regions the service

was under considerable pressure. However, it appeared that purchasers were intending to move an

increased proportion of intensive care to local

units (probably for financial rather than clinical

reasons). and this might have a deleterious effect

on the viability of the larger training institutions

and on quality of care. The report noted that few

consistent measures of quality existed and that a

population-based audit of outcome in terms of

mortality and disability was required.

 Extracorporeal Membrane Oxygenation

(ECMO)

The well-controlled introduction of ECMO to the

United Kingdom is due largely to the influence of

the perinatal research unit in Oxford. ECMO was

introduced unevaluated in Leicester in 1991. Before any other units were installed, planning by researchers at Oxford University began for a

randomized controlled trial to cover the entire

United Kingdom. Recruitment started in January

1993: to date, more than 80 babies have been included, making it by far the biggest controlled

trial of ECMO in the world. Results are expected

in 1996.

SCREENING FOR BREAST CANCER

Interest in screening for breast cancer developed

slowly in the 1970s mainly in the form of specially

funded projects or adjuncts to symptomatic mammography services. During the early 1980s, a considerable lobby developed; it consisted of

surgeons who specialized in breast cancer treatment and women’s groups. In 1985 the health

minister announced that a committee would be set

up to:

● consider the information now available on

breast cancer screening by mammography:

■ the extent to which the literature suggests necessary changes in policy on the provision of

mammographic facilities and the screening of

symptomless women;

suggest a range of policy options and assess the

benefits and costs associated with them; and

identify the service, planning, labor, financial,

and other implications of implementing such

options.

Forrest Report

The committee reported in November 1986 in a

document known as the Forrest report (9). On the

basis of evidence from randomized trials in New

York and Sweden and two studies in the Netherlands, the committee concluded that “screening

can reduce mortality from breast cancer, although

the reduction varies with the age of the women

screened. ” Despite the existence of a large, sevenyear, multicenter, population-based trial that was

being conducted and was due to report in 1988, the

committee recommended the introduction of a national breast screening service for women between the ages of 50 and 64, with the expectation

of reducing deaths from breast cancer by a third or

more. The key screening test was to be one-view,

high-quality, medio-lateral oblique-view mammography. The program was to include a personal

invitation to all eligible women, arrangements to

ensure that positive results were followed up, a

specialist team to assess detected abnormalities, a

call-and-recall system, quality control, and a designated person responsible for managing local

screening services.

This report was fully implemented because the

government, on announcing its acceptance of the

recommendations, also agreed to finance the

screening program in full. Over &50 million nationally was invested of new funds to the NHS

provided by the Treasury. By 1991 there was 77

screening programs covering the 190 health authorities.

On a more practical level, the Forrest report

clearly acknowledged that “the development of

any national programme will require careful planning not only of the basic screening services but

also to ensure the availability of the necessary as-
270 I Health Care Technology and Its Assessment in Eight Countries

sessment, diagnostic and treatment services for

screen-detected abnormalities.”

 Results of the U.K. Trials

In 1990 the Scottish arm of the U.K. Trial for the

Early Detection of Breast Cancer reported a nonsignificant reduction in mortal it y after seven years

with an initial attendance rate of 61 percent (35).

The net result of the trial was to emphasize that a

high level of reduction in mortality could be

achieved only with high participation rate in

screening (46). The service was set up with a wellstructured call-and-recall system, but it became

clear that although uptakes of 80 to 90 percent

were possible in areas of high socioeconomic status, such rates were not achievable in inner-city

areas and among those populations that traditionally do not use preventive services (28).

During this period the results of the U.K. trial

led to criticism of the Forrest report. It was suggested that the expectation of a 30 percent reduction in mortality was too ambitious; that the

disadvantages of screening had not been adequately measured, especially in view of the number of false positives; and that the group had been

biased and should have considered selective

screening to ensure proper use of resources.

 The National Screening Program

Following the Forrest report, major new evidence

was reviewed by Forrest and a group of experts.

This evidence consisted of the U.K. trial, further

evidence from Malmo (Sweden) and New York,

and the Edinburgh randomized trial. This review

concluded that “the original evidence that screening for breast cancer can reduce breast cancer

mortality is supported by additional results from

recent evidence. The expected impact after about

10 years was that roughly 1,250 deaths attributable to breast cancer would be prevented each year

in the United Kingdom.

Concerns about translating trial results into national experience have focused on three main issues: population coverage, skills development,

and proper introduction of the program. Adequate

population coverage is clearly challenging in

some parts of the country. The Forrest review acknowledged this and identified difficulties with

the population denominator register used for contacting women about attending their screening.

Certain sectors of the population are unlikely to

attend even if contacted, however—a problem

that is being addressed locally with a range of initiatives.

It was reported that the development of skills

through training centers had been sufficient to

train the required staff in three years. In fact, the

training program had initially lagged but eventually came to play an ongoing role in supporting

continuing education.

The U.K. Cancer Coordinating Committee

Breast Screening Sub-Committee set up three

trials looking at the interval between screening

episodes, the number of views, and the effect of

screening women under the age of 50. The SubCommittee also coordinates research on acceptability and economics. This high level of central

control reflects the program’s unusual commitment to centralization and uniformity.

 Impact of the NHS Reforms

The NHS reforms at present have not affected the

screening service in any major way. At present,

the funding for breast screening and the centralized style of service provision have been protected, but this will not necessarily continue to be

the case.

Breast screening has been given additional impetus by virtue of its inclusion in the national

health strategy. The proposed target is to reduce

the death rate for breast cancer in the population

invited for screening by at least 25 percent.
Chapter 8 Health Care Technology in the United Kingdom | 271

CHAPTER SUMMARY

The picture painted above shows a varied pattern

of influences on the introduction of health care

technologies in the United Kingdom and little evidence of a coherent policy for technology development until very recently.

In the past, the constant requirement to limit the

availability y of care has been met primarily by general practitioners who act as gatekeepers and by

the acceptance of waiting lists for nonemergency

care. This system of priorities has become politically unacceptable over the last decade, however,

as shown by the Department of Health’s waiting

list initiative. Patients have been encouraged by

the Patients’ Charter to demand their “rights.”

Consequently, without any major increase in resources, different mechanisms for the control of

spending have had to be developed.

To date, limiting development by constraining

resources has resulted in a haphazard control of

technological development based on cost considerations rather than on effectiveness. Those who

have found it easiest to obtain new resources (primarily the main teaching hospitals) have been the

most successful in introducing new technologies

and those who live closest to such facilities are

more likely to receive care.

Looking at the way in which different technologies have developed in the United Kingdom, it is

clear that the government has had little control of

technological development except in the case of

breast cancer screening, where specific funding

was provided to fund a new national program.

With other technologies, the government has tried

to influence development by more indirect routes,

such as identifying expected service levels or

planning norms. Yet without any real method of

enforcement, such means appear to have had little

influence.

The most important factor in technology diffusion has been product champions: individual clinicians or members of key regional or district

management teams who have found appropriate

ways of obtaining resources (public, private, or

charitable), and ushering in the introduction of

new developments. Such champions have been

found mainly in teaching institutions, where the

environment is more encouraging (both in terms

of availability of resources and tolerance of more

maverick personalities). That this is not always

true is illustrated by the development of local renal dialysis units, minimally invasive surgery, and

neonatal units.

Over the past decade, awareness of the concepts of appropriateness, effectiveness, and costbenefit analysis have moved to center stage on the

agenda of purchasers and the NHS Management

Executive. Ten years ago, few managers or politicians were aware of the level of inappropriate use

of technology or of new developments that were

about to occur—and of how to assess their usefulness. Clinicians continued to battle for resources

for their particular specialities but were rarely

challenged on the effectiveness of their activities.

The main challenge today is finding ways of using the NHS reforms to implement technology

assessment results so as to ensure the most costeffective use of resources. The creation and appointment of a national Director of Research and

Development and the commitment of this entire

structure to technology assessment is a major step

forward. At present, however, there appears to be

more discussion and publication of strategies than

funding of useful research or use of previous work

to effect change. Little new money is available,

and at regional levels, R&D directors are finding it

difficult to obtain realistic budgets.

Some regions have also had difficulties finding

appropriately qualified candidates. Most senior

clinicians with a research background who are acceptable to the medical fraternity are knowledgeable only about their own specialties; they do not

have an overview of the whole of health care, nor

are they experienced in working within health service management. It is hoped that these problems

will be resolved and that the real power of the post-
272 I Health Care Technology and Its Assessment in Eight Countries

holders will be felt. Unfortunately, this will inevitably be delayed by the structural reorganization of

the regional health authorities and potential dislocation of this function.

Possibly more effective in achieving change

will be the purchasing authorities. In theory, they

play a powerful role in identifying what they wish

to purchase and ensuring through contracts that

desired patterns of health care are provided. In

reality, however, difficulties arise in identifying

exactly what is required and in using the contract

process effectively.

In summary, although the United Kingdom did

not become systematically involved in technology assessment until recently, the field has recently

been much publicized and discussed. It is ironic

that the randomized clinical trials and cost-effectiveness studies undertaken in British research

units have had relatively little impact on health

care and its management up to now. The increasing necessity for making choices, along with the

increasing availability of research from health

care technology assessment, makes this problem

unlikely to persist.

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Health Care

Technology in

the United States

by Sean R. Tunis and Hellen Gelband 9

OVERVIEW OF THE UNITED STATES

T

he United States occupies over 3.5 million square miles of

North America and, with just under 250 million inhabitants, is the third most populous country in the world after

China and India. The population structure is younger than

that of most of the European countries, with 12.5 percent of the

population older than 65 in 1990 and a large, middle-aged “baby

boom” population bulge. The majority of the population is Caucasian, but a large minority—20 percent in total—belong to one

of four large ethnic groups: black, Hispanic, Asians, and Pacific

Islander.

The United States has the largest economy in the world, driven

by a free enterprise system concentrated in manufacturing and

service; agriculture, mining, fishing, and tourism also make substantial contributions. The per-capita gross domestic product

(GDP) in the United States is second highest among Organisation

for Economic Cooperation and Development (OECD) countries

(after Switzerland); at $21,399 in 19911 (84), but this hides a

highly unequal distribution. Compared with most European

countries, the poorest fifth of U.S. households has a smaller share

of total income, and the wealthiest fifth has a higher share. Poverty rates are generally higher in the United States than in Europe; as

of the mid- 1980s, 17 percent of U.S. children were living below

the official poverty level (129).

The U.S. government can be described as either a constitutional democracy or a federal republic. The powers of the three

branches of government are balanced: the executive comprises

275

1

1991 data expressed as purchasing power parity, which provides a standard international measure.
276 I Health Care Technology and Its Assessment in Eight Countries

the president (elected by popular vote every four

years) and all the departments and other operating

agencies; the legislature is composed of the Congress (the Senate, with two Senators per state, and

the House of Representatives, with 435 members

representing approximately equal fractions of the

population) and its support staff and agencies; and

the judiciary (the court system). Power not specifically assigned to the federal government by the

U.S. Constitution is automatically assigned to the

states, which are significant players in health care.

HEALTH STATUS OF THE POPULATION

In 1990, life expectancy at birth in the United

States was 71.8 years for men and 78.8 years for

women, among the lowest of the OECD countries.

The 1990 infant mortality rate was 9.2 per 1,000

live births, which puts the United States in the bottom half of the distribution among all developed

countries (129). These poor statistical showings

have been the focus of political frustration in the

face of high spending for health care.

Important causes of death and health-related

trends in the United States are similar to those in

other developed countries: heart disease, cancers,

stroke, chronic lung disease, and pneumonia.

About 20 percent of all deaths are attributable to

cigarette smoking, which also is similar to other

developed countries. Although overall patterns of

morbidity and mortality in the United States are

similar to those of other developed nations, two

features stand out as different or more extreme.

First, health status is correlated with socioeconomic status, which itself is correlated with race in

the United States; health indicators for blacks and

other minorities are uniformly and significantly

worse than for whites. Second, deaths in relatively

young age groups, starting in the teenage years,

are dominated by violent deaths from homicide

and deaths from AIDS. In the 15-to-24-year-old

age group, homicide is the second leading cause of

death, and black men between the ages of 15 and

44 are eight times more likely to die from violence

than are white men (143). Injuries related to violence and illness related to drug use are also more

prevalent in the United States than in other developed countries. These social conditions are directly and indirectly associated with both health

outcomes and health care expenditures.

THE U.S. HEALTH CARE SYSTEM

The organization and delivery of health care in the

United States is a good reflection of the free market system: this health care system has no fixed

budget or limitations on expansion, and it now accounts for 14 percent of the U.S. gross national

product-over $800 billion dollars in 1993. The

delivery system is loosely structured, with hospital location determined by market forces and community preferences; physicians are free to practice

in any location. The recent and rapid increase in

numbers of health maintenance organizations

with capitated payment arrangements (i.e., a fixed

amount per person regardless of services used), a

response to pressures to hold down health care

costs, represents a shift in direction from the traditional laissez faire approach in the U.S. health industry.

A few states do have an effective coordinated

plan to control and distribute resources, but the

federal government does no central planning. The

government is the major purchaser of health care

for older people and, along with the states, for

some poor people. By and large, however, payments for health insurance and care are private

sector transactions. Access to health care is not

universal, and even among those with health insurance, coverage is uneven. The level of satisfaction expressed by U.S. citizens with their health

care system is lower than in other developed countries.

Expensive medical technology is a particular

specialty of U.S. medicine: some major U.S. cities, for example, have more magnetic resonance

imaging (MRI) scanners than do most countries in

the world. (In Los Angeles there were more of

these scanners (25 in 1985) along a one-mile

stretch of road than there are in all of Canada (49).)

The huge public and private investment in basic

medical research and pharmaceutical development is often cited as an important driver of this

“technological arms race.” Moreover, efforts to
Chapter 9 Health Care Technology in the United States 1277

restrain technological developments in health care

face opposition from policy makers concerned

about negative impacts on medical technology industries.

 Delivery System

Hospitals

The hospital system in the United States consists

of 5,480 acute care hospitals, 880 specialty hospitals (psychiatric, long-term care, rehabilitation,

etc.), and 340 federal hospitals (serving active

military personnel, veterans, and Native Americans) for a total of 2.7 per 100,000 population (7).

Fifty-nine percent of acute care hospitals are privately owned, nonprofit institutions; 14 percent

are for-profit; and the rest are operated by local

governments. In 1990 the average length of stay

for the nation’s 33 million admissions was 9.2

days. Average bed occupancy rate was 66 percent

( 143). Lengths of stay are shorter and admission

rates lower than in other OECD countries.

Physicians

In 1990 there were 615,000 physicians practicing

in the United States (2.4 per 1,000 population) (8).

Rural areas are relatively underserved, with 0.9

physicians per 1,000 population (126). Primary

care practitioners (practitioners of family medicine, internal medicine, and pediatrics) make up

33 percent of the active physician population; the

remainder are specialists (90). Among the aims of

current health care reform proposals are better

geographic distribution of physicians and a more

favorable balance of primary care practitioners

and specialists (one goal is 55 percent for the former). Most physicians are paid on a fee-for-service basis by insurers or individuals, but an

increasing number are salaried or obtain patients

through insurance networks that negotiate payment rates.

 Health Care Financing and

Payment for Services

Health care is financed by a mixture of private insurance, government programs. and payments by

individuals seeking care. Health insurance for

most U.S. citizens is paid for by their employers

and is considered part of their compensation for

working; however, employers are not current] y required to provide health care. Public programs

cover the elderly, some disabled and some of the

poor, and some military veterans, but many poor

Americans have no insurance—and many people

have lapses in insurance coverage. Uninsured individuals may receive episodic care from public

clinics, hospitals, and some private providers who

will not be paid for that care. At any given time

about 15 percent of the U.S. population has no

health insurance (1 33).

Health Insurance

Health insurance in the United States grew out of

post-Depression efforts by hospitals to establish

programs that would allow patients to pay bills

even when facing personal economic hardship.

Organized medicine, motivated to take some action on health insurance by discussions of a national health plan in the Roosevelt administration,

created various funds administered by local medical associations and authorized to pay fees for

low-income families. There were 43 such plans by

1946, and this system ultimately evolved into the

Blue Shield program. A Supreme Court ruling in

1948 determined that health insurance benefits

could be included in collective bargaining between employers and employees, giving a powerful boost to development of employment-linked

health insurance. By the early 1960s, threefourths of U.S. citizens were covered by some

health insurance; however, such insurance covered on average only 27 percent of medical bills

and was entirely unavailable to many poor and elderly citizens. To address these problems, legislation proposed by President Johnson and passed in

1965 created Medicare and Medicaid, marking the

first time that health insurance became compulsory for some groups. By 1967, third-party payers

covered over 50 percent of medical bills, and U.S.

citizens were buying increasingly comprehensive

coverage through a growing private insurance industry.
278 I Health Care Technology and Its Assessment in Eight Countries

In the 1990s, employers are providing insurance for 61 percent of the total U.S. population,

and another 13 percent of Americans purchase

their own private insurance (133). More than

1,000 private insurance companies provide a multiplicity of policies. State insurance commissions

regulate health insurance quite loosely. In the past

decade most large employers have moved to selfinsurance, which, under federal law, immunize

them from state regulation. Employer-paid health

benefits are an attractive substitute for wages because they are not subject to income tax or Social

Security tax. In 1990 this translated into a $56 billion federal subsidy for employment-based health

insurance (156). Although most group insurance

policies cover hospital care and physician services, there are few other consistencies. It is estimated that 55 million people have limits on how

much their policies will pay, so they are not protected from being impoverished by serious illness

(30).

Medicare

Medicare provides insurance for acute care services to people over 65, certain disabled individuals, and most of those with end-stage renal

disease, totaling about 13 percent of the U.S. population (133). Hospital care is financed from a

trust fund fed by a payroll tax that, at current

spending levels, will be exhausted in the year

2006. Physician services are funded by a combination of premiums collected from recipients

(25 percent of total outlays) and funds from the

regular federal budget (75 percent of outlays).

Most beneficiaries buy additional insurance—’’medigap policies’’—to cover expenses

not covered by Medicare, including deductibles,

co-payments, and uncovered services, and—perhaps most important-out-patient prescription

drugs and skilled nursing care.

Medicaid

Since 1965, acute and long-term care have been

provided to low-income individuals through

Medicaid programs administered by each state

and funded in equal parts by the state and (as long

as certain minimal criteria are satisfied) the federal government. About 10 percent of the population is insured through Medicaid. Mandatory

benefits are specified by the federal government

by type of service, but states may decide to limit

the amount of any service to recipients. Payment

rates for physicians providing services to Medicaid patients are fixed by the states and are relatively low, leading many physicians not to accept

these patients in their practice. Medicaid benefits

must be provided to poor aged, blind, or disabled

individuals, and usually to poor single mothers

and their dependent children, but not to all individuals who by all measures are considered impoverished. Between 1990 and 1991, Medicaid

payments by the federal and state governments increased by 34 percent (71).

Federal and Local Governments as Providers

In addition to paying through Medicare and Medicaid for services in the private sector, federal,

state and local governments provide health care

services directly to some groups. Through the federal government, the Department of Veterans Affairs maintains hospitals and out-patient clinics

throughout the country for veterans of military

service (at a cost of $14.6 billion in 1993 (157):

the Civilian Health and Medical Program for the

Uniformed Services (CHAMPUS) cares for active and retired military forces and their dependents ($12.8 billion); and the Indian Health

Service runs facilities for Native Americans (71 ).

State and local jurisdictions run psychiatric, municipal, and county hospitals. In 1991 the aggregate cost for these government-run programs was

$81 billion (72).

 Health Care Spending

Spending on health care increased from $70 billion in 1950 to $752 billion in 1991 (both in 1991

dollars) (71). Part of this rise is explained by population growth, but even looking at per-capita

spending, spending grew fivefold.

At least five factors are frequently offered as

having contributed to this increase.
Chapter 9 Health Care Technology in the United States 1279

1. The spread of private insurance had reduced

out-of-pocket medical payments to 27 percent

of the total by 1983, reducing the direct cost to

the consumer and probably increasing use of

services to some extent.

2. The price of health care services has also increased substantially, although changes in the

content and quality of care make it difficult to

compare prices over time.

3. Aging of the U.S. population is commonly cited

as an important contributor to rising costs because per-capita health care spending increases

dramatically with age. Currently, a large proportion of lifetime health care spending occurs

in the last year or two of life, and the benefits

of some of this spending are unknown and increasingly questioned. No easy approaches to

prospectively identifying and eliminating unneeded care exist, and elder] y patients are likely

to continue to receive high-intensity services

for the foreseeable future.

4. The costs of defensive medicine are often cited

as increasing health care spending. Premiums

for malpractice insurance totaled 0.8 percent of

total health care spending (about $5 billion) in

the United States in 1989. It has been argued,

however, that a substantial number of services

(mainly diagnostic tests) are prescribed primarily or solely for the purpose of avoiding

malpractice litigation and that spending attributable to defensive medicine may add up to

much larger amounts (1). One high estimate reports that the US health care liability system

costs nearly $45 billion per year, or about 5 percent of total of health care spending (73). Some

decisions said to be motivated by malpractice

may also be driven by physician uncertainty,

fear of patient harm, and other reasons, and it

is therefore impossible to make rigorous estimates of the true economic impact of defensive

medicine (13 1).

5. Many analysts have argued that changes in the

availability and use of medical technologies

have made the largest contribution to increased

health care spending. Individual new technologies may sometimes offer a less expensive alternative to more expensive lder approaches;

however, total spending may still increase as a

result of increased total utilization (11 1,1 18).

Furthermore, many new technologies are introduced at a considerable increase in the costs

of providing care. It is generally believed that

a substantial fraction of increases in health care

spending can be traced to greater use of increasingly sophisticated medical technologies, although it is impossible to quantify this (1).

Measures intended by the government to control health care costs over the years have largely

failed. The system relies heavily on market incentives and the profit motive as driving forces in financing and organizing care—not only in the

private insurance market, the hospital system, and

physician services but also in the drug and medical device industries. Expansion (as in the economy as a whole) has been an implicit goal of these

enterprises. Because supply-side controls have

been virtually impossible to implement, demandside cost control has been the predominant

approach, most often in the form of patient costsharing for medical services. The failure of these

measures has led to other demand-side controls.

such as utilization management and preferredprovider arrangements.

 Recent Reform Efforts

In 1993, the United States, at the instigation of

President Bill Clinton, embarked on the most ambitious effort to reform the health care system

since the enactment of Medicare and Medicaid.

The issues that drove the country toward reform

are the high and rising cost of the system and the

failure to provide adequate health insurance to

many. The quality of care, though by no means ignored in the current health care debate, receives

most attention as a basis for competition between

health plans rather than as a primary concern.

The President proposed a model of reform that

would maintain many of the key structural features of the current system, particularly the link

between employment and health insurance as well

as an industry of third-party payers providing insurance. Significant changes proposed by the

President would be that employers would be re-
280 I Health Care Technology and Its Assessment in Eight Countries

quired to pay most of the cost of health insurance

for their employees, and the government would

provide coverage to the unemployed poor. To hold

down the increase in health care spending, the proposal seeks to encourage health care organizations

to compete for customers (individuals and companies) on the basis of price and measures of quality.

Each plan would have to offer a “minimum benefits package” to be specified by the federal government. Cost control would also be implemented by

limiting the annual increases in premiums that

health plans would be allowed to charge.

By early July 1994, four committees of Congress had proposed alternative health plans, with

the expectation that some compromise would be

agreed to by the fall of 1994. Several of these included provisions in the President’s plan, but softened the most controversial elements, such as

control of premium increases and the requirements for employer payments. Other proposals

differed more significantly, such as legislation to

enact a single-payer system (similar to Canada’s)

or that would take incremental steps, such as malpractice reform and changes in the rules regarding

insurance policies that exclude people with health

problems. At some point Congress will have to

decide on a fundamental question underlying

health system reform: will every citizen be guaranteed access to health care services, or will more

modest changes be made to reduce some of the

major current barriers? The health care system is

so large and involves so many individuals, businesses, and powerful stakeholders that the debate

has been joined more broadly than with any other

public policy issue in recent times. The 1994 congressional session adjourned with no action on

health care reform, however.

At this point, most health care reform legislation has dealt primarily with issues of financing

and has paid relatively little attention to the potential impact of reform on medical technology. Neither has much progress been made in deciding

how health care services will be selected for inclusion in the standard benefits package. Few proposals would introduce new mechanisms for

controlling the development and use of technology. Legislative proposals addressing technology

assessment have generally proposed modest increases in funding for agencies that perform assessments and for the development of clinical

practice guidelines. There is substantial debate on

the potential impacts of proposed cost-containment strategies on technology development, assessment, and use, but current legislation does not

attempt to address these consequences. For that

reason it is likely that policy makers’ interest in the

management and assessment of medical technology will continue to intensify over the next decade.

HEALTH-RELATED RESEARCH

AND DEVELOPMENT

Spending on basic research in health care is the

necessary first stage in the development of every

new technology, and the level of funding for basic

research has an important impact on the rate at

which new technologies are generated. The

United States spends more than any other country

on health research and development (R&D), although it is second to Sweden in terms of per-capita spending on biomedical R&D (103). In 1989

the health R&D budget for the federal government

was $9.2 billion, and U.S. industries spent an

additional $9.4 billion.2 Total national expenditures on health-related R&Dare estimated to have

risen by 50 percent (in nominal terms) between

1983 and 1992 (149).3

 National Institutes of Health

The National Institutes of Health (NIH) receives

the majority of the federal health R&D money,

and most of that money (about 80 percent) goes to

2

State and local governments and private nonprofit foundations are the other significant supporters of health R&D.

Measured in constant dollars using a biomedical research price index adjuster.
Chapter 9 Health Care Technology in the United States 1281

universities and research institutions in competitive grants and contracts.4 NIH is part of the Public Health Service of the U.S. Department of

Health and Human Services. All areas of medicine

and public health are covered to some degree by

the 15 separate institutes, each of which operates

with considerable autonomy.

NIH spends considerably more on basic science research ($4.1 billion in 1989) than it does

for clinical trials of medical treatments in humans

($519 million in 1989). Over three-quarters of the

clinical trials budget is expended by the National

Cancer Institute (NCI), the National Institute for

Allergy and Infectious Diseases (NIAID), and the

National Heart, Lung and Blood Institute

(NHLBI) (149). Most of the trials are devoted to

evaluating new interventions, such as cancer treatment protocols and new treatments for complications of AIDS.5 Little is devoted to studies of

existing treatments, even though the effectiveness

of many of them is unknown and questioned.

Historically, the investigational methods supported by NIH have been limited to basic science

research and clinical trials. Recently NIH has begun devoting a small fraction of its funds to other

methodologies, including meta-analysis and costeffectiveness analysis and, quite recently, to data

collection on cost and measures of functional status within the clinical trials it funds.

 Pharmaceutical and

Medical Device Industries

Drug and medical device manufacturers in the

United States expend considerable resources evaluating products during the development stages

and in post-marketing studies. About two-thirds

of the $9.4 billion spent by industry on health-related R&D in 1989 was spent by pharmaceutical

companies (88), and about one-third by device

manufacturers (149).

This investment in R&D is associated with

substantial successes in the development of new

medical technologies. Like any competitive industry, pharmaceutical manufacturers devote considerable resources to promoting existing products. In fact, the particular forces surrounding the

U.S. drug industry have prompted drug manufacturers to spend as much or more on advertising and

promotion of their products (estimated in one

study at 24 percent of sales (22)) as they do developing them (about 15 percent of sales (88)). In total, marketing expenses for the drug industry in

1990 were estimated at over $5 billion (23). With

the combination of heavy investment in R&D,

substantial promotional efforts, and a health care

marketplace that has placed few restraints on pricing or utilization, the U.S. pharmaceutical industry has enjoyed healthy profits over the last two

decades.6 Some of the resulting products represent important advances in therapy, but many others provide little or no significant incremental

benefit over existing products. In any case the increasing revenues of this industry are supported

by public and private health care spending. To the

extent that health care spending is perceived as a

problem, a highly profitable drug industry exists

at the price of exacerbating that problem.

CONTROLLING HEALTH CARE

TECHNOLOGY

 Marketing Review of Pharmaceuticals

The Food and Drug Administration (FDA) within

the Department of Health and Human Services has

responsibility for ensuring the safety and efficacy

of drugs and biologics as well as medical devices.

4About gA~ul [o ~rCent of (he NIH budget is devoted to the intramural Work of NIH researchers.

51t is dlficu]t [0 detemine tie precise di~triburion of rria]$ SUppofled by NIH because no comprehensive database exists on the topics addressed.

6A recent OTA rew~ on (he ph~rmaceutica] indus[ry dete~ined [hat (he profitability of ~is market was greater tian that of other industries

with comparable investment risks ( 128).
282 I Health Care Technology and Its Assessment in Eight Countries

Under the Federal Food, Drug, and Cosmetic Act

(FDCA) as amended in 1962, drugs and biologics

must be demonstrated to be safe and are held to a

standard of “substantial evidence that the drug

will have the effect it purports . . . consisting of

adequate and well-controlled investigations, including clinical investigations” (Federal Food

Drug and Cosmetic Act, Sec. 505(d)). The procedures and standards applied by FDA are widely

perceived to be among the most rigorous in the

world. The drug approval process, which has

changed only incrementally since the 1962

amendments, involves three phases of study in humans, progressing from simple toxicity and dosing studies in small numbers of healthy volunteers

to randomized clinical trials, usually involving

hundreds of patients with the target clinical condition.7

Regulatory approvals by FDA do not consider

data on the costs of therapy, nor do they consider

efficacy relative to currently marketed products or

nondrug alternative therapeutic strategies for a

given clinical problem. FDA approval indicates

simply that a product is considered safe and effective for a specified clinical indication and does not

provide a basis for “controlling” the use of a product. Congress is considering legislation that would

provide incentives to drug companies to conduct

studies comparing the effectiveness of their products to existing therapeutic alternatives (165).

However, no consideration is being given to making such comparisons a regulatory requirement.

Drug development in the United States is expensive; most estimates hold that it costs in the

range of $200 million to bring a new drug to market (22,128). Part of this expense is a function of

the time required to complete clinical testing

(about six years on average) and to obtain FDA

approval for a new drug (between two and three

additional years (22,63). Because of the length of

time required for drug approval and the associated

expense, FDA has been under pressure from Congress and the drug industry to take steps to expedite new drug approval. In part, Congress and the

pharmaceutical makers have sought to increase

funding to support more FDA staff;8 the more

controversial push, however, has been toward modifying the evidence standards used for drug approval, which affect technology assessment as it

relates to pharmaceuticals.

Disease-specific interest groups have added to

the pressure on FDA to speed approvals, particularly for drugs to treat serious or life-threatening

illness. Persistent efforts of AIDS activists resulted in two major regulatory changes in 1992 for

drugs used for life-threatening illnesses, including AIDS. The first is a “parallel-track” program,

in which patients outside clinical trials can have

access to drugs before they are approved, while

they are also being tested in randomized trials.

Under the second regulatory change drugs may be

approved in some cases by showing improvement

in a “surrogate marker” (such as T-cell counts in

AIDS) rather than actual clinical benefit to patients. This provision is limited by intent to cases

in which a clinical correlation between the surrogate marker and clinical benefit is accepted; however, at least one AIDS drug has already been

approved on this basis, with considerable uncertainty about whether it is actually beneficial to patients. Drugs approved through this mechanism

are subject to greater post-marketing surveillance

requirements and streamlined procedures for market withdrawal in the event of unexpected adverse

effects, but these provisions have not yet come

into play. A major countervailing pressure on reductions in the pre-approval testing of drugs is the

possibility of significant undiscovered toxicities

associated with use. Drug manufacturers and FDA

are quickly held accountable for any adverse effects produced by these products.

7A more complete description of the FDA drug approval process is available in (1 28).

81n 1992, Congress passed Iegis]ation allowing FDA to collect “user fees” from drug companies submitting drug approval appliCiNiOnS md

to use these funds to hire additional reviewers (PL 102- 571).
Chapter 9 Health Care Technology in the United States 1283

Another approach to speeding the development

and approval of drugs is the Orphan Drug Act,

which was passed by Congress in 1983 to provide

incentives for the development of drugs aimed at

uncommon clinical problems (expected to be economically unattractive). The original law provided tax credits for research, FDA assistance

with meeting regulatory requirements, and seven

years of marketing exclusivity for eligible products (Orphan Drug Act, P.L. 97-414). Most policymakers consider the law successful, and by

1992 more than 60 new drugs had been approved.

Several of the products approved as orphan products have in fact been extremely profitable and

expensive (e.g., human growth hormone, erythropoietin), and for several years Congress has attempted to amend the act to remove the market

protection for such products. The difficult of refining this law is a potent illustration of the influence of economic stakeholders on the federal

legislative process.

 Marketing Approval for Medical Devices

Over the past 15 years, as medical devices themselves have become more sophisticated, expensive, and potentially hazardous, they have come

under greater regulatory scrutiny. Before the Medical Device Amendments to the FDCA were enacted in 1976, medical devices were subject only

to basic quality control standards, and no information on safety or efficacy was required for their approval. Problems with intraocular lenses,

pacemakers, and intrauterine devices first brought

this regulatory vacuum to the public’s attention.

The 1976 amendments established a classification

system for devices based on level of potential risk

and applied increasing regulatory scrutiny to

those devices posing greater risk (with some major exceptions for existing devices and new ones

similar to existing ones) (66). Class I devices are

those that present minimal risks (e.g., tongue depressors, stethoscopes, elastic bandages, enema

kits) and are subject only to general controls and

good manufacturing standards. Class 11 devices

present modest and known risks (e.g., hearing

aids, hip prostheses, electrocauterizers, urinary

catheters, arterial catheters) and are approved

based on performance standards established by

FDA for that type of device. Class 111 devices pose

the greatest potential risk (e.g., pacemakers, ventilators, heart valves, extended wear contact

lenses). The manufacturers of these devices must

provide FDA with evidence of their safety and effectiveness before they can be approved for marketing. MRI scanners were the first Class III

devices subject to pre-market approval (107).

The standard of evidence required for device

approval is legally set at a lower level than that required for new drugs. The FDA law requires “reasonable assurance” that a device will be safe and

effective for a specified use, as established by

“valid scientific evidence” from which experts

can reasonably conclude that the device will beeffective (66). This determination would be made

on the basis of well-controlled investigations, including “clinical investigations where appropriate” (emphasis added) (FFDCA, Sec. 513(a)(2)).

In other words, controlled clinical trials may not

always be required as they are for drugs. The

adoption of this regulatory standard reflects the

view that devices pose fewer unanticipated safety

problems than drugs, that well-controlled studies

are more difficult to perform for devices, that the

effectiveness of medical devices is more readily

predictable than that of drugs, and that an overly

stringent regulatory standard poses economic barriers that would discourage the development of

beneficial medical devices (35). In practice, it

means that the clinical utility of medical devices

must often be established in clinical trials conducted after approval, and in the absence of such

studies, optimal clinical use of the devices may

never be clearly defined.

The 1976 law also allowed approval of some

class III devices without proof of safety and effec -

tiveness if the manufacturer claimed they were

“substantially equivalent” to a device marketed

before 1976 (the “510(k) exemption”). This path

to approval has been well worn because it is the

fastest and least expensive means of obtaining approval for new devices, and the precise definition

of “substantial equivalence” was not carefull y de-
284 I Health Care Technology and Its Assessment in Eight Countries

fined until recently. For example, the use of laser

catheters to open clogged leg arteries was approved through the 5 IO(k) process because it was

judged substantially equivalent to the use of a

catheter with an inflatable balloon on the tip. This

laser treatment diffused rapidly in the United

States until it was shown in clinical studies to be

less effective than several safer alternatives. The

5 IO(k) approval meant that few clinical data were

collected prior to the regulatory clearance of these

devices. In 1990 Congress passed the Safe Medical Devices Act (P.L. 101-629), which imposed

more stringent data requirements on devices for

which 5 10(k) approval was sought. The number of

devices approved through this route has since decreased, and review times for 5 IO(k) applications

have increased.

Medical devices that were on the market before

enactment of the 1976 amendments have been allowed to remain on the market through a“grandfather” clause in that law. However, FDA has

recently begun demanding that manufacturers

provide clinical data for certain devices, some of

which now serve to illustrate the potential hazards

of limited characterization of seemingly safe devices. Silicone breast implants, in wide use since

before 1976, have been increasingly suspected of

causing systemic autoimmune disease. In 1992

FDA withdrew its approval for their use, and the

largest maker of these devices recently agreed to

pay several billion dollars to implant patients as

part of a class action suit.

Before approval, devices in the later stages of

testing may be sold for use in clinical trials that

will provide data for the FDA approval application, through an Investigational Devices Exemption (IDE). This allows manufacturers to recoup

the cost of devices used in clinical trials (66). For

most IDEs, FDA requires that the study design is

adequate, that investigators are qualified, and that

data are collected expeditiously; however, there is

no limit on the number of units that may be

installed under an IDE (107). In practice, a number of medical devices have been designated investigational while being widely used, and it is

unclear whether the primary intent of these studies

is to establish market share or to collect systematic

data on clinical performance. For example, home

uterine monitors to detect premature labor have

been FDA-approved for use in women with previous preterm deliveries; however, they are being

sold under IDE status for use in women considered to beat risk for pre-term labor. This contributes to use of these technologies in clinical

practice without the benefit of studies demonstrating clinical benefit. Similarly, MRI scanners were

sold under IDE status and were in widespread use

prior to full regulatory or clinical assessment.

Insurance coverage for FDA-approved devices

is not as automatic as it is for drugs, reflecting the

lower standard of evidence required for approval

and the often high pricetags of medical devices.

Increasingly, Medicare has refused to pay for devices that are FDA approved even though their

standards for coverage are nominally the same as

FDA’s for approval. For instance, breast thermography and lower-extremity pumps for venous insufficiency are FDA approved but not paid for by

Medicare. Medicare has suggested that its interpretation of effectiveness applies to use in common practice rather than evidence supplied by the

manufacturer. These differences also reflect the

differing pressures that agencies face when making decisions regarding technology.

Like drugs, devices can be used by physicians

for any clinical purpose after FDA approval has

been granted for a single clinical indication. FDA

laws prevent a company from labeling or promoting a product for uses beyond the one(s) for which

approval was granted, but other uses are often discussed and promoted in journals and professional

meetings. Unapproved use (also known as “off-label use”) of both drugs and medical devices is

common, and often supported by evidence, and it

can be considered state-of-the art. For example, a

February 1994 consensus conference held by NIH

on Helicobacter pylori (a bacterium) and peptic

ulcer disease concluded that all patients with new

or recurrent ulcers should be given one of three

combinations of drugs, none of which had been

approved by FDA for that indication. Nonethe-
Chapter 9 Health Care Technology in the United States 1285

less, many off-label uses are not supported by evidence, and insurers have attempted to use that fact

to deny coverage, although they have not been

very successful.

There is considerable concern and debate about

the effects of approval requirements on innovation

in medical devices. Manufacturers argue that the

approval process increases the cost of development and limits the speed with which new devices

can be invented and put to use (35). Some Members of Congress, however, have been concerned

that regulatory requirements for certain devices

(e.g., heart valves, donor tissue, breast implants,

penile prostheses) are not strict enough, and they

have been urging standards with greater information requirements. Other Members hope to force

FDA to streamline the management and procedures of the device approval program. Finally, a

recent FDA internal report has found that many

clinical trials submitted in applications for FDA

approval are inadequately designed and conducted (146). Device regulation, it appears, is destined for changes over the next few years.

 Technology Control Through Health

Planning

The most prominent governmental attempt to

control the diffusion of medical technology

through a regulatory program grew from the National Health Planning and Resources Development Act of 1974. Under that federal law, each

state was required to establish a mechanism for

reviewing and approving hospital purchases of

expensive technologies and other capital expenditures (costing more than $150,000) through a certificate-of-need (CON) program. States complied

at least in part because federal funding for some

state-run public health programs was contingent

on their enacting CON legislation (50). The laws

were intended to promote the rational introduction

of new technologies, encourage equitable distribution of high-priced technology within each

state, and hold down costs. Federal requirements

for and funding of state health planning agencies

was discontinued in 1986, but about 30 states have

continued without federal support.

The original federal law left the design of CON

programs to the states, setting out no specific procedures or criteria for approving projects. Not surprisingly, states took approaches ranging from

automatic approval of all applications (e.g.,

California, Arizona, Utah) to defining strict limits

on the number of devices that would be permitted

in hospitals within the state (e.g., New York, New

Jersey, Illinois) (109). Massachusetts instituted a

strict planning program for MRI that combined

CON procedures with payment rate regulation

(50).

The perception is widespread that CON laws

failed to control health care costs and were usually

ineffective in promoting the rational introduction

and use of new technology ( 13, 15). CON efforts to

control the supply of acute care beds may have

been more successful, but one such program that

decreased bed supply was also associated with an

increase in overall hospital costs (99). More stringent CON programs have been credited with

slowing the purchase of MRI units located in hospitals but not the total number of MRI facilities

(50,1 15). In New York State, regulatory policies

related to cardiac surgery facilities may have reduced inappropriate procedures (see case study).

Three reasons are most commonly cited for the

failure of CON programs. First, many programs

were highly political and subject to manipulation

by special interests rather than being guided by

clinical requirements. Second, it was (and remains) difficult to quantify the “need” for specific

technologies (49). Finally, because CON laws applied only to purchases of hospital equipment,

technology in outpatient facilities was not affected (50). Underlying the failure of CON programs may have been the simple problem that the

CON decisionmaking boards did not have powerful incentives (such as financial risk) to motivate

them to deny purchases in difficult situations

when faced with a variety of professional, public,

and political forces encouraging approval (95).
286 I Health Care Technology and Its Assessment in Eight Countries

 Payment, Coverage, and

Utilization Controls

A patchwork of mechanisms has developed in the

absence of structural or legal limits to growth of

health care spending. Pushing against these are

forces compelling greater spending, at least in part

through the use of increasingly expensive medical

technology. These forces exist in every country,

but the United States consumes substantially

greater amounts of costly medical care than other

developed countries. This section describes some

of the policies, programs, and funding strategies

designed to promote efficiency and economy in

the use of medical technology.

Financing mechanisms, coverage policies, and

utilization controls have assumed increasing importance in efforts to dampen rising health care

costs. The common element of these approaches is

limiting the use of medical services. In the 1980s

most efforts to control technology were based on

the perspective that increased scrutiny of medical

practice and some general economic constraints

would be sufficient to keep costs under control by

“rationalizing” the use of care. The failure of the

health care industry to respond to those too-subtle

cues has led to the recognition that more information on the risks, benefits, and costs of alternative

practices are needed, along with strong incentives

for all parties to use this information. The federal

government has direct control over payment for

health care through the Medicare program and, to

a lesser extent, the Medicaid program. The payment policies of these programs have influenced

the greater health care market, as well.

Coverage and Payment Mechanisms

Under Medicare

About 16 percent of all U.S. health care spending

flows through the federal government’s Medicare

program, a larger share than any other single payer

(see figure 9-1) (20). Because of its market share,

Medicare payment and coverage policies strongly

affect the behavior of health care organizations,

clinicians, and patients. Furthermore, many private payers are influenced in coverage and

WHERE IT CAME FROM

Other government

1470 Medicaid

Medicare .

17% A

‘Out of pocket

N

m Other private

5?40

Private insurance

33%

WHERE IT WENT

Other spending

ursing Home

Physicians

19%

2 %

Other

personal care

23%

NOTES Other personal care includes dental, home health, and drugs

Other spending includes public and private Insurance administration,

research, and construction

SOURCE K R Levit, H C Lazenby, C A Cowan, et al , “National Health

Expenditures, 1990,” Health Care Financing Review 13(1) 29-54, fall

1991

payment policy by decisions made regarding the

Medicare program.

In considering new technology, the Medicare

program makes basic decisions on: 1) whether any
Chapter 9 Health Care Technology in the United States 1287

use of the technology should be covered, 2)

whether coverage should be limited to particular

clinical circumstances, and 3) if a technology is

covered, how much should be paid for its use

(109). Coverage decisions determine whether

physicians will be paid for using a technology

(e.g., radiologist interpretation of computed tomography (CT) scans), whether outpatient use of

the technology will be covered, and whether the

cost of purchasing and operating medical equipment will be reimbursed by Medicare (see below).

The Medicare coverage process exerts substantial

influence on the adoption and use of new medical

technologies, particularly devices that are expensive to buy and operate (107).

A factor not considered in Medicare coverage

decisions is cost-effectiveness (or cost); however,

considerable interest (including a proposal from

the Medicare program) in using cost as a criterion

has been extant since the mid- 1980s. In reform

discussions. there was a proposal to offer a drug

benefit as part of the Medicare program, and some

policy makers suggested creation of a panel that

would have to approve addition of new, high-cost

drugs before they could be covered under this new

benefit. Substantial opposition by the biotechnology industry to such a committee makes its establishment virtually impossible.

New technologies may be covered by the Medicare program through several different mechanisms. First, clinicians or hospitals may begin

using anew technology as a substitute for existing

technology and bill for it using existing payment

codes. Earl y laparoscopic removal of the gallbladder was often billed for use as the traditional open

gallbladder surgery. A second mechanism for payment decisions is approval by the local insurance

company that is under regional contract to the federal government to administer the Medicare program (such companies are called intermediaries or

regional carriers). The medical directors of these

local insurers are responsible for ensuring that

payments are made only for “reasonable and necessary” services. The third coverage mechanism

entails a payment decision to be made at the national level by the coverage policy office in the

Health Care Financing Administration (HCFA),

the federal office that administers the Medicare

program. HCFA uses a group of physicians in the

Public Health Service who either make a group

decision on coverage policy or refer it to the Office

of Health Technology Assessment (OHTA) for a

more comprehensive review. OHTA then makes a

coverage recommendation to HCFA, which

makes the final coverage decision. The role of

OHTA is discussed below.

HCFA Coverage Standard

The law underlying Medicare coverage policy

prohibits payment for “items or services which are

not reasonable and necessary” (Social Security

Act, Section 1862(a)(l)(A)). Although HCFA has

never defined the terms “reasonable and necessary” in regulations, it has stated that a service

should be safe and effective, appropriate, and not

experimental (134). Judgments concerning safety

and effectiveness are to be based on authoritative

evidence or general acceptance in the medical

community. Experimental is defined as investigational (anything that is provided for research purposes), or as subject to approval but not yet

approved by FDA. Even absent evidence of safety

and effectiveness, practices that are generally accepted in the medical community may not be considered investigational. Finally, “appropriate”

means that a service is provided in the proper setting by qualified personnel. For uncommon, serious, or life-threatening conditions, Medicare may

allow coverage for services even though effectiveness has not been demonstrated: “the standards for

safety and effectiveness are less stringent when

evaluating breakthrough medical or surgical procedures” (134). A lower threshold of evidence for

life-saving therapies means that Medicare coverage procedures can provide an explicit avenue by

which costly, unproven treatments may be paid for

and diffuse widely.

Technologies that diffuse rapidly before there

is appropriate evidence of effectiveness may be

covered by Medicare based solely on their frequency of use. This was the case with MRI (although most uses would have been covered in any

case). Services that are not subject to proof of effectiveness by FDA, such as procedures and de-
288 I Health Care Technology and Its Assessment in Eight Countries

vices deemed substantially equivalent to existing

products, are particularly likely to enter general

practice without being supported by evidence of

effectiveness and to be covered without question

by Medicare.

Medicare’s Prospective Payment

System for Hospital Care

The development and use of technology may be

influenced powerfully by the mechanisms

through which hospitals and doctors are paid for

the care they provide. A predetermined lump-sum

payment for hospitalization by diagnosis, for example, creates substantially different pressures

than a system in which services are paid for on a

cost basis after they are provided. Until 1983, hospitals were paid by Medicare based on their costs,

creating a reimbursement environment that allowed acquisition and use of new technologies

with little consideration of cost (107). Prospective

payment to hospitals through diagnosis-related

groups (DRGs), begun in 1983, substantially altered the financial incentives faced by hospitals.

The DRG program sets a fixed price for each hospitalization based on the primary diagnosis, patient’s age, comorbidities, procedures, and

complications. All hospitalizations are classified

as one of 494 DRGs (in 1993) for which prices

have been determined initially using historical

patterns of care. DRG payment rates are updated

regularly at the recommendation of the congressionally appointed Prospective Payment Assessment Commission (ProPAC), which carries out

detailed analyses of medical practice.

Because DRG payment does not increase when

additional services are provided, the policy

created new incentives to be efficient in the hospital care of Medicare patients. In theory, prospective payment should encourage the introduction of

cost-saving technologies, such as those that reduce the length of hospitalization or substitute for

more expensive tests, and should provide a disincentive for technologies that increase costs,

whether or not they would benefit patients. For existing technologies, DRGs would favor underuse

as long as hospital stay was not prolonged and adverse events did not increase.

Two aspects of the DRG updating process have

important implications for technology use. Individual DRG payments are updated on a regular

schedule to account for new technologies

associated with specific diagnoses; therefore, decisions made by HCFA (based on recommendations by ProPAC) concerning the likely cost and

clinical effects of new technologies can send an

important economic signal. Second, an adjustment factor is applied to all DRGs that is meant to

allow for scientific and technical advances in

health care. This adjustment is an estimate based

on a review of specific emerging, quality-enhancing, cost-increasing technologies and is intended

neither to inhibit nor to promote adoption of new

technologies. ProPAC has recommended increased total DRG payments for 1995 of over

$300 million dollars for advances in science and

technology, sending a modest but positive signal

to the health care technology industry (38,92).

Capital Equipment Payments

Through Medicare

Until 1992, Medicare reimbursed hospitals for the

cost of new medical equipment (capital costs) by

allowing them to bill for depreciation, interest

payments, and rental fees while paying for operating expenses through DRG payments. Capital

costs have been full y covered as long as use of the

technology is approved by Medicare, essentially

providing a federal subsidy for acquisition of new

equipment and possibly encouraging preferential

spending on equipment over labor or other operating expenses (107). Beginning in 1992, Congress

established a new method paying for capital costs

through Medicare, to be phased in over a 10-year

period, which includes a fixed capital cost payment added onto each DRG. Hospitals that spend

more on capital investments no longer get increased payments from Medicare to cover these

capital expenses, thereby removing a financial incentive to introduce expensive technologies unless they are cost reducing (92).
Chapter 9 Health Care Technology in the United States 1289

Physician Payments Under Medicare

In 1989 Congress responded to persistent increases in Medicare payments to physicians by replacing the “usual, customary, and reasonable”

(UCR) method of physician payment that had

been in place for the previous three decades with

a resource-based relative values scale (RBRVS)

that allows Congress to establish the payment

rates for medical services, control the rate of increase in payment rates, and control the increase

in the number of services provided. Rates under

RBRVS are determined by considering physician’s time and effort as well as the expenses of

practice.

The new system is seen as correcting an imbalance that had grown worse over the years between

payment for “procedures,” which were highly

paid relative to time and expense and “cognitive

services” (i.e., services such as diagnosis by history and physical exam, preventive counseling, patient education, and soon) which have historically

been paid poorly relative to time and expenses. Increases in payments to physicians in the

mid-1980s were driven strongly by procedures

such as cataract surgery, endoscopy, total knee replacement, hip replacement, hernia repair, and

coronary artery bypass graft surgery, all of which

were reimbursed at high rates (86). Studies during

the same period showing geographic variation and

high rates of inappropriate utilization of some of

these services raised hopes that payment tools

could be used to reduce services without compromising the quality of care. Under RBRVS, cognitive services are given relatively greater weight,

whereas procedures (especially those that take

little time) may be less generously reimbursed.

The hoped-for effects are greater attention on the

part of physicians to preventive and other primary

care services; a gradual increase in income for primary care providers; an eventual increase in the

supply of generalists; and a decrease in use of expensive technologies by specialists.

Another new feature of the payment system is

the volume performance standard, which is designed to control increases in the total volume and

intensity of services provided. Each year Congress will decide what increase in total physician

expenditures will be allowed, taking into account

general inflation, changes in technology, evidence

of over- or undersupply of services, and distribution of services among the population. Once the

expenditure target has been set, spending over the

target will result in downward adjustments across

the entire fee schedule (55). Such a payment

mechanism is anticipated to offset any tendency

for physicians to respond to reduced fees by increasing the number of services they provide. The

actual impact on utilization of services is unclear:

some evidence suggesting that the anticipated increase in volume of services did not occur when

physician Medicare fees were reduced, but other

studies document a strong behavioral response to

reduced fees (11 6).

 Managed Care

One of the most significant recent changes in the

U.S. health care system is the growth in the number and variety of managed care plans. Health

maintenance organizations (HMOS) and preferred

provider organizations (PPOS) are only the bestknown examples, and within these categories

there are numerous variants. What all managed

care plans have in common is the primary goal of

reducing costs through payment policies that

create financial incentives for cost-effective care

and individual case management techniques. Policies include negotiation of discount rates with

providers or agreements that make providers share

the financial risks of the cost of care. Utilization

management (UM) techniques, used to influence

care at the level of the individual patient, have included preadmission certification, second-opinion programs, high-cost case management, and

others described below.

The increase in managed care enrollment has

been most pronounced for workers who receive

health coverage through their employers. Although only a small minority of such employees

belonged to such plans in the early 1980s, by 1993

more than half were enrolled in managed care.

Furthermore, for the minority who remained in

the indemnity insurance program, the vast majority are subject to UM programs. In 1984,5 percent
290 I Health Care Technology and Its Assessment in Eight Countries

of fee-for-service insurance plans used some form

of UM service, and in 1992, only 5 percent did not

(37,45). Because of these trends, the differences

between managed care programs and traditional

indemnity insurance are decreasing. By virtue of

the increasing prevalence of UM in both managed

care and indemnity insurance programs, it is an increasingly important source of influence on use of

medical technology.

Utilization Management

All the various forms of UM involve 1) collecting

data on what was wrong with patients and how

they were (or will be) treated, and 2) applying preset algorithms to identify care that may not be appropriate. With a few exceptions UM has been

targeted at determining whether in-patient hospitalization is required for particular medical problems and what length of hospital stay is necessary.

A small but growing number of organizations are

applying more detailed algorithms to specific

conditions and medical services, and some are devising methods for translating practice guidelines

into review criteria.

Individual hospitals report working with up to

250 different review organizations which approve

and monitor their care for different payers. UM organizations may specialize in areas such as mental

health, drug utilization, or high-cost case management; some cover all areas.

Initial efforts to control utilization in the Medicare program consisted of a requirement that hospitals establish committees to review the quality

and necessity of care. By avoiding a government

review program, this policy satisfied the stipulation in the preamble of the legislation that created

Medicare, which prohibits federal “supervision or

control over the practice of medicine or the manner in which medical services are provided.” As

costs continued to rise and the perception grew

that hospital review was ineffective, Congress

passed legislation in 1972 creating professional

standards review organizations (PSROs)-community-based, physician-controlled organizations that set practice standards and reviewed

institutional care. The limited effectiveness of

PSROS led to the establishment of statewide programs of utilization and quality-control peer review organizations (PROS), which have also not

been particularly successful in controlling utilization or improving quality of care (58). In part the

limited impact of Medicare review can be attributed to its focus on surveillance mechanisms to

identify markedly substandard care. In 1992

HCFA announced a new approach to reviewing

care that is based on analysis of patterns of care

rather than case-by-case review, adopting some of

the principles of continuous quality improvement

for the program (62).

Physician Profiling

Physician profiling examines individual physicians’ patterns of treatment—in particular, their

use of specific procedures (e.g., cesarean section,

hysterectomy) and compares them with defined

standards or average practices. Profile information is used to encourage physicians to alter their

practices if they are “inappropriate” or possibly to

select physicians for a network of providers in a

group practice arrangement. The use of profiling

is growing rapidly, and health reform proposals

may encourage its further use by emphasizing development of computerized data and patient records and by linking the use of profiles with

quality-of-care measurement.

Profile information has been associated with

significant changes in the use of medical technologies in some cases. A Chicago hospital was able

to decrease cesarean section rates by encouraging

physicians whose rates were high to modify clinical decision strategies (82). The Maine Medical

Assessment Foundation (MMAF), which brings

together physicians to discuss variations in the

rates of use of common procedures, reported reductions in lumbar disc surgery, admission for pediatric asthma, cesarean section, and

hysterectomy using physician profiling and feedback (77). Although profiling is unlikely to be the

sole explanation for these results, the comparative

practice information did serve in each case as a basis for applying other forces to change practice.

Simply comparing rates of practice or outcomes of care has its limits, however, as average, lowest, or highest rates may not in fact be the “correct”
Chapter9 Health Care Technology in the United States 1291

rates. Increasingly, technology assessment is being used to provide an objective standard against

which existing practices are compared. The increasing use of profiling represents a movement

away from case-by-case review of patient care and

is considered less burdensome by physicians—

and easier as a result of better systems for collecting computerized clinical data.

Effectivenessof UM

The impact of UM has been largely unevaluated.

Certainly, the increase in health care costs over

time does not seem to have been substantially influenced by the rapid increase in use of UM, but

it is impossible to know what the cost trend would

have been without it. Positive effects have been reported in the few studies of UM that have been

published. In one case, claims data from 200 insured groups over a four-year period showed an

immediate 6 percent decrease in health care costs

after implementation of preadmission and concurrent review; however, there were no additional

changes noted over the study period (32). Other

evidence suggests, however, that in-patient savings from UM may be offset at least partially by

increasing costs of out-patient care. Few studies

have addressed the significance of changes in decisionmaking associated with UM for the quality

of patient care. Patient outcomes usually have not

been measured, nor has the appropriateness of use

of services been evaluated (58).

Systematic studies of the influence of managed

care on the purchase and use of medical technologies have not been performed, debate continues on

the extent to which managed care plans are able to

produce savings (1 30). To the extent that such

plans force providers to operate within fixed budgets, the financial incentive to provide access to

more costly technologies would be reduced.

Many of these plans have established committees

that discuss the need for and appropriate use of

new technologies; these committees have occasionally decided to limit the availability of some

technologies. For example, one large HMO decided that a new FDA-approved drug for Alzheimer’s disease should not be included on the

plans formulary. However, when another HMO

decided not to provide a bone marrow transplant

for a patient with breast cancer, it was required by

a jury to pay an $89 million fine. The specific effect of managed care on the management of health

care technology may be unpredictable, but it is

clearly exerts an important and growing influence.

HEALTH CARE TECHNOLOGY

ASSESSMENT

 Federal Health Technology Assessment

Several developments in the mid- 1970s are commonly associated with rising interest in health

care technology assessment. Breakthrough

technologies, such as renal dialysis and CT scanning, promised great potential benefits at enormous costs at a time when national health care

spending already was considered at a crisis level.

At the same time large gaps in information on

medical technologies were increasingly recognized, and exposed the possibility that money was

being spent on ineffective treatments. One prominent health economist (Victor Fuchs) captured

these concepts in the notion of “flat-of-the-curve”

medic ine, a reference to the shape of the cost benefit curve at increasing levels of expenditure.

Among the analytically oriented, these factors

contributed to a growing interest in examining the

benefits and costs of medical technologies in a

systematic way.

The economic and clinical importance of the

failure to evaluate technology was first made concrete by several studies of CT scanning, and was

highlighted by a 1978 report from OTA (121).

This 1978 study provided examples of many common medical practices supported by limited published evidence and concluded that information

on safety and efficacy of most technologies “may

be inadequate to allow the rational and objective

utilization of medical technologies.” The report

provided an argument for a more systematic, coordinated and active role for the federal government

in conducting or promoting systematic evaluations of technologies (122).
292 I Health Care Technology and Its Assessment in Eight Countries

In 1978 Congress created the National Center

for Health Care Technology (NCHCT) to advise

Medicare and Medicaid on coverage decisions,

provide technology assessment information to

health planning agencies, establish priorities for

technology assessment, and help develop methods for evaluating the safety and efficacy of medical technology (34). The Center was directed to

consider broadly the implications of new and existing medical technologies, including their legal,

ethical and social aspects. A National Council on

Health Care Technology, composed of 18 members who included scientific experts, technology

industry representatives, clinicians, lawyers, ethicists, and members of the general public, was

created to advise NCHCT (87). This ambitious

agenda was funded at a modest $4 million per

year.

During three years of operation, NCHCT published three broad assessments of high-priority

technologies and made about 75 coverage recommendations to Medicare (87). Despite its apparent

value and success, NCHCT was put out of business by Congress in 1981, a casualty of the political climate under which it operated. From the time

of NCHCT’S establishment, the medical profession and the medical device industry opposed it

(87,94). An AMA representative testified before

Congress in 1981 that:

. clinical policy analysis and judgments are

better made—and are being responsibly made—

within the medical profession. Assessing risks

and costs, as well as benefits, has been central to

the exercise of good medical judgment for decades. The advantage the individual physician

has over any national center or advisory council

is that he or she is dealing with individuals in

need of medical care, not hypothetical cases

(87).

AMA may have seen the functions of NCHCT

as a move in the direction of greater federal involvement in medical decisionmaking, particularly NCHCT’S role in recommendations to enforce

government-sponsored judgments on coverage.

The medical device industry objected to

NCHCT’S compiling a list of emerging technologies and argued that early assessments might stifle

innovation. It also argued that assessments could’

be undertaken by existing federal entities and that

the Center was therefore redundant. It seems likely that the major cause for the industry’s concern

was the potential for new devices to fail in the market after a negative evaluation from a central government source. This way of thinking persists. In a

March 1994 hearing on the Clinton health care reform proposal, the device industry trade association representative testified that “no single

provision of health reform could work greater

harm on medical innovation or patients in this

country than national assessments of technologies

before they could be used by local plans” (46).

In addition to opposition from AMA and the

medical device manufacturers, the anti-regulatory

climate of the early Reagan administration may

have contributed to the Center’s demise. When it

was disbanded, responsibility for advising Medicare on technology issues was transferred to the

Office of Health Technology Assessment (OHTA)

within the National Center for Health Services

Research (NCHSR), both of which are described

below.

 Council on Health Care Technology

After eliminating NCHCT, Congress still perceived a need for some capacity to explore the implications of medical technology ( 124).

Responding to a 1984 congressional mandate, the

Council on Health Care Technology (CHCT) was

formed by the Institute of Medicine (IOM) (part

of the National Academy of Sciences). CHCT was

intended to be a public-private venture and received “matching” government funding only on

the condition that it first obtain private funds (P.L.

98-55 1). CHCT focused primarily on conceptual

and methodological issues in technology assessment, such as approaches to priority setting, attention to a wider range of outcomes in assessments,

the relationship of technology tissessment to quality assurance, and considerations in assessing

diagnostic technologies (94). It produced assessments of only two technologies: the end-stage renal disease program and the artificial heart. From

the beginning, the Council’s goals were never
Chapter 9 Health Care Technology in the United States 1293

E

Agency for

Toxic Substance

& Disease Control

E

E

1

E

Agency for

Health Care Policy

and Research

Department of Health

and Human Services

Assistant

Secretary for Health

F

E

SOURCE Office of Technology Assessment 1994

clear, and its need to raise private funds hampered

its operation (94). IOM did not seek further public

funds for the Council after 1989, and its statutory

authorization was allowed to expire. Since 1990

IOM has maintained a smaller effort under public

and private funding, its Committee on Clinical

Evaluation, which has reported on quality of care,

technological innovation, clinical practice guidelines, and outcomes research.

 Agency for Health Care

Policy and Research

The Agency for Health Care Policy and Research

(AHCPR), legislated into existence in 1989, is the

newest entity to take on technology assessment

for the federal government. It is not an entirely

new agency but rather represents the takeover and

expansion (in both responsibility and funding) of

the National Center for Health Services Research,

which had moved during the 1980s from funding

traditional health services research into areas

verging on technology assessment (e.g., “geographic variation” in medical technology use and

measures of “appropriateness” of care). AHCPR

Indian Health Health Planning

Service and Evaluation

L_——__JL_____ J

Centers for Population

Disease Control Affairs Office

is part of the Public Health Service, at the same administrative level as NIH (see figure 9-2).

AHCPR’S new responsibilities include launching

a major initiative in “medical effectiveness research,” developing clinical practice guidelines,

and disseminating research findings and guidelines. AHCPR also continues many existing

NCHSR funding programs, including basic health

services research and an intramural program that

collects and analyzes data on national medical expenditures, hospital costs and utilization, and

long-term care. OHTA, which continues to provide technology assessments for Medicare. is now

administratively within AHCPR.

AHCPR’S 1989 budget was $99 million, with

$34 million for general health services research

and $38 mill ion for medical effectiveness research

and for developing and disseminating practice

guidelines (the $38 million goes to the ● ’MEDTEP” program). By fiscal year 1993, funding had

grown to $128 million, with $73 million for

MEDTEP (141), and the agency employed 277

workers.
294 I Health Care Technology and Its Assessment in Eight Countries

Clinical Practice Guidelines

In the legislation creating AHCPR, Congress said

that the Agency must produce clinical practice

guidelines to “assist in determining how diseases,

disorders, and other health conditions can most effectively and appropriately be prevented, diagnosed, treated, and managed clinically” (P.L.

101 -239). In addition, guidelines are to be used to

establish review criteria for assessing the quality

of health care. Unstated is the hope and belief that

physicians treating patients according to these

guidelines will deliver only “appropriate” care

and perhaps thereby lower health care costs. These

are large aims.

These guidelines have no regulatory force, but

intense interest from physician and payer groups

suggests that the guidelines are perceived as potentially influential in coverage and other policyrelated decisions. At the this early stage,

guidelines have not had much impact (in line with

previous efforts of the federal government to produce expert consensus on clinical problems) (67).

Most successful efforts to change practice using

clinical guidelines have involved intensive programs at local institutions to develop and implement the guidelines (80).

AHCPR has not developed a formal mechanism for selecting guideline topics. The selection

criteria listed in AHCPR’S legislation include the

adequacy of scientific evidence, prevalence of a

condition, variation in practices, and total cost of

related health services. The first three guidelines

addressed acute pain management, urinary incontinence, and prevention of pressure ulcers. In 1992

Congress stated that the process for selecting

guideline topics must become more explicit, systematic, and accountable (PL 102-410), and the

Agency has contracted with IOM to assist in developing a formal method of priority setting.

The methodology for developing guidelines is

evolving over time, but the essential features are

an exhaustive literature review, multidisciplinary

expert panel discussions, and wide external review. For the AHCPR guideline on cataracts in

adults (one of the more methodological y rigorous

AHCPR guidelines to date), over 8,000 articles

were reviewed (of which 4 percent met criteria for

adequate study design). Building on other

“strength of evidence” methods (e.g., the Canadian Task Force on the Periodic Health Examination, the U.S. Preventive Services Task Force), the

cataract guideline used formal rules of evidence to

assess the literature. AHCPR spends in the range

of $500,000 to $1 million per guideline, and each

takes two to four years to complete (60). By August 1994, 12 guidelines had been issued and a

similar number were in various stages of development (see table 9-1).

The guidelines issued so far have been praised

for their comprehensiveness but have also provoked controversy. Aspects of the cataract guideline and one on depression were rebutted by

groups that disagreed with some recommendations.9 As AHCPR begins to develop methods for

converting the guidelines into standards of qualit y, performance measures, and medical review criteria—which it is required to do by statute—the

guidelines may be greeted with ever-lessening enthusiasm by the medical profession. A more recent requirement, that cost information on

alternative treatments be included in the guidelines, is likely to produce further debate. Several

methodological issues concerning the guidelines

will be faced by AHCPR as it continues its work,

including the optimal composition of guideline

panels, the best strategy for organizing the actual

consensus process, and the optimal format for

stating recommendations.

me cataract guidelines were protested by high-volume cataract surgeons who believed that several diagnostic tests were indicated for

which the guideline panel could find no evicience. The psychiatric profession felt that the depression guideline did not encourage sufficiently

early referral of patients from primary caregivers to psychiatrists.
Chapter 9 Health Care Technology in the United States 1295

Acute Pain

Prevention of Pressure Ulcers

Urinary incontinece

Depression in Primary Care

Cataracts

Sickle Cell Disease in Infants

Cancer-Related Pain

Low Back Problems

Benign Prostatic Hyperplasia

Treatment of Pressure Ulcers

Management of HIV Infection

Otitis Media with Effusion

Congestive Heart Failure

Workgroup of Guideline Translation

Post Stroke Rehabilitation

Cardiac Rehabilitation

Unstable Angina

Screening for Alzheilmer’s

Quaility Determinants of Mammography

Smoking Prevention and Cessation

Anxiety and Panic Disorder

Released

Released

Released

Released

Released

Released

In progress

Released

Released

In progress

Released

Released

Released

In progress

In progress

In progress

Released

In progress

Released

In progress

In progress

SOURCE “Guildelines Being Developed, ’ Agency for Health Care

Policy and Research, Public Health Service, U S Department of

Health and Human Services, Rockville, MD, unpublished document,

September 1993, E McGovern, Agency for Health Care Policy and

Research Public Health Service, U S Department of Health and Human Services, Rockville, MD, personal communication, Mar 4, 1994,

Physcian Payment Review Commission, Annual Report to Congress,

1992 (Washington, DC U S Government Printing Office, 1992)

Outcomes Research

In addition to clinical guidelines, AHCPR is mandated by law to investigate the “outcomes, effectiveness, and appropriateness” of health care

services. Each term in this phrase has a historical

meaning derived from specific bodies of research

associated with particular investigators and policymakers. “Outcomes research” is distinguished

by its focus on using functional status, patient

preferences, and other patient-centered information in evaluating the impact of health services.

‘“Effectiveness research” refers to average effects

of treatment (in contrast with the results of traditional clinical trials) and is associated with the use

of large existing databases for analysis (98). Motivation for this initiative derived in part from the

existence of a large Medicare database available

for analysis and a perceived need to provide some

reassurance that the recently enacted DRG program was not forcing sick Medicare patients out

of hospitals (94). “Appropriateness of care” is the

term of researchers who argued that identifying

inappropriate care could lead to large cost savings

for the health care system.

Through common and variable usage, “outcomes,” “effectiveness,” and “appropriateness”

have lost their sharpness of meaning and often are

referred to collectively as outcomes research.

They do, however, share the characteristic of being attempts to find alternatives to randomized

trials for determining medical effectiveness. The

AHCPR legislation outlines in detail the expectation that the Agency would use existing data and

previously published research as an inexpensive

and rapid approach to begin filling gaps in medical knowledge. For this reason and because they

are so well funded and institutionalized in

AHCPR, these “new methods” raise a legitimate

source of concern about the direction of technology assessment in the United States.

“Patient outcomes research teams” (PORTS)

are the main mechanism by which AHCPR funds

outcomes research. Each PORT is devoted to a

specific clinical condition, addressing all relevant

aspects to determine “what works best, for whom,

and at what cost” (140). Fourteen PORTS have

been funded as of 1994, each for five years at $5 to

$6 million (see table 9-2), and four of those will

complete five years in 1994. PORT study methods

include literature reviews and meta-analyses, database studies of geographic variation and other

patterns of care, targeted primary data collection,

decision analyses, and dissemination activities.

A few findings from PORT studies are often

cited as examples of their potential to provide important clinical information. Analysis of several

hundred thousand patients undergoing cataract

surgery and a followup laser procedure has shown

a higher rate of retinal detachments than was ex-
296 I Health Care Technology and Its Assessment in Eight Countries

Project period

Grants Start date End date

Back Pain Outcome Assessment Team

U. of Washington, Seattle, WA

Consequences of Variation in Treatment for Acute Myocardial Infarction (AMI)

Harvard Medical School, Boston, MA

Variations in Cataract Management: Patient and Economic Outcomes

Johns Hopkins U., Baltimore, MD

Assessing Therapies for Benign Prostatic Hypertrophy and Localized Prostate Cancer

Dartmouth College, Hanover, NH

Assessing and Improving Outcomes: Total Knee Replacements

Indiana U., Indianapolis, IN

Variations in the Management and Outcomes of Diabetes

New England Medical Center, Boston, MA

Outcome Assessment Program in Ischemic Heart Disease

Duke U., Durham, NC

Outcome Assessment in Patients with Biliary Tract Disease

U. of Pennsylvania, Philadelphia, PA

Analysis of Practices: Hip Fracture Repair and Osteoarthritis

U. of Maryland, Baltimore, MD

Assessment of the Variations and Outcomes of Pneumonia

9/01 /89

9/07/89

9/07/89

9/07/89

4/01 /90

6/01 /90

7/01 /90

8/01/90

9/01 /90

8/31 /94

8/31/94

9/29/94

8/31 /94

3/31/95

9/29/95

8/01/95

8/31/95

9/29/95

U. of Pittsburgh, Pittsburgh, PA 9/30/90 9/29/95

Contracts

Variations in Management of Childbirth and Patient Outcomes

The Rand Corporation, Santa Monica, CA 9/28/90 9/27/95

Secondary and Tertiary Prevention of Stroke

Duke U. Medical Center, Durham, NC 8/01 /91 8/01/96

Schizophrenia Patient Outcomes Research Team

U. of Maryland, Baltimore, MD 9/30/92 9/29/97

Low Birthweight in Minority and High-Risk Women

U. of Alabama, Bumingham, AL 9/30/92 9/29/97

SOURCE U S Department of Health and Human Servercis, Public Health Service, Agency for Health Care Policy and Research, Rockville, MD, 1994

pected from existing literature, and this finding is

being explored through primary data collection

(61).

In the area of benign prostatic hypertrophy

(BPH), studies of claims data showed that rates of

complications from prostate surgery were more

common than generally believed (159).10 Given

these higher rates of complications and results

from patient interviews showing that patients

were less bothered by symptoms than objective

measures of prostatic obstruction had suggested,

BPH researchers concluded that patient preferences were the critical variable in choosing treatment for BPH (160). Another finding from the

BPH PORT was a higher mortality rate associated

with a less invasive method for removing prostate

tissue as compared with open surgery, which was a

clinically counterintuitive result (97). The researchers felt that unmeasured patient differences

l~e s[udles of BPH preceded [he establishment of APHCR and served as the model for what became known w PORTS within the new

agency.
Chapter 9 Health Care Technology in the United States 1297

might account for these results (i.e., sicker patients were more likely to be referred for the less

invasive procedure) and subsequent database

studies confirmed that such selection bias had occurred (17). To determine the true difference in

mortality between the procedures, a randomized

trial was required. Proposals to conduct such a

trial were rejected by both AHCPR and NIH because neither sees support of such a trial as consistent with its agenda or resources. The value of

observational studies may depend on the ability of

the U.S. government to support definitive trials in

the areas of clinical uncertainty identified by outcomes researchers.

In 1993 PORT investigators reviewed their experience at a workshop and made suggestions for

the future of the program. In general, they sought

greater flexibility to determine what methods of

evaluation to use, less emphasis on comprehensive meta-analysis when literature is deficient, decreased emphasis on administrative data, and

efforts to develop more accurate and clinically detailed databases. The next generation of PORTS is

expected to include more primary data collection,

but they will continue to emphasize the use of administrative data to study clinical effectiveness.

Because the congressional members who

created AHCPR were particularly concerned that

the results become widely known and applied, a

separate division of the Agency was established to

disseminate products and findings and to support

research on how best to transfer new knowledge,

particularly from the guidelines and PORTS, into

practice. The Center for Research Dissemination

Liaison has distributed millions of copies of

guideline documents to consumers and clinicians,

although it has only begun to develop a strategy to

determine whether practices have changed as a result. The Agency is supporting numerous studies

on different strategies for implementing AHCPR

guidelines, and results from these should be available in a few years.

Office of Health Technology Assessment

Since the beginning of the Medicare program in

1965, a federal office always has been designated

to advise the program on whether to pay for specific medical services. Before 1978, questions

were handled by the Office of Health Practice Assessment in the old Department of Health, Education, and Welfare and later by NCHCT until it

ceased to function in 1981. The Office of Health

Technology Assessment (OHTA) was then established in NCHSR. Today it sits under the aegis of

the successor agency, AHCPR. OHTA, which

makes coverage recommendations for the Department of Defense as well as Medicare, has an annu11 which S Up pOIIS al budget of $1 million per year,

a staff of six performing about 15 assessments

annually (see table 9-3).

Individual OHTA staffmembers conduct assessments of specific technologies by collecting

published literature on their effectiveness, synthesizing it informally, and consulting with FDA,

NIH, and other relevant federal agencies to come

to a conclusion about whether the technologies are

safe and effective. Evidence from randomized

clinical trials is usually but not always a necessary

ingredient for a positive determination (i.e., that

the benefits sufficiently outweigh the risks). No

randomized trials of laparoscopic cholecystectomy were available, but OHTA analysis argued that

the “risk/benefit ratio of the procedure was similar

or superior to that of the open procedure” and recommended that it be approved for coverage (see

the case studies below) (52).

By law HCFA cannot consider cost as a criterion for covering medical services, and although

OHTA may include cost information in its reports,

it does no formal cost-effectiveness analyses. On

occasion OHTA has recommended against coverage for procedures that are extremely costly and

minimally effective. For example, in OHTA’S assessment of liver transplantation, the five-year

I I NOI in cons[~t do]]ars; [herefore, actual resources have decreased as a resuh Of inflation.
298 I Health Care Technology and Its Assessment in Eight Countries

Reviews a

1991 Laparoscopic Cholecystectomy

1992 Home Uterine Montoring

Procuren A Platelet-Derived Wound Healing Formula

Cochlear Implantation in the Outpatient Setting

1993 Lymphedema Pumps Pneumatic Compression Devices

Intradialytic Parenteral Nutrition for Hemodialysis Patients

Small Intestine and Combined Liver-Small Intestine Transplantation

External and Implantable Infusion Pumps

1994 Electrical Bone Growth Stimulation and Spinal Fusion

Assessments

1991 Intermittent Positive Pressure Breathing Therapy

Hyperthermia in Conjunction with Cancer Chemotherapy

Cardiac Rehabilitation Programs

Polysomnography and Sleep Disorder Reports

Single and Double Lung Transplantation

Measuring Cardiac Output by Electrical Bioimpedance

Upcoming Heart-Lung Transplantation, Plethysmography; Combined Kidney-Pancreas Transplantation

. . —

a“Technology Reviews are brief evaluations of health technologies prepared by the Off ice of Health Technology Assessment, Agency for Health

Care Policy and Research (OHTA/AHCPR) of the Public Health Service Reveiws maybe composed in lieu of a technology assessment because the medical of scientific questions are limited and do not warrant the resources required for a full assessment the available evidence IS

limited and the published medical or scientific literature iS Insufficient in quality or quantity for an assessment, or the time frame available

precludes utilization of the full formal assessment process (OHTA statement printed at the bottom of all Technology Reveiws )

SOURCE Off Ice of Health Technology Assessment, Agency for Health Care Policy and Research “OHTA Assessmentand Reveiws, Published

1981 -,’ unpublished document, Rockville, MD, February 1994 B Gordon, Off Ice of Health Technology Assessment, Agency for Health Care

Policy and Research Rockville MD personal communication, May 25, 1994

survival rate for transplant patients with cancer (O

to 30 percent) was better than that for patients who

did not undergo transplant, but much lower than

the survival rate of patients with chronic active

hepatitis, alcoholic cirrhosis, and other liver diseases (around 70 percent). Medicare ultimately

decided not to cover transplants for liver cancer

patients but would cover for the procedure for

conditions with a better prognosis ( 137).

The direct effect of OHTA reports is on whether

services are paid for by Medicare, the single largest payer for medical services. Private insurance

companies have often used OHTA assessments in

developing their own coverage policies. The drug

and device industry considers Medicare coverage

an important factor in the potential market for its

products, so OHTA may affect technology diffusion beyond the bounds of Medicare; however, the

evidence to determine this is lacking. OHTA

could potentially play a greater role in federal

technology assessment, including expanding beyond Medicare and systematically conducting

cost-effectiveness analyses in its assessments.

Political discussions about this issue have taken

place from time to time, and some limits to

OHTA’S activities have been removed legislatively; however, opposition to expanding its role has

also surfaced, particularly on the part of the medical device industry.
Chapter 9 Health Care Technology in the United States 1299

1992

Year Topic Sponsor

1991 Gastrointestinal Surgery for Severe Obesity NIDDK

Dental Biomaterials NIDR

Treatment for Panic Disorder NIMH

Recognition and Treatment of Depression in Later Life NIMH

Acoustic Neuroma NINDS

Diagnosis and Treatment for Early Melanoma NCI

Triglycerides, HDL, and Coronary Heart Disease NHLBI

Methods for Voluntary Weight Loss and Control NIH Nutritional

Coordinating Committee

Gallstones and Laparoscopic Cholescystectomy NIDDK

Impotence NIDDK

Early Identification of Hearing Impairment in Infants

1993 and Young Children NIDOCD

Morbidity and Mortality of Dialysis NIDDK

KEY NCI = National Cancer Institute, NHLBI = National Heart, Lung, and Blood Institute, NIDDK = National Institute of Diabetes and Digestive

Disorders, NIDOCD = National Institute on Deafness and Other Communication Diorders, NIDR = National Institute of Dental Research, NIMH =

National Institute of Mental Health, NINDS = National Institute of Neurological Disorders and Stroke

SOURCE Office of Technology Assessment, 1994, based on Information from U S Department of Health and Human Services, Public Health Service, National Institutes of Health, Off Ice of Medical Applications and Research

 Other Federal Evaluation and

Assessment Programs

National Institutes of Health

The Office of Medical Applications of Research

(OMAR) at HIH began holding consensus conferences in 1977, and conducts about a half dozen of

them each year (see table 9-4). These conferences

take a “science court” approach, in which experts

present the state of knowledge on a topic to a “consensus panel”-a group chosen specially for each

conference and consisting mainly of scientists

(but not experts on the topic under review, except

for the chairperson), with “consumer” representation as well. The key questions for each conference are set out in advance by a planning group

that includes appropriate NIH staff and the chairperson. After a day and a half of presentations, the

panel develops a consensus statement that is finalized on the second day. Following the meeting,

these statements are disseminated widely through

mailings and publication in medical journals.

NIH consensus conferences have not been a

particularly successful means of changing clinical

practice, as most physicians are unaware of the

conferences or their recommendations, and studies of impact generally document no alterations in

practices following release of their results (67,74).

Some analysts believe that the conferences do

play a role in laying the groundwork for more

gradual changes in the standard of practice over

time. The literature on physician behavior change

suggests that there are many factors in addition to

knowledge that determine practices (75). Passive

dissemination of practice policy statements, even

those of nationally recognized experts, has been

shown to be inadequate to affect practice (19).

U.S. Preventive Services Task Force

(USPSTF)

USPSTF is a committee impaneled by the Office

of Disease Prevention and Health Promotion (in

the Department of Health and Human Services)

that produced a set of 169 recommended preventive services, collected and published as a book in

1989 (154). A new edition of the guidelines is expected in 1994, to be developed by a standing pan-
300 I Health Care Technology and Its Assessment in Eight Countries

el of 10 experts working with medical specialty

experts and federal agency representatives.

USPSTF has adopted an explicitly evidencebased approach to developing recommendations

using predefine criteria to rate the strength of evidence from relevant studies.

12 Where no studies

exist, the panel will not make any recommendation. Recommendations from USPSTF play no direct role in policymaking, but they have

considerable weight in decisions on coverage and

benefit design because of the rigor of the assessment methods used. The recommendations do not

currently consider costs, but meetings were held

in 1993 to explore using a cost-effectiveness standard in future editions.

Congressional Office of Technology

Assessment (OTA)

OTA was created in 1972 to advise Congress in all

areas of science and technology. (It is different

from the other government offices discussed,

which serve the executive branch). OTA studies

are initiated by requests from congressional committees and are conducted by OTA staff. Advisory

panels of experts and stakeholders are appointed

for each study to help focus the work and review

the products.

OTA’s Health Program, one of nine original

programs, issued its first report in 1976. In the

early years, studies of technology assessment

methods were emphasized—particularly costeffectiveness analysis and randomized clinical

trials—and case studies of specific technologies

were common. The program’s scope of work has

broadened over the years to include health policy

more generally, but the initial focus on methodology remains a constant thread. Recent assessments include a study of the cost of defensive

medicine, a critique of potential use of cost-effectiveness methods in benefit design, an evaluation

of the Oregon Medicaid system, a review of evidence for unconventional cancer treatments, and

others. Specific technology assessments include a

series on the cost-effectiveness of cancer screening strategies in the Medicare population and ongoing studies of osteoporosis, prostate cancer

screening, wound-healing agents, and the role of

Helicobacter pylori in peptic ulcer disease.

 Private Sector Assessments

Interest in technology assessment outside the federal government has expanded rapidly in the last

decade, particularly among professional organizations, insurance companies, health maintenance

organizations, and hospitals. Work is done in academic settings and, increasingly, in profit-making

companies.

Medical professional organizations have become increasingly involved in evaluating devices,

drugs, procedures, and practices within their own

areas of medical expertise. These activities are

conducted as a means of educating the members of

these organizations and also to provide payers

with a professional perspective on what practices

are state-of-the-art. One product of this activity is

practice guidelines that review existing evidence

and provide care recommendations endorsed by

the professional organization. In 1938 the American Academy of Pediatrics produced the first formal guideline, on pediatric immunizations. A

recent count identifies more than 30 professional

organizations developing guidelines, for a total of

over 1,500 individual guidelines produced (64).

Explanations for this activity are the perceived

need for greater accountability y and interest in controlling evaluations, particularly as they are applied to payment decisions.

Evaluation programs range from the Clinical

Efficacy Assessment Program (CEAP) of the

American College of Physicians (ACP), which

uses a formal, evidence-based approach to assessment, to AMA’s Diagnostic and Therapeutic

Technology Assessment (DATTA) program,

which canvases physicians on particular issues.

Topics are usually selected informally based on

the importance of or uncertainty surrounding an

I ~Thl$ approach t. guide] ine de~e]oplllent \vas Origlna]]y developed b~ the C’anadian Task Force on the pcriodi~ Hcal(h ~~amination.

.
Chapter 9 Health Care Technology in the United States 1301

issue, although ACP is in the process of developing more explicit approaches to choosing topics.

The informtition provided usually focuses on gen -

erating preferred strategies on the basis of existing

evidence on safety and effectiveness. Cost information is generally not considered, but some

preventive service evaluations have included it; in

some cases. extreme cost differentials between alternative strategies are mentioned.

It is not clear what effect the evaluations of professional societies have on clinical practices. A

variety of studies show that clinicians often are

not aware of them, may not agree with the ones

they arc aware of, or may not follow even those

they agree with (43, 119). A growing body of research on the impact of guidelines on practice suggests that compliance with guidelines is strongly

associated with the intensity of the effort undertaken to implement them ( 19). Particularly effective approaches include the usc of respected local

clinicians to deliver messages and the involvement of local providers in the guideline development process (60). The use of clinical guidelines

in utilization review, provider profiling, and as a

basis for administrative restrictions within hospitals and health plans increases their likely impact

on the use of specific technologies (41, 132).

Other than pharmaceutical and medical device

manufacturers. private insurers are probably the

single largest funders of technology assessment

activity in the country, spending considerably

more than the federal government. In addition to

Blue Cross/Blue Shield (BC/BS). other major insurers also conduct assessments to guide their

coverage decisions.

BC/BS established its Medical Necessity Program (MNP) in 1976 with the purpose of reviewing thc evidence on medical and surgical

procedures suspected to be ineffective. The program was conducted in close collaboration with

medical professional societies and resulted in

guidclincs for coverage used by BC/BS plans as

well as publications distributed by medical organizations. (For example, ACP has issued books on

screening and diagnostic tests based on collaborative work with MN P.) To focus on new and cmerging technologies, BC/BS established its

Technology, Evaluation, and Coverage (TEC)

program, which relies on a comprehensive staff

literature review and an independent, expert Medical Advisory Panel. In these evaluations the Panel determines whether a given technology satisfies

five predetermined criteria:

1. status of regulatory approval,

2. adequacy of scientific evidence about the effect

of the technology on patients,

3. net impact on health outcomes,

4. benefits as compared with established alternatives, and

5. effect obtained outside research settings.

Although the national BC/BS organization —

conducts these technology assessments, the results are only advisory to individual BC/BS plans,

and each plan is responsible for its own coverage

decisions. In the majority of cases, coverage will

not be approved when the Panel determines that a

technology is experimental. However, a negative

assessment does not necessarily mean that coverage will not be frequently provided for a technology. For example, most technology assessments of

home uterine monitoring for women at high risk

of premature delivery (including that done by BC/

BS) conclude that the device has not been proven

effective for that indication. Despite this, 40 to 50

percent of BC/BS plans pay for this technology,

and 20 state Medicaid programs also reimburse

for its use (25).

The TEC evaluation of autologous bone marrow transplantation (ABMT) for advanced breast

cancer provides an interesting (though atypical)

case study of this process. TEC considered all

available evidence on two separate occasions and

determined both times that the procedure should

be considered experimental. But because of the

patient demand, bad publicity, and a number of legal judgments against plans refusing COVerage,

BC/BS determined that the TEC decision itself

was not an adequate response to the new procedure, which in small studies showed a small advantage over conventional treatment. In 1991,

BC/BS managed to have a randomized trial (actually, four separate protocols) conducted in collab-
302 I Health Care Technology and Its Assessment in Eight Countries

oration with the National Cancer Institute (NCI)

and a number of individual Blue Cross plans. (Local Blue Cross plans paid a fixed fee for patients

willing to be randomized and the remaining costs

were covered by transplant centers and NCI.) Although some patients and physicians were reluctant to accept random allocation to conventional

therapy, by mid-1994 the trials had accrued about

half of their target sample size ( 100). It will likely

take 3 to 5 more years before these trials provide

information on the effectiveness of ABMT for

breast cancer. In the meantime, and increasing

number of insurers are covering the procedure,

rather than risk negative publicity or costly law

suits. In the Kaiser Permanence HMO network,

ABMT was determined to be experimental, but

Kaiser pays for the procedure anyway. The hazards of failing to pay were made apparent in late

1993 when a California HMO was required to pay

$89 million to the family of a breast cancer patient

for whom it denied payment for ABMT.

If clinical trials themselves are included as

technology assessments, the drug and device industry may be the largest supporter of technology

assessment in the United States (57). These

manufacturers have also increasingly used

technology assessment as a policy analysis tool,

as they face increasingly cost-conscious buyers.

They use such analyses to provide early guidance

on which product areas might be most profitable

to research and also to demonstrate to providers

and payers that their products are efficacious or

cost-effective. Serving the needs of the medical

products industry is a growing private-sector

technology assessment community (e.g., Battelle,

Health Technology Associates, Lewin and

Associates, Arthur D. Little) as well as individual

consultants in academia. As the private sector

conducts more technology assessments, concerns

about conflict of interest and assessment validity

are mounting. Several public and private groups

are involved in developing standards for appropriate conduct of technology assessment, particularly cost-effectiveness analysis.

Finally, several private nonprofit organizations

have begun evaluating and disseminating ,information on medical technology over the past

few years. ECRI (originally the Emergency Care

Research Institute), long involved in performance

testing of medical devices, has become increasingly active in assessing the risks and benefits of

the entire range of health care technology. Its major clients are payers and hospitals, which identify

the assessment topics. ECRI also has been creating large databases of existing assessments and

has collaborated with the National Library of

Medicine to increase the completeness and accessibility of the technology evaluations in its electronic database.

A group of over 60 academic hospitals created

the University Hospital Consortium in 1989. It reviews specific technologies and coordinates small

primary-data collection studies among the member institutions. The information is used in

technology purchasing decisions, to help hospitals guide clinical protocols, and to select drugs

for their formularies. UHC also produces reports

on policy issues relevant to UHC hospitals, such

as an analysis of pharmaceutical company reimbursement assistance programs, and an assessment of the impact of automation on pharmacy

departments.

 Summary of Recent Trends

in Assessment

Several important trends in the evaluation of

health care technology have emerged since 1982,

when a previous international comparison of medical technology management was published (10).

Most obvious is the continued rise in health care

spending in the United States, which has increased the motivation to develop techniques for

using existing resources with greater efficiency.

Methods that analyze the benefits of technology in

relation to costs, such as cost-effectiveness analysis, are of particular interest. Research over the

past decade also has continued to highlight the

poor state of evidence in health care practice, reflected in high variability in practice styles and

high levels of marginally beneficial care. Finally,

advances in computer technology have allowed

the routine collection of administrative and clinical information as well as the inexpensive proc-
Chapter 9 Health Care Technology in the United States 1303

essing of this information. resulting in the

emergence of new evaluations methods.

The pressure to improve cost-effectiveness and

bring these analyses to bear in decisionmaking has

grown in proportion to the fraction of GNP devoted to health care. Much of the increased attention to these methods is found in the academic

community and also among the drug and device

manufacturers. Explicit use of cost-effectiveness

criteria for allocating health care resources has

been more problematic, primarily because there is

no widely accepted cut-off for a level of cost-effectiveness that demands or excludes coverage.

The concept of cost-effectiveness is, from a political perspective, difficult to separate from health

care rationing, which is roundly rejected by most

of the U.S. public. This probably explains the lack

of progress of a Medicare regulation proposed in

1989 that would have allowed the use of cost-effectiveness as a criterion for coverage under Medicare. The recently approved Oregon Medicaid

proposal, which generated a list of services ordered partially by consideration of cost-effectiveness. provided a forum in which the difficulty of

trading off costs and benefits in public policy

could be observed. s

The U.S. health care system features numerous

independent mechanisms by which the application of medical technology and total spending

within the system are controlled. There is, however. little effective budget setting at any level, and

when cost overruns occur in one segment of the

system, they often are made up by shifting of resources from other sectors. As an example, the

cost of care for patients with no insurance is partially offset by inflated charges billed for services

provided to patients with good coverage. Effective cost constraints on in-patient care, such as that

produced by the DRG program of Medicare, is

offset by increased use of out-patient services and

possibly by increased billing to payers who reimburse in-patient care on a fee-for-services basis

(11 6). Overall, the system continues to expand to

accommodate an increasing national appetite for

technology and services. In such an environment

the analytical tools provided by technology assessment, designed to facilitate efficient use of resources by making optimal tradeoffs in use of

services, plays a more limited role than in

constrained systems.

 Databases and the Focus

on Effectiveness

Developments in microcomputer technology

have been one factor in changing the methods

used in technology assessment. Because large

amounts of electronic data now can be collected

and manipulated, there has been increased emphasis on using existing data, often in the form of insurance claims databases, to evaluate health care

technologies (98). Data gathered from events occurring in a wide range of practice settings have

become viewed as a tool for looking at effectiveness—average outcomes achieved by average

doctors and patients. The usefulness of this type

of data for addressing questions of effectiveness is

currently being explored. To date the primary utility of such data has been in tracking patterns of

care by location and population group and over

time. and also for generating hypotheses that

would need to be explored in controlled trials.

Moreover, payers and purchasers of health care

services make use of these utilization data as a

means of managing the quantity and cost of health

care services. Among some policy makers and researchers, such appellation have created the impression that the effectiveness of services, rather

than simply their pattern of utilization, is being

measured.

While methodologists deal with these issues on

a seemingly arcane and theoretical level, policymakers and the public are confronted with the

downstream implications of these issues. which
304 I Health Care Technology and Its Assessment in Eight Countries

are central to discussions of comprehensive health be an important determinant of how rationally

care reform. The development and use of informa- medical technology is managed in the United

(ion on the performance of technology promises to States.

TREATMENTS FOR CORONARY

ARTERY DISEASE

Before the mid-1960s, a number of procedures

had been tried in the United States and around the

world to improve collateral circulation around

diseased coronary arteries. The only procedure

that offered some hope of benefit was the known

as the Vineberg procedure, which involved implanting the internal mammary artery directly into

the heart muscle to enhance the flow of oxygenated blood to the diseased heart. Unfortunately the

amount of blood flow through the artery was

small, and more than half the patients undergoing

the operation died. As these procedures were being abandoned, coronary artery bypass grafting

(CABG) was being developed at three centers in

the United States (the Cleveland Clinic, the University of Wisconsin, and New York University).

By 1969, the operative mortality for CABG was

reported to be about 12 percent, and many patients

were free from angina following the operation

(42).

Since the early 1970s, the number of CABGS

has risen rapidly, without any apparent constraints

from government policy or regulation and without

a body of clinical trials to guide practice. By 1971,

432 U.S. institutions had facilities for open heart

surgery (96) and an estimated 24,000 bypass procedures had been performed (16). At that time, no

randomized studies of the procedure had even begun, and in most other countries procedures were

done only on an experimental basis. By 1979

about 100,000 CABG procedures were performed

annually in the United States (16) and this number

had more than tripled to an estimated 309,000 operations per year by 1992 (see table 9-5) (163).

PTCA also surged into popular use after its

U.S. introduction in 1978. Until the VA published

its trial of PTCA versus medical treatment for patients with stable single-vessel disease in 1992,

there was no evidence from randomized trials

demonstrating a benefit from the procedure. Two

randomized trials comparing PTCA with CABG

are expected to report in the mid- 1990s. This scarcity of evidence is particularly striking when considering that 26,000 of these procedures were

already being done annually by 1983 (31). In

1992, the same year the first randomized study of

PTCA versus medical therapy was available,

approximately 360,000 patients PTCAS were performed (table 9-5) (163).

The expectation that PTCA would supplant

CABG for certain classes of patient (particularly

those with single-vessel disease) and therefore

lead to a decline, or at least a leveling off, in the

number of CABGS has not been realized. Both

procedures have continued to diffuse and increase

in number every year as the patient population

considered eligible for them expands to include

older, sicker patients.

Overall use of CABG and PTCA in the United

States was quite high by the early 1990s, but their

use was not uniform across population groups:

rates of use were significantly higher in white patients and among patients with private insurance.

Furthermore, CABG rates vary as much as threefold in different geographic regions. The explanation for these disparities has not been clearly
Chapter 9 Health Care Technology in the United States 1305

Year

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

CABG

(thousands)

112

136

158

169

186

188

201

227

243

253

260

262

265

209

PTCA

(thousands)

—

—

60

152

208

239

260

298

360

SOURCE U S Department of Health and Human Services, Public

Health Service, Centers for Disease Control and Prevention, National

Center for Health Statistics, unpublished 1979-1992 data from the

National Hospital Discharge Survey provided by E. Wood, Hospital

Care Statistics Branch, Hyattsville, MD, 1994

determined, but they suggest that supply of these

procedures in the United States is based at least

partly on non-clinical factors.

 Evaluation

In the case of CABG, clinical trials began well after diffusion of the procedure was well under way

in the United States. The National Heart, Lung,

and Blood Institute (NHLBI) initiated the Coronary Artery Surgery Study (CASS) in 1973,

which compared CABG to medical treatment in a

randomized trial and also opened a registry to

gather data on CABG patients. The trial randomized fewer than 800 patients, reflecting a reluctance to enter patients into randomized trials, even

when the value of the procedure was not yet clear.

Many more patients were entered into the registry,

which was a good source of information on complication rates, but could not be used to compare

the efficacy of CABG with medical treatment. In

the meantime, the Veterans Administration conducted a randomized trial of CABG versus medical treatment in about 700 people from 1972 to

1974. It is noteworthy that all three randomized

trials of CABG involved a source of graft material

that it now used only rarely. The new source (the

internal thoracic artery) is almost certainly

associated with better surgical results than the older technique, and this may have led to variable

opinions among experts concerning tradeoffs of

medical and surgical therapy (68).

As is increasingly common in the United

States, various public and private entities have issued guidelines and recommendations for the use

of CABG and PTCA. Unlike the case for some

other technologies, the guidance of these groups is

remarkably consistent in their assessments of

whether the technology is appropriate in a given

clinical situation. In many cases, the groups are in

agreement that not enough evidence exists to provide clear guidelines (see chapter 1 for a summary

of indications). The relatively small information

base may be, in part, responsible for the level of

agreement.

The NIH consensus program has not been active in recent assessments of CABG and PTCA. A

consensus conference was held on CABG in 1980,

but not since then, and PTCA has never been the

subject of an NIH consensus conference. OHTA

has never reviewed CABG, but they have done

two assessments of PTCA. In 1982, they concluded that there was inadequate information to

determine long term safety and clinical effectiveness (135). Upon re-evaluation in 1985, data from

an NHLBI patient registry was used as a basis for

concluding that PTCA was a “reasonable alternative” to CABG in selected patients with singlevessel disease (136). The report notes, however,

that “in the absence of trials identifying the differences in outcome between PTCA and CABG, or

between PTCA and medical therapy, physicians

must base their therapeutic decisions on current

reported results and sound clinical judgment.”

Approval of Medicare coverage despite this inadequate evidence basis ensured that rapid dissemination would occur prior to any further

guidance from these needed trials.
306 I Health Care Technology and Its Assessment in Eight Countries

The American College of Cardiology (ACC),

in collaboration with the American Heart

Association, has issued guidelines for both

CABG (4) and PTCA (5), which have been updated over the years, most recently in 1994.

AHCPR issued guidelines for Diagnosing and

Managing Unstable Angina in 1994, including indications for PTCA and CABG. A private sector

assessment effort that has had remarkable visibility, if not measurable impact, is the RAND rating

of “appropriateness and necessity,” which has

been applied to both CABG (68) and PTCA (47).

In this process, an extensive literature on each

technology was reviewed and the efficacy of the

technology under scrutiny in each of a wide range

of very specific indications was assessed using a

form of Delphi technique (i.e., expert opinion)

(see below for more detail).

Using the RAND method, each possible indication for revascularization was rated on a scale

from 1 (inappropriate) to 9 (clearly necessary).

For the 230 indications considered for CABG,

144 (63 percent) were considered necessary (a median score of 7 to 9 without disagreement among

the raters); 84(37 percent) were considered uncertain (either a median rating of 4 to 6 or of 7 to 9

with disagreement); and 2 ( 1 percent) were considered unnecessary. For PTCA, 158 indications

were rated, with 36 (23 percent) rated as necessary, 120 (76 percent) rated as uncertain, and 2 (1

percent) not necessary.

The RAND researchers used their indications

ratings to evaluate the actual use of CABG (69)

and PTCA (48) in New York State. For CABG,

they sampled about 1,300 procedures in 1990 and

sorted them into categories based on the indications ratings. A small fraction (about 2 percent)

were considered “inappropriate,” about 90 percent were considered “appropriate” (most were

“appropriate and crucial”), and about 7 percent

were considered “uncertain.” The results for about

1,300 PTCAS in 1990 were: 4 percent “inappropriate,” 35 percent “crucial,” 23 percent “appropriate,” and 38 percent “uncertain.”

While it might be comforting to see such a low

rate of clearly inappropriate use of these procedures, the number of procedures for which experts

believe the benefits are uncertain is sobering. That

38 percent of PTCAS were of uncertain value reflects directly the lack of information from randomized trials testing the efficacy of the

procedure, and the cost of poor evaluation early on

in the diffusion of a technology. It is also worth

noting that these appropriateness categories vary

when generated by different expert panels. Using

RAND methodologies, a panel of British physicians rated twice as many procedures “inappropriate” as did a U.S. panel rating the same clinical

cases (12).

 Costs and Payment

PTCA is clearly less expensive than CABG on a

per-procedure basis, largely because hospital

stays are less than half as long for PTCA (4 or 5

days versus 12 or 13 days for CABG). Total costs

(in 1989 dollars) were $10,000 to $13,000 for the

initial hospitalization for PTCA and $20,000 to

$32,000 for CABG (68). But because of the high

failure rate of PTCA and the need for subsequent

angioplasty or CABG, the costs of adequately

treating patients with an initial PTCA or CABG

look somewhat different. RAND reports that, using data from the Framingham Heart Study and

expert judgment, they estimated five-year costs at

about $33,000 for PTCA and $40,000 for CABG

patients. Potential cost savings in the treatment of

coronary artery disease by the use of PTCA in

place of CABG have not been realized because of

the combination of relatively high long-term costs

for PTCA (relative to the cost of the initial procedure) and the expansion of the eligible patient

population.

In the prospective payment system, PTCA was

treated as a cost-increasing quality improving

technology, and was factored into the adjustments

made to hospital DRG payments. One of the effects of Medicare paying hospitals on a per-admission basis is the phenomenon of “unbundling

services,” meaning that visits and tests related to a

procedure may be performed on an outpatient (or

separate admission) basis, so that those charges

can be billed separately rather than taken out of the

DRG payment. Recently, Medicare has experim-
Chapter 9 Health Care Technology in the United States 1307

ented with paying providers a lump sum for all

services related to a CABG, including preoperative visits, hospitalization, and post-operative

follow-up (the package is called an “episode-ofcare”). This may further encourage physicians to

use resources efficiently, though no data are yet

available to suggest that this impact has actually

occurred.

 Regulatory Policies

Neither CABG nor PTCA faced significant federal regulatory barriers to diffusion. There have not

as yet been credentialing requirements for performing these procedures (although various committees and associations have developed

guidelines for institutions to use in developing

their own credentialing and quality of care monitoring policies for PTCA) (3). The various devices

involved in CABG and PTCA all have counterparts from before 1976 to which current equipment have been considered substantially

equivalent, so their approval was grandfathered in

accordance with the current regulation of medical

devices. Thus, even balloon catheters used in

PTCA were approved through the 5 IO(k) process

(see main chapter), and only limited clinical data

were required to support their approval.

State regulatory polices have in some cases influenced utilization of interventions for coronary

disease. The National Health Planning and Resources Development Act of 1974 established a

regulatory role for states over hospital acquisition

of cardiac surgery units through certificate of need

(CON) programs. Some states, such as California,

had very permissive CON programs, while others

established rigorous limits within their states, and

in some cases, such as New York, combined the

CON program with payment rate regulation. In

addition to a direct impact on cardiac surgery

units, CON regulation also influenced the diffusion of PTCA, since facilities must be capable

of providing an emergency bypass during angioplasty.

In support of their cardiac surgery CON program, New York maintains a cardiac surgery advi -

sory board to advise on how many cardiac surgical

facilities are needed and on the minimum numbers

of surgeries that should be done each year to keep a

center running. In part due to this limited number

of surgery centers, the per-capita supply of cardiac

surgeons in New York is about one-half the national average. The board also has advised on the

appropriate clinical circumstances for cardiac surgery, and in 1990 funded the RAND Corp. to produce “appropriateness” guidelines to help

establish new standards. As described above,

these studies of cardiac surgery in New York

found rates of inappropriate use to be considerably

lower than they have found elsewhere (69). It is

impossible to determine which element of New

York’s approach is most responsible for what appears to be more rational use of cardiac surgery,

and therefore difficult to know whether these results are achievable in other states. During the

1980s, the Health Commissioner of New York enjoyed the strong support of the Governor, and

therefore was able to enforce regulatory policy

with unusual latitude. Such political strength may

be a prerequisite for effective health care regulation.

MEDICAL IMAGING (CT AND MRI)

 Computed Tomography (CT)

The first CT scanner in the United States was

installed at the Mayo Clinic in 1973. By 1975,20

companies were developing or had developed CT

scanners; by 1977,921 units were in operation. Of

these, 60 percent were head scanners and 40 percent were body scanners. Every state had at least

one operational scanner installed or approved by

the end of 1977(121). Early adoption was primarily by non-profit community hospitals affiliated

with a medical school. By 1980 the number of

units was estimated at 1,471 (6.5 per million population) (123), and in 1992 the reported number of

operational CT scanners was 6,060 (24.3 per million) (1 14). For purposes of comparison. there

were 216 CT units operating in Canada in 1993

(see Canada chapter).
308 I Health Care Technology and Its Assessment in Eight Countries

Evaluation

Early diffusion was not guided by established evidence of safety and efficacy. By 1975 about a dozen clinical studies of CT scanning of the head had

been published, and over 100 units had already

been installed. Even though the evidence for many

applications of CT was quite limited, the relative

advantage of CT scanning over existing technology was considered apparent by many clinicians,

especially given the risks associated with alternative diagnostic procedures (e.g., pneumoencephalography, cerebral arteriography). Studies

completed by 1977, primarily based on accumu-

 lated clinical experience as opposed to clinical

trials, did confirm a high accuracy rate in detection of abnormalities and limited apparent safety

problems (122). More information was available

for head CT studies than for body scans.

Although CT did detect abnormalities, little information was available on the extent to which

therapy was influenced or patient outcomes affected. Criteria for selecting patients likely to

benefit from the test were not available. In some

institutions, up to 90 percent of scans performed

were negative.

Diffusion Factors

Approval by the FDA was not required for CT

scanners, as they were introduced prior to the

1976 Medical Device Amendments. No evidence

of safety or efficacy was required by this agency

prior to marketing. During early adoption of CT,

most states had not yet acted on federal laws directing them to establish certificate-of-need

(CON) programs (49). Later, as these programs

did come into existence, the more stringent programs did appear to slow the rate of diffusion of

CT scanners. In states with stringent programs,

which included CON programs combined with

setting of reimbursement rates for the procedure,

the rate of diffusion was halved compared to that

of states with no functional program (14).

Professional standards review organizations

(PSROS) were associated with a modest increase

in the 1ikelihood of adoption of CT, a phenomenon

(observed with other technologies) that may be

due to the fact that PSRO physicians respond to

the same incentives as those using the devices.

Also, PSRO panels had little objective information on efficacy upon which to base an assessment

of need for the technology. Health planning laws

did not require PSROS to consider the extent to

which existing equipment was being used at capacity (121 ).

At the time of the introduction and early diffusion of CT, hospitals were still reimbursing based

on costs (prior to the prospective payment system). This mechanism of payment resulted in high

profitability of CT scanners.

 Magnetic Resonance Imaging (MRI)

The diffusion of MRI has unique elements as well

as features common to a number of important

technologies. Some of the distinctive features of

MRI are the high cost of acquiring and operating

the technology; dramatic changes in regulation,

financing, and tax policy that coincided with its

introduction; and its technical complexity. Added

to this is the concrete appeal of the new technology, which presented images of the brain and internal organs that, for the first time, offered a level of

detail of internal anatomy that resembled actual

photographs of living tissue rather than black,

white, and gray shadows.

Development and Early Diffusion

MRI was introduced in 1978, with the first two

scanners installed in Great Britain in that year

(109). The first U.S. scanner was installed in a private office in Cleveland, Ohio, in 1980. By the end

of 1984, between 108 to 150 MRI scanners had

been installed in the United States (109). Large

hospitals and academic medical centers were the

major early adopters of MRI (101 ).

Because no federal or state government agency

keeps track of the total number of MRI units in the

United States, the best available data have been

collected through surveys of individual manufacturers and facilities. One survey reports that the

number of scanners rose to 1,230 (5.04 units per

million population) by 1988; however, methodologic limitations of the study suggest that this esti-
Chapter 9 Health Care Technology in the United States 1309

mate is conservative (115). Estimates for the

number of MRI units in operation in the United

States in 1992 are between 2,800 and 3,000

(36,1 14). This translates to about 11.5 per million

population nationwide.

Distribution of U.S. scanners is very uneven.

Maryland, which does keep track of operational

units, has 52 MRI scanners, 11 of which are in Baltimore (16 per million) (36). It has been reported

that there are 25 operational MRI scanners within

a single mile in Los Angeles, California.

A number of comparisons have been made between the diffusion of CT scanners in the United

States in the mid- 1970s and the diffusion of MRI

in the early 1980s. The pattern of early MRI diffusion was clearly slower than that for CT, but many

differences between the two situations have been

noted; any or all might explain the variance in diffusion. Among these differences are the relative

advantage each technology represented over previous technologies, the adoption of prospective

hospital payment by Medicare, the beginning of

device approval by the FDA, active health planning programs in some states, and increasing costconsciousness and competition for patients in

health care generally (49, 109).

Evaluation

A consensus conference conducted by the National Institutes of Health in October 1987 qualified

its list of clinical indications for MRI by noting

that “judgments about the role of MRI relative to

other imaging modalities are based on less rigorously designed studies than are desirable” (147).

(The conferees, half of whom were radiologists,

went on to characterize MRI as a “superb method

of studying brain tumors” and “particularly valuable as a technique for imaging the heart and great

vessels”; they also listed numerous other promising clinical applications (147).)

These assessments of the quality of studies supporting the use of MRI were reaffirmed in a systematic review published in 1994, that noted that

less than 30 studies out of more than 5,000 citations on the use of MRI in neuroimaging were prospective comparisons of diagnostic accuracy or

therapeutic choice (65). In a position statement on

uses of MRI, the evidence for 13 out of 17 clinical

applications was rated as “weak” by the American

College of Physicians (6). Weak evidence was defined as the absence of any studies on therapeutic

impact or patient outcomes.

Diffusion Factors

MRI was the first device to be evaluated as a class

III device by the FDA under the 1976 Medical Device Amendments. Under the new law, it was necessary to supply evidence of safety and efficacy in

order to obtain FDA approval and permission to

market this product. Despite these new requirements, it does not appear that the FDA represented

a barrier to acquisition of the new device (49). Under the exemption allowing device manufacturers

to charge for investigational devices, 43 scanners

were placed in service in the United States by

1983 (21 from a single manufacturer) (108). Technical refinements of these early prototype systems

were still under way at that time. Five manufacturers had obtained full pre-market approvals by

1985 (109).

Providers considering acquisition of MRI

viewed FDA approval as inevitable; therefore,

lack of FDA approval was not considered a disincentive to acquisition (50). The safety of the device was not seriously questioned, and it was

obvious that the device produced cross-sectional

images with excellent resolution. so MRI clearly

could provide diagnostic information. Neither

FDA nor physicians planning to use the device required rigorous studies that demonstrated improved clinical outcomes, cost-effectiveness, or

superiority of MRI compared to diagnostic alternatives.

In 1983 OHTA was asked to review MRI

technology and provide recommendations to

HCFA on coverage policy. It has been suggested

that the delay by HCFA in making any coverage

decision nullified its ability to exert any influence

on diffusion, as public and professional pressure

for access grew. At that time only a few studies

with small numbers of patients reported on experience with MRI, and a review of this literature by

Blue Cross/Blue Shield determined that the benefits of MRI were unproven. By the end of 1985,
310 I Health Care Technology and Its Assessment in Eight Countries

however, public and professional pressure had led

to coverage by dozens of private carriers, including many local BC/BS plans.

In November 1985 HCFA decided, based on

the OHTA analysis, to reimburse for MRI scanning, with professional fees based on those in

place for CT. Recommended clinical indications

were broad enough to encompass most potential

uses of the technology and were not seen as a deterrent to any proposed clinical application.

HCFA approval meant not only that MRI would

be paid for on an out-patient basis but also that part

of the capital costs for hospital MRI scanners

would be paid for and that MRI costs would be

factored into a recalibration of HCFA’S prospective payments to hospitals payments when they

were updated. Finally, the approval placed a

strong pressure on private payers to provide coverage for MRI.

Although many MRI scanners were obtained

before HCFA or other third-party payers had decided to cover the new technology, many hospitals

and physicians deemed it inevitable that payment

would be allowed. Insurers were rarely able to

deny coverage for a major new technology when

use of the device was spreading and both professional entities and the public were promoting its

use.

The prospective payment system of the Medicare program has recently begun a transition to incorporate capital costs for hospitals into DRG

payments. This mechanism, which no longer allows hospitals to simply pass along capital costs

to the Medicare program. will force hospitals to

weigh more carefully the value of purchases such

as MRI against other possible uses of capital funds

(1 lo).

Regulatory and Financing Issues

in MRI Diffusion

CON laws were passed in each state in response

to enactment of the National Health Planning and

Resources Development Act of 1974. This national legislation made funding for a number of

public health programs contingent upon a state’s

having enacted CON legislation. The federal law

required state review of capital expenditures exceeding $150,000, but the procedures and criteria

for approval of projects were left to state discretion. Also, federal support for health planning was

discontinued beginning in 1981, and states varied

considerably in the degree to which planning activities were continued (49). As a result, the extent

to which CON requirements posed a barrier to

technology acquisition depended heavily on what

type of planning existed in each state. This may

account for some of the difference of opinion as to

whether CON programs influenced the rate of diffusion of MRI.

Several studies of the relationship between

CON and MRI acquisition support the notion that

state CON laws, when they were rigorously applied and particularly when they were coordinated

with rate-setting activities, did reduce the number

of MRI scanners in hospitals. For example, Massachusetts used CON rulings and rate setting to set

the initial number of MRI scanners in the state at

eight. Several other states frequently delayed or

denied requests for MRI installation (51). In contrast, California adopted minimally intrusive

CON procedures resulting in 25 MRI scanners

planned or operating in Los Angeles by 1985 (50).

Some states felt unable to conduct rational

CON procedures because of an inability to objectively define a “needed” level of MRI capacity.

Planning required establishment of some rational

criteria on which to base approval or denial of capital requests. Because of limited data on the clinical performance of MRI, objective evidence was

inadequate as a basis for guiding these planning

committee deliberations, substantially reducing

the effectiveness of CON review.

Because most planning laws did not apply to

out-patient facilities, states with effective CON

programs may not have been able to control the total number of new MRI scanners. The CON regulations were one of the factors that may have

encouraged out-patient location of MRI facilities

(109).

State planning continues to be an important influence on MRI diffusion. Maryland discontinued

its planning in 1985 and now has a higher per-capita supply of MRI (as well as CT) devices and a

high concentration of units around Baltimore. Vir-
Chapter 9 Health Care Technology in the United States 1311

ginia discontinued its planning in 1989 and, in

three years, saw the number of scanners in the

state rise from 28 to 58 (36).

Diffusion of MRI was strongly influenced by

the policies that provided financial incentives for

entrepreneurial interests. Unlike other expensive

medical technology, MRI units were frequently

purchased by nonmedical investors and institutional joint ventures and located off hospital

grounds. Also atypically, mobile MRI units were

fairly common. These patterns of investment and

siting have been linked with the high financial risk

associated with MRI investments because of the

high cost and complex technical issues as well as

the unpredictability of regulatory influences

(101 ). MRI magnets often required special building features that necessitated new construction

(which opened the opportunity to consider nonhospital siting). (Because MRI cannot be used on

critically ill patients, it is not necessary to site

units near be close to an acute care hospital s.) Outpatient use of MRI was also encouraged by the

fact that state planning programs applied only to

hospitals, so no state approval was required. Finally, the prospective payment system does not

provide a cost-based reimbursement for MRI

scans performed on hospitalized patients, but the

full fee could still be charged for out-patient scans.

Decision to acquire MRI made by hospitals and

investors were complex and influenced by the uncertainties of the newly installed prospective payment system, elimination of many state health

planning programs, rapid modification and obsolescence of MRI technology, and high demand

from physicians and patients. Because of limited

information on the potential clinical applications

of the technology, it was difficult to predict the

volume of scans that would be likely. Academic

medical centers acquired the devices, even though

it was unclear how the DRG system would handle

the capital costs or imaging fees, because they felt

that acquisition was necessary to fulfill their research and teaching mission and to maintain their

prestige.

Diffusion may also have been stimulated in the

mid- 1980s by competition, as some hospitals may

have viewed MRI as a technology that would

symbolize the sophisticated care available and

thus attract patients for other services (11 O). Furthermore, many physicians prefer to practice in

state-of-the-art facilities, and for hospitals, patient

volume depends on recruitment of physicians. Finally, MRI almost certainly was the object of competition among medical specialists (e.g.,

radiologists, neurologists, orthopedists) to become leading providers of the service, stimulating

additional purchase independent of actual clinical

demand for the service (50).

It is evident that hospitals, physician-entrepreneurs, and medical device manufacturers have approached MRI and CT as commodities with

high-profit potential, and decisionmaking on the

acquisition and use of these procedures has been

highly influenced by this approach. In this context

clinical evaluation, appropriate patient selection,

and matching supply to legitimate demand might

be viewed as secondary forces. As the U.S. health

care system becomes more dominated by issues of

cost containment and managed care, there will be

less profit potential in these and similar technologies, and the role of clinical evaluation may become relatively more important.

LAPAROSCOPIC SURGERY

Laparoscopic cholecystectomy was introduced to

an enthusiastic U.S. audience at a professional

surgical society meeting in late 1989. Following

this introduction, the adoption of laparoscopic

cholecystectomy was extraordinarily swift. Within 18 months of its introduction, about half of the

general surgeons practicing in the United States

(about 15,000 surgeons) had learned to remove

the gallbladder laparascopically (161). By 1992

an estimated 80 percent had begun using the procedure (29). A survey in Pennsylvania revealed

that Iaparoscopic cholecystectomy was being performed in virtually all responding hospitals by

1992. In these hospitals the fraction of cholecystectomies performed laparoscopically increased

from 6.1 percent in 1990 to 71.6 percent in 1992

(33). It has been estimated that in 1993. five years

after the first known procedure was per-formed in

France, about 85 percent of all cholecstectomies
312 I Health Care Technology and Its Assessment in Eight Countries

in the United States were performed laparoscopically (105).

The adoption of laparoscopic cholecystectomy

appears to have been associated with an increase

of about 30 percent in the rate at which cholecystectomies are being performed. The total number

of cholecystectomies (open plus laparoscopic) increased by 34.3 percent between 1990 and 1992 in

Pennsylvania (33). Similar findings were noted in

a large population in a Pennsylvania health maintenance organization that saw its total cholecystectomy rate rise from 1.35 per 1,000 enrollees in

1988 to 2.15 enrollees per 1,000 in 1992; rates of

the procedure had remained stable from 1985 to

1989 (70). A cholecystectomy patient registry

from Connecticut and hospital discharge data

from Maryland demonstrate similar trends in the

use of total cholecystectomy procedures since the

introduction of the laparoscopic technique (a 29

percent increase in the rate of procedures in Connecticut (85); a 28 percent increase in the rate in

procedures in Maryland (11 l)). The rate appears

to have reached a plateau in 1992, suggesting that

the increase in use represents a change in selection

criteria for the procedure (11 1).

An estimated 20 million people in the United

States have gallstones, and of these, about

600,000 underwent cholecystectomy in 1991. (It

is the second most common surgical procedure in

the United States, after cesarean section) (148).

Assuming that 75 percent of these procedures

were performed laparoscopically (a middle estimate), about 450,000 laparoscopic cholecystectomies would have been undertaken in 1991.

No study has yet been performed in the United

States to determine which new patient group accounts for the increase in cholecystectomy rates.

There is evidence that patients undergoing the laparoscopic procedure are younger, have fewer comorbid conditions, and are less likely to have

acute cholecystitis than patients having open procedures (70, 11 1). These data are compatible with

the hypothesis that gallbladders are now being removed from less symptomatic patients than was

the case before the laparoscopic procedure became available.

The apparent increase in the total volume of

cholecystectomy procedures performed may have

offset some of the potential benefits of the less invasive new procedure. With this increased volume, one large HMO saw the total costs

associated with cholecystectomy increase 11.4

percent between 1988 and 1992 despite a 25.1 percent drop in the average per-procedure cost (70).

Furthermore, another study showed that the

mortality rate for cholecystectomy remained

stable between 1990 and 1993, possibly because

the lower death rate associated with the laparoscopic procedure was offset by the increased number of patients put at risk by undergoing a

cholecystectomy (1 11).

 Evaluation and Assessment

The adoption of laparoscopic cholecystectomy

outpaced efforts to conduct randomized trials

comparing the new technology to open cholecystectomy. This led some observers to argue that

such trials are now unrealistic. European trials

gathered patients slowly because of patient and

physician reluctance to forego the new technique.

The completed, small random controlled trials

that have compared the laparoscopic procedure to

open cholecystectomy have documented a shorter

hospital stay and more rapid return to usual activities (11,1 17). Similar findings have been provided

by nonrandomized studies involving several thousand patients (106). These studies also have found

that laparoscopic cholecystectomy is associated

with reduced in-patient duration; fewer co-morbidities from prolonged immobilization (e.g., pulmonary embolism, pneumonia, stroke); decreased

post-operative pain; and a shorter period of restricted activity.

All studies have also noted an increased rates of

bile duct and major vessel injuries associated with

laparoscopic cholecystectomy. The rate of these

complications has been observed to be inversely

correlated with the number of laparoscopic procedures previously performed by the operator ( 148).

OHTA reviewed laparoscopic cholecystectomy to assist Medicare in determining coverage in
Chapter 9 Health Care Technology in the United States 1313

1991 (52). The OHTA report collated all available

reported cases of laparoscopic cholecystectomy to

determine complication rates, which compared

favorably to complication rates reported for open

cholecystectomy. Noting that no randomized

study comparing open to laparoscopic cholecystectomy had yet been published, the OHTA analysis concluded that “there are sufficient published

data to permit the conclusion that laparoscopic

cholecystectomy can be accomplished with a risld

benefit ratio similar or superior to that of the open

procedure.” The analysis was also noted that the

risldbenefit ratio would be affected by the training

and experience of surgeons; reports were cited regarding an inverse relationship between complication rate and experience (52). OHTA

declined to do a full assessment, arguing that because the effectiveness of surgical removal of the

gallbladder in individuals with cholecystitis and

cholelithiasis was well established, accomplishing this with different instruments through a

smaller incision was clearly effective therapy as

well (53). The Medicare program followed the

OHTA recommendation and began payment for

the procedure in 1992.

Because data from clinical trials are limited, the

safety and effectiveness of laparoscopic cholecystectomy for particular clinical situations is limited. There is some evidence that suggests that

common bile duct injuries and length of hospital

stay increase with laparoscopic cholecystectomy

for acute cholecystitis (52), raising questions

about the most appropriate choice of therapy in

this situation. Additional clinical data from prospective trials comparing open and laparoscopic

cholecystectomy for patients with acute cholecystitis might help clarify this issue; however, none

are under way.

 Diffusion Factors

The rapid adoption of laparoscopic cholecystectomy might be explained by the absence of any significant restraining forces and by various potent

forces that promoted adoption of the new procedure. There were no major hurdles to adoption, as

no major capital investment was required and no

significant regulatory barriers were encountered.

Patient demand, fueled by substantial media

attention on this new technology, was a major

force in promoting rapid adoption. Because of the

apparent reduced discomfort and disability

associated with the procedure, patient preference

for the new technique was very strong. Device

manufacturers played an important role in using

the media to further stimulate patient interest and

demand. Payers saw the potential for reduced cost

from shorter hospital stays, and hospitals saw the

potential for higher profits for the cholecystectomy DRG (until adjustments were made for the

new procedure). In addition, this new state-of-theart technique was attractive to surgeons, and this

was reinforced by the belief that failure to learn the

procedure might result in substantial losses in patient volume.

A prominent feature in the diffusion of iilaparoscopic cholecystectomy was the critical role of the

medical device industry in promoting adoption of

the technology. The video demonstration

introducing the procedure in 1989 was produced

and shown by the major manufacturer of laparoscopic equipment. This company and others continued aggressive promotion to surgeons as well

as to the public through the lay press ( 162). A substantial percentage of surgeons who learned the

procedure early in the dissemination process were

trained at workshops conducted by the manufacturers, some of which involved two days or less of

instruction and practical experience using pigs.

There are reports of surgeons who performed unsupervised cholecystectomy following this type

of training.

In a national survey, common reasons cited by

surgeons for adopting the new procedure included

a desire to keep up with the state of the art, preference of patients for the procedure, the likelihood

of improved patient outcomes, and a desire to

maintain their referral bases. Among the minority

of surgeons who did not adopt the procedure. the

chief reason was concerns about its safety. interestingly, the physician characteristic most strong-
314 I Health Care Technology and Its Assessment in Eight Countries

ly predictive of likelihood of adoption was receipt

of payment by fee for service, although this may

reflect the nature of the patient population rather

than the influence of economic incentives (29).

Coverage determination by insurers did not appear to be a factor in diffusion of laparoscopiccholecystectomy, as open surgery was already

covered and many providers simply used the same

procedure codes for each procedure. A unique

procedure code was established in 1991, allowing

better data collection concerning the procedure

but with no importance in terms of reimbursement.

Beginning in October 1993, Medicare established a separate DRG category for laparoscopic

cholecystectomy that pays about 25 percent less

than the DRG for the open procedure. The adjustment was made to account for the lower costs

associated with the new procedure, primarily

associated with decreased length of stay (27). This

removes a financial bonus to hospitals.

 Other Laparoscopic Procedures

Laparoscopic approaches to removal of the appendix, exploration of the common bile duct, repair

of inguinal hernias, resection of the colon, and

surgical removal of the uterus are all increasingly

common in the United States. In addition to these,

many other diagnostic and therapeutic uses are under development. None of these clinical indications have generated as much enthusiasm as

gallbladder removal. Small studies suggest that

Iaparoscopic appendectomy offers little benefit

over the open procedure, in part because the existing operation is technically simple and involves a

small incision. In the case of herniomhaphy, the laparoscopic procedure is used increasingly despite

the possibility that it is less effective (early series

showed recurrence rates of over 15 percent following the laparoscopic approach), less safe (laparoscopic hernia procedure requires general

anesthesia instead of a local anesthetic), and more

expensive than the traditional hernia repair (105).

 Regulatory Policies

Because laparoscopic devices had been in use

prior to the 1976 amendments, the equipment

used in Iaparoscopic cholecystectomy was eligible for FDA approval based on an abbreviated application. Achieving the designation of

“substantial equivalence” as defined in section

5 IO(k) of the amendments, there was no requirement for additional data to obtain approval. No

clinical data were necessary to obtain FDA clearance for the laparoscopic equipment used in cholecystectomy.

Most state health departments did not become

involved in regulating laparoscopic cholecystectomy. In New York, the health department of

Health became concerned with laparoscopic cholecystectomy as a result of data suggesting increased complications from the procedure.

particularly bile duct injuries and major blood

vessel punctures. Several of the major injuries

were found to be associated with procedures performed by surgeons less experienced in the technique who had had training only at a weekend

seminar. After having identified 192 complicated

laparoscopic cholecystectomies between August

1990 and June 1992, the state’s health department

issued an advisory memorandum to all state hospitals recommending specific credentialing criteria and quality assurance protocols (83). Although

the procedures outlined were not mandatory, the

health department continues to monitor developments in this area and has the authority to issue

regulations requiring more specific actions on the

part of hospitals. The state is considering developing a state registry for Iaparoscopic procedures to

further monitor laparoscopic cholecystectomy

and some of the newer laparoscopic applications.

In its consensus statement NIH recommended

the development of strict guidelines for training

laparoscopic surgeons, determining levels of

competence, and monitoring clinical results. Professional societies have come forward to issue
Chapter 9 Health Care Technology in the United States 1315

their own recommended guidelines on training

and credentialing (104).

TREATMENTS FOR END-STAGE

RENAL DISEASE (ESRD)

Permanent kidney failure is the only medical

condition that entitles nearly all Americans uncategorically to treatment paid for by the federal

government under the Medicare program. A favorable political climate, strong congressional

sponsors, and the drama of a patient being dialyzed during a congressional hearing are among

the factors that led Congress in 1972 to create this

entitlement to dialysis and kidney transplantation.

The tremendous growth of the program, both in

patients treated (from the initial 10,000 treated in

1973 to more than 150,000 in 1989) and in costs,

which now approach $5 billion per year, have

made the ESRD program a continual focus for policymakers and payers. More than any other publicly funded medical program, this one has been

subject to changing reimbursement policies that

have influenced physicians’ and patients’ treatment choices.

Because of its unique characteristics, the ESRD

program also has been fertile ground for study.

The IOM was asked by Congress in 1987 to study

the program thoroughly; it published the 1991

book Kidney Failure and the Federal Government

(59). This book chronicles the ESRD program

from its inception and recommends a range of actions to improve it. In 1990 Congress required

ProPAC to report on Medicare payment policies

for the ESRD program, which it did in 1992 (91).

Relative to other diseases, enormous amounts

of data are collected on ESRD. HCFA maintains

an ESRD program management and medical information system: the U.S. Renal Data System is

run by the National Institute of Diabetes and

Digestive and Kidney Disorders (NIH); and the

United Network for Organ Sharing database includes data on kidney transplants.

The ESRD patient population has grown not

only in numbers since the inception of Medicare’s

program, but has changed in character. People entering the program today are older and sicker than

their counterparts of the 1970s. The U.S. incidence of treated ESRD is 180 per million population, and rising at almost 8 percent per year.

 Dialysis and Transplantation

Outpatient hemodialysis is the dominant treatment under the Medicare ESRD program, with 82

percent of beneficiaries using it in 1989. Continuous ambulatory peritoneal dialysis (CAPD) is

used by 14 percent, home hemodialysis by 2 percent, and continuous cycling peritoneal dialysis

by 2 percent. Improvements in the process of hemodialysis have been made over the years, but

they have been incremental.

The dialysis setting has shifted from the dominant hospital-based, not-for-profit setting of the

1970s and early 1980s to largely for-profit independent dialysis centers. In 1980 there were 1,004

Medicare-certified dialysis centers: by 1988,

there were 1,740. In 1980,342 of the centers were

for-profit, and in 1988, 912 were for-profit, accounting for 70 percent of dialysis stations.

Recently, concern has focused on the quality of

dialysis treatment, spurred by a rise in the mortality rate among dialysis patients (56) and a generally high rate in international comparison. Some

suspicion that shorter dialysis times and, possibly.

reuse of dialysis filters (which is more common in

the United States than in other countries) may be

responsible has led to further investigations. The

Renal Physicians Association is preparing clinical

guidelines recommending a minimal and an optimal dose of dialysis (56). These issues were also

addressed at a 1993 NIH Consensus Development

Conference (150).

Kidney transplantation would be the preferred

treatment for perhaps half to three-quarters of all

new ESRD enrollees (113), but the supply of kidneys falls far short of the demand. About 20 percent of current ESRD beneficiaries have had

transplants. Technological advances in transplantation technique and particularly in immunosuppressive therapy have improved the results of

transplants and broadened the patient population

now considered eligible. Although advanced age

is no longer considered a medical contraindication
316 I Health Care Technology and Its Assessment in Eight Countries

to transplantation, in practice few people over 65

are transplanted; however, diabetic patients, once

considered poor risks, are no longer excluded.

The number of transplants leveled off in the

mid- 1980s at just under 9,000 per year, where it

remains (up from about 3,200 in 1974). Transplant centers also increased from 151 units in

1980 to 219 in 1989. Early increases in transplant

numbers were due almost exclusively to cadaverdonated kidneys. With 40,000 new patients per

year entering the Medicare ESRD program, the

shortfall is obvious. At the end of 1989, more than

16,000 people were on waiting lists for kidneys.

(Shortages of kidneys and other organs became a

point of national debate and prompted passage of

the National Organ Transplant Act of 1984. This

law created national norms for the donation and

equitable allocation of organs and mandated an infrastructure to carry out its aims.)

 Payment Policy for ESRD

Under Medicare

Government payment for ESRD services has been

a subject of recurrent interest to Congress, the

executive branch, and the provider community.

Since the program’s inception, payment has followed somewhat different rules than those forother Medicare services, although the basic split

between payment to facilities and to physicians

has been retained.

Dialysis centers are paid for each dialysis session. From 1973 to 1983, reimbursement was

based on the same “reasonable-charge” basis as

other services; however, unlike other services, a

payment ceiling was set at $138 (with some exceptions), which was what nearly all centers collected. After congressional hearings on the

program from 1976 to 1978, part of the 1978 Social Security Act Amendments required that a prospective payment system for outpatient dialysis

be devised on a “cost-related or other economical

and equitable basis.” The rules finally proposed to

do this were rejected by the Reagan administration in 1981. In 1981 legislation, a similar provision required development of a single composite

reimbursement rate for outpatient dialysis; a final

rule by HCFA established this in 1983, with different rates for hospital-based and independent

centers but with all dialysis sessions otherwise

treated the same. The base rates were $131 for

hospitals and $127 for independent facilities,

which were adjusted only for geographic differences in wage rates; this constituted a decrease in

nominal payment over the previous ceiling. In

1986 HCFA proposed reducing the base rate by

$6, but Congress limited the reduction to $2. The

base rate is not subject to regular adjustments (unlike payments under the DRG system used for other services under Medicare), although annual

changes in wage indexes are applied.

Physicians are paid separately from facilities

for services to ESRD patients. Originally their

fees were included in the per-session payment to

dialysis facilities, but the medical community rejected this and assisted HCFA in developing an

“alternative reimbursement method,” a monthly

cavitation payment for each ESRD dialysis patient that physicians could opt for, starting in

1974. In 1983 a cavitation payment system for

outpatient services was made mandatory at a

monthly rate based on prevailing charge rates (average payment was $184.60, which varied by geographic region); the rate was reduced by $10 in

1986. Under this system the nephrologist was expected to serve as the primary care physician, providing some general internist services as well as

specific dialysis-related services. The lowered

payment, however, provides a disincentive for the

nephrologist to offer all the services he or she

might otherwise provide. ESRD physician services have been exempted from the general physician payment reform under Medicare, which in

1991 implemented a resource-based relative value

scale as the basis for payment.

Peculiarities of the Medicare kidney transplant

benefit affect the epidemiology of transplantation

and even the success of transplants. Medicare

pays all costs associated directly with kidney

transplantation-organ procurement and hospital

and physician fees—as well as for immunosuppressive drugs for one year. All Medicare

ESRD entitlements terminate three years after
Chapter 9 Health Care Technology in the United States 1317

transplant. For people under 65, health insurance

may become a significant problem. Once Medicare coverage is lost, the transplant is considered a

preexisting condition by private insurers, so even

with coverage, kidney-related problems might be

excluded. In fact, nearly half the transplant recipients reaching the three-year limit have established

eligibility for disability payments under the Social

Security system, including eligibility for Medicare, even though many probably could return to

work. The system seems to act as a disincentive,

making the modest disability payment more attractive than attempting a return to work, with uncertainty about meeting medical bills (27). It also

appears to discourage some people from seeking

transplants, so they remain on dialysis. Although

the total number of transplants is limited by the

supply of kidneys, which people receive them

probably is affected by financial concerns.

The one-year limit on reimbursement for immunosuppressive drugs also causes hardship for

transplant recipients. According to a 1990 survey

by the American Society of Transplant Surgeons

(9), almost half of its members said patients had

difficulty affording these drugs, and the drug cost

was responsible for most cases of noncompliance .

From the perspective of the Medicare program,

a successful transplant is cheaper than continued

dialysis even for individuals who continue to

qualify for Medicare coverage. The average dialysis patient has costs of $32,000 per year; the firstyear costs for a successful transplant are $56,000,

but in later years the average cost to Medicare is

$6,400. Overall, Medicare estimates a break-even

point at three years; after that, costs to Medicare

are lower (27). This equation might change, however, when all costs (not just those covered by

Medicare) are considered.

 Expenditures for ESRD

From its humble beginnings at $229 million in

1974, Medicare spending on ESRD beneficiaries

grew to over $4 billion in 1989 (this includes all

Medicare-covered care for the eligible population,

not just kidney-related services). Growth in the

patient population accounts for more than a proportionate share of the rise, which follows from

the falling inflation-adjusted reimbursement rate

per dialysis session.

Medicare pays the biggest share of ESRD

costs, but not all. In 1988, when Medicare’s share

was $3 billion, total ESRD costs were estimated at

$5.4 billion (153). The rest comes from monthly

premiums paid by beneficiaries, other insurers

(including Medicaid), and patients’ out-of-pocket

payments.

 Erythropoietin

EPO, one of the first drugs produced through biotechnology, was approved by FDA in 1989 to treat

anemias caused by chronic renal failure (CRF),

ESRD, and HIV. Amgen, the manufacturer, was

given exclusive rights to market EPO for seven

years through provisions of the Orphan Drug Act.

HCFA developed an interim policy to pay for

EPO for Medicare CRF and ESRD patients. It assumed, based on Amgen’s recommendations, an

average dose of 5,000 units administered three

times per week and single use of vials (2,000-,

4,000-, and 10,000-unit vials were available). It

estimated that about 20,000 (19 percent) ESRD

patients would be treated with EPO in the first

year. Reimbursement was set at $40 per treatment

for up to 10,000 units and $70 for more than

10,000 units, using a “per-bottle” approach. The

total cost of EPO was estimated at $125 million,

of which Medicare would pay 80 percent ($100

million).

In fact, 50,000 ESRD patients (43 percent)

were treated with EPO that first year. They were

treated with an average dose of 2,700 units, however, and somewhat less than half of those treated

were achieving the desired results as measured by

hematocrit levels. In addition, the vials were commonly being used more than once. Medicare’s total EPO costs were $265 million, averaging

$5,300 per treated individual for EPO alone.

It did not take long for HCFA to revise the way

payments were calculated for EPO. Beginning in

January 1991, reimbursement was set at $11 per

1,000 units, reducing any incentive to use lower
318 I Health Care Technology and Its Assessment in Eight Countries

dosages and recognizing that multiple doses were

being drawn from a single vial. The average dose

did in fact increase to 3,450 units by December,

and the number of ESRD patients treated rose to

74,600-more than half of the entire Medicare

ESRD population. Contrary to HCFA’S anticipation of a lower bill for EPO, Medicare expenditures for 1991 rose to $396 million. The average

cost per beneficiary for the year remained at

$5,300. According to HCFA, blood transfusions

decreased significantly among EPO-treated

ESRD patients, but were not replaced entirely by

the new treatment, as some patients do not respond to EPO. ProPAC concluded in its review

that providers “appear to have responded to financial incentives” in their use of EPO.

Medicare’s ESRD program might be viewed as

a continuing experiment in how government policies can affect medical care. Its management has

been driven by the desire to create a fair reimbursement system that neither induces excessive

spending by the government nor compromises the

quality of service to ESRD beneficiaries. Congress has been particularly active in influencing

ESRD management, sometimes in concert and

other times in conflict with HCFA.

NEONATAL INTENSIVE CARE

During the twentieth century the infant mortality

rate has taken on importance as a “yardstick” for

gauging a nation’s health. In the broadest international sense the gulf in infant mortality rates between developing and developed countries is an

obvious and meaningful proxy for disparities in

the general level of economic development.

Among the developed countries—where really

large improvements in infant mortality no longer

can be achieved by environmental measures, such

as improving sanitation and water supply—the

differentials are much smaller and. at least to some

extent, attributable to reporting differences ( 129);

nonetheless, the imperative to lower infant

mortality rates remains strong.

Nowhere is it stronger than in the United States,

which ranks poorly among the developed countries. Aggressive neonatal intensive care is the

most visible response to high infant mortality in

the United States. In 1990 the United States

ranked 24th in infant mortality out of 38 selected

developed countries, with a rate of 9.2 per 1,000

live births. A larger absolute differential exists

within the United States between blacks and

whites: in the 1987-89 period the U.S. black infant

mortality rate was 18.6 per 1,000 live births and

the rate for U.S. whites was 8.8 (142). A major

contributor to the high rate for blacks is a very

high proportion of low- birthweight babies. The

factors contributing to low birthweight are understood only poorly, but there are definite correlations of rates (within other countries as well as the

United States) with low socioeconomic status,

suggesting that the combined effects of poor nutrition, poor medical care, and a generally poor environment all are important.

 Supply of Neonatal Intensive Care Units

(NICUS)

Perinatal medicine and its associated technologies

began to evolve in the 1960s; with that development, hospitals began installing special units for

sophisticated, intensive care of newborns. In the

1970s, the number of NICUS began to grow. By

1976 the Committee on Perinatal Health—a joint

effort of the American Medical Association, the

American College of Obstetricians and Gynecologists, the American Academy of Family Physicians, and the American Academy of

Pediatrics—had outlined a three-tiered system of

regionalized maternal and perinatal health services. Level I hospitals provide care for normal

newborns with no special services, level 11 hospitals are equipped to deal with some special problems, and level 111 hospitals are regional referral

centers for the most specialized and intensive

care. Although various groups have issued guidelines on level II and 111 units, the classification

system is not applied consistently across the coun -

try. The regional structure still exists, but there are

now so many NICUS that the referral system has

become less important.

OTA reported that there were 534 NICUS in the

United States in 1983, including both level 11 and
Chapter 9 Health Care Technology in the United States 1319

level 111 units. The Perinatal Information Center

estimates that in 1993, there were 700 level II

units and between 700 and 750 level 111 units (81 ).

 Patient Population

About 6.5 percent of babies born in the United

States weigh less than 2.500 g (classified as low

birthweight). About 1 percent of babies are born

weighing less than 1,500 g, (very low birthweight). The birthweight distribution has continued with a trend of increasing proportions of

low-birthweight babies, particularly in the lowest

categories. At least part of this change appears to

be artifactual, as smaller and smaller babies are

saved at birth and kept alive for at least some period of time in NICUS. In fact, this probably accounts to some extent for the poor performance of

the United States in international comparisons of

infant mortality (129).

Most babies admitted to NICUS are low-birthweight. Virtually all babies weighing less than

1,500 g require intensive care, and NICU admissions mirror the changing birthweight distribution.

Extremely low birthweight babies (less than

1,000 g) constituted about 5 percent of admissions

in the 1970s, and by the late 1980s, they represented more than 10 percent. The smaller the baby,

the longer the NICU stay. Very -low-birthweight

infants who survive until discharge can expect to

stay 70 to 90 days in an NICU.

 Effectiveness of NICUS

Nearly all of the decline in the U.S. infant mortality rate since 1960 is due to improved birthweightspecific survival during the first month of life.

Although all of the improvement cannot be credited to NICUS. they undoubtedly have played a

large role, generally believed larger than any other

single factor. Decreases in mortality in the 1,500

to 2,500 g weight class had the greatest impact on

overall mortality rates (125). Even in the smaller

weight classes, the improvement has been significant: in 1985 a baby between 1,000 and 1,500 g

had a 90 percent chance of surviving; 20 years earlier, it was 50 percent.

More and more low-birthweight infants are surviving, to be sure, but they do not all become

healthy children. Although the evidence suggests

no change in the birthweight-specific rate of handicap and disability among survivors, the great

number of survivors means that the absolute number of children with problems increases. This is

the basis of one debate about the aggressiveness of

NICUS and the imperative to save smaller and

smaller babies. Should we be expending enormous resources to save babies with a strong predilection for handicap? In 1987 OTA reported that

about 40 percent of babies born weighing less than

800 grams have a moderate or severe handicap.

 NICU Technologies

Premature infants most often need help breathing, and technology for ventilator support is the

mainstay of the NICU. In the early 1970s,

introduction into the NICU of continuous positive

airway pressure (CPAP) was a quantum improvement over earlier technology for saving babies

weighing less than 1,500 g; before that, only about

10 percent could be ventilated successfully (21).

Improvements in ventilation have been incremental since that time, and have recently focused not

merely on survival but on reducing the chronic

lung damage (e.g., bronchopulmonary dysplasia

or BPD) caused by ventilation. In the late 1980s,

great enthusiasm began to develop for high-frequency, low-volume ventilators, based on a belief

that they would reduce the rate of BPD in comparison to conventional ventilators. This enthusiasm,

however, has not been confirmed by definitive evidence that they actually are better (11 2). Yet that

lack of evidence may not have played as large a

role in slowing the dissemination of high-frequency ventilators as has an FDA decision not to

“grandfather” approval (under the 510(k) provisions of the FDCA) of ventilators at more than 150

breaths per minute (39).

The technology of the 1990s is surfactant for

babies with hyaline membrane disease (HMD). It

is distinguished by being not only a breakthrough

but also the best-evaluated technology to enter the

NICU. There still are many questions about the
320 I Health Care Technology and Its Assessment in Eight Countries

most effective regimens and about the particular

formulations but the evidence for benefits from

HMD is clear and convincing. The evidence from

randomized trials owes in large part to the fact that

surfactant is a drug that required FDA approval

before it could be marketed.

ECMO

ECMO entered the NICU in the early 1980s on a

wave of enthusiasm but little evidence of efficacy.

By 1986, 18 centers were active and had treated

715 newborns. By the end of 1989, more than 64

centers had treated a total of 3,595 babies. In the

peak year (1992) 1,452 patients were registered

(an ECMO registry keeps information on all

ECMO patients reported).

The equally remarkable and sharp decline in

ECMO use has come about in little more than a

year as a result of the practical application of a basic science discovery: nitric oxide (NO) is a selective pulmonary vasodilator. In the first quarter of

1994, only 33 patients were entered into the

ECMO registry (this may be explained partially

by a time lag in reporting, but for the most part, it

appears to reflect a real trend). What appears to be

happening now is the systematic investigation of

NO in many of the conditions for which ECMO

has only recently been the treatment of choice. If

the clinical trials under way are successful, they

will provide a much better information base from

which to determine the best uses of ECMO as well

as NO in conjunction with some new ventilation

techniques. A factor driving the systematic evaluation of NO is that it is not currently approved for

any medical use, so it can be used (legally, at least)

only under investigational protocols. This is really a postscript to the main ECMO story, however.

As recently as 1989, a survey of obstetrical hospitals suggested that more ECMO units were

planned (102). This suggested a clear push toward

expanding ECMO use from term to preterm infants, potentially a much bigger patient population. The most visible government activity with

regard to ECMO was spurred by concern over the

“apparent increasing use of this technology, especially in new patient populations, as well as concerns about long-term outcome.” The result was a

forum in 1990 sponsored by NIH, FDA, and

AHCPR, with a report issued in 1993 (152).

ECMO was adopted on the basis of what propo-

. .

nents believed to be good evidence of its lifesaving abilities: they held that most of the infants

treated with ECMO (of whom 90 percent or more

may survive) would die if treated conventionally.

A very definite “other side” believed that the evidence on which the proponents based their belief

(from two small clinical trials) was faulty, and that

the indications supported by evidence were, in

fact, much narrower (28). The main criticism of

the trials is that infants receiving “conventional”

treatment were actually receiving substandard

care. With careful management of newborns, the

incidence of the conditions leading to the need for

intervention is greatly reduced, and improved

“conventional” treatment for infants in distress

leads to results as positive as those for ECMO

without the need for dramatic invasive technology”

There are no explicit controls on the acquisition

and use of ECMO. Unlike some other new

technologies, the cost of operating an ECMO unit

is not so great as to pose a barrier to many hospitals. Using three different approaches, a recent

study estimated the annual cost per case of an

ECMO unit at between $6,000 and $16,000 (the

higher figure is based on charges and is probably

higher than the actual cost) (102). The total cost

for ECMO averages about 4 percent of NICU operating costs, based on a sample of five hospitals.

In comparing the cost of treatment with ECMO to

the cost of conventional care, this analysis runs

counter to earlier analyses showing that ECMO

costs less.

In summary, ECMO, a highly invasive technology, diffused rapidly in the United States as a result of a highly enthusiastic group of supporters,

the appeal of “high technology,” modest cost, and

a belief (if not necessarily well supported) that the

technology could save babies, most of whom

would die otherwise. A 1990 government-sponsored forum concluded that alternative means of

preventing and treating (which appear to be successful in some centers) respiratory conditions in

newborns have not been investigated adequately.
Chapter 9 Health Care Technology in the United States 1321

In the meantime, ECMO has been largely overtaken by the introduction of NO.

SCREENING FOR BREAST CANCER

Breast cancer screening is one of the few clinical

preventive services for adults that the federal government has encouraged women to use, and it is

one of only a handful of preventive technologies

that the Medicare program will pay for. The policy

issue that has captured the most attention in the

United States as well as in other countries is the

age at which screening mammography should

start. The appropriate level of payment for the service under Medicare both to compensate appropriately for the service and to create incentives for

increasing the number of women screened has

been debated, and the quality of mammography

services has been the focus of recent legislation.

Under the Breast and Cervical Cancer Mortality

Prevention Act of 1990, the Centers for Disease

Control began providing money to states for comprehensive breast and cervical cancer screening,

followup, and treatment programs for poor and

minority women.

Most women who have a screening mammogram are referred by a physician rather than seeking it on their own. Most of the 12,000

mammography machines in the United States

(more than triple the number in 1986) are in hospitals, breast screening and treatment clinics, and radiology offices (93,1 58), and payment for most

mammograms is on a fee-for-service basis. Mobile mammography clinics are often at “health

fairs,” and a number of businesses (about onethird of the 500 largest U.S. companies in recent

years) report bringing mobile mammography

equipment to their workplaces (76).

Although some well-publicized cases of the

disease raised awareness about breast cancer

screening in the early 1970s, it was in 1980 that

rates of screening really began to rise. In 1978

about 15 percent of women surveyed reported

having had a mammogram. In a 1987 survey, 38

percent of women over 40 reported at least one

mammogram. Screening prevalence decreased

with age: the highest rate was 42 percent in

women aged 40 to 54, and the lowest, 25 percent,

was in women 75 years and older. Evidence that

screening rates continue to increase comes from

standardized surveys in about 30 states. From

1987 to 1989, the median percentage (of states

surveyed) of women age 40 and over having had a

mammogram rose from 49 percent to 63 percent.

and in both those years, 80 to 90 percent of the

women who had been screened reported a mammogram within the past two years (2). As in the

previous surveys, older women were less likely to

be screened. The most common reason given by

women for not being screened, among all age and

race groups, was that their physician had not recommended it.

Breast cancer screening has had a dramatic effect on the epidemiology of breast cancer. Mortality from breast cancer has remained more or less

stable for the past 20 years, at a rate high relative to

other developed countries (in the period 1985-89

it was 22.6 per 100,000, using a standard world

population). It is the most frequently diagnosed

cancer among women and, until recently (when it

was overtaken by lung cancer), the most common

cause of cancer death in women. In contrast with

mortality trends, the measured breast cancer incidence rate rose by 36 percent between 1973 and

1987 (mainly from increased rates of localized

and in situ cancers) and has leveled off since then.

The increase in incidence is thought to be due almost entirely to cancers detected at screening

(15 1) but has fueled popular belief that breast cancer is on the increase.

The National Cancer Institute (NC]) and FDA

estimated that in 1990 there were more than

enough mammography machines in use to handle

all screening and diagnostic needs even if women

followed NCI screening guidelines. The supply

was estimated at 27 percent greater than need,

spread relatively evenly across metropolitan areas

(although in some rural areas capacity maybe insufficient). One implication is that many facilities

are operating below capacity. The General Accounting Office (a congressional agency) estimated that in 1989 only 11 percent of facilities
322 I Health Care Technology and Its Assessment in Eight Countries

performed more than 100 examinations per week

(158).

 Insurance Coverage for Mammography

Private health insurers and public programs vary

in their mammography coverage. The original

statutory language of the Medicare program excludes coverage for preventive services, but it has

been amended to provide coverage for specific

services, including mammography. A mammography benefit was first introduced as part of the illfated Medicare Catastrophic Coverage Act of

1988, which was repealed before it took effect.

Mammography coverage was then inserted in the

Omnibus Budget Reconciliation Act of 1990, taking effect in 1991 (120). The law allows payment

for mammography every other year for women

over 65. There has been constant pressure from activist groups and within Congress to improve coverage, resulting in the introduction of several bills

during the 1991/92 session. It is likely that such

activity, which is part of a broader movement toward greater attention to women’s health, will

continue ( 1 20).

In 1992 all but seven states had mandated some

type of coverage for mammography by private insurers under the regulations of their state insurance commissions. A minimum schedule for

screening was specified in 32 states, most of them

identical:

1 ) baseline mammogram between 35 and 39 years

of age,

2) biennial screening between 40 and 49 years of

age, and

3) annual screening for women over 50.

The rules also contain various provisions that apply to payment levels and other particulars of coverage (45).

 Mammography Quality Standards Act

Of 1992

Each facility must have a quality assurance and

quality control program, and its personnel must be

licensed to perform radiological procedures. Each

facility will be inspected at least annually by the

Department of Health and Human Services or a

state agency, and an accreditation body will review clinical images from each facility not less

than every three years. If problems are found, the

following sanctions are available: directed plans

of correction, state on-site monitoring, civil

money penalties, and suspension and revocation

of the certificate.

 Specific Screening Recommendations

A consensus development conference on breast

cancer screening was sponsored by NCI in 1977,

four years after publication of results from the

landmark Health Insurance Plan (HIP) of New

York study and subsequent launching of the

Breast Cancer Detection Demonstration Project

(BCDDP) by the American Cancer Society (ACS)

and the NCI. NCI’S recommendation was for

annual mammography for women over age 50,

screening between age 40 and 49 only for women

whose mother or sister had breast cancer, and

screening for younger women based only on their

personal history. Periodic breast physical examinations were recommended for all women

older than 20. ACS concurred with the NCI recommendations until it modified them in 1980 to

include a baseline mammogram between ages 35

and 40 and a recommendation that women under

50 consult their physicians about the advisability

of a mammogram (24).

In 1983 BCDDP results were published indicating that about one-third of all breast cancers

were detected in women between 35 and 49 old

and most of the cases had been found with mammography and not breast physical examination.

The ACS “concluded that a favorable benefit:risk

ratio could be anticipated in women 40 years of

age and older” and adopted a recommendation

that all women over age 40 have a mammogram

every one or two years (24).

In 1988 the American College of Radiology

(ACR) convened a meeting to develop uniform

recommendations for breast cancer screening. It

accepted the ACS 1983 recommendations minus

the recommendation for a baseline study. The following groups signed on to the ACR guidelines:
Chapter 9 Health Care Technology in the United States 1323

the American Academy of Family Physicians, the

American Association of Women Radiologists,

the American Cancer Society, the American Medical Association, the American Osteopathic College of Radiology, the American Society for

Therapeutic Radiology and Oncology, the American Society of Clinical Oncology, the American

Society of Internal Medicine, the American College of Pathologists, NCI, and the National Medical Association (24).

The dissenters were the American College of

Physicians and the U.S. Preventive Services Task

Force (USPSTF), both of which objected to recommending mammography for women under 50.

As technologies, both mammography and clinical breast examination met USPSTF criteria for

accuracy and effectiveness of early detection;

their recommendation for “average risk” women

was for mammography every one to two years beginning at age 50 and ending at age 75. Baseline

mammograms are not recommended. Clinical

breast examination was recommended annually

starting at age 40. Both physical breast examination and mammography should begin earlier for

high-risk women. The task force was neutral on

the question of breast self-examination, finding

insufficient evidence to recommend a particular

regimen ( 164).

Unlike ACS, USPSTF examined the effects

and consequences of preventive services in a societal context and not exclusively from the individual point of view. It concluded that the potential

benefit to women under 50, should one exist, is

certainly smaller than the benefits to older

women. Among the adverse effects of screening

younger women are psychological morbidity,

morbidity associated with biopsies, radiation exposure, and the “social effect of diverting health

care resources away from more effective interventions.” The latter concern was especially salient

given USPSTF’S estimation that current resources

are insufficient to screen all women over 50.

The debate over screening women under 50

was reinvigorated by publication in November

1992 of the first findings from the Canadian National Breast Cancer Study, a randomized study of

50,000 women. Mammography did not improve

the mortality experience of women age 40 to 50

during the first seven years of followup of this

study (79). This all but forced a reexamination of

the various recommendations; NCI sponsored a

meeting in February 1993 for this purpose. Part of

the response has been to level severe criticism at

some of the study’s methods (18).

ACS decided not to change its guidelines based

on the Canadian data but to wait for more data. In

December 1993 NCI announced its new position:

routine screening every one to two years for

women over 50 is worthwhile, but for younger

women, the evidence has not shown a net benefit.

By this action NCI repudiated the advice it had received weeks before from its own Nat ional Cancer

Advisory Board not to change its position (78).

As with renal dialysis, payment policies have

been generous enough to encourage the proliferation of mammography units. It appears, however.

that incentives to increase the screened population

do not reward reaching the segment of population

most likely to benefit: older women. In fact, because fees for non-Medicare patients can be considerably higher than the Medicare limited

payment, the incentive may be reversed (93).
324 I Health Care Technology and Its Assessment in Eight Countries

CHAPTER SUMMARY

In the United States, substantial investment in

health care R&D in the public and private sector

has ensured a steady flow of technological innovations. These advances, many of which provide at

least some benefit to some population of patients,

are introduced into an environment in which explicit fiscal limits are unusual. In the absence of

macro-level policies that limit the adoption of new

technologies, varied of mechanisms have

emerged that seek to distinguish effective technologies from those that are ineffective. None of

these mechanisms has been shown to be particularly effective in limiting the dissemination of

technologies, regardless of their clinical value.

Whether or not the health care system in the

United States undergoes a legislative restructuring, continue escalation in health care costs will

sustain the current trend toward increased provision of care in managed care environments, many

of which make use of annual payments per individual. In this setting payers and purchasers do

face pressures to implement policies limiting access to technologies. These are the circumstances

that encourage and sustain technology assessment

in medical decision making. Any broad federal or

state policy that places limits on the rate of increase in premiums charged by insurers or health

plans will intensify the need for accurate analyses

of the cost, risks, and benefits of medical technologies.

Over the past decade, technology assessment

has burgeoned in the United States. Changes are

occurring not only in how much is done but in who

is doing it. In many countries, technology assessment has remained largely a governmental activity; in the United States, however, the private

sector has continually ratcheted up its use and support of technology assessment methods. Insurers,

drug and device manufacturers, hospitals, and

professional societies have developed their own

capabilities and have also fueled the growth of

contract technology assessment organizations and

university-based research groups. Meanwhile, the

federal government has expanded its support of

technology assessment, recently and most visibly

in the new Agency for Health Care Policy and Research.

The government’s interest in technology assessment has paralleled the growth in U.S. health

care spending, and private sector interests too are

inextricably linked to health care costs in one way

or another. A drug manufacturer wants to show,

through cost-effectiveness analysis; that its expensive new product actually will save money; the

insurer may want to restrict access to an expensive

technology until sufficient evidence exists to justify its use on the grounds of effectiveness—but

the longer it can be held off, the better; the government wants to control overall spending, particularly by eliminating unnecessary and ineffective

care. In this atmosphere technology assessment is

not a neutral activity. Given the pressures and incentives, and particularly the financial consequences that depend on the use of technology

assessment results, special agendas may be perceived everywhere even where they may not exist.

Taking as the broad aim of technology assessment the more rational use of health care services,

it is difficult to know how successful overall efforts have been. Specific examples of when

technology assessment has had a definite effect on

medical practice seem to be the exception rather

than the norm. Furthermore, many examples can

be cited in which technology assessment results

have been clear, yet payment decisions are made

that do not reflect those results (usually in the

direction of paying for unproven technologies). It

may be that Americans do not share a single set of

values about health care and how it should be

used; hence, even with better information about

the utility and cost-effectiveness of interventions,

for instance, decisions are not obvious. And with

so many players in the field, assessments from different sectors may favor different decisions. There

also may be a suspicion that the main purpose of

technology assessment is to save money by denying services, or that the individual is being sacrificed for some “public good” that is not

necessarily subscribed to by the general population. Obviously, this goes beyond technology assessment itself, but it may help to understand how
Chapter 9 Health Care Technology in the United States 1325

assessment is viewed in the context of U.S. culture.

The biggest development in technology assessment methods over the last decade is the growth of

“outcomes research” using data collected for other

purposes (largely administrative, but some medical) to answer various questions, including whether interventions are effective. This may be seen as

the latest attempt to obviate the need for randomized clinical trials to evaluate technologies. In the

United States, randomized trials seem always to

have been undervalued and their utility dismissed

too easily. Innovations in clinical trials have largely taken place elsewhere, and although some proponents in the United States continue to press their

case, the use of clinical trials currently is disappointing. There seems to be a growing recognition

that administrative data may not yield the answers

we need about technologies, but it is not clear that

a similar amount of energy will be directed toward

clinical trials, should the use of administrative

data be abandoned.

In short, while technology assessment is thriving in the United States, and while it has clearly

raised the level of debate about medical technology, understanding how it has actually affected the

use of technology overall appears virtually impossible.

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T

Lessons

from the

Eight Countries

by Renaldo Battista, H. David Banta,

Egon Jonsson, Matthew Hedge, Hellen Gelband 1 0

he preceding chapters have described the policies and

mechanisms used to manage health care technology in

eight industrialized countries: Australia, Canada, France,

Germany, the Netherlands, Sweden, the United Kingdom,

335
336 I Health Care Technology and Its Assessment in Eight Countries

——

Over 65 Over 75 Over 80

Country ( % ) ( % ) (Ye)

Australia 11.4 4,5 2.3

Canada 11,6 4.7 2.4

France 14.1 7.0 3.8

Germany 15.4 7.2 3.8

Netherlands 12,9 5.3 3.0

Sweden 17.7 8.1 4.4

United Kingdom 15.8 7.0 3.7

United States 12,7 5.2 2.9

OECD average 13.4

SOURCE Organasation for Economic Cooperation and Development, OECD Health Data a Software Package for the International

Comparison of Health Care Systems (Paris, France Organisationo for

Economic Cooperation and Development, 1993).

Perhaps the most striking difference among the

health care systems surveyed here concerns financing and the links between payers and patients.

In the United States “payers” is most definitely

plural; there are more than 1,500 for-profit and

not-for-profit insurers as well as substantial government expenditures on care for the elderly, the

indigent, and military veterans. At the other extreme, in Canada and Sweden, there is essentially

only one payer or at least one payment scale.

Several European nations have systems of

linked multiple payers in which both employment-based insurance plans and governmentmanaged plans coordinate coverage and payments. These arrangements rely on significant

collaboration among the various payers such that

they are able to exert something similar to the market power of a single payer.

In all health care systems, patients receiving

care often incur out-of-pocket expenses, particularly for prescription pharmaceuticals and assistive devices. In the United States these expenses

may include the costs of acute care for people

without insurance. In the United Kingdom a parallel “private” health system, together with privately provided insurance, exists as an alternative to

the universal National Health Service for those

willing to pay. In France co-payments are made by

most citizens, and ambulatory medical care expenses are reimbursed to the patient and not paid

directly to practitioners.

Nevertheless, with the exception of the 30 to 40

million uninsured people in the United States,

virtually every citizen of these eight countries is

freed from contemplation of the costs of care at the

point of delivery. Thus, people go to physicians or

other health care providers, providers recommend

treatments or investigations, and neither patient

nor provider is much concerned with (or, in some

cases, even aware of) the cost implications of

these decisions.

Divorcing payment for services from their provision, which in some countries has advanced important social equity goals, also has facilitated the

diffusion of health care technologies. This facilitation, along with concomitant efforts to regulate

technology adoption and use, point to the dominant theme of this volume: namely, that technology management within a health care system is a

function of the structure of that system and its surrounding cultural milieu. In France the health care

system exists as an extension of the state bureaucratic apparatus. In Germany corporate influence

is as strong in the health care system as it is in other aspects of German society. In the United Kingdom the health care system has changed from a

benevolent government service to a pastiche of

market-driven components. Despite these differences, the management of technology in all of

these countries requires consideration of two distinct but related processes: adoption and utilization.

TECHNOLOGY ADOPTION

Health care technologies are goods. Markets exist

for these goods, and suppliers in these markets

seek competitive advantages to increase market

share and profitability. The proprietary nature of

much medical technology, together with the high

costs of innovation, have created world markets

for many technologies—particularly pharmaceuticals and imaging and surgical instrumentation.

Despite patent protection and multinational

conglomeration in production, demand for tech-
Chapter 10 Lessons from the Eight Countries 1337

Physicians Beds Health care personnel

Country (per 1,000 population) (per 1,000 population) per bed

Australla - 9.8a

3,9a

Canada 2,2 6.6a 2.4

b

France 2,7 9.4 1,1

Germany 3.1 10.4 1 .3a

Netherlands 2.5 11,5 2.1

Sweden 2 9 12,4 1 .9a

United Kingdom 1 4 6.4 2.6C

United States 2,3 4,7 3,4

OECD average 2,4 9.0 2.0

a

1989

b

1988

c

1 987

SOURCE Organisatrion for Economic Cooperation and Development, OECD Health Data a Software Package for the International Comparison of

Health Care Systems (Paris, France Organsation for Economic Cooperation and Development, 1993)

nological advances has been sufficient to sustain

a very rapid pace of introduction of new products.

Furthermore, rapid communication and the globalization of markets has meant that the range of

technologies available in a given country is likely

to be similar to that in another country, at least

within the developed world. The six technologies

considered in this volume are available in all eight

countries, although the accessibility of each

technology differs-quite markedly in some

cases.

In this situation incentives for adoption include

the benefits accruing to patients (decreased

mortality or morbidity, increased quality-of-life),

to providers (market advantage to a given physician or facility, more efficient provision of services), and to societies (economic development

and economic nationalism focused on goods perceived to be high-tech). The relative importance

of these incentives depends on the technology. Although the diffusion of computed tomography

(CT) and magnetic resonance imaging (MRI) has

been shaped by economic development issues in

France and the Netherlands, the spread of laparoscopic cholecystectomy has been driven largely

by patient and practitioner preferences.

Attempts to regulate technology are made at

national or regional levels, or both. These include

relatively ineffective certificate-of-need programs

in Australia and the United States; the moderately

effective Article 18 mechanism in the Netherlands; more effective systems of designated national centers for particular technologies in

Australia; global budgets in Canada, Sweden, and

the United Kingdom; and French “health maps”

for planning. In countries with some form of central or system-level budgeting and expenditure

management, incentives for adoption can be managed within a policy framework designed to optimize spending on technologies. In the Canadian

and Swedish health care systems, particular attention is paid to siting of resource-intensive technologies, and the absence of alternative sources of

capital funding acts tore inforce regulatory powers

wielded at a systemwide level.

In such countries increasing energy is being invested in evaluation and assessment as part of the

management process. Government-funded health

systems in Canada and Europe are increasingly attempting to investigate the return on their expenditures in terms of improved health outcomes and,

in some cases, in cost savings. In this climate various technology assessment schemes have evolved

to marshal information relevant to spending decisions. To date, the greatest success in technology
338 I Health Care Technology and Its Assessment in Eight Countries

Country Visits/person/year Bed-days/person/year Average length of stay

Australia

Canada

France

Germany

Netherlands

Sweden

United Kingdom

United States

8.8

6.9

7,2

11.5

5.5

2.8

5.7

5.5

2.9

2.0

2.9

3.3

3.7

3.5

2.0

1.2

12,9

13.9

12.3

16.5

34.1

18,0

14,5

9.1

OECD average 6.2 2.7 15,7 —

SOURCE Organastion for Economic Cooperation and Development, OECD Health Data a Software Package for the International Comparison of

Health Care Systems (Paris, France Organisation for Economic Cooperation and Development, 1993)

management in countries with single-payer or

linked multiple-payer financing has involved the

shaping of policy decisions on the adoption and

diffusion of resource-intensive technologies. Less

costly technologies and those requiring minimal

infrastructure investment have generally diffused

unimpeded by macro-level management. With

some exceptions, the power of financing has only

begun to be used to manage technology.

In the United States, in contrast, such macrolevel management is generally lacking or ineffective. Attention has been paid much more to the

operational level of administration and clinical

practice, through attempts to control utilization.

TECHNOLOGY UTILIZATION

Rates of procedures, the means used to deliver a

specific service (such as neonatal intensive care

units), and the mechanisms for regulating use vary

widely. The evidence supports the theoretical ex-

.

pectation that fee-for-service reimbursement of

providers creates incentives for technology use.

For example, in France, MRI equipment diffused

more rapidly in private hospitals than in public

ones, apparently buoyed by opportunities for feefor-service reimbursement in the private sector.

Similar experience in several countries has fostered attempts to shift the basis of reimbursement

from fee-for-service remuneration of practitioners

and facilities to various forms of cavitation, global

budgets, and salaries for practitioners.

Additional incentives for use emerge from the

opportunity for accelerated capital cost recovery

by owners of private establishments offering technological services, particularly medical imaging

and laboratory services. Investment returns and

subsequent incentives for use have been further

enhanced by the incoherence of pricing for services such as medical imaging, particularly in the

United States. Health systems in which technology use is subsumed within the budget of health facilities should theoretically encourage efficiency

and specialization in service delivery as technology holders seek to reduce their average costs. In an

entrepreneurial fee-for-service setting the

constant rate of payment by insurers for each

imaging study or laboratory test makes doing as

many as possible more and more economically rewarding, as the marginal cost of each use diminishes.

Further incentives for technology use arise

from the interplay of public expectations and

health care systems. Among patients and practitioners, notions of rationalizing or optimizing resource use have only recently become

admissible—and even then only minimally in

most settings. The historical conception of practitioner responsibility as requiring an unbounded
Chapter lO Lessons from the Eight Countries 1339

Country Percent

Australia NA

Canada NA

France NA

Germany (1989) 5.6

Netherlands (1990) 6.3

Sweden (1990) 9.9

United Kingdom (1990) 4,6

United States (1989) 6.3

NA - not available

SOURCE Organisation for Economic Cooperation and Development OECD Health Data a Software Package for the International

Comparison of Health Care Systems (Paris, France Organisation for

Economic Cooperation and Development 1993)

commitment of resources to each and every patient has hampered the management of technology

use and, with the rise of nonpractitioner health administrators, has signaled a shift in the practitioner’s role from that of a steward of health care

resources to that of an employee of a health care

system or enterprise.

This is particularly marked in the United

States, where many physicians are either employees of managed care enterprises or treated as

subcontractors to such enterprises. Contract terms

are increasingly set by the enterprise-a fundamental change from historical patterns of fee-forservicc reimbursement at local prevailing rates. In

the United Kingdom the rise of a private system

may be seen as a response to perceived failures in

managing health care as a public responsibility

and a nonmarket service.

In the United States insurers have invested

heavily in systems to review technology utilization. In the absence of a framework for national or

regional management of the system, attention has

shifted to the operational level, that of administration and clinical practice. Technology assessment

in the United States is often taken to mean the various guidelines and procedures put in place to regulate the use of technology by providers. Many of

these guidelines focus on reimbursement, such as

insurers’ declining to cover experimental therapies (i.e., those with little or equivocal evidence of

efficacy).

Although guidelines are an important element

of technology assessment in any health care system, the United States has not been able to support

the effects of these efforts with national or regional policymaking. In this environment incentives

for the use of certain technologies seem likely to

overwhelm the mechanisms for use management,

leading to overuse in some cases and underuse in

other cases. In the long run, effective technology

management requires attention to both system and

practice levels.

PUBLIC REACTIONS AND PRESSURES

The public has played a vital role in the adoption

and diffusion of’ new technologies. In all of the

eight countries surveyed here, the public may

complain about the costs of health care, but when

individuals are sick, they are unlikely to inquire as

to whether the technology used in their care is being used optimally. In addition to the trust vested

in practitioners, the level of knowledge required

to evaluate technology use often lies beyond even

the practitioners who use the technology regularly. That laypersons rely on their health care practitioners for guidance in such matters is not

surprising.

Concern arises because the practitioner-patient

relationship, in addition to being heavily

weighted in favor of the practitioner knowledge,

creates an opportunity for the practitioner not only

to recommend the amount of a good (i.e.. medical

care) to be supplied but often also to set the price at

which it will be supplied. All of this occurs with

little role for payers for these services.

Still, the public also plays an important role as a

social arbiter, modulating forces favoring technology use. This takes several forms. but in all countries surveyed here, health care services and their

provision and financing have been major domestic policy issues. The pressure for change comes

both from policy makers and directly from the

public. The public has expressed some dissatisfaction with its health care system in all the coun-
340 I Health Care iTechnology and Its Assessment in Eight Countries

Health care system Public financing by federal & provincial

governments, provincial administration,

universal access & portability, legal

prohibition of parallel private-sector activity

Regulation

a) drugs

b) equipment

c) physicians

Research &

development

FDA model, provincial formularies for

publicly funded programs, price regulation

through Patent Medicines Review Board

Device registration, suggestions for

enhanced system exist; siting restrictions

established by payers (provincial

governments)

Provincially-based self regulation,

incentives for nonurban practice, some

licensing restrictions; generally

fee-for-service practice

Small industrial role, generally arms of

multinational firms, government spending

low compared to other OECD nations;

provincial sources exist for health services

research

Technology CCOHTA, provincial bodies in BC and

assessment Quebec, attention to TA in Saskatchewan

and Alberta

Multiple payers (1 ,500 insurers);

Medicaid/care public financing, corporate

roles and interests, administratively

cumbersome and increasing reform

pressure

FDA; large domestic industry; applicants

support costs of regulatory requirements in

exchange for faster processing

Law establishes classes 1, 11, and Ill with

exemptions for devices “substantially

equivalent;” certificate-of-need programs in

some States

Entrepreneurial, fee-for-service practice

with increasing amount of “managed care;”

concern over imbalance in number of

specialists v. generalists

Large industry with extensive R&D; also,

high level of government funding (NIH,

AHCPR)

Diverse groups but little coordination; OTA,

OHTA, AHCPR, professional organizations,

industry. state-level activities

France Sweden —

Health care system Mix of employer-managed sick funds &

social security financing, individuals

reimbursed for 80’%. of costs (remainder

privately insured); system of public and

private hospitals

Regulation

a) drugs

b) equipment

c) physicians

FDA model; cost-efficiency aspects

considered by Commission de la

Transparence; Agence du Medicament

issues approval for marketing after

examining evidence of safety and

effectiveness

Process of needs definition and

government authorization for siting and

operation

Fee-for-service, public and private MDs,

current plans to limit medical student

enrollment

Research & INSERM plays prominent role

development

Technology CEDIT, ANDEM, consensus conferences,

dassessment CREME mandated by law but evidence of

County-level administration of local and

shared regional facilities;

publicly-managed insurance with annual

deductible; current climate of reform to

increase choice and decrease bureaucracy

via internal markets

FDA model, state monopoly on sales with

patient paying small co-payment

Little regulation; current move to establish

device system like that for drugs and

harmonize with EC policies

Physician resource plans exist, MD

freedom to adopt new technology iS

relatively controlled

MRC; also, industrial policy to groom

national champions in the drug Industry

SPRI, SBU (good track record, particularly

with big-ticket items), consensus

impact not yet available conferences with social orientation
Chapter 10 Lessons from the Eight Countries 1341

The Netherlands Germany

Health care system Multiple payers, sick funds, global 1,120 employer-based sick funds,

budgeting, changes to Internal markets office/hospital separation with remuneration

to physician associations

Regulation FDA model, national formulary linked to FDA model; 140,000 drugs available but

a) drugs payment for drugs most not evaluated as approval applies

only to new drugs

b) equipment Minimal regulation, Article 18 for siting of No apparent restrictions or regulation,

big-ticket technologies powerful export-oriented device Industry

c) physicians General Incomes policy; payment by Regional association with bargaining

capitation and fee-for-service power; fee-for-service remuneration

Research & Investigational fund, TNO, industrial Significant Industrial role, government

development development support

Technology Many actors, coordination mechanisms Some QA activities

assessment weak; includes Health Council, CBo

Australia United Kingdom

Health care system Multiple payers with mix of private and

public insurers, shared state-federal

jurisdiction

Regulation

a) drugs

b) equipment

c) physicians

Research &

development

Technology

assessment

FDA model

Little regulation, some attempt at

certificate-of-need program, national

centers for highly specialized services

Fee-for-service although “national” fee

schedule appears to cover most

physicians

MRC, Iittle Industry role

NHTAP, AHTAP, AIH & NCHPE all involved

in technology assessment; impact

strongest in gate-keeper roles, influence

growing, Increased role for public possible

NHS funds health care through regional

and district health authorites, recent

purchaser-provider reforms, private-sector

insurance and practice also exist

FDA model

Minimal regulation; some technical

commentary prepared by Department of

Health in some cases

Cavitation payments to GPs, fund-holding

GPs purchase care form trusts and other

health services

Noted role of MRC in clinical trials and

substantial UK-based pharmaceutical

industry in R&D

Growing interest particularly with need for

outcomes information as part of NHS

reforms, bodies whose work may

contribute to TA Medical Research

Council, Audit Commission, Kings Fund,

Cochrane Collaboration

-. -.

SOURCE R Battista & M Hedge 1994

tries analyzed in this report. Satisfaction is at its needed. At the other extreme, the Canadian populowest in the United States, where in the early lation seems the most content with its current sys1990s, 29 percent of those polled felt that the tern; 56 percent of those polled saying that only

health care system needed to be rebuilt completely minor changes were needed (5) (see table 10-6).

and 60 percent felt that fundamental changes were
342 I Health Care Technology and Its Assessment in Eight Countries

Percentage of respondents

Fundamental changes

Country Minor changes needed needed Completely rebuild system

Australia 34

—

43 17

Canada 56 38 5

France 41 42 10

Germany (West) 41 35 13

Netherlands 47 46 5

Sweden 32 58 6

United Kingdom 27 52 17

United States 10 60 29 —

SOURCE R Blendon, R Leitman, 1 Morrison, K DoneIan, “Satisfaction with Health Systems in Ten Nations, ” Health A/fare, pp 185-192, summer

1990

Important differences exist in public roles

among the countries surveyed here. In publicly financed systems, the citizen as taxpayer is unlikely

to accommodate the limitless demands of the citizen as patient. The Netherlands and several Canadian provinces have established public

commissions on health care in whose deliberations financing has figured prominently. In France

changes in health care financing in 1990 created a

contributory tax whose existence has provided the

French parliament with an inroad to the national

discourse on health costs and services.

In linked multiple-payer systems, governments

often play a similar role, acting as the facilitators

of collaborative price-setting while also acting as

payers for services delivered to some segments of

the population. The quasi-governmental role of

sick funds and other population-based insurance

arrangements may shield governments in these

systems from the extent of criticism and scrutiny

that those in Canada and the United Kingdom

have received over their provision of health care

services.

In the United States public attitudes have

created a climate for health care reform. Concern

has focused less on high overall expenditures or

the quality of health care available than on inadequate financial protection against the costs of illness. The 1992 presidential election brought with

it the promise of significant change. It remains too

early to evaluate the successor even feasibility of

such massive reform; however, that the public is

calling for change is recognized by virtually all

participants in the debate.

There is an additional avenue through which

the public affects technology use in health care

systems: mass media. Technology advocates,

payers, and practitioners and facilities all use media outlets with a view to shaping social discourse

on health care. For example, media coverage of

“waiting lists” for access to specific technologies

has been a powerful factor in accelerating decisionmaking with regard to CABG in Canada, the

Netherlands, and Sweden. In both France and the

Netherlands, mass media coverage of laparoscopic surgical techniques is credited with increasing

patient demand for these technologies.

Technologies (particularly pharmaceuticals)

are advertised to patients and providers. Several

countries have guidelines for advertising, but not

one prohibits it. Particularly in the United States,

facilities and practitioners attempt to increase

business by advertising the availability of specific

technologies.

All of these facets of public participation combine in ways that appear to resist generalization

even within a single country. Whatever form it

takes and through whatever channels, public participation is an important factor affecting health

care management in all eight countries.
HEALTH CARE TECHNOLOGY

ASSESSMENT

Some form of technology evaluation or assessment is occurring in each of the countries in this

report. The specific details and impacts of those

efforts are, however, highly variable.

Health care technology assessment is a relatively new field in the United States as well as

elsewhere. Its beginnings may be traced to the establishment of a health program in the Congressional Office of Technology Assessment (OTA) in

1975. The first report to describe assessments of

specific technologies was published by the U.S.

National Research Council in 1975 (9). Subsequent OTA reports described methods of technolOgy assessment and illustrated how they might be

applied to a variety of technologies ( 12, 13,14,15).

The United States does not have a dedicated national (executive branch) agency for health care

technology assessment, although various entities

carry out and encourage assessment activities.

Without a national focus, activities have grownup

in many, probably hundreds, of different public

and private organizations. In some other countries, however, both national and regional programs have been established. The first was the

Australian National Health Technology Advisory

Panel (NHTAP), established in 1982. Countries

that have established or designated national programs to become involved in health care technology include Sweden (1987), France (1990), the

United Kingdom (1990), and Canada (1990). Regional or provincial programs also have been established, as in Quebec (1988).

Although programs have been established in a

number of countries, investments in technology

assessment are small compared to investments in

health care and health-related research. The Institute of Medicine (7) estimated that U.S.1.3 billion-O.3 percent of the money spent on health

care—was related to health care technology assessment in the United States in 1984, which included U.S.$1. 1 billion for clinical trials, mostly

of pharmaceuticals. Spending direct to technology assessment was less than $50 million, about

0.5 percent of health R&D funds.

Chapter 10 Lessons from the Eight Countries 1343

Health care technology assessment has developed primarily to aid policymaking in the countries described. In some countries fixed and

prospective budgets have led to limitations on

rises in health care expenditures that have begun

to force choices between competing alternatives.

One of the main emphases of the programs in such

countries as the United Kingdom. France, and

Sweden is to aid such choices.

It is important not to overstate the influence of

technology assessment, however. Only a small

minority of existing technologies have been formally assessed. The emphasis of most agencies

until the present has been on newer, capital-intensive technologies that are more often the subject of

explicit policymaking. There is, however, increasing attention to the established, "small-ticket” technologies that probably contribute much

more to health care budgets and may also include

many ineffective tools and practices.

Furthermore, adoption and use of health care

technology is influenced by many factors, including the perception and experience of health and

disease, cultural responses to technology, the nature of the medical profession, industrial information and promotion, and financial and regulatory

systems. Policies can strongly affect some

technologies, but many others are not affected directly by such policies. Physicians and hospitals

retain considerable autonomy despite formal national or regional policies. Most decisions concerning diffusion are made in the purchasing

departments of hospitals and in the clinics and

practices of physicians.

Several key themes deserve attention. First,

technology assessment’s potential is realized only

with effective links to technology management.

Health care systems with a limited policy structure for technology management, such as those of

Germany and the United States, do little in the

way of implementing technology assessment

findings, (despite much activity in the United

States). In contrast, systems with centralized public management and collectivized financing tend

to have greater demonstrable links between

technology assessment and technology manage-
344 I Health Care Technology and Its Assessment in Eight Countries

ment, particularly at the national or regional

policy level.

Second, the level at which technology assessment activities occur in a health care system will

dictate their scope and impact. In the single-payer

systems of Canada, Sweden, and the U.K. National Health Service, the “client” for technology assessment information is easily identifiable and

reasonably receptive to such information. In the

multiple-payer system of the United States, insurers have embarked on forms of technology assessment with a view to regulating the practice of

those who provide care to their insured clients. Although these activities are not focused on the

adoption or financing of technology, they have a

significant impact on technology use by providers. No health care system has yet established a

technology assessment program spanning these

two domains.

Finally, there is much about the use of health

care technologies that is unknown or uncertain. In

this environment, identifying lacunae in knowledge, whether about effectiveness or economics,

should be an important part of technology assessment activities. Following that, collaboration is a

logical response, for the information generated

about health care technologies stands to benefit

patients, providers, and payers in many countries.

THE CASE STUDIES

The authors of the eight chapters in this volume

each examined six areas or technologies to explore policies in health care and their results (table

10-7). The six technologies are:

1.

2.

. . 3

4.

-.5

6.

treatment of coronary artery disease;

medical imaging;

laparoscopic surgery;

treatment of end-stage renal disease (including

the use of EPO);

neonatal intensive care (including the use of

ECMO); and

screening for breast cancer.

All the technologies examined here share the

combination of at least some accepted effectiveness and relatively high cost. In some circumstances societies have had to decide how much of

these services they are willing to purchase and to

whom limited supplies will be offered. Each country has also had to struggle to find information to

answer questions on benefits and costs. The cases

shed light not only on policy mechanisms but also

on the development and use of technology assessment in these decisions. Our best judgment of the

relative impact of technology assessment in each

country on the adoption and diffusion of the

technologies examined is shown in Figure 10-1.

 Treatments for Coronary Artery Disease

Coronary artery bypass grafting (CABG) was

introduced in the early 1970s and diffused rapidly

in the United States (which now has the highest

CABG rate) but less rapidly in other countries (3)

(table 10-8). The use of CABG in patients who are

unlikely to benefit (and, conversely, patients who

are likely to benefit by not having it) may be substantial. PTCA was introduced as an alternative to

CABG in the late 1970s and was touted as a cheaper and less-invasive alternative to CABG. It also

diffused rapidly, but the promise of substitution

for CABG has been largely unfulfilled (table

10-9): in no country has PTCA diffusion been accompanied by slowing rates of CABG.

Policies on these procedures have generally

been weak or nonexistent. Although randomized

clinical trials of CABG were organized fairly early in its diffusion (especially in the United States),

the results of these trials have not been used systematically in making policy or influencing clinical practice. In the United States diffusion has not

been slowed by any discernible factor.

In Europe and Canada decisionmaking seems

to have been guided primarily by a desire to limit

resources for such care, linked to skepticism about

the procedure’s effectiveness early in its diffusion.

Early diffusion was limited in a number of European countries because of limitations in the number of procedures that could be done and the slow

pace of increasing capacity. In Sweden only four

hospitals were equipped with the facilities necessary to perform the procedure; facilities were also

limited in other countries, including the United

Kingdom, the Netherlands, France, and Germany.
Chapter 10 Lessons from the Eight Countries 1345

 Impact of TA

 Highest

I

I

Lowest

- ~ —

Canada U.K .

I Canada

U.K

France Netherlands

Netherlands France

Australia Australia

U.S ~U.S ——–~————

Germany Germany ——. 1

LC

Sweden Sweden Canad a

I Canada

T

Australia Netherlands

Netherlands I

France - ‘i UK.

U K 1 France 1 France

Canada I Netherlands Sweden

us. Australi a ~

~

Germany 1 U.K.

I

I us. I us.

I

Germany IGermany

1 1 — — —

Breast cancer I

U.K

~

Sweden I

Canada

Netherlands 

U.S.

Australi a

– -

France

“Germany 4

_ — J

KEY Breast cancer = screening programs for breast cancer, CABG = coronary artery bypass grafting, CT/MRl - computerized tomography

and magnetic resonance imaging, ESRD = treatments for end-stage renal disease, LC = Iaparoscopic cholecystectomy techniques, NICU =

neonatal intensive care units & EMCO, PTCA = percutaneous transluminal coronary angioplasty

NOTE Joined cells suggest that there is Iittle to distinguish the countries in the Iist

SOURCE R Battista and M Hedge, 1994

No assessments other than informal evaluations or

expert judgments guided decisions on how many

facilities to have, how many surgeons to train, or

how many operations to perform.

Early in its life cycle the public did not demand

the procedure (3). With time, however, public and

political pressures developed. In Sweden and

Canada the existence of waiting lists for CABG

created political pressure to accelerate diffusion.

In the Netherlands the government tried to maintain a restrictive policy but eventually had to expand greatly the available facilities in light of

public pressure (including the patients’ association occupying the Parliament building). PTCA

also seems to have diffused without a great deal of

policy attention: it was only after the mid- 1980s

that public agencies began to publish assessments

of these technologies. The assessments had little

impact.

Newer treatments are now emerging, such as

those using lasers. Despite the large investments

that would be required for such technologies, little

evaluation or information on diffusion is available. In light of the

artery disease in all

massive burden of coronary

the countries surveyed here,

conditions appear ripe for rapid diffusion of new

technologies aimed at treating this disease. If the

experience with CABG and PTCA is repeated,

this diffusion may well proceed largely unchecked

by research findings or assessment activity.

 Medical Imaging

Evaluation of medical imaging is difficult. Traditionally, diagnostic technologies such as CT scanners have been assessed on the basis of their

technical capability and their diagnostic accuracy.

Beginning in the 1970s, however, more and more

authors recognized that the result sought from

diagnosis was improved patient health. Studies

were mounted to examine the impact of information from imaging on therapeutic decisions, but

only rarely on the effects on health outcome. The

state-of-the-art of studying diagnostic technologies continues to lag behind the recognition that

health outcome should be the standard for its eval -
CABG & PTCA

CT/MRl

Laparoscopic

Cholecystectomy

End-stage

Renal Disease

NICU

Breast Cancer

Screening

In Quebec, CETS work led to decision to put catheterization labs

only where surgery existed; some planning attempts but few data

(e.g., 1,000 procedures/500,000 people/yr); permits for service

establishment; no PTCA evaluation

CT. policy limited reaction very political decisionmaking

MRI: tight economic times, increasing evaluation culture and links

to information have slowed diffusion

Rapid diffusion via public pressure, commonly surgeons, no

specific regulation

Patient-level approach, rapid move to home dialysis, transplants

limited by organ availability

Regionalized care; ECMO in Quebec has TA using outcome data

explicitly for future policy on ECMO

Politically charged, major Canadian research (NBSS); screening is

neither high-technology nor a TA-resisting practice, so TA’s role

Wide diffusion, wide geographic variation and expansion of

indications to include treatment of elderly persons

CT: many machines, some experience with certificate-of-need

programs

MRI: like CT, for both, self-referral may act to increase diffusion

Rapid diffusion, public pressure and professional repositioning for

general surgeons

Universally accessible; incentives for dialysis as payment for drugs

post-transplant limited to three years, more than half of all patients

treated with EPO

Rapid diffusion, championed by users

Range of recommendations; insured services in 32 states; apparent

tension among guideline developers (ACS, NCI)

focuses on choices for efficient program delivery

CABG & PTCA

CT/MRI

Laparoscopic

Cholecystectomy

End-stage

Renal Disease

NICU

Breast Cancer

Screening

France Sweden

Ministry of Health authorization required, rapid increase in PTCA,

no identifiable role for TA

Both require government authorization and have diffused rapidly

carrying France from a position of few machines to many per

population, when compared to other European countries

Started in France, no authorization required

Ministry of Health authorization required, health needs are defined

but apparently not linked to actual practice

No TA role, ECMO seems low priority in Iight of AREC, a

made-m-France technology

Insurance programs pay for mammography for women 50-69

years of age, CNAMTS IS now funding pilot screening projects

Moderate diffusion pace but increasing public concern in mid-80s

over waiting lists prompted national evaluation and calls for increased

CABG & PTCA, “watt-and-see” slows diffusion and affords an

opportunity for TA involvement

CT slowish diffusion, planned evaluation was actually used in

managing diffusion

MRI much the same as CT experience with big impact for NEMT

report

Financial incentives for less invasive, stay-shortening technologies

have encouraged diffusion

Regionalized services, high prevalence of ESRD and of transplanted

patients

Regionalized despite lack of official pressure/policies to do so, 2

ECMO centers exist and are felt to satisfy demand

Introduced in 1964, now virtually national coverage of screening

program with county-to-county variation in eligibility; >50% of eligibles

are believed to be screened

.

3
The Netherlands

Highest rates in Europe, despite inclusion under Article 18, initail

Intention to use Information in policymaking never actually

happened

Germany

Rapid diffusion, planning for catheterization lab needs at state level,

CABG guidelines developed by surgeons for QA

‘CABG & PTCA

CT diffused rapidly, funded initially by federal Ministry of Research &

Technology, certificate-of-need attempts ineffective but

documentation requirements produced temporary slowing of growth

MRI slower than CT, possibly Iimited by financing changes Iimiting

resources from government for establishment and from sick funds for

reimbursement

CT/MRI CT Iittle impact of TA, covered by Article 18 from 1984-1989

MRI better timing, more impact of TA, still rapid diffusion

Fairly rapid diffusion, Iittle assessment Originated in Germany and France, no particular regulatory or

licensing requirements but consumer demand and competition with

nonsurgeons drive rapid diffusion

Laparoscoplc

Cholecystectomy

Low transplant rate, possibly due to absence of law governing organ

donation and retrieval

‘non-profit” non-hospital dialysis has grown in Importance

End-stage

Renal Disease

Health Council role in decisionmaking for payment, transplantation

limited by organ supply use of predictive modeling for forecasting

Regionalized care established by obstetricians, ECMO diffusion slow

but due to no particular factor

NICU Small units now consolidating

Eligibility for screening reported to be women > 20 years of age,

mammography Included as part of broad cancer screening

programs, paid for by sick funds, currently project in place to

generate data for recommendation on mammography’s place in

screening programs

United Kingdom

‘Regional specialty until 1991 reforms, 1986 target of 300

CABG/milion people established but not reinforced

Breast Cancer

Screening

Early hospital-based screening led to 1987 recommendation to

establish biennial screening for women aged 50-70, Sick Funds

Council funds program administered through regional cancer

centers, CBO developed guidelines for screening

Australia

No evaluation of CABG, 1991 rate of 669/mllllon people, NHTAP

assessment of PTCA recommended developing guidelines,

waiting Iists exist but average wait iS < 1 month

CABG & PTCA

Brain and body CT scanners evaluated by Department of Health (DH)

and Introduction regulated by DH, MRI evaluated in DH/MRC project,

diffusion slowed by NHS requiring providers to pass capital costs on

to purchasers through charges for services

CT/MRl CT >1/100,000 population, CT diffused rapidly and current

concern IS Inappropriate use, MRI evaluated early in diffusion &

NHTAP recommend a centralized planning of MRI services

Assessments undertaken but diffusion still rapid, Iaparoscopic

cholecystectomy’s Introduction associated with 26% increase in

rates of gallbladder surgery, other laparoscopic techniques have

diffused less rapidly

Lack of central policy combined with private sector adoption,

relatively rapid diffusion

Laparoscopic

Cholecystectomy

AHTAC guidelines developed for transplantation minimum number

(30/yr) and orgaization of dialysis services, rate of growth of

home dialysis slower than rate of growth of persons with ESRD

ESRD therapies centralized in bigger centers, emphasis on home

dialysis and CAPD, Increasing role for private sector contractors to

provide dialysis in Wales not yet seen elsewhere

Regionalized care, growing concern about long-term morbidity

among NICU-treated children

End-stage

Renal Disease

NICU Regionalized care, 2 centers provide ECMO, growing concern

about costs of care (institutional and social) for

very -low- birthweight infants

Breast Cancer

Screening

Small-scale Screening begun during 1980s led to national

program targeted at women 50 & over, NHTAP & AHMAC heavily

involved in process Ieading to national program .

National screening program in place current concerns include

ensuring adequate coverage of population and maintaing skills Of

program workers

SOURCE R Battista & M Hedge, 1994
348 I Health Care Technology and Its Assessment in Eight Countries

Country

Australia

Canada

France

Germany (all)

West Germany

East Germany

Netherlands

Sweden

United Kingdom

United States

1985 1988 1990 1991

7,100 (470) 9,566 (579) 10,775 (630) 12,649 (731)

9,690 (380) 11,400 (425) 18,360 (680)

5,900 (1 10) 13,200 (240) 21,450 (390) 22,250 (410)

26,137 (335)

12,600 (190) 22,000 (360) 30,500 (500)

3,800 (62)

6,800 (478) 8,280 (563) 9,470 (635)

1,970 (236) 3,518 (416) 4,329 (51 1) 5,693 (670)

10,840 (195) 16,233 (282) 22,882 (405)

201,000 (855) 253,000 (1 ,017) 262,000 (1 ,056) 265,000 (1,055)

SOURCE Biomedical Business International Newsletter 14(2):10, 1991, European Society of Cardiology, “European Survey on Open Heart Surgery 1990, ’’Annals of the European Academy of Sciences and Arts, vOI 2, Salzburg, Austria, 1991: U S Department of Health and Human Services,

Public Health Service, Centers for Disease Control and Prevention, National Center for Health Statistics, unpublished 1979-1992 data from the National Hospital Discharge Survey provided by E Wood, Hospital Care Statistics Branch, Hyattsvlle, MD, 1994

uation. This means that comparing different methods of diagnosis, including those within the fieldof diagnostic imaging, has not often been done

vigorously.

Diffusion of CT scanners was quite rapid in

relation to other technologies that have been studied (1) (table 10- 10). In the United States this occurred despite certificate-of-need programs.

Several factors promoted this rapid diffusion, including high profitability and enthusiastic physician acceptance. Beginning in 1978, MRI devices

diffused into U.S. health care. Health planning

also was unable to regulate diffusion of MRI scanners for reasons that included weaknesses of the

planning program and difficulties in obtaining objective information on MRI’s value.

CT and MRI scanners entail similarly high infrastructure costs. In all countries but the United

States their diffusion has been shaped by the willingness of the public purse to fund them.

The diffusion of CT scanners illustrates clearly

the effects of public policies. In France, for example, diffusion of CT scanners was delayed until the

French industry produced scanners. When

French-made scanners were available, the policy

was to encourage their purchase.

Several countries, including Australia, the

Netherlands, France, and Canada, developed

guidelines for the number of CT scanners per population, restricting the numbers or rates. In general, formal assessment played little role in the

development of such guidelines, which subsequently were revised rather rapidly (followed by

the equally rapid diffusion of CT scanners).

Whether this is a failure of regulation or indicative

of responsive public policy is difficult to say.

One country in which an early assessment

clearly had an influence on diffusion was Sweden,

where an assessment gave guidance to hospitals as

to whether it might be economically advantageous

for them to purchase a CT scanner. Initial diffusion was slower than in other countries despite

well-developed expertise in neurology. The Canadian province of Quebec also was able to slow diffusion of CT scanners, but the resulting lack of

access to CT scanning led to pressures to relax the

controls.

A number of countries used the case of the CT

scanner to learn what might be done in linking assessment and decisionmaking. When MRI was

introduced, it was assessed earlier and more sys-
Chapter 10 Lessons from the Eight Countries 1349

Country 1985 1989 1990 1991

Australia 1,244

Canada

France 3,480

Germany

West Germany 4,490

East Germany

Netherlands 2,556

Sweden 165

United Kingdom 1,640

United States 90,000

(79) 4,219

10,730

(60) 18,000

(77) 18,800

(185) 6,828

(20) 858

(29) 7,148

(380) 239,000

(251)

(405)

(324)

(308)

(458)

(103)

(126)

(1 ,018)

4,904

12,230

22,863

35,881

30,956

4,925

8,205

1,098

8,460

260,000

(288)

(453)

(460)

(490)

(505)

(294)

(550)

(129)

(148)

(1 ,048)

5,726

12,420

23,125

34,328

8,899

1,834

9,775

298,000

(330)

(460)

(410)

(560)

(593)

(21 5)

(1 70)

(1 ,187)

SOURCE European Society of Cardiology, “European Survey on Open Heart Surgery 1990, ” Annals of the European Academy of Sciences and

Arts, vol 2, Salzburg, Austria, 1991, The Swedish Council on Technology Assessment in Health Care, Goodman, C , The Role of PTCA in Coronary

Revascularlzation Evidence, Assessment, and Policy, Sept , 1992, U S Department of Health and Human Services, public Health Service, National Heart, Lung, and Blood Institute, The Bypass Angioplasty Revascularizatlon Investigation (BARI) A Brief Description Bethesda, MD, 1990, U S

Department of Health and Human Services, Public Health Service, National Institutes of Health, NIH Dataf300k 1993 (NIH Publication No 93-1261)

(Bethesda, MD, 1993)

thematically. In addition its slower diffusion was in

part due to worldwide economic problems.

Whether assessment was an important cause of its

slower diffusion would be difficult to say, but certainly plans for MRI diffusion were more effective

(table 10-1 1). In the Netherlands, for example, assessments were organized with the underlying

idea of affecting policy through phased changes.

In Sweden a report done by SPRI influenced MRI

diffusion.

 Laparoscopic Surgery

All eight health care systems surveyed in this volume have been rapid adopters of laparoscopic surgical techniques. In all except Sweden, this has

occurred in the absence of any particular policy incentives. In Sweden explicit policy incentives for

adoption of stay-reducing technologies have acted

in concert with forces present in other countries.

In all countries public interest and pressures have

stimulated diffusion of laparoscopic cholecystectomy, but other laparoscopic procedures have not

diffused so rapidly.

The speed of diffusion has made it impossible

to perform good evaluations. Policy mechanisms

did not control the diffusion in the United States,

where payment was readily available for conventional cholecystectomy (although the Medicare

program did establish a lower payment than that

for conventional cholecystectomy). Industry

strongly promoted the innovation. In Canada, too,

policy mechanisms did not control Iaparoscopic

cholecystectomy. In Europe, although laparoscopic cholecystectomy diffused relatively rapidly, diffusion of other laparoscopic procedures

seems to have been constrained by limited budgets and lack of fees for these procedures (2).

At the level of the hospital, laparoscopic equipment is relatively low-tech, requiring little change

in infrastructure or service arrangements. New

technologies substituting for existing ones with

minimal capital outlay diffuse with a stealth and

speed not seen with imaging or any of the other

technologies surveyed in this volume, all of which

require substantial infrastructure investments.
350 I Health Care Technology and Its Assessment in Eight Countries

Australia

Canada

France

West Germany

East Germany

Netherlands

Sweden

United Kingdom

United States

165

264

423

45

45

149

3,000

(10,6) 185

(4.8) 350

(7,0) 595

(3.2) 83

(5.4) 75

(2,7) 204

(12.7) 4,991

SOURCE M Bos, 1994

All health systems share an interest in reducing

hospital length of stay, but any advantage arising

from laparoscopic surgery in this regard may be

squandered if the bed-days freed are simply filled

with persons undergoing other elective surgeries.

The rapid growth in laparosopic cholecystectomy use in several countries is consistent with a

growth greater than the rate of natural increase of

the open procedure it replaces. Expanding the

number of persons deemed candidates for operation (particularly for an often-elective procedure

such as cholecystectomy), in the absence of guidelines defining indications, may well increase

overall expenditures on surgery.

Little assessment of any of the laparoscopic

procedures has been done (2). As this case shows,

despite the growth in technology assessment activities, such activities still may be unsuccessful in

identifying technological innovations early

enough to influence their diffusion. Without clear

measures of benefit of expansions in surgery, evaluating the overall impact of these and other minimally invasive, stay-reducing technologies will

be an ongoing challenge for all health care systems.

 Treatments for End-Stage Renal

Disease (ESRD)

Treatment of ESRD is different from other areas

of health care technology because its efficacy and

(10.9)

(6.2)

(97)

(5.7)

(9 o)

(3.6)

(20.4)

235

190

409

750

109

90

250

6,715

(137) 292 (17.1)

(7.0) 200 (7.5)

(7,2)

(122)

31 (1 .8)

(73)

(10.5) 102 (12.0)

(4.3)

(26.8) —

appropriate use is not at issue; patients with ESRD

will die without treatment. All eight countries in

this report furnish essentially full financial coverage of the cost of treatment for all or most of the

people with the disease.

Because of the high cost of treatment (particularly renal dialysis) questions concerning this procedure have generally centered on how to provide

it more efficiently. All countries have made some

attempt to limit the number of services provided,

but then have met irresistible pressures to expand

the provision of treatment to all who can benefit

from it.

ESRD treatment is a field in which a great deal

of assessment has been performed, with a major

focus on the high aggregate costs of conventional

dialysis. This has led nearly all countries to advocate alternatives, including renal transplant, peritoneal dialysis, and home dialysis. If successful, a

transplant eliminates the need for continuing dialysis; however, the number of transplants is limited

by the availability of kidneys. Home dialysis, emphasized by some countries (such as Canada and

the United Kingdom), is a method of providing

more services at lower average costs.

In the United States outpatient hemodialysis is

the dominant treatment under the Medicare ESRD

program. which covers nearly all Americans with

ESRD. Home dialysis is used by only 2 percent of

program enrollees. The American system of treat-
Chapter 10 Lessons from the Eight Countries 1351

Country 1986 1988 1990 1991 1992

Australia 3 (0.2) 7 (0.4) 11 (0.6) 20 (1,2) 25 (1 .5)

Canada 5 (0.2) 9 (0.3) 20 (0.7) 22 (0.8) 28 (10)

France 29 (0.5) 36 (0.6) 70 (1.2) 95 (1 .7) 107 (19)

West Germany 41 (0.6) 91 (1.5) 143 (2.3) 200 (3.2)

East Germany 1 (.05)

Netherlands 2 (0.1) 5 (0.3) 14 (0.9) 20 (1.3) 27 (1 .8)

Sweden 2 (0.2) 6 (0.7) 12 (1 .5) 17 (2.2) 22 (2.6)

United Kingdom 14 (0.2) 25 (0.4) 55 (0.9) 65 (1.1) 80 (1 .4)

United States 110 (0.4) 1,600 (6.6) 2,076 (8.4) 2,560 (10.1) 2,940 (11.3)

SOURCE M BOS, 1994

ment is dominated by profit-making dialysis centers, and incentives to move toward less expensive

forms of dialysis are lacking. Policy changes

within the ESRD program are almost continuous

and are intended to avoid introducing incentives

for overuse.

EPO was introduced in 1989. This drug reduces

morbidity and improves the quality of life for

some people on dialysis, but at a substantial cost.

Because services for ESRD are managed at the

system level in all eight countries, responses to

EPO may provide some insight into how health

care systems are managing the transition from the

sole goal of prolonging life to a more complex improvement in quality of life with minimal morbidity. In Canada and France initial limitations in

access to EPO led to public demonstrations, particularly by nephrologists caring for persons on

dialysis, and to subsequent expansion of access. In

other countries, despite its high cost, EPO has

been incorporated into ESRD programs without

assessment or serious public discussion. The percentage of ESRD patients receiving EPO in 1990

ranged from 60 percent in the United States and

Sweden to about 20 percent in the United Kingdom (8).

 Neonatal Intensive Care

Neonatal intensive care services are provided in

all eight countries through organized systems of

care, although the levels of services are not directly comparable. The United States is striking for its

high level of such services combined with a high

infant mortality rate compared with other industrialized countries.

Few figures are available concerning the diffusion of neonatal intensive care. One reason for this

is the difficulty of defining such care. Techniques

of intensive care are now widely used in newborn

health care. The components of neonatal care vary

both from center to center within a country and

from country to country. As an example, extracorporeal membrane oxygenation (ECMO) is hardly

used in France but is used in many centers in the

United States.

ECMO diffused rapidly in the United States

without consensus on effectiveness. By the end of

1989, more than 64 neonatal intensive care units

had treated a total of 3,595 babies. Its rapid diffusion is probably related to the chance it may offer

to save the life of a newborn, together with its revenue-generating potential in the United States and

some other countries.

Assessment has generally played little role in

developments in neonatal intensive care. One exception is Canada, which has a regionalized system for neonatal intensive care. An assessment of

ECMO has been organized using outcome data to

help decide future policy. In the Netherlands and

the United Kingdom prospective randomized
352 I Health Care Technology and Its Assessment in Eight Countries

studieso of ECMO are intended to guide future

policy decisions.

 Screening for Breast Cancer

Breast cancer screening is available in all eight

countries, but there are vast differences among

screening activities. Preventive measures are

often not covered automatically by insurance, especially when they require special investments. In

the case of screening for breast cancer special

mammography equipment is required as well as

specially trained staff. Special centers for this purpose maybe established. These factors may explain its slow diffusion. The differences from

country to country, however, suggest that political

circumstances may beat least as important for implementation as evidence of efficacy.

In the United States mammography screening

has been recommended since 1977, based on a

large randomized clinical trial done in New York

City. Gradually, state laws have mandated insurance coverage for mammography screening, and

the Medicare program has covered it since 1991.

The capacity for screening in the United States is

more than adequate to screen the entire target population, but the actual percentage of women over

the age of 50 who have been screened falls far

short of the goal of universal screening.

A number of assessments of mammography

have been done in the countries covered in this report (including randomized trials in Canada, the

United Kingdom, and Sweden, and formal costeffectiveness analyses organized in Sweden, the

Netherlands, and the United States). These assessments appear to have affected policy. All assessments have encouraged a public sector program

for breast cancer screening. Single-payer control

provides a political target for advocates of mammography and appears to have contributed to the

development of coordinated programs in Canada,

the Netherlands, and Sweden.

The absence of coordination among program

advocates and payers remains an issue in all countries. As a result, screening programs have tended

not to be focused on risk categories (e.g., age, family history) for which the greatest benefit has been

demonstrated. The relative success of programs in

Canada, Sweden, and the Netherlands demonstrate the difficulty of providing, managing, and

evaluating preventive services in the absence of

some form of central policy and coordinating

mechanism for such preventive services.

CONCLUSIONS

In contrast to the situation in 1980, all of the countries examined in this report now have stated

policy goals of assessing the benefits of health

care technologies. Formal programs for health

care technology assessment vary but are operational in all the countries studied. Although still

small, these programs are beginning to change the

nature of health care policymaking.

Countries with national systems of health care

have attempted to develop policies to manage new

and existing technologies in concert with global or

prospective budgeting. One element of these policies is technology assessment and its linkage to

policy decisions. Technology assessment’s impact varies, but it is becoming an important factor

in decisions about technology acquisition. Table

10-12 presents our best judgment of the overall

impact of technology assessment on policymaking in the eight countries studied.

The United States has not developed a policy

structure that makes the management of health

care technology possible at the national level. Efforts in the United States are aimed at directly affecting medical practice (with varying success).

The national and regional issues have not been addressed effectively.

One lesson emerging from this report is that although national and regional policymaking is essential to control health care expenditures, such

policies are not sufficient for managing technology. To ensure the efficacy and cost-effectiveness

of technology adoption and use, actions at the operational level of clinical medicine also seem to be

necessary. Such actions are only beginning in

most of the countries studied, other than the

United States.

Health system reforms appear to be accelerating around the globe. All countries face increasing
Chapter 10 Lessons from the Eight Countries 1353

Significaton impact Sweden

Moderate impact Canada

The Netherlands

Modest impact Australia

U.K.

Minimal impact Us.

France

No impact Germany

(Nascent Technology

Assessment)

SOURCE R Battista and M Hedge, 1994

demands from an aging population for increasing

costly services (even if the percentage of GNP

spent on health care does not rise greatly). In addition, all are grappling with inappropriate use of

technology, and consumer dissatisfaction (16).

Some countries, such as Sweden, are making

changes to enhance consumer choice of physicians and hospitals. Others, such as the United

Kingdom, are making profound organizational

changes to affect incentives in their health care

systems. Some countries are planning further

changes in financing mechanisms to control specialists’ incomes and to change incentives in specialist payments. Quality of care is of growing

concern: several countries are actively attempting

to limit payments for “unnecessary” care, and the

public and policy makers are beginning to question the benefits of certain clinical procedures.

These trends point to a future for technology assessment and, perhaps, to better management of

health care technology. There is a growing recognition of the need for more timely and accurate information on the benefits, risks, and costs of

health care technologies. To the extent that they

deal with specific technologies, all policies,

whether regulatory or financial, can be developed

intelligently only if there is good access to such information. Physicians, institutions, and patients

also need information to make their decisions.

The informational needs are enormous and remain

largely unmet.

Although the effects of technology assessment

have so far been relatively limited in some countries, others can point to real successes. The most

striking differences between the situation in 1980

and today in 1994 include:

the substantial increase in governmental support for health care technology assessment,

the marked increase in the number of institutions and people involved in technology assessment, and

the strengthening of the international network

in this field.

A final word about internationalism in this

field: the 1980 OTA report ended with a recognition of the importance of an international perspective in health care technology assessment. The

current report also demonstrates the common

problems and similar solutions that countries are

finding. In 1994 we can describe actual progress

that has been made in this area, beginning with the

establishment of the International Society for

Technology Assessment in Health Care (ISTAHC) in 1985, which has furnished a forum for

individuals from many countries to share concerns, results of analysis, and possible problemsolving approaches. In 1993 the International

Network of Agencies for Health Technology Assessment (INAHTA), initially involving about 13

public agencies in 10 countries, was formed for

the purpose of exchanging information, avoiding

duplication, and perhaps actually working together on assessment. In 1994 the EUR-ASSESS program, intended to coordinate technology

assessment activities among the members of the

European Union, was funded by the European

Commission. These networks are still relatively

young, but their very formation indicates that the

need for an international perspective has been recognized.

REFERENCES

1. Banta, H. D., "Embracing or Rejecting Innovations: Clinical Diffusion of Health Care

Technology,” The Machine at the Bedside.
354 I Health Care Technology and Its Assessment in Eight Countries

S.J. Reiser and M. Anbar (eds.) (London:

Cambridge University Press, 1984).

2. Ban(a, H.D. (cd.), Minimally Invasive Therapy in Five European Countries (Amsterdam:

Elsevier, 1993).

3. Banta, H. D., and Kemp, K.B. (eds.), The

Management of Health Care Technology in

Nine Countries (New York, NY: Springer

Publishing Co., 1982).

4. Biomedical Business International Newsletter 14(2): 10, 1991.

5. Blendon, R., Leitman, R., Morrison, I., DoneIan, K., “Satisfaction with Health Systems in

Ten Nations,” HeaZth A~airs, 185-192, summer 1990.

6. European Society of Cardiology, “European

Survey on Open Heart Surgery 1990,” Annals

of the European Academy of Sciences and

Arts, vol. 2, Salzburg, Austria, 1991.

7. Institute of Medicine (IOM), Asse.ssing Medical Technologies, report of the Committee for

Evaluating Medical Technologies in Clinical

Use, (Washington, DC: National Academy

Press, 1985).

8. Juday, T. R., (Project HOPE Center for Health

Affairs), “Crossnational Comparisons of

ESRD Treatment and Outcomes,” Abstract

Number 145, ISTAHC meeting, Baltimore,

MD, 1994.

9. National Research Council, Committee on

the Life Sciences and Social Policy, Assembly of Behavioral and Social Sciences, Assessing Biomedical Technologies: An Inquiry

into the Nature of the Process (Washington,

DC: National Academy of Sciences, 1975).

10. Organisation for Economic Cooperation and

Development, OECD Health Data: a Software Package for the International Comparison of Health Care Systems (Paris, France:

organisation for Economic Cooperation and

Development, 1993).

11. The Swedish Council on Technology Assessment in Health Care (SBU), Goodman, C.,

The Role of PTCA in Corona~ Revascula -

rization: Evidence, Assessment, and Policy

(Stockholm, Sept., 1992).

12. U.S. Congress, Office of Technology Assessment, Development of Medical Technology:

Opportunities for Assessment (Washington,

DC: U.S. Government Printing Office, 1976).

13. U.S. Congress, Office of Technology Assessment, Assessing the Eficacy and Safety of

Medical Technologies (Washington, DC:

U.S. Government Printing Office, 1978).

14. U.S. Congress, Office of Technology Assessment, The Implications of Cost-Effectiveness

Analysis of Medical Technology (Washington, DC: U.S. Government Printing Office,

1980).

15. U.S. Congress, Office of Technology Assessment, Strategies for Medical Technology

Assessment (Washington, DC: U.S. Government Printing Office, 1982).

16. U.S. Congress, Office of Technology Assessment, The Quality of Medical Care, Information for Consumers (Washington, DC: U.S.

Government Printing Office, 1988).

17. U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control and Prevention, National Center

for Health Statistics, unpublished 1979-1992

data from the National Hospital Discharge

Survey provided by E. Wood, Hospital Care

Statistics Branch, Hyattsville, MD, 1994.

18. U.S. Department of Health and Human Services, Public Health Service, National Heart,

Lung, and Blood Institute, The Bypass Angioplasty Revascularization Investigation

(BARI): A Brief Description (Bethesda, MD,

1990).

19. U.S. Department of Health and Human Services, Public Health Service, National Institutes of Health, NIH Data Book 1993 (NIH

Publication No. 93-1261) (Bethesda, MD,

1993).
I ndex

A

ABMT. See Autologous bone marrow transplant

Accreditation. See Quality control and accreditation

AIDS

expenditures for new treatments, 281, 282

new drug approvals, 26

zidovudine treatment, 38

American Journal of Surgery, 125

Antenatal fetal heart rate monitoring, 36

Antilymphocy te serum

kidney transplants and, 10

Applied research. See also Research and

development policy and, 2

Arteriovenous malformations, 37-38

Arthroscopic surgery

France, 124

MRI comparison, 7

United Kingdom, 263

Artificial heart

United States, 292

Atherectomy, for coronary artery disease, 41

Australia. See also International comparisons

Adverse Drug Reactions Advisory Committee, 25

Australia and New Zealand Dialysis and

Transplant Registry, 47

Bureau of Statistics, 20, 23

Cardiac Society of Australia and New Zealand

PTCA guidelines, 40

Care Evaluation Program, 28-29

case studies

breast cancer screening, 51-53

coronary artery disease, 39-41

end-stage renal disease, 47-49

Iaparoscopic surgery, 44-47

medical imaging (CT and MR1), 42-44

neonatal intensive care, 49-51

Casemix Development Program, 24-25

Committee on Applications and Costs of Modem

Technology in Medical Practice, 29

cooperative research centers, 23

Coordination Committee on Organ Registries and

Donation. 48

Council on Health Care Standards, 28

Customs (Prohibited Imports) Regulations, 25

Department of Human Services and Health, 22,

23,35

Drug Evaluation Committee, 25

economy, 20

Federal National Health Act, 29

government and political structure, 19-20

health care system

health expenditures and health services, 23-24

medical research and policy coordination, 23

organization and funding, 21-22

pharmaceutical benefitsj24

proposals for change, 24-25

health care technology assessment

agencies, 30

current structure of assessment entities, 32-33

description, 29-30

funding, 34-35

highly specialized drugs, 38

impacts, 35-37

national advisory bodies, 30-32

nationally funded centers, 33, 37-38

health care technology controls

financial controls for health care technology,

27-28

medical devices, 26-27

pharmaceuticals regulation, 25-26

placement of services, 28

quality control and accreditation, 28-29

Health Ministers’ Advisory Council, 23,34

extracorporeal membrane oxygenation, 50-51

Health Ministers’ Conference, 23

health status of population, 20-21

health expenditures and health services, 22,

23-24

Health Technology Advisory Committee

end-stage renal disease guidelines, 47-48

formulation and operation of, 30,31,32-33,

34,35,36,37

Highly Specialized Drugs Working Party, 38

hospital accreditation, 28

I 355
356 Health Care Technology and Its Assessment in Eight Countries

infant mortality rate, 3

Institute of Health and Welfare, 23,34-35,36

laparoscopy cost effectiveness, 9

life expectancy, 4

major health concerns, 21

Medical Benefits Schedule, 22,27

National Association of Testing Authorities, 29

National Breast Cancer Screening Evaluation, 51

National Center for Health Program Evaluation,

33

National Health and Medical Research Council,

23,32,33,36

CT recommendations, 42-43

extracorporeal membrane oxygenation, 50-51

mammography policy, 53

MRI recommendations, 43-44

National Health Technology Advisory Panel,

30-32,34,35,36,37,343

National Pathology Accreditation Advisory

Council, 29

National Program for the Detection of Breast

Cancer, 52

New Drug Formulation, 25

pathology laboratory accreditation, 29

Pharmaceutical Benefits Advisory Committee, 26

Pharmaceutical Benefits Scheme, 22,24

population, GDP per capita, and health care

spending, 2, 3

population characteristics, 19

State Health (Radiation Safety) Act, 28

summary, 53-55

Superspecialty Services Subcommittee, 30,32,

38

neonatal intensive care guidelines, 49, 51

Therapeutic Devices Evaluation Committee,

26-27

Therapeutic Goods Act, 25,26

women’s health, 21

Autologous bone marrow transplant

United States, 301-302

Auvard incubators, 11

AVMS. See Arteriovenous malformations

AZT. See Zidovudine

B

Back pain

Swedish study, 223

Basic research. See also Research and development

policy and, 2

Benign prostatic hypertrophy

United States, 296-297

Breast cancer screening

Australia, 51-53

Canada, 92-94

economic aspects, 52

France, 131-132

Germany, 164-165

HIP study, 12-13,234,322

international comparisons, 352

Netherlands, 203-205

procedures used, 13

Sweden, 233-234

United Kingdom, 269-270

United States, 321-323

c

CABG. See Coronary artery bypass grafting

CAD. See Coronary artery disease

Canada. See also International comparisons

Bill C-22, 70

British Columbia

Office of Health Technology Assessment, 77

British North America Act of 1867,61

Bureau of Radiation and Medical Devices,71

Canadian Coordinating Office for Health

Technology Assessment, 77,93

research budget, 69

Canadian EPO Group, 11

Canadian Medical Association, 78

Canadian Organ Replacement Registry, 88

Canadian Task Force on the Periodic Health

Examination, 75-76,78

case studies

breast cancer screening, 92-94

coronary artery disease, 79-82

end-stage renal disease, 88-90

laparoscopic surgery, 9,86-87

medical imaging (CT and MRI), 82-85

neonatal intensive care, 12,90-92

Conseil Consultatif de Pharmacologic, 70

Conseil devaluation des Technologies de la

Sant6, 69

Constitution Act, 62

economy, 63

Food and Drug Act, 69-70

government and political structure, 61-63

Health and Welfare Canada, 71

Health Protection Branch, 70,71

health care system

geographic maldistribution of physicians, 66

history, 64-65

number of physicians, 66, 72-73

Quebec, 66-67

universal health insurance, 65-66

health care technology assessment, 75-78

health care technology controls

authorized drugs and prices, 70-71

control mechanisms control efficacy, 74-75
Index 1357

cost control efficacy, 74

equal access to services, 74-75

health care providers control, 72-73

macro-mechanisms for fiscal management,

67-68

marketing authorization and patent protection,

69-70

medical equipment control, 71-72

pharmaceuticals control, 69-71

placement of services, 72

provider locations control, 74

recent policy reports and decisions, 68

research funding, 68-69

health status of the population, 64

infant mortality rate, 3

language and ethnicity issues, 63

life expectancy, 4

National Breast Cancer Study, 323

National Breast Screening Study, 92-93

National Partnership for Quality in Health, 78

Ontario

Center for Health Economics and Policy

Analysis, 77

computed tomography, 83-84

Institute for Clinical Evaluative Sciences, 77

Ontario Medical Association, 77

Patented Medicine Prices Review Board, 70

physical description, 61

political parties, 62-63

population, GDP per capita, and health care

spending, 2, 3, 74

population characteristics, 63

provincial populations, 62

Quebec

background, 63-64

cardiac services, 79-82

Centres Locaux de Services Communautaires,

66

Commission of Inquiry on Health and Social

Services, 68

computed tomography, 84

Conseil devaluation des Technologies de la

Sante', 68, 74,76-77,91-92,93-94

end-stage renal disease, 88, 89-90

erythropoietin, 89-90

extracorporeal membrane oxygenation, 90-92

health care provider control, 72-73

health care system, 66-67

hospital budgets, 67,74

kidney transplants, 89

magnetic resonance imaging, 85

Ministry of Health and Social Services, 71-72,

73

placement of services, 72

provider location control, 74

Re'gionale de la Sante' et des Services Sociaux,

66-67

resource limitations, 75

ultrasound, 75

summary, 95-96

thermography use, 73

university-based training programs, 77-78

Canadian Journal of Surgery, 86

Canadian Medical Association Journal, 76

Case studies

breast cancer screening

Australia, 51-53

Canada, 92-94

France, 131-132

Germany, 164-165

international comparisons, 345, 352

Netherlands, 203-205

Sweden, 233-234

United States, 321-323

coronary artery disease, 4-6

Australia, 39-41

Canada, 79-82

France, 120-122

Germany, 154-155

international comparisons, 344-345

Netherlands, 188-191

Sweden, 225-227

United States, 304-307

end-stage renal disease, 9-11

Australia, 47-49

Canada, 88-90

France, 126-129

Germany, 160-162

international comparisons, 345, 350-351

Netherlands, 198-201

Sweden, 231-232

United States, 315-318

laparoscopic surgery, 8-9

Australia, 44-47

Canada, 86-87

France, 124-126

Germany, 158-160

international comparisons, 345, 349-350

Netherlands, 197-198

Sweden, 229-231

United States, 311-315

medical imaging (CT and MRI), 6-8

Australia, 42-44

Canada, 82-85

France, 122-124

Germany, 155-158

international comparisons, 345, 348-349

Netherlands, 191-197

Sweden, 227-229

United States, 307-311
358 Health Care Technology and Its Assessment in Eight Countries

neonatal intensive care, 11-13

Australia, 49-51

Canada, 90-92

France, 129-131

Germany, 162-164

international comparisons, 345, 351-352

Netherlands, 201-203

Sweden, 232-233

United States, 318-321

Cataract surgery

United States, 295-296

Cerebrovascular embolization, 37-38

Clinical investigation and testing. See also Research

and development policy and, 2

Clinton, President Bill

health care reform proposal, 279-280

Coelioscopy. See Laparoscopic surgery

Computed tomography

Australia, 42-43

Canada, 82-84,85

France, 112, 122-124

Germany, 155-157, 159

history of, 6

international comparisons, 345, 348-349

MRI comparison, 6-8

Netherlands, 191-193, 196

Sweden, 227-228

United Kingdom, 260-261

United States, 307-308

Congenital diaphragmatic hernias, 91

Consensus conferences, 224,259,284-285,299,

305,322

Continuous positive airway pressure

Sweden, 233

United States, 319

Coronary artery bypass grafting

Australia, 39

Canada, 79,81

France, 120

Germany, 154, 155

history of, 4-5

Netherlands, 188-190

Sweden, 223

United Kingdom, 258-259

United States, 304,305-306, 307

Coronary artery disease, 259

coronary artery bypass grafting, 4-5, 6

Australia, 39

Canada, 79,81

France, 120

Germany, 154, 155

Netherlands, 188-190

Sweden, 225-227

United Kingdom. 258-259

United States, 304, 305-306, 307

extracorporeal blood circulation

France, 121

international comparisons, 344-345

percutaneous balloon valvuloplasty

Germany, 154

percutaneous transluminal coronary angioplasty, 5

Australia, 39-41

Canada, 79-80

France, 120-122

Germany, 154, 155

Netherlands, 190-191

Sweden, 226-227

United Kingdom, 260

United States, 304,305-307

restenosis rate, 121, 226

Vineberg procedure, 304

Coronary stents, 41

CT. See Computed tomography

Cyclosporine, 10,38, 127

D

D&C. See Dilatation and curettage

DeBakey, Michael, 4

Defensive medicine, 279

Desferoxamine, 38

Diabetic nephropathy

end-stage renal disease and, 47

Dialysis. See Hemodialysis

Didanosine, 38

Diffusion. See also specific technologies by name

definition, 2

policy and, 2-3

Dilatation and curettage, 44-45

Dotter and Judkins

catheter use in coronary artery disease, 4-5

Drugs. See Pharmaceutical regulation

E

EBC. See Extracorporeal blood circulation

ECMO. See Extracorporeal membrane oxygenation

End-stage renal disease

erythropoietin, 10-11

Australia, 48

Canada, 89-90

France, 128

Germany, 162

Netherlands, 201

Sweden, 232

United Kingdom, 266-267

United States, 317-318

hemodialysis, 9, 10

Australia, 47

Canada, 88
France, 127

Germany, 160-161

Netherlands, 198-201

Sweden, 231

United Kingdom, 265-266

United States, 315,316

international comparisons, 350-351

kidney transplants, 9-10

Australia, 47-48

Canada, 88-89

France, 127-128

Germany, 161-162

Netherlands, 198-201

Sweden, 231

United Kingdom, 264-265

United States, 315-317

Endoscopy. See also Laparoscopic surgery

history of, 8

EPO. See Erythropoietin

Erythropoietin, 10-11

Australia, 48

Canada, 89-90

France, 128

Germany, 162

highly specialized drug listing, 38

Netherlands, 201

Sweden, 232

United Kingdom, 266-267

United States, 317-318

ESRD. See End-stage renal disease

ESWL. See Extracorporeal shock wave lithotripsy

Eurotransplant, 199

Evans and colleagues

quality of life and EPO, 11

Excimer laser angioplasty, 5, 41

Extracorporeal blood circulation

France, 121

Extracorporeal membrane oxygenation, 12

Australia, 50-51

Canada, 90-92

France, 130-131

Germany, 163

Netherlands, 203

Sweden, 233

United Kingdom, 269

United States, 320-321

Extracorporeal shock wave Iithotripsy

Canada, 87

Netherlands, 197

F

Framingham Heart Study, 306

France. See also International comparisons

Index 1359

Agency for the Development of Medical

Evaluation, 109, 115-117, 118

case studies

breast cancer screening, 131-132

coronary artery disease, 120-122

end-stage renal disease, 126-129

laparoscopic surgery, 124-126

medical imaging (CT and MRI), 122-124

neonatal intensive care, 129-131

causes of death, 104

Centre National de l’Equipment Hospitalier, 119

Committee for Evaluation and Diffusion of

Medical Technology, 114, 115, 116

France Transplant, 128

French Society for Evaluation in Health Care and

Technology Assessment, 119

government and political structure, 103-104

health care system

general administration, 105-107

health map, 105, 112-113

hospital system, 106-107, 109-110

number of physicians, 107

payment for health care, 107-110

price setting, 108-110

private office practice, 109

social security system, 107-108

health care technology assessment

agencies involved, 114-117

CNAMTS medical board, 120

evaluation bureau of the department of

hospitals, 118-119

law on hospitalization, 117-119

medical school departments of public health,

119-120

physicians, 119

private consultants, 119

researchers, 119

health care technology controls

health care planning, 112-114

pharmaceuticals regulation, l10-112 ●

post-marketing quality control, 111-112

pre-marketing approval process, 111

health-related expenditures, 105

health status of the population, 104-105

infant mortality rate, 3

infectious disease incidence, 105

Institut National de la Santew de la Recherche

Medicale

medical practitioners report, 107

life expectancy, 4

National Sickness Fund, 108, 109, 119, 120

breast cancer prevention program, 132

Neonatal Study Group, 129, 130
.—

360 Health Care Technology and Its Assessment in Eight Countries

population, GDP per capita, and health care

spending, 2, 3

population characteristics, 104-105

Regional Committees for Medical Evaluation of

Hospitals, 117-118

regional scheme of health organization, 112-113

Social Aid Scheme, 105, 108

summary, 132-133

G

Gallbladder removal. See Laparoscopic surgery,

cholecystectomy

Gamete intrafallopian transfer, 49-50

Ganciclovir, 38

Germany. See also International comparisons

birth rate decline, 138

Board of Experts for the Concerted Action in

Health Care, 140, 153, 161

Buro fur Technikfolgenabschatzurgbeim

Deutschen Bundestag, 148

case studies

breast cancer screening, 164-165

coronary artery disease, 154-155

end-stage renal disease, 160-162

laparoscopic surgery, 8, 158-160

medical imaging (CT and MRI), 155-158

neonatal intensive care, 162-164

Central Association of Electromedical Industry,

143

Concerted Action in Health Care, 139-140

cost containment debate, 144-147

Department of Research and Technology, 148

deregulation issue, 145

Deutsche Mammographie-Studie, 165

DiaIyse Trainingszentren, 161

Drug Law of 1976, 149-150

Einbecker Empfehlung guidelines, 163-164

European Dialysis and Transplant Association,

162

Federal Association of Sickness Fund Doctors,

152

Federal Chamber of Physicians, 164

Federal Commission of Physicians and

Mandatory Sickness Funds, 165

Federal Ministry of Research and Technology,

157-158, 165

German Center for Cancer Research, 155

German Society for Thoracic and Cardiovascular

Surgery, 155

German Society of Medical Law, 163

Health Care Act of 1992, 145-147, 151, 153

health care system

associations of sickness fund doctors, 141

health care delivery, 140-142

institutional separation of inpatient and

outpatient care, 140-142, 151

legislation and financing, 139-140

medical equipment market, 143-144

office-based physicians, 141, 143, 146, 152

private insurance companies, 140

sickness funds, 140, 143, 144-145, 148-149

health care technology assessment, 147-149

health care technology controls

drug price regulation, 150

drug regulation, 149-150

medical device regulation, 150-151

health status of the population, 138-139

Hospital Financing Act of 1972, 142

industrial decline, 138

infant mortality rate, 3

Kuratorium fur Heimdialyse, 160

life expectancy, 4, 138

overview, 137-138

Patienten-Heimversorgung, 161

placement of services, 151-153

population, GDP per capita, and health care

spending, 2, 3

quality assurance, 153-154

rate stabilization, 144-145

Regional Associations of Sickness Fund Doctors,

152, 156

Scientific Institute of the Federal Association of

Local Sickness Funds, 148

Gruentzig and colleagues

catheter use in coronary artery disease, 5

Gynecological laparoscopic surgery

France, 124-125

H

Health care expenditures

Australia, 23-24

by country, 2,3

France, 105

United Kingdom, 242

United States, 278-279

Health care providers

number of physicians

Canada, 66,72-73

France, 107

Sweden, 220

United States, 277

Health care systems

Australia, 21-25

Canada, 64-67

France, 105-110

Germany, 139-144

Netherlands, 173-178

Sweden, 213-219
Index 1361

United Kingdom, 243-249

United States, 276-280

Health care technology assessment. See also Health

care technology controls

Australia, 29-38

Canada, 75-78

France, 114-120

Germany, 147-149

Netherlands, 183-187

Sweden, 222-225

United Kingdom, 256-257

United States, 291-304

Health care technology controls. See also Health

care technology assessment

Australia, 25-29

Canada, 67-75

France, 110-114

Germany, 147-151

Netherlands, 178-183

Sweden, 219-222

United Kingdom, 249-256

United States, 281-291

Health Insurance Commission

Medicare program administration (United States),

22

Health Insurance Plan of Greater New York

breast cancer screening study, 12-13,322

mammography randomized, controlled trial, 234

Health status of the population

Australia, 20-21

Canada, 64

France, 104-105

Germany, 138-139

Netherlands, 173

Sweden, 211-213

United Kingdom, 242-243

United States, 276

Heart transplants

Netherlands, 184

Hemodialysis, 9, 10

Australia, 47

Canada, 88

France, 127

Germany, 160-161

Netherlands, 198-201

Sweden, 231

United Kingdom, 265-266

United States, 315,316

HIC. See Health Insurance Commission

High-frequency oscillation ventilation systems

Sweden, 233

HIP. See Health Insurance Plan of Greater New York

Hip replacement

consensus conferences, 224

Home uterine monitors

United States, 284,301

Hospitals. See also Neonatal intensive care;

Placement of services

Australia, 20,24,28

Canada, 67,74

France, 106, 109-110, 117-119

Germany

Health Care Act of 1992, 147

hospital ownership types, 141-142

institutional separation of inpatient and

outpatient care, 140-142, 151

quality assurance, 153-154

Netherlands, 174, 175-176

Article 18 regulation, 181-182

Sweden, 216-217,232

United Kingdom, 247

United States, 277,302

Hypertension

Swedish study, 223

Hysteroscopy, 44-45,47

I

Immunosuppressive therapy

kidney transplant and, 10,89, 127-128,317

In vitro fertilization, 49-50

Netherlands, 184

Incubators, 11

Infant mortality rates

Canada, 64

by country, 3

Sweden, 211

United Kingdom, 242

United States, 318

Infants. See Neonatal intensive care

International comparisons

case studies, 344, 345

breast cancer screening, 345,352

coronary artery disease, 344-345

end-stage renal disease, 345, 350-351

Iaparoscopic surgery, 345,349-350

medical imaging (CT and MRI), 345, 348-349

neonatal intensive care, 345, 351-352

health care technology assessment, 343-344

health systems, 335-336,340-341

impact of technology assessment on

policymaking, 352-353

public reactions and pressures, 339,341-342

technology adoption, 336-338

technology utilization, 338-339

International Journal of Technology Assessment in

Health Care, 7

International Symposium of Gynecological

Endoscopy, 8
362 Health Care Technology and Its Assessment in Eight Countries

K

Kidney transplants, 9-10

Australia, 47-48

Canada, 88-89

France, 127-128

Germany, 161-162

Netherlands, 198-201

Sweden, 231

United Kingdom, 264-265

United States, 315-317

L

Laboratories

accreditation, 29

 LAH. See Laparoscopically assisted vaginal

hysterectomy

Laparoscopic surgery

appendectomy, 8, 46

France, 124, 125

Germany, 160

Netherlands, 197

United Kingdom, 263

United States, 314

cholecystectomy, 8-9

Australia, 45-46,47

Canada, 86-87

France, 125, 126

Germany, 158

Netherlands, 197

Sweden, 230

United Kingdom, 262,263

United States, 311-314

cost effectiveness, 9, 230

digestive surgery

France, 125-126

gynecological laparoscopy

Sweden, 229,230

United Kingdom, 263

hemiorrhaphy

Australia, 46

United States, 314

history of, 8

international comparisons, 349-350

percutaneous nephrolithotomy

Germany, 158, 160

Netherlands, 197

uses for, 8-9, 44-45, 314

vagotomy

Australia, 46-47

Laparoscopically assisted vaginal hysterectomy, 46

Laser catheters

United States, 284

Laser treatment for coronary artery disease, 5,41

Life expectancy

Australia, 20

by country, 4

Germany, 138

Lion incubators, 11

Liver transplants

Australia, 38

Netherlands, 184

M

Magnetic resonance imaging

advantages of, 6-7

Australia, 43-44

Canada, 84-85

costs, 7-8

CT comparison, 6-8

dry chemistry pathology analyzers, 30,35

France, 112, 122-124

Germany, 157-158, 159

history of, 6

international comparisons, 348-349

mobile units, 311

Netherlands, 193-197

pathology testing, 35

Sweden, 228-229

United Kingdom, 261-262

United States, 276,308-311

Mammography. See Breast cancer screening

Meconium aspiration syndrome, 50

Medawar, Peter, 10

Medical devices and equipment

Australia, 26-27

Canada, 71-72

France, 111-112

Germany, 143-144, 150-151

Netherlands, 180

Sweden, 221-222

United Kingdom, 253-254

United States, 281,283-285,288,292

Medical equipment. See Medical devices and

equipment

Medical imaging. See Computed tomography;

Magnetic resonance imaging; Positron emission

tomography; Sonography; Thermography;

Ultrasound; X-ray imaging

Medical personnel. See Health care providers

Mental health technology

Sweden, 224

6-mercaptopurine

kidney transplant and, 10

Minimally invasive surgery. See also Laparoscopic

surgery

in Germany, 158-160

Minimally invasive therapy. See also Laparoscopic

surgery
Index 1363

Sweden, 230

MIS. See Minimally invasive surgery

MIT. See Minimally invasive therapy

Mortality

Canada, 64

France, 104

Netherlands, 174

Sweden, 211,213

United Kingdom, 242

United States, 276

MRI. See Magnetic resonance imaging

N

Neonatal intensive care

Australia, 49-51

Canada, 90-92

continuous positive airway pressure, 233, 319

extracorporeal membrane oxygenation, 12

Australia, 50-51

Canada, 90-92

France, 130-131

Germany, 163

Netherlands, 203

Sweden, 233

United Kingdom, 269

United States, 320-321

France, 129-131

Germany, 162-164

high-frequency oscillation ventilation systems,

233

history of, 11

infant mortality rates and, 11-12

international comparisons, 351-352

Netherlands, 201-203

nitric oxide

United States, 320,321

surfactants

United States, 319-320

Sweden, 232-233

United Kingdom, 267-269

United States, 318-321

Netherlands. See also International comparisons

aging of the population, 173

Article 18 of the Hospitals Act, 181-182, 189,

200,202

Board for the Evaluation of Drugs, 179

case studies

breast cancer screening, 203-205

coronary artery disease, 188-191

end-stage renal disease, 198-201

laparoscopic surgery, 197-198

medical imaging (CT and MRI), 191-197

neonatal intensive care, 12, 201-203

causes of death, 174

Central Board for Hospital Provisions, 192

Central Board of Health Care Tariffs, 176, 177

central government

technology assessment involvement, 186

Committee for the Regulation of Blood and

Blood Products, 180

Council for Health Research, 179, 187

Drugs Act of 1963, 179

Dutch Association of Dialysis Doctors, 199,201

Dutch Heart Patient Association, 188

Dutch Kidney Foundation, 183, 199

Dutch Organization for Scientific Research, 179

Dutch Pediatric Association, 201

economy, 172-173

Exceptional Medical Expenses Fund, 204

excimer laser angioplasty, 5

government structure, 171-172

Health 2000 program, 174-175

health care system

administering the system, 176-177

certification of health professionals, 176

health care costs, 175-176

health insurance, 175

history, 173-175

legal and legislative background, 175-176

regulation of institutions, 175

reimbursement of services, 177

health care technology assessment

development of interest, 183-184

heart transplant project, 184

liver transplant project, 184

national fund for, 184-185

new policies, 185-186

organizations, 186-187

in vitro fertilization project, 184

health care technology controls

influence of the public, 183

medical device regulation, 180

payment system and, 182-183

planning and regulation of medical services,

180-183

regulation of drugs and biological substances,

179-180

research and development efforts, 178-179

Health Council

breast cancer screening, 204

CT scanning report, 191-192

dialysis and kidney transplant report, 200

Medical Practice at the Crossroads, 185

MRI report, 194

neonatal intensive care report, 201-202

technology assessment involvement, 186

health status of the population, 173

Hospital Planning Board, 181
———

364 Health Care Technology and Its Assessment in Eight Countries

Hospital Provisions Act, 174, 175, 181

Hospital Tariffs Act, 174, 175-176

infant mortality rate, 3

Institute for Medical Technology Assessment

breast cancer screening, 204-205

kidney transplant cost effectiveness, 10

life expectancy, 4

Medical Devices Act, 180

Medical Professions Bill, 176

Memorandum on the Structure of Health Care,

174

National Coordination Committee, 204

National Council for Health Care, 186

National Fund for Investigational Medicine,

184-185

National Health Care Board, 204

National Institute for Health and Environmental

Hygiene, 187

National Organization for Quality Assurance, 204

National Organization for Quality Assurance in

Hospitals, 187

National Registry for Renal Replacement

Therapy, 200

National Society of Private Heahh Care Insurers,

175

Netherlands Organization for Applied Scientific

Research, 178, 180, 187

Nieveen Committee, 188

population, GDP per capita, and health care

spending, 2, 3

Radiological Society of North America, 191

reform proposals and implementation, 177-178

Renal Patients Association, 199

Royal Dutch Academy of Sciences, 179

Sick Fund Act, 175

Sick Funds Council, 175

benefit package, 182-183, 184, 186

breast cancer screening, 204

erythropoietin negotiations, 201

guidelines for drug use, 180

technology assessment involvement, 186

Society of Dutch Sick Funds, 175

Standing Committee on Investigational Medicine,

185

Steering Committee on Future Health Scenarios,

184, 187

summary

changing policies for controlling health

technology, 207

success of control mechanisms, 206-207

ways to control health care technology,

205-206

University Institutes for Technology Assessment,

187

NICUS. See Neonatal intensive care

Nordic Evaluation of Medical Technology, 225

radiology evaluation, 229

P

Pancreas transplants, 48

Peptic ulcer disease

consensus conference recommendations, 284-285

role of Helicobacterpylori, 284-285, 300

Percutaneous balloon valvuloplasty

Germany, 154

Percutaneous nephrolithotomy

Netherlands, 197

Percutaneous transluminal coronary angioplasty, 5

Australia, 39-41

Canada, 79-80

France, 120-122

Germany, 154, 155

Netherlands, 190-191

Sweden, 226-227

United Kingdom, 260

United States, 304,305-307

Persistent pulmonary hypertension of the newborn,

91

PET. See Positron emission tomography

Pharmaceutical Manufacturers Association of

Canada, 70

Pharmaceutical regulation

Australia, 25-26,38

Canada, 69-71

drug evaluation, 26

France, 110-112

Germany, 149-150

Netherlands, 179-180

Sweden, 221

United Kingdom, 250-253

United States, 281-283

Philips Medical Electronics, 195-196

Philips Medical Systems, 192, 193-194

Placement of services

Australia, 28

Canada, 72

Germany, 151-153

United Kingdom, 254-255

Positron emission tomography

Australia, 44

Preoperative investigations in elective surgery

Swedish study, 223

PTCA. See Percutaneous transluminal coronary

angioplasty
Q

QALYs. See Quality adjusted life years

Quality adjusted life years

coronary artery bypass grafting, 6, 259

hemodialysis and kidney transplant comparison,

10

neonatal intensive care, 12

Quality control and accreditation

Australia, 28-29

Germany, 153-154

R

Radiation treatment of cancer

Swedish study, 223

RAND Corp.

“appropriateness” guidelines, 306, 307

coronary artery bypass grafting study, 223, 227,

306,307

PTCA and CABG cost comparison, 5

Renal transplants. See Kidney transplants

Research and development

Australia, 23

Canada, 68-69

France, 119

Netherlands, 178-179

Sweden, 219-220

United States, 280-281

s

Service accessibility. See also Placement of services

Canada, 74-75

Silicone breast implants

United States, 284

Sonography

Germany, 155

Steroidal hormones

kidney transplants and, 10

Survival rates

kidney transplants, 10,89

Sweden. See also International comparisons

breast cancer screening studies, 13

case studies

breast cancer screening, 233-234

coronary artery disease, 225-227

end-stage renal disease, 231-232

laparoscopic surgery, 229-231

medical imaging (CT and MRI), 227-229

neonatal intensive care, 232-233

causes of death, 211, 213

Center for Technology Assessment, 225

Chemical Inspection, 215

Council of Research, 220

ecmomy. 209-210

Index 1365

Federation of County Councils,214,215

MRI moratorium, 229

government and political system, 210-211

Health and Medical Services Act of 1983,

214-215

health care system

administration, 215

co-payment for services, 216

constitutional basis and legislative

background, 213-215

costs of health care, 216

financing, 215-216

number of physicians, 220

organizational levels, 216-217

private health care, 213

public policy concerns, 217-218

reform proposals and implementation,

218-219

role of public, 219

health care technology assessment

agencies, 222-225

consensus conferences, 224

health care technology controls

medical devices regulation, 221-222

medical education and employment policies,

220-221

pharmaceuticals regulation and control, 221

primary health care payment, 222

research policies, 219-220

health status of the population

relative disease burden, 211, 212

infant mortality, 3, 211

Institute of Forensic Medicine, 215

life expectancy, 4

medical education, 214

Medical Products Agency, 215

Medical Research Council, 224

extracorporeal membrane oxygenation, 233

funding responsibilities, 220

milestones in Swedish health care, 214

Ministry of Health and Social Affairs,215

National Board of Health and Welfare

allocation of medical posts, 220

CABG and PTCA, 225,226-227

ESRD policy, 231,232

establishment, 214

mammography screening, 234

medical devices regulation, 221 -222

perinatology conference, 232-233

quality assurance, 222

National Board of Occupational Safety and

Health, 215

National Corporation of Swedish Pharmacies,

215
366 Health Care Technology and Its Assessment in Eight Countries

National Drug Institution, 215

National Environmental Protection Board, 215

National Food Administration, 215

National Health Insurance Act, 213

National Institute of Radiation Protection, 215

National Pharmaceutical Board, 221

National Register of Laparoscopic Surgery, 230

National Social Insurance Board, 215

population, GDP per capita, and health care

spending, 2, 3

Public Health Institute, 213

Social Research Council, 220

summary, 234-236

Swedish Council on Technology Assessment in

Health Care

back pain, 223

funding responsibilities, 220

hypertension, 223

mental health technology study, 224

MRI assessment, 229

preoperative investigations in elective surgery,

223

radiation treatment of cancer, 223

responsibilities, 222-224

Swedish Planning and Rationalization Institute,

215

consensus conferences, 224

MRI assessment, 229

responsibilities, 224-225

T

Thermography

Canada, 73

United States, 284

u

Ultrasound

Canada, 75

United Kingdom. See also International

comparisons

Audit Commission, 248,257

Cancer Coordinating Committee Breast

Screening Sub-Committee, 270

case studies

breast cancer screening, 13,269-270

coronary artery disease, 258-260

end-stage renal disease, 264-267

Iaparoscopic surgery, 262-264

medical imaging (CT and MRI), 260-262

neonatal intensive care, 12,267-269

Central Research and Development Committee,

249-250

Clinical Advisory Group, 268-269

Clinical Standards Advisory Group, 257

Cochrane Centre, 250

Committee on the Review of Medicines, 252

Committee on the Safety of Medicine, 252

community health councils, 248

Coordinating Committee on Clinical Application

of NMR

Imaging, 261-262

Department of Health

hemodialysis costs, 266

laparoscopic surgery policy, 263-264

medical equipment regulation, 253

pharmaceutical firm profitability assessment,

252

prescribing analysis and cost data, 253

prescription drug limited list, 252-253

provider location control, 254

“Report of an Independent Review of

Specialist Services in London,” 259

responsibilities, 245

District Health Authorities, 245

Family Health Service Authorities, 245

Forrest Report, 269-270

government and political structure, 241

health care system

England, 244

funding, 243,247

health care purchaser-provider relationship,

245

health policy, 245

impact of reforms, 248-249

principles, 243-244

purchasing chain, 245-246

reforms planned, 246-248

Wales, Scotland, and Northern Ireland, 244

health care technology assessment

assessment entities, 256-257

health care technology controls

control of use, 255

medical equipment regulation, 253-254

national policy development, 249-250

NHS Supplies Authority, 254

pharmaceuticals regulation, 250-253

placement of services, 254-255

private sector and consumers role, 255-256

provider location control, 254

utilization and quality control, 255

Health of the Nation program, 245

health status of the population

causes of death, 242

health care expenditure, 242

patient’s charter, 243,245,255

targets for health improvement, 242-243

House of Commons Health Committee report,

268
Index 1367

House of Lords Select Committee on Science and

Technology, 249-250

infant mortality, 3, 242

Joint Subcommittee and Standing Maternity and

Midwifery

Advisory Committee, 267

King’s Fund, 257

consensus conference on CABG, 259

Consensus Statement on CT scanners, 261

life expectancy, 4

medical audit, 257

Medical Research Council

role, 256-257

Medicines Act, 252

National Audit Office, 248,254,268

National Health Service

patient’s charter, 243,245,255

National Health Services Act, 244

National Perinatal Epidemiology Unit, 268

NHS and Community Care Act, 244,245

NHS Management Executive, 244

NHS trusts, 246,248

population, GDP per capita, and health care

spending, 2, 3

Public Expenditure Survey Committee, 246

Regional Health Authorities, 245

Royal College of Physicians, 267-268

Sheldon report on neonatal intensive care, 267

Standing Group on Health Technology, 250

Standing Medical Advisory Committees, 256-257

summary, 271-272

Trial for the Early Detection of Breast Cancer,

270

University of York CT user guide, 261

Wolfson Foundation, 264

United States. See also International comparisons

Agency for Health Care Policy and Research

clinical practice guidelines, 294

funding sources, 293

guidelines for diagnosing and managing

unstable angina, 306

Office of Health Technology Assessment, 292,

297-298, 300,305,309,310,312-313

patient outcomes research teams, 295-297

aging of the population, 279

American Academy of Pediatrics, 300

American Cancer Society

breast cancer screening, 322,323

American College of Cardiology, 306

American College of Physicians, 300

American College of Radiology

breast cancer screening, 322-323

American Hetirt Association, 306

American Medical Association, 292

Diagnostic and Therapeutic Technology

Assessment program, 300-301

American Society of Transplant Surgeons, 317

Blue Cross/Blue Shield, 277

Medical Advisory Panel, 301

Medical Necessity Program, 301

MRI benefits, 309-310

Technology, Evaluation, and Coverage

program, 301

Breast and Cervical Cancer Mortality Prevention

Act, 321

Breast Cancer Detection Demonstration Project,

322

case studies

breast cancer screening, 13,321-323

coronary artery disease, 304-307

end-stage renal disease, 315-318

laparoscopic surgery, 9, 311-315

medical imaging (CT and MRI), 307-311

neonatal intensive care, 318-321

Center for Research Dissemination Liaison, 297

certificate-of-need program, 285, 307, 308, 310

Civilian Health and Medical Program for the

Uniformed Services, 278

Clinical Efficacy Assessment Program, 300

Committee on Perinatal Health, 318

Council on Health Care Technology, 292

defensive medicine, 279

Department of Veterans Affairs

hospitals and outpatient clinics, 278

Food, Drug, and Cosmetic Act, 282

Medical Device Amendments, 283,308,309

Food and Drug Administration, 281-283

Framingham Heart Study, 306

General Accounting Office

mammography machines, 321-322

Health Care Financing Administration

ESRD payments, 316,317-318

health care system

delivery system, 277

description, 276-277

federal and local governments as providers,

278

health care expenditures, 278-279

health insurance, 277-278

number of physicians, 277

recent reform efforts, 279-280

health care technology assessment

databases, 303-304

federal efforts, 291-300

private sector assessments, 300-302

recent trends, 302-303

health care technology controls

health maintenance organizations, 289
368 Health Care Technology and Its Assessment in Eight Countries

health planning and, 285

managed care, 289-291

medical device marketing approval, 283-285

payment, coverage, and utilization controls,

286-289

pharmaceuticals marketing review, 281-283

physician profiling, 290-291

preferred provider organizations, 289

utilization management, 289-290, 291

health status of the population, 276

Indian Health Service, 278

infant mortality rate, 3, 318

Institute of Medicine, 292,343

end-stage renal disease study, 315

Investigational Devices Exemption, 284

Kaiser Perrnanente

autologous bone marrow transplantation, 302

life expectancy, 4

Maine Medical Assessment Foundation, 290

Mammography Quality Standards Act, 322

Medicaid, 277,278

Medicare

capital equipment payments, 288

coverage description, 277, 278

DRG system, 288,303

end-stage renal disease, 315-318

ESRD payments policy, 316-317

“experimental” defined, 287

Health Care Financing Administration

coverage standard, 287-288

mammography coverage, 322

new technology and, 286-287

physician payments, 289

Prospective Payment Assessment

Commission, 288,315,318

prospective payment system, 288,306-307,

310

“usual, customary, and reasonable” method of

physician payment, 289

Medicare Catastrophic Coverage Act, 322

National Cancer Advisory Board, 323

National Cancer Institute

autologous bone marrow transplantation,

301-302

breast cancer screening consensus

development conference, 322

budget, 281

mammography machines, 321

National Center for Health Care Technology, 292

National Council on Health Care Technology,

292

National Health Planning and Resources

Development Act, 285,307,310

National Heart, Lung and Blood Institute

budget, 281

Coronary Artery Surgery Study, 305

National Institute for Allergy and Infectious

Diseases

budget, 281

National Institute of Diabetes and Digestive and

Kidney Disorders, 315

National Institutes of Health

clinical indications for MRI, 309

consensus conferences, 224, 299, 305

Consensus Development Conference, 315

funding, 280-281

National Organ Transplant Act, 316

National Research Council, 343

off-label uses of drugs, 284-285

Office of Technology Assessment, 343

Omnibus Budget Reconciliation Act, 322

Oregon Medicaid proposal, 300,303

Orphan Drug Act, 283,317

overview, 275-276

peer review organizations, 290

pharmaceutical and medical device industries,

281

population, GDP per capita, and health care

spending, 2, 3

professional standards review organizations, 290,

308

Renal Data System, 315

research and development, 280-281

Safe Medical Devices Act, 284

Social Security Act, 287

Social Security Act Amendments, 316

Social Security disability payments for ESRD,

7

summary, 324-325

United Network for Organ Sharing, 315

University Hospital Consortium, 302

U.S. Preventive Services Task Force, 299-300

Veterans Administration

CABG benefits, 226

CABG randomized trial, 305

V

Vineberg procedure, 304

w

WHO. See World Health Organization

World Health Organization

CABG recommendations, 226

x

X-ray imaging

Germany, 155

z

Zidovudine, 38