Market access for cardiac point-of-care testing in the UK National Health Service

The National Health Service (NHS) is the universal public healthcare system that is delivered free at the point of access throughout the United Kingdom.¹ It operates within all four regions: England, Scotland, Wales, and Northern Ireland.^1-3 An estimated 75% of U.K. healthcare is delivered through the NHS, with the remaining 25% delivered by the private sector.² The NHS is run by the Department of Health and funded through general taxation. Hence, there is no patient reimbursement mechanism in place in the U.K., as either patients receive their care through the NHS and hence treatment is free at the point of access or they elect to get private care. The latter is paid directly to the healthcare provider via health insurance company schemes, with a smaller number opting for self-payment.^2,3
 

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Figure 1. Market access for point-of-care (POC) diagnostics within NHS.

Within the NHS, a significant application of point-of-care testing (POCT) goes toward the measurement of acute cardiac markers during the assessment of patients presenting with suspected cardiac-related chest pain at emergency departments.^3-6 From the viewpoint of cardiac marker POCT device manufacturers, the main user market is within the NHS Pathology Service, operating in Trust hospital emergency departments, out-patient cardiology departments, rapid access clinics, and clinical decision units, rather than primary care level general practice clinics.^3,6-10
 

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Table I. Regional Medical device Procurement Organizations within the UK NHS.

The structure of the POCT device market within the NHS is shown in Figure 1. The market size for cardiac marker POCT is projected to rise from £30 million to £35 million by 2011.^3,6,7,11-13 In the past, funding among NHS Trust hospitals has impeded investment into pathology services, leading to delays in purchasing new and emerging diagnostic devices. However, recommendations from the Carter Review on the future of the NHS Pathology Service, together with pressure from cardiologists, emergency department clinicians, and laboratory scientists, has encouraged greater POCT usage through improved budgeting control.^1,3,7-10
NHS Reimbursement Architecture
When considering introducing a new POCT device into NHS, IVD manufacturers need to consider the market drivers affecting decentralized testing, together with an understanding of the U.K. reimbursement architecture and medical device procurement organization.^2,14,15 Reimbursement is a significant driver affecting the POCT market (see Figure 2). Within primary care in NHS, reimbursement is available only for prescribed POCT applications such as glucose monitoring. There is no separate policy for non-prescribed cardiac marker POCT.^3,15,16
 

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Figure 2. Drivers affecting the decentralized testing market.

In relation to NHS market entry, it is important to understand how local tariff schemes operate for pathology services. Within NHS hospitals, reimbursement is incorporated into most inpatient and day case tariffs. Separate tariffs exist for certain POCT applications as in those for outpatients, indicative, and unbundling.^3,10,15,16 The main NHS costing for pathology services within NHS primary care is based on payment by results.^{3,7,10,14,16,17} The basis of payment by results is that a tariff should be developed for services which are commissioned directly from primary care. Hence, general practice direct access pathology will need to be included as part of the tariff.^10,16
The process has already started in the NHS with the development of a simple indicative tariff for direct access pathology that primary care and Trust hospitals may adopt. However, the indicative tariff has a disadvantage due to being based on a mean cost per test for each discipline, and it does not reflect the complexity and scope of the work of the pathology service. The expert working group that is responsible for setting tariffs should continue to develop pathology healthcare resource groups in this area in order to assess funding options for hospital-based pathology services.^3,10,15-17
In light of the Carter Review, these options could include either complete unbundling of pathology costs, leaving pathology costs bundled within clinical healthcare resource groups, or partial unbundling with core non-test related pathology services being funded separately.^3,8,16,17 This model would include a mix of fixed and activity based variable funding.
In order to assess fully the consequences of these approaches, a suitable methodology for assessing the pathology workload would need to be developed, which is linked to a comprehensive model of funding all aspects of the pathology service before costs are unbundled. This is a recent recommendation of the U.K. Department of Health.^3,7-10,16,17
A key outcome recommendation of the Carter Review regarding NHS pathology services was the establishment of a specific tariff to drive change and create a link between cost and value.8,9,16,17 This would be in agreement with the existing tariff under the payment by result policy in which pathology services are included in a larger bundle covering diagnostic and imaging services. The Carter Review indicated that a tariff for pathology should be unbundled so as to clarify costs which are specific to pathology. The new tariff proposed by the Carter Review could potentially be a mechanism for driving change as it would highlight those providers whose costs were above average. Hence, providers would need to improve efficiency or income to avoid exceeding their budget limits.
The significance to POCT device manufacturers is that the suggested tariff for the NHS being developed for pathology services will make allowances for investments in new tests and technologies encouraging greater uptake.^10,16 However, this requires further evaluation to assess the health economic and clinical outcome benefits of such an investment. This U.K. policy trend is in agreement with the objectives of the main NHS procurement organization, Purchasing and Supply Agency (PASA), which has been absorbed into Buying Solutions and Local Regional Purchasing Units (BSLPU) and the findings of the Health Industry Task Force (HITF) report.^14,17
This would also have the advantage of identifying where the benefits from new tests and IVD technologies would be seen together, and how change might occur in clinical practice and the patient pathway to achieve them. In addition, the Carter Review suggested that before a new tariff is introduced into the NHS, a feasibility pilot study should be undertaken for a range of pathology tests before commencing its implementation.^8,9,16,17 Once the final version of the tariff is implemented, it will serve as the basis by which central pathology laboratories are funded.^3,15,16
Medical Device Procurement Organizations
It is important for POCT device manufacturers to know how medical device procurement is organized regionally within NHS. Essentially, four main regionally based healthcare supplies agencies are responsible for medical device procurement within the NHS. These include BSLPU, which were formerly PASA in England, the Welsh Health Supplies Agency in Wales, the Scottish Healthcare Supplies Agency in Scotland, and the Regional Supplies Service in Northern Ireland (see Table I). Each of these U.K. health procurement agencies have varying policies relating to the procurement processes of medical devices.^3,14
 

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Table II. Evidence-based purchasing units associated with medical device procurement organizations within the UK NHS.

Evidence-based purchasing is common to all these health procurement organizations within the NHS and is the basis for all procurement decisions. Located within these regional health procurement agencies are departments or centers of evidence-based purchasing, which are responsible for carrying out both technical and health economic assessments (including those for POCT and other medical devices) prior to purchase.^3,18 For example, the Centre for Evidence-based Purchasing, which has recently been absorbed into the National Institute for Health and Clinical Excellence (NICE), fulfils this role within BSLPU in England, together with NICE.^3,14,18 The supporting evidence-based purchasing units associated with NHS procurement organizations are shown in Table II.
Health Technology Assessment
Health technology assessment is widely used in the U.K. healthcare sector. It aims to influence health policy during medical device procurement and reimbursement decision making by determining the value and benefits of new and emerging health technologies in terms of improvements in clinical and health economic outcomes.^3,18-20
Within the NHS, tactical procurement and implementation policies have been introduced, which are based on health technology assessment evidence-based purchasing and on payment by results for medical devices. This has meant that POCT device manufacturers now need to be able to provide sufficient evidence to NHS purchasers to demonstrate clearly both the cost and clinical benefit of acquiring their POCT devices when submitting a competitive tender to the NHS procurement organization.^3,14,17
Similarly, during the process of medical device implementation into NHS, the HITF strategic implementation group and the National Innovation Procurement Plan have also required an evidence of value-based case support to be provided.17 Such health economic and clinical outcome supporting evidence can be generated if POCT device manufacturers and NHS procurement agencies (such as BSLPU) collaborate with a recognized U.K. health technology assessment research group to carry out early stage value assessments prior to tender, purchase, and implementation.^3,18-20 The most significant health technology assessment research groups associated with NHS are shown in Table III.
 

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Table III. Health Technology Assessment Research Groups associated with the UK NHS.

These groups are located across the U.K. in all regions. The leading ones that are involved in advising on NHS medical device evaluation and procurement include the National Institute for Health Research health technology assessment program at the University of Southampton, NICE, the National Innovation Centre in London, and the Multidisciplinary Assessment of Technology Centre for Healthcare (MATCH) program.^3,18-20 The latter undertakes applied research in health technology assessment to assist with the speed of uptake of safe healthcare technologies (both diagnostic and therapeutic) for the direct benefit of patients.
The MATCH research program covers all types of medical devices, especially new and emerging health technologies, and focuses on key health technology assessment areas, including health economic modelling, human factors and user needs, Bayesian analysis, patient pathway simulation, and tactical procurement and implementation issues.^3,19,20 The assessment of IVD technologies, especially those intended for POCT application, is an important MATCH research topic.^3,5
This research has been shown to be of mutual benefit to both medical device manufacturers and healthcare providers, from the generation of evidence of value leading to a shortening of the uptake and adoption lead times by procurement organizations when introducing new and emerging technologies within the NHS.3,5,19,20 Table IV shows the common clinical and health economic outcome metrics that are used in a health technology assessment evaluation of POCT applications.^3,11-13

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Table IV. Metrics for assessing the impact of cardiac POCT on clinical and health economic outcomes in chest pain diagnosis.

Barriers to Cardiac POCT Adoption
Despite the advantages of cardiac POCT, which have been extensively demonstrated, adoption and uptake of POCT within NHS has been relatively slow.^3,11-13 Several issues relating to the barriers on POCT uptake and implementation have been reported.^3,11-13 These include regulatory and external quality control, user perspectives, silo budgeting, and reimbursement in relation to NHS funding, which has resulted in economic outcome needs and changes in clinical practice that are required or followed for effective POCT application.^3,11-13
In addition, despite the technology developments, healthcare structures, and funding which have been driving POCT applications for diagnostics, conflicts within the NHS structure delay or impede their uptake.^{3,7-9,11-13,17} In relation to NHS medical device procurement, two significant factors have been identified. First, NHS procurement policy has tended to focus on price rather than value and has used its large purchasing power to command greater discounts.
Second, the NHS budget has tended to favor critical medical products (e.g., medicines, wound care products and implantable devices), while capital equipment like diagnostics technologies have been considered a low priority.^3,11-13,17
The issue of pricing and reimbursement within the procurement process for POCT devices has been recently highlighted as one of the major uptake barriers within NHS.^3,11-13,15 In order to address how these barriers operate and may be overcome, the MATCH program recently carried out a collaborative health technology assessment research project which involved a Web-based survey of leading UK cardiac POCT device manufacturers in relation to their pricing, reimbursement, and procurement policies.^3,19
Strategies for Overcoming Barriers to Cardiac POCT Uptake
Three cost elements are essentially affecting cardiac POCT uptake: device costs, test panel costs, and costs associated with IT connectivity (see Tables V and VII). Within the NHS, a key factor affecting the rate of cardiac POCT device uptake is how manufacturers set their overall product marketing strategies and pricing policies.
A recent U.K. manufacturer survey carried out by the MATCH program at the University of Ulster collected information on five leading cardiac POCT device manufacturers regarding their procurement options, costs, and pricing strategies. The unit costs of the POCT devices, cardiac test panels, and IT connectivity is shown in Table V. The manufacturer survey also indicated three possible procurement options for POCT devices: direct purchase, rental/lease, and free unit product placement (see Table VI).
 

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Table V. Comparison of cardiac point-of-care testing device unit costs in the UK.

All these procurement options were available from the manufacturers surveyed, with the latter being the preferred option by the NHS procurement organizations. The free unit product placement option depends on the NHS purchaser agreeing to meet an annual target threshold purchase volume for test panels, which is the manufacturer sets.
The MATCH program survey indicated that the overall industry average annual purchase volume is around 1000 tests/year for the free product placement procurement option (see Table VII). The survey of manufacturers also showed that in the case of cardiac marker POCT test panels, there were two pricing policy options and test panel formats adopted by POCT device manufacturers (see Tables VI and VII).
There is the fixed pricing policy for the multiple test panel formats as in the case of the Biosite Triage and Dade Behring Stratus CS, which is now marketed by Siemens Healthcare Diagnostics. In this case, the purchaser cannot obtain a further price discount even if the annual target threshold purchase volume is exceeded. In contrast, other POCT device manufacturers use discounted pricing, which is directly related to the amount that the annual purchase volume exceeds the annual threshold purchase volume for test panels.
 

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Table VI. Procurement options and test-panel pricing for POC devices.

The survey indicated that three manufacturers (Abbott Diagnostics, Response Biomedical, and Roche Diagnostics) adopted this discounted pricing policy in single test panel formats for the i-Stat, Ramp, and Cobas h232 device test panels, respectively (see Table VI).³ The significance of this pricing option is that NHS purchasers of these POCT devices can obtain cardiac marker test panels at prices well below the basic unit manufacturer price. In addition, the discounted pricing option can act as a distinct competitive advantage to enhance market entry compared to those manufacturers using a fixed pricing policy and provide an incentive for NHS procurement organizations such as Buying Solutions to purchase higher test panel volumes (see Table VII).^3,11-14
The discounted pricing policy adopted for the Abbott i-Stat device results in a test panel price reduction of 45% from a unit price of £13.12 to £7.12 on increasing purchase volumes, up to 15,000 tests per year. In contrast, the fixed test panel pricing policy adopted for the Biosite Triage means that the test panel price remains at £16.85 and is unaffected by the increasing purchase volume (see Figure 3). The relevance of these price differentials to POCT device manufacturers is that in a typical NHS Trust in Northern Ireland, an estimated 10,870 cardiac marker tests are carried out annually by the central pathology laboratory using laboratory based analyzers. At this volume, the price for the Abbott i-Stat test panel reaches its lowest point on the price curve (see Figure 3).
 

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Figure 3. Comparison of fixed and sicounted pricing policy for two manufacturers of cardiac marker point-of-care device test panels.

However, if the number of cardiac tests carried out by the four other NHS Trusts in Northern Ireland is included, this would exceed the limit of 15,000 tests per year on the price-volume discount curve. In this case, the manufacturer could offer a further price reduction that is based on an alternative billing comparable to the central pathology laboratory cost of £2.40 per test. Hence, this would be an additional uptake incentive by the NHS procurement organization. Therefore, POCT device manufacturers can use a discounted pricing policy as a means of encouraging uptake and assist in overcoming procurement hurdles within the NHS.^3,11-13
Conclusion
In the U.K., the introduction of new diagnostic technologies is largely funded and regulated by the Department of Health, the NHS Pathology Service, and a regional network of health procurement organizations. Current reforms within the NHS Pathology Service are leading to many changes, significantly being the development of a new national pathology tariff that will determine the price of tests.
However, this has been delayed until 2012, and there is some uncertainty as to how the tariff will operate and whether POCT applications will be included within the tariff bundle. If that is the case, POCT device manufacturers will have greater influence in setting the price of tests, and POCT may have to be repositioned from being decentralized to being laboratory-based applications. This could have it included within the tariff, or else a new test pricing schedule will be developed. Alternatively, POCT costing may remain within an existing payment by results NHS Pathology Service cost bundle.
 

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Table VII. Comparison of point-of-care testing device cardiac marker test panel pricing and annual threshold purchase volumes for product placement acquisition option in the UK.

More independent and objective health technology assessment research and evidenced-based studies need to be carried out both within the NHS and the medical device sector to support procurement and reimbursement policy decision making. UK-based health technology assessment groups (e.g., the National Institute for Health Research Health Technology Assessment Program and the MATCH Program) carry out vital roles in bridging the medical device manufacturer-health service assessment interface to generate evidence of clinical and health economic benefits. Such evidence is the basis for establishing business models for manufacturers and the NHS Pathology Service to facilitate tactical procurement and implementation of POCT applications within the NHS.
References
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Francis FitzGibbon is a research associate at the Multidisciplinary Assessment of Technology Center for Healthcare (MATCH) Program at the University of Ulster, Northern Ireland, UK. He can be contacted at f.fitzgibbon@ulster.ac.uk [24].

David Huckle, PhD, is CEO of Adams Business Associates in High Wycombe, UK. He can be contacted at aba@a-b-a.co.uk [25].

Brian J. Meenan, PhD, is professor of biomedical materials at the Nanotechnology and Advanced Materials Research Institute (NAMRI) and head of the Multidisciplinary Assessment of Technology Center for Healthcare (MATCH) Program at the University of Ulster, Northern Ireland, UK. He can be contacted at bj.meenan@ulster.ac.uk [26].