my challenge to each of us is

My challenge to each of us is …

collaborate

for the benefit of all New Zealanders!

Anne Kolbe ONZM, MBBS (Hons), FRACS, FRCSEng (Hon), FCSHK (Hon), FRCSEd (Hon), MAICD

Chair, New Zealand National Health Committee

NHC MTANZ 2014

Declarations of Interest

• Vocationally registered paediatric surgeon

• Chair, National Health Committee

• Co-chair, international Policy Group G2MC

• Director, Pharmaceutical Management Agency

(PHARMAC) 2010 - 2013

NHC MTANZ 2014

My responsibilities today …

• Set the scene

• Discuss the NHC’s approach to the

management of technology with an

emphasis on business and finances

• Dispel some myths

• Encourage collaboration and cooperation

for the good of all

NHC MTANZ 2014

Vote: Health $15 billion

DHBs

Disability

Education

Public Health

Primary Health

Maternity

Ministry

NHC MTANZ 2014

Growth in core Crown health spending has outstripped national income...

0%

50%

100%

150%

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250%

300%

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450%

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10

Health: 412%

GDP: 144%

% change since 1950

Core Crown health expenditure per capita and GDP per capita (indexed real growth)

Growth in core Crown health spending has

outstripped national income … Core Crown health expenditure per capita and GDP per capita indexed real growth

This has major implications for organising health and long term care

• Systems evolved to manage acute (e.g. infectious), life-threatening conditions

– care tended to be episodic, reactive, delivered by individual professionals

– emphasis on hospitals & doctor-led care organised around medical specialties

– patients were seen as passive rather than contributors to their own care

• Even systems with strong emphasis on LTCs suffer from variations in quality, weaknesses in coordination, unplanned hospital admissions

Nicholas Mays, London School of Hygiene and Tropical Medicine, Affording Our Future

Wellington, December 2012 NHC MTANZ 2014


Wellington, December 2012







Projected change in composition of govt expenditure (excl. financing)

Health

Superannuation

Education

Other

Non-NZS welfare

21%

31%

2010

2060

NHC MTANZ 2014

Drivers of sector expenditure

• Labour Price Index

• Commodities Price Index

• Deficit Funding

• New Policy

• Demographics

• Technology

NHC MTANZ 2014

National Health Committee

Section 11 advisory Committee responsible for providing the Minister of Health with evidence based recommendations on:

• Which technologies should be publicly funded in New Zealand

• To what level and where technology should be provided

• How new technology should be introduced and old technology removed

NHC MTANZ 2014

NHC uses the WHO definition of technology

with a focus on models of care

Components of a model of care

• Pathway of care for 80% of target patient

population

• Business model that supports and manages

the resource critical nodes in the pathway of

care

NHC MTANZ 2014

What are we trying to achieve?

• Safe, quality, measurable health,

wellbeing and independence

outcomes for individual patients and

populations

• Value for money and affordability

• Sustainability

• Contribute to GDP growth

NHC MTANZ 2014

Value for money (VfM) and

affordability

measurable health outcomes

VfM

cost of the resources invested

in the model of care

NHC MTANZ 2014


Wellington, December 2012







Sustainability

Continuing to provide the range and

types of services (outcomes) currently

available, or better, without incurring

excessive levels of taxes and / or debt

NHC MTANZ 2014

NHC approach …

• Evidence based, management of non-drug

technologies with a focus on models of care

• Four domains

• Clinical safety and effectiveness

• Societal and ethical

• Economic

• Feasibility of adoption

• 11 decision making criteria

• A4R framework

NHC MTANZ 2014

NHC Strategic Business Plan

technology management streams and tools

• Proactive

• Reactive

• Pull model

• Sector Programme Budget

• Tiered business cases

• Notional Budget

• Sector annual referral round

• Innovation fund, HRC &CI

Streams

Tools

NHC MTANZ 2014

Programme Budget 2013 NHC analysis of 2010–2013 NMDS

Source; NHC Strategic Business Plan 2014/15-17/18

FINAL June 2014 15

Figure 5: Size and price of New Zealand public hospital disease burden, 2012/13

Source: 2013 NHC analysis of 2010–2013 NMDS

3.3 Measuring the bend in the cost curve

3.3.1 QALY and DALY measures

The traditional approach to managed diffusion of technology through a health system is to undertake

a detailed health technology assessment of a single technology in isolation and to measure the

outcome in QALYs or DALYs (Quality Adjusted Life Year or Disability Adjusted Life Year). Most HTA

agencies internationally follow this path and will recommend the introduction of a technology that

generates a benefit in local currency of less than or equal to 15,000–30,000 per QALY. The difficulty

with this approach is that its slow speed means it cannot keep pace with the volume of technology

being introduced. Its isolation also means it does not test the comparative effectiveness of the

technology against other new or existing interventions or the best fit of the technology into a model of

care. Therefore, the health system may invest in an effective, but comparatively inefficient technology

and the cost curve will not be bent to maximum effect, limiting the choices for investment elsewhere.

The risks of the traditional methodology are increasing as many new technologies have higher up-

front costs than has traditionally been the case. New Zealand is moving to reduce this risk by

implementing “mega analyses” whereby the NHC undertakes an assessment of a basket of

technologies used to treat a particular disease state(s)/ service linked to a pre-selected heath status.

The NHC then recommends implementation of the most cost effective mix of interventions across a

model of care.

The NHC will continue to implement the mega analysis approach through its tiered business case

model. Focus areas are outlined in section 5 of the four year strategic business plan.

Mean%Price%($1000s)

Individuals%(n,%thousands)

Ministry of Health 8/4/14 1:05 PM

Deleted: As an interim step the Committee intends to act on (and refine and extend) the cluster of cardiology related referrals the

sector sent to it for consideration for health technology assessment during 2012/13. This course of action will enable it to reflect

sector concern about the push for investment within the specialty while at the same time developing expertise in one of

the areas its own work has identified as being amongst the top three fast growing health spends – making it an ideal candidate

for the initial development of the pull model.... [6]


Deleted: 1


Deleted: <#>Figure 2, Size and price of New Zealand admitted and non-admitted

health system burden, 2011/12 ... [7]


Deleted: pathway


Deleted: Ontario, Canada


Deleted: its HTA agency, the Ontario Health Technology Assessment Committee (OHTAC),


Deleted: OHTAC


Deleted: In New Zealand t


Deleted: through an assessment of respiratory medicine (chronic obstructive pulmonary

disease, COPD) and a further investigation of cardiac interventions (ischaemic heart disease, IHD).

NHC MTANZ 2014

NHC Business Plan 2013/14

9 Commercial In Confidence

Figure 2: NHC Tiered Approach for Prioritising Work Plans/Seeking Advice and Engaging with the Health Sector

Source: NHC Executive

1.1.4. Providers – DHBs, NGOs and Private

The bulk of the work and risk associated with implementing NHC recommendations sits with sector

providers. The NHC will remain closely aligned to sector thinking in order to be successful in

improving New Zealand’s uptake of health technology. On-going engagement and participation at

a governance and executive level will be necessary. This will be reflected by:

· the composition of the Committee itself

· the NHC facilitating the development of regional prioritisation networks whose work

will benefit and inform that of the national committee

· the running of a distributed executive model with offices in Auckland and Wellington

· alignment with financial planning, funding and budgeting processes

· Ensuring close involvement in the development of NHC business cases through the

tiered approach to ensure feasibility of adoption of the NHC’s recommendations.

Ministry of Health 11/10/13 9:30 AM

Deleted: these agencies are


Deleted: d


Deleted: NHC working groups

NHC Tiered Business Approach to Work Plans

Sector Engagement and Participation

Source; NHC Strategic Business Plan 2014/15-17/18 NHC MTANZ 2014

5

Figure 1: NHC Workflow Diagram

Source: Source; NHC Strategic Business Plan 2014/15-17/18 NHC MTANZ 2014

Basic Research Clinical Trials Field and Innovation Evaluations

HRC HIP CI NZTE

NHC

T Phase 1 2 3 4

NHC MTANZ 2014

NHC MTANZ 2014

!!

Global&Market&

!

The&Missions&National&Health&Committee&(NHC)& &

·

·

·

Callaghan&Innovation&

·

·

·

The&Opportunity&&

easier New&Zealand&firmscommercialise new

technologies&and&services

·

growth&potential

· fair value

· inventiveness attractiveness

· safe

The&Unique&Assets&National&Health&Committee&(NHC)&

·

·

·

·


·

·

·

·

Together&

·

·

·

Research&Community&

Firms

Assessment&Gatekeepers&

· NHC&

·

Domestic&Market&&

&&

How&do&we&make&this&process&easier?&


National&Health&Committee&

CMDT%

THE!NHC’s!model!of!forecast!“significant!and!fast!growing!spend”!becomes!a!signaling!device!for!current!research!priorities,!and!informs!support!policies!!!

The!NHC’s!Innovation!fund!validates!technology!through!clinical!trials!(HRC!methodologies)!designed!to!maximize!value!to!firms’!global!commercialisation!efforts,!but!in!ways!that!keep!NZers’!safe.!!

Terms!of!agreement!with!firm!structured!to!capture!future!to!NZ!!!

Next&Steps&

·

·

·

·

Explore!potential!to!expand!approach!more!widely,!including!expansion!to!PHARMAC!and!leveraging!of!the!HIH’s!

relationships!with!some!DHBs!!!

CI’s!National!Technology!Networks!and!leadership!

positions!in!other!research/firm!consortia!(such!as!the!CMDT)!are!effective!means!of!

engaging!with!the!research!community!and!shaping!research!priorities!!

CI’s!Business!R&D!grants!support!firm!lead!development!of!

technology!

CI’s!Business!Innovation!Advisors!support!firms!in!their!commercialization!journeys,!including!

business!planning,!capital!access!and!deQ!risking!and!increasing!the!market!potential!

Pipeline!of!emerging!technologies!can!be!mapped!and!monitored!against!the!NHC’s!emerging!and!

future!priorities!

Procurement%Gatekeepers%

· PHARMAC!· HBL%

Procurement%Gatekeepers%

· DHBs%

Intention!to!accommodate!the!joint!regulatory!agreement!with!Australia!(2016)!!

NHC MTANZ 2014

4 Committee Report to the Minister June 2014

Table 3: Example of a notional budget.

Portfolio

assessments Year 1 Year 2 Year 3

Total over

10 years

Health

Outcome

Measure (QALY / DALY)

Intervention A -$5m -$5m -$5m -$50m 10

Intervention B $10m -$12m -$12m -$96m 25

Intervention C -$10m $0m $0m -$10m 50

Intervention D $5m $10m $15m $135m 100

Total $0m -$7m -$2m -$21m

Source: NHC Executive

22. Table 3 demonstrates how a portfolio of assessments would work together to build a fiscally

prudent and sustainable notional budget. In this example, the NHC is creating $15 million in

savings in year one, which is offset by $15 million in new expenditure. This results in zero

additional expenditure in year one.

23. The zero year one expenditure impact outlined in Table 3 is only one of the possible

scenarios. For example a different portfolio might yield a net total savings in year one, which

would allow the NHC to bank or reallocate funds towards additional high value for money

investments. Net positive expenditure could occur with the approval of the Minister. Risk is

managed by the need for the notional budget to deliver a realistic forecast in order to work

appropriately.

24. In the example in Table 3, interventions A and B contribute savings to the sector in the out

years, which generates notional savings in the portfolio. Over time as the portfolio builds up

these savings become more significant.

25. The notional budget approach also illustrates how the NHC can offset expenditure in

interventions with upfront costs, but long run savings (Intervention B) or interventions which

are not cost saving, but provide good value for money health gains to New Zealanders

(Intervention D).

26. The example illustrates how the use of a notional budget would discourage new expenditure,

which is not offset by savings as the budget would no longer balance. In this way, the notional

budget also allows for the NHC to manage ‘investments’, where recommendations are net

cost increasing, but provide significant health benefits. In addition, the concept allows the

NHC to manage a balance between short run expenditure and long run savings.

27. A notional budget informs the amount of savings that would need to be found in a financial

year in order to balance new expenditure and savings, as well as short and long run

outcomes. This allows the NHC to align its work programme and resources in order to deliver

a material notional budget to the sector.

28. Balancing a notional budget alone does not incentivise a high volume of recommendations. To

create these incentives, it is recommended that the NHC continues to set a materiality target,

focusing on growing the size of the notional budget over time. As shown in Table 3 this should

also be aligned to health outcomes measures.

Example of a notional budget

Source: NHC Executive Notional Budget paper 2014

NHC MTANZ 2014

NHC budget management

• Released value (savings): cost effectiveness,

efficiencies and reprioritisation

• Wise investment (expenditure)

• Savings and expenditure:

• Notional and real

• Budget and non-budget

• Direct and indirect

NHC MTANZ 2014

Tier 1 Strategic Overview

Respiratory Disease in New Zealand

• $265m public casemix hospital discharges

• 10 disease states within respiratory disease

• prevalence, incidence, health outcomes, health utilisation and cost

Identify the disease state for Tier 2 assessment with the aim of improving health outcomes whilst maintaining or reducing costs through the prioritisation and application of the most cost effective new and existing health technologies across a model of care

Source: NHC Respiratory Disease in New Zealand

NHC MTANZ 2014

Respiratory Disease in New Zealand (Working Draft) 11

6 Pathway of Care

Whilst there are many variations of the specific details of a COPD pathway, all COPD pathways

follow the same basic principles of diagnosis and treatment. Figure 3 outlines the pathway of

care for COPD and the interventions that comprise that pathway. This pathway provides a

general picture of COPD care, but not every patient will travel through the pathway in the same

way nor will they receive the same interventions along the pathway of care.

Figure 3: Pathway of care for COPD

Source: Refer to Methods

NHC Model of Care for COPD 2013 NHC MTANZ 2014

5

Yes

No

Yes

No

Low, medium,

high

Very high

Yes

No Referred

Referred

High Frailty

Patient presents to

Primary Care with symptoms and/or

murmur

Seen in Cardiology

Outpatients (COPC)

Transthoracic Echo performed/reviewed

Transthoracic Echo performed by another

service e.g. General

Medicine, Geriatrics

Severe AS

confirmed

Frailty

Assessment1

No

Intervention

Palliative Care Primary Care

Investigations Coronary angiogram Femoral angiogram

Spirometry Cardiac CT

Transoesophageal

Echo

Symptoms? Consider BNP

Cautious stress testing

High BNP? Symptoms?

Follow closely in

COPC until symptoms are present

Cardiac surgical Conference

Cardiologists Cardiac Surgeons

Cardiac Anaesthetists CVICU Specialist

Cardiothoracic

Coordinator

Discussion regarding

sutureless AVR among the surgeons

Risk assessment for

sAVR2

Surgical

Waiting List CPAC Criteria to

prioritise

Standard surgical AVR

Sutureless AVR

4

BAV

Heart Team Interventional cardiologists

Cardiac Surgeon Imaging Cardiologist

Cardiac anaesthetist/Intensivist Coordinator

Geriatrician Input

Suitable for TAVI?3

Approach discussed

TAVI Waiting List Priority given

TAVI Transfemoral

Transapical

Transaortic

1. See Frailty Score attached;

however, the assessment is still

under development

2. See criteria for surgical risk

assessment

3. See TAVI eligibility criteria

4. See Sutureless AVR criteria

Figure 1: Model of care in severe AS

Briefing Paper for Meeting on: 28th February 2014

Pathway of Care for aortic stenosis (AS)

NHC MTANZ 2014

Index admission costing data

9% 2%

57%

1%

2%

17%

8% 4%

TAVI COST BREAKDOWN

medical labour

Allied labour

implant cost

Blood

labs

ICU

theatre

ward

17%

1%

14%

4%

4% 29%

21%

10%

SAVR COST BREAKDOWN medical

labour

Alliedlabour

implantcost

Blood

labs

ICU

theatre

ward

Cost Comparison of Trans catheter Aortic Valve Implantation (TAVI) with Surgery for patients with

severe symptomatic aortic stenosis.

Bhattacharyya S1, Roskruge M1, Haynes S2, Ramanathan T2, Webster M2, Ruygrok P2

1National Health Committee, 2Auckland City Hospital

NHC MTANZ 2014

EGFR-TKI questions …

• New Zealand mutation rate

• BOD and model of care for lung cancer

• Target population for TKIs

• Model of care for tumor biopsy

• Model of care for specimen management

• Cost inputs, testing platforms, TKIs etc.

• Comparison existing vs. new model of care

NHC MTANZ 2014

Challenges

New Zealand values the health and wellbeing

of our citizens above all else

Health is a complex, adaptive, resource

expensive business

To ensure value for money, affordability,

sustainability and strong growth in GDP we

must work together!

NHC MTANZ 2014

NHC MTANZ 2014

my challenge to each of us is

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