Government reimbursement systems for digital health products in Europe

Providers of digital health applications can only successfully tap into European markets if they have a thorough understanding of the healthcare systems in the European countries they want to tap into. European healthcare systems are extraordinarily complex. Companies must therefore allow sufficient time when entering the market to learn about the relevant reimbursement channels and to find out which stakeholders (apart from patients) can benefit most from their digital health solution.

The different evaluation processes for digital health solutions in Europe

Reimbursement mechanisms for digital health solutions in Europe are complex and evolving at different rates in different European markets. Germany, England, Denmark, and Sweden are relatively developed markets where governments have targeted the digitization of healthcare and created standardized reimbursement pathways for digital health products. In other European countries, reimbursement pathways are often still under development or apply only on a trial basis. Add to this the general challenges of some European countries that have highly regionalized healthcare systems, such as Italy and Spain. In both of these countries, there are independent regional payers, so treatment pathways and evidence of benefit requirements vary regionally within these countries.

However, even in countries where reimbursement for a digital health product is decided centrally, the structure of public health systems means that reimbursement mechanisms are complex. In Germany, for example, there are several different reimbursement pathways, depending on whether the solution is for inpatient or outpatient hospital care, preventive care, or care that is eligible for reimbursement through the state's Innovation Fund, which was established to encourage new forms of care that improve on current standards.

Germany has what is known as the DiGA process, which allows digital health solutions to be included in the nationwide reimbursement catalog, provided they meet certain conditions in terms of patient benefit, care improvement, safety, data protection and effectiveness. We present this in detail here: [LINK TO DIGA]. In addition, more than 8 million citizens in Germany are not insured through the public health care system (through the so-called health insurance funds), but have private health insurance, for which a variety of special reimbursement rules exist.

Significance and impact of reimbursement diversity for the inventors

These different reimbursement pathways in different countries mean that digital health solutions are more difficult to scale than digital products in other industries. In addition, while diseases do not make regional differences for patients, treatment for the same disease often also varies from country to country, as clinical guidelines, treatment pathways, and patient and physician practices vary by country. And last but not least, patients, physicians, and payers also have varying degrees of digital affinity depending on the country. All of this raises the stakes for the detailed analysis a vendor must conduct to successfully embed a digital health solution solution into a healthcare system. There is no other option but to proceed market by market and to develop European markets step by step with an innovative digital health product.

Importance of proof of benefit for digital health products in Europe

Digital health products that are reimbursed by the public sector must provide solid evidence of their effectiveness and benefits. A market strategy that helps provide this evidence is therefore essential.

Payers typically want to see compelling medical data demonstrating the effectiveness of a digital health solution before they will even consider reimbursement. Increasingly, payers are also demanding health economic models that show actual value added, potential cost savings, and patient-relevant improvement or adherence to treatment. The same high standards that already apply to pharmaceuticals and medical devices in most European countries will also apply to digital health solutions in the medium term. Germany has chosen a procedure with the DiGA process that is similar in places to the German drug assessment process (the so-called AMNOG process). In the United Kingdom, health authorities have published guidelines setting out the standards of evidence required for the evaluation of digital health technologies.

Obtaining the data needed for the reimbursement process

Given the high standards of evidence, it is critical for developers of digital health solutions to realistically assess the market readiness of their product. This is especially true with respect to startups, whose investors are pushing for early commercialization. Often, the path to reimbursement will be slower than expected, as companies need time to meet the requirements of public payers.

The following development or go-to-market phases for a digital health solution can collect the data needed for the reimbursement process:

Test phase

In the test phase, a digital health application is tested in a small patient pool. This is used to refine the technology and collect initial data to demonstrate effectiveness. In order to establish high-quality methods and obtain insightful data, it is a good idea to collaborate with a university hospital or an established research institute.

Obtaining early application data

The early use phase involves obtaining data to gather sufficient efficacy and safety evidence to make the digital health solution marketable as a medical device. This phase can also develop a health economic model that can be used to inform some European reimbursement processes.

Application for reimbursement and dialogue with the reimbursement authority

After the early application phase, it is time to initiate dialogue with the relevant reimbursement authority or to apply for reimbursement. In Europe, public payers reimburse digital health solutions in two main ways: through a centralized approval process, where the full cost of qualified treatments is reimbursed nationwide, or through a decentralized process, where payers or local health authorities sign individual contracts with solution providers. The former, while attractive, is often difficult because very extensive efficacy and utilization data are required. Standardized efficacy data is regularly required, which must meet high criteria for the type and level of evidence. A digital health solution that is still in the early stages of development cannot usually meet such requirements. However, it should be noted that some European countries have created reimbursement procedures at the national level under which such digital health solutions are also reimbursed on a trial basis where the final evidence and efficacy and patient benefit has not yet been established. This is done through innovation support programs or reimbursement procedures that are designed from the outset to generate further data for final reimbursement during the trial reimbursement.

Individual reimbursement contracts

As an alternative to nationwide reimbursement procedures, there are individual reimbursement contracts with individual payers. This means that a company can enter into a reimbursement contract with only one provider (for example, a local healthcare provider or an individual statutory health insurance company). The requirements for proof of efficacy and benefit are generally much lower than for national reimbursement. The company can gain data through this non-national reimbursement that it can later use for the national reimbursement process.