Chile: Private Hospital Sector Unveils Technical Norm to Increase Transparency of Reimbursement Decisions

The Chilean Association of Private Hospitals has unveiled its plan to set up a technical norm aiming to increase regulation and transparency regarding reimbursement decisions of private health payors, the local La Tercera reported. The guideline has been worked out with the collaboration of private insurers and it will be presented to the authorities, namely the Superintendency of Health, within the next weeks. The aim of the regulation is to clarify doubts that often payors, either private insurance companies or individuals, have in relation to the cost associated with medical services, involving different variables such as severity, surgery room overall costs and difference of cost between services provided during weekdays and weekends.

Indeed Ana Maria Albornoz, representative of the Chilean Association of Private Hospitals which grouped 36 private hospitals in the country, commented that this new regulatory framework will increase transparency throughout the sector, which recently has been questioned by the Chilean Free Competition Advocacy Authority (Fiscalia Nacional Economica, FNE) opening an investigation in order to determine the condition on which private hospitals charge their patients in terms of drugs and medical devices. The announcement made by the FNE came after lawsuits were initiated by patients who were subject to higher charges and what is being described as “abuse of the system”. This situation is caused because providers are not subject to price regulation and nowadays they are part of health networks in connection with private insurance companies, a sort of informal Health Maintenance Organisation. That situation determines that users of the private health system are not able to compare prices and they do not have free choice to decide which provider they want using market mechanisms, because they are caught within the health network of their insurance company.

The new norm, which is almost complete, has received the endorsement of the President of the Private Insurance Companies Association (Isapres), who has agreed that the new norms will increase transparency between providers and payors, because it will establish a clear set of criteria per medical service or procedure and each component will be attached to a certain price. The manoeuvre also has been branded as the creation of a new sort of dialogue between the two sectors.

Despite the modern private health sector that Chile already has, according to this information it seems to be crystal clear that payment mechanisms and other methods of estimating cost within the normal operation of private hospitals were lagging. Even though inconsistencies between providers and payors must have existed, prompting the creation of this new framework, it is clear that private insurance companies have not been affected heavily in terms of revenues and profits, after reports confirmed that profits increased 92% on a year-on-year basis.

However, part of the rationale to explain this manoeuvre could be related to prospective further co-operation between the private and public sector; public hospitals are involved in a similar kind of process driven by the integration of Diagnostic Related Groups (DRGs), a long-awaited reform. If the government has plans to increase even more the partnerships between public and private providers, it is understandable that the requirements are going to be higher, at least in terms of cost transparency. That would help the government to support its movement encouraging the transfer of resources from public to private health.

Brazil Improves Device Assessment for National Health System

This is the report written by Molly Cohen from FDA News about my article regarding the regulatory changes in Device Assessment in Brazil.

A new Brazilian law requires using protocols and guidelines as part of enhanced assessment processes to increase access to medical devices through the country’s national health system, the Sistema Unico de Saude System (SUS).

Law 12.401, proposed by Brazil President Dilma Rousseff, which aims to improve the inclusion of devices in the SUS, will be implemented within the next six months.

It will improve access to high-quality devices that adhere to criteria based on clinical protocols and therapeutic guidelines created by health professionals from different SUS provisions, according to Latin America and Spain analyst for IHS Global Insight Ruben Gennero.

The law allows 180 days for manufacturers to demonstrate compliance with the new effectiveness, safety and cost-effectiveness criteria, with an additional 90 days for extension — an appropriate time to complete the safety and efficacy studies, Gennero said. It also includes a provision for consultation and public input.

Including Devices

The decision to include devices in the SUS will be governed by the National Commission of Technology Incorporation (Comissio Nacional de Incorporacio de Tecnologias, Citec); coordinated by the Ministry of Health and integrated by representatives from the Ministry, the National Agency of Supplementary Health (Agencia Nacional de Saude Suplementar, ANS) and the National Drug Regulator (Agencia Nacional de Vigilancia Sanitaria, Anvisa), as well as one member from the National Health Council and the Federal Council of Medicine, Gennero said.

But even though a reshaping of Citec’s capabilities and the inclusion of new members on the board will ensure transparency, there is also a risk of bureaucracy under the new assessment paradigm, Gennero warns. “The real impact will be measured when the law enters into force within the next six months.”

It introduces periodic assessments of medical technologies offered by the SUS. The assessment criteria cover standards for effectiveness, safety and cost as conditions for the inclusion of new products listed on the SUS, Gennero said.

This is the most recent change in a growing list of changes in Brazil that aim to improve medical device regulation. In April, Brazil’s Attorney-General of the Union restricted Anvisa’s power to examine applications of intellectual property rights on medical products and reduced its role to weighing in on the scope of health risks on the product seeking patenting (IMDRM, April).

Last month, ANVISA began charging inspection fees for certificates of compliance with good manufacturing practice (GMP) and quality control every two years instead of annually to clear up confusion stemming from a 2009 law that called for annual quality system inspection fees while the GMP certification is renewable on a bi-annual basis (IMDRM, May).

Colombia: The crisis affecting the Health System is far from over

The controversial Law 100, set out in 1993, which established the base of the current health system and especially its financial provision, has suffered severe questioning recently, based on the recent intervention in Saludcoop, the biggest health administration company with a portfolio of approximately 4 million Colombians.

Indeed, the Colombian SuperIntendencia de Salud, the state body in charge of overseeing the private insurance sector that is the main reimbursement source of the Colombian Health System, intervened in private insurance company (Entidad Promotora de Salud, EPS) Saludcoop, accused after an investigation of alleged disastrous financial management and being unable to pay providers, debts and more importantly, meet its obligations to patients. In fact, the President of Saludcoop, Carlos Palacino, announced he will step down from the job whilst Superintendencia takes control of the assets and operation of the company, which will continue offering financial protection to its beneficiaries.

The Colombian Minister of Social Protection, Mauricio Santa Maria, has commented in an interview published by the local El Tiempo that actions are required to improve the current situation. Even though political opposition has highlighted the need for a complete change in the system, the current President Santos, coming from the same political ideology of the former President Uribe, is not willing to undergo deep changes. The Minister of Social Protection has said that an enhancement in terms of regulation and price control of certain drugs is important, in order to improve the financial status of EPSs and at the same time, reduce the huge rate of judicial intervention that the system is experiencing. The Minister pointed out that even though Law 100 has increased the access and fairness of the Health System in Colombia, there are some important actions that must be taken in order to increase the transparency and accountability of the system. He ruled out a complete change in the rules and criticised the opposition leaders for trying to take political advantage of this situation. The authority has described one of the big actions will be expansion and improvement of the role of SuperIntendencia de Salud, conducting the overseeing and accountability of the system. The public entity will have an increase in its budget (from 40 billion Colombian pesos/USD22 million to COP80 billion), more inspectors and better technical skills. In addition, he pointed out its aims will be concentrated into three main aspects: quality, flow of resources and opportunity of medical attention. In terms of drug pricing, it is worth noting that in 2006 there was enacted the freedom of pricing. What has been complicating things in the Colombian health system, according to the authorities, is the situation when EPS re-charge the Fosyga (national health fund) for drugs which have been indicated after a litigation process, between patients and  EPS. Every time that this situation happens, EPSs allegedly are charging the government more than the normal value of the drugs and in some instances carrying out fraudulent activities, such as charging for drugs for patients who are deceased.

Another big concern of the authorities is when EPSs charge the government for drugs or procedures which are not included in the Compulsory Health Plan, but have been indicated after a litigation process. The Minister has commented that the government is planning to control prices, setting out maximum prices by active pharmaceutical ingredient in the case of the so called re-charge process of EPSs.

Conclusions: The Colombian health system is facing one of its biggest crises after the intervention of Saludcoop. Even though the trigger which ignited the intervention by the Superintendencia de Salud is related to lack of accountability in terms of financial management and insolvency, it has been the opportunity to highlight all the problems that the liberal and privatised Colombian system is experiencing. In fact, the huge presence of justice and litigation as part of the system, given the fact that every time there is a inconsistency between the beneficiary and the EPS, the court ends up intervening, has sent the system into an spiral of overspending. The lack of regulation, overruled by the EPS, and the freedom that they have in terms of deciding where they want to conduct their business, has seen many of these companies investing in golf camps, housing sector and hedge funds abroad, diverting the attention of their core business and some of them failing in their financial obligations. The government is trying to send a message of tranquillity to the markets, however, it is likely that new EPSs are going to be regulated, which could increase the current levels of uncertainty.