Medicine Value And Usage Mechanism Analysis For Medical Expenses Control

There are two major issues in medicine usage in Chinese healthcare system,which leads to the high cost of drugs.One is that the price of medicine is unreasonably high compared to its medical effect.Pharmaceutical manufacturers are not willing to produce common or traditional medicines with high effect.Instead,they tend to produce new medicines which have higher prices but providing a similar effectiveness.Another is that the medicines are overused.The integration of supply of medical service and medicine makes hospitals rely on medicine sales,and kickbacks give doctors extra incentives to overprescribe.The driving forces of these two problems are correlated,and they jointly make high medicine expenditure a commonly-concerned issue in China society.To control medicine expense,Chinese government has initiated and implemented a series of reforms,e.g.,cancellation of drug mark-up(i.e.,separation of prescribing and dispensing)in public hospitals,group procurement of medicines,consistency test of generic drugs,etc.However,as healthcare system is a complex system involving multiple departments,what results can be achieved from these reforms are far from concluded,and few theoretical researches have focused on these issues under Chinese healthcare background.To fill in these theoretical gaps,we analyze and study the key influence factors which cause high medicine expenses from the perspective of medicine inner value and medicine usage mechanism,and propose solution accordingly.Specifically,the solution approaches and research content are as follow:First,selection and use of drugs should be value oriented.The regulatory authorities should be able to use scientific methods to identify high-value drugs and encourage its production and usage.The inner value of medicines is their effectiveness.Costeffectiveness analysis(resp.CEA)is an effective way to evaluate the inner value of medicines.Long-term CEA is difficult to implement since it has high requirements on sample size and integrity of long time-span data.To deal with this issue,we propose a Markov model and meta-heuristics combined method for long-term CEA.Specifically,we use Markov model to describe the disease process,based on which,we formulate a transition probabilities estimation model,and use heuristic algorithms to solve the model.To improve the performance of the algorithms,we design some local search methods to adapt to the features of transition probabilities estimation.Compared with traditional heuristic algorithms,the searching abilities of our proposed algorithms are greatly enhanced.To validate the effectiveness of our proposed method,we collaborate with one anonymous hospital,and conduct long-term CEAs of two immunosuppressants(Cyclosporine and tacrolimus)after kidney transplantation.The results validate the practicability of our proposed method,and show that the long-term effectiveness of the two immunosuppressants are comparable.Furthermore,the government should understand how the mechanism of medicine usage can be influenced by related factors,and accordingly design appropriate policies to guide the hospitals and doctors to use medicines reasonably.For hospitals,the separation of prescribing and dispensing(resp.SPD)eliminates hospitals' reliances on medicine sales,and it potentially changes hospitals' preference on medicine selection.However,in the long-term,how the SPD reform can influence medicine expense and other stakeholders is still unknown.To answer these questions,we consider the effects of SPD from the perspective of service supply chain.Specifically,we consider a healthcare service supply chain which contains one hospital and one medicine supplier.We model the hospital as a queueing system subject to a service level requirement.It faces price-and qualitysensitive demand.Before the SPD,the hospital procures the supply from a supplier through a wholesale contract,which is determined by Nash bargaining with asymmetric bargaining power.After the SPD,the supplier sells the supply to patients directly.We analyze the Nash equilibria of the two systems.Intuitively,the hospital before the SPD is often viewed as a monopoly,and supposedly it should be detrimental to patients.However,in contrast to the conventional wisdom,we show that the SPD is not always beneficial to patients,and is also not necessarily detrimental to the hospital.These potential results may be contrary to the purpose of SPD reform.Therefore,policymakers should be cautious on when to adopt the SPD reform.As to doctors,it is beneficial to control their overprescribing behaviors.Supposedly,a doctor is expected to treat patients with appropriate treatments,however,overprescribing is commonly observed in different healthcare systems no matter whether there are economic incentives or not.To explain the overprescribing behavior,we consider risk avoidance incentives of doctors,and adopt a signaling game framework to investigate the prescribing behavior and the equilibrium outcomes.Specifically,we consider two types of doctors and two types of patients which require different types of medicines.An altruism doctor prescribes a patent medicine or a generic medicine for a patient with serious conditions or minor conditions,respectively.Whereas,a risk-averse doctor may act on her own interests,and tend to prescribe patent medicines to all patients.We consider twodimensional information asymmetry that a doctor has private information about whether herself is ethical or self-interested and about whether the patient's conditions are serious or minor.By solving the model,four different kinds of market equilibria are obtained.We find that the overprescribing probability could be increasing in the level of ethics,and the pooling equilibria can lead to higher overprescribing probabilities.Moreover,the price of patent medicine has significant influence on the social welfare loss.To summarize,this thesis studies the driving forces which cause high medicine expenses in Chinese healthcare system.To help control medicine expense,an evidencebased evaluation method is proposed to assess the value of medicine,and how the SPD reform and doctor's prescribing behavior can influence the usage of medicines are analyzed.Some management suggestions and insights are derived from these results,which can provide theoretical references for Chinese healthcare reforms in the future.