Cost-Effectiveness and Outcomes Research Setting value to what we do.

Cost-Effectiveness and Outcomes Research

Setting value to what we do

Define CE terms Review methods of evaluation

in health care Review examples Identify activities that may

promote CE studies

Objectives:

What it is -

What is Cost-Effectiveness?

What it is not-

What it is -“a method for evaluating the health outcomes and resource costs of health interventions”

Russell, et al., JAMA 1996;276:1172



Interventions– Nutrition Support– MNT Protocols– Presence of the RD on

the health care team, in the public health jurisdiction, etc.


Outcomes in CEA– Traditional

Medical Outcomes

– Resource Costs

– Expanded definitionPatient centered outcomes

Quality of life; Client satisfaction


Cost-Savings

Cheaper bang

Cost-Benefit Analysis

All benefits cost in dollars

?? Putting dollar value on life years

What it is not -

What it is -

Health Care Expenditure as a Share of Gross National Product (%)

Year 1960 1970 1980 1990

Canada 5.5 7.1 7.4 9.0

Germany 4.7 5.9 .4 8.1

France 4.2 5.8 7.6 8.9

I taly 3.3 5.2 6.8 7.6

J apan 2.9 4.4 6.4 6.5

Netherlands 3.9 6.0 8.0 .1

Switzerland 4.7 7.2 9.4 8.7

Sweden 3.3 5.2 7.3 7.4

UK 3.9 4.5 5.6 6.1

USA 5.3 7.4 9.3 12.4

Zweifel P: Health Economics, 1997

OutcomeThe result of the performance (or

nonperformance) of a function or process(es). JCAHO 1996

Outcome IndicatorMeasures what happens (or does not

happen) to a patient after something is done (or not done) to the patient. NLHI

Terms

Cost Benefit AnalysisAn analytic tool for estimating the net

social benefit of a program or intervention as the incremental benefit of the program less the incremental cost, with all benefits and costs measured in dollars.

Cost Effectiveness in Health and Medicine. Gold, Martha, et al 1996 University Press

Terms

Cost EffectivenessAn analytic tool in which costs and effects

of a program and at least one alternative are calculated and presented in a ratio of incremental costs to incremental effects. Effects are health outcomes such as cases of a disease presented, years of life gained or quality adjusted life years rather than monetary measures as in cost benefit analysis.Cost Effectiveness in Health and Medicine. Gold, Martha, et al 1996 University Press

Terms

QALY“Quality-adjusted life year”

“A measure of health outcome which assigns to each period of time a weight, ranging from 0 to 1, corresponding to the health-related quality of life during that period, where a weight of 1 corresponds to optimum health and a weight of 0 corresponds to a health state judged equivalent to death: these are then aggregated across time periods.”Gold 1996

Terms

Terms

DFLE“Disability-free life expectancy”

Life expectancy free of class I (or worse) disability

Disability classes based on person-trade off method

Terms

DALE“Disability-adjusted life expectancy”

HLHLxx = L = Lxx ( 1 - ( 1 - PPixix DDixix ))

Where:

HLx =the number of years of healthy life lived at age

x

Lx = the number of years of life lived at age x from a

life table

Pix =the prevalence of disabling sequelae j at age x

Dix =the disability severity weight for disabling

sequelae j at age x

DiscountingThe process of converting future dollars

and future health outcomes to their present values. (Gold 1996)

BootstrappingA simulation method for deriving

nonparametric estimates of variances of interest (e.g. the variance in the C/E ratio) from a data set. (Gold 1996)

Bayesian methodA branch of statistics that uses prior

information on beliefs for estimation and inference. (Gold 1996)

Terms

Objectives:

Define CE terms Review methods of

evaluation in health care Review examples Identify activities that may

promote CE studies

Outcomes ResearchOutcomes Research– Process

• Identify the outcome (what we effect)• Set a clear definition of the outcome

– Implementation• Measure• Analyze• Evaluate

Features of Cost Effectiveness

Methods of Evaluation in Health Care: CEA

Method of evaluation would be cost-effectiveness analysis (CEA). Only for mutually exclusive projects.

t1CEA = costs in units of money

benefits in mmHg

and

t2CEA = costs in units of money

benefits in additional life years


Methods of Evaluation in Health Care

Limitations of CEA

Implies that it is not relevant who obtains the additional life years

It does not lend itself to the evaluation of projects with several different (positive) effects.

Provides a rank order of preference among mutually exclusive projects, it does not answer the question which of the projects should be realized and which should not


Methods of Evaluation in Health Care: Cost Utility Analysis

Method of evaluation that takes account of the multidimensionality of the concept ‘health’ by trying to encompass all effects of an intervention - prolonging life and changing health status.

tCUA = costs in units of money

benefits in QALYsThe index value may be interpreted as ‘QALYs’ gained.

Again, only for mutually exclusive projects.

Unlike CEA, suitable for comparing medical interventions of heterogeneous kind and purpose


Methods of Evaluation in Health Care: Cost Benefit Analysis


Monetary equivalents are assigned to prolongations of life and change of health status.

tCBA = costs in units of money

benefits in units of money

Methods of Evaluation in Health Care:


Unlike cost-benefit analysis, cost-effectiveness analysis and cost-utility analysis circumvent the problem of monetary evaluation of life and health. However, they provide only a relative evaluation of mutually exclusive projects, while CBA permits evaluation of each

project on its own.

Objectives



promote CE studies

What is the question (intervention)?– Compared to what?

Who is the decision maker? Over what time period for study? What is (are) the unit of outcome?

Judith Barr, ScD; Director, National Education and Research Center for Outcomes Assessment in HealthcareNortheastern University, Boston MA

Fundamental Health Economic Questions

Hoch JS: Health Econ. 11: 415–430 (2002), Published online 31 January 2002 in Wiley InterScience (www.interscience.wiley.com).

Intervention -- Weight Reduction ProgramComparing usual care to dietitian consult

Your Effects < usual Your Effects > usual

Your $ < usual A BYour $ > usual C D

What can be said about A, B, C, and D?D -- Need for incremental cost-effectiveness


Incremental Economic Analyses: 4 Possible Situations

Dietitian Usual CareCosts $2,500 $2,200Effects 15 lbs 10 lbs

What is the additional cost for an additional unit of gain?

($2,500 - 2,200)/(15lbs-10lbs) = $300/5 or $60 for each additional pound lost.


Incremental Cost-effectiveness

Dietitian Usual CareCosts $2,500 $2,200Effects 20% 16% reduction in Hemoglobin A1c

What is the additional cost for an additional unit of gain?




Dietitian Usual CareCosts $2,500 $2,200Effects 20% 16%

($2500-2300)/(20-16% reduction in HbA1c) $300/4% reduction in HbA1c $75/1% reduction in HbA1c



League Tables progressive listing of costs per unit of effectiveness/outcome Unit of Outcome: Cost per Life Year Saved– Hypertension screening

40 year male $9,800/LY 40 year female $45,869/LY

– Mammography 55-65yr women $44,550/LY– Pap screening (Pap Net) 20-65y$122,888/LY– Exercise ECG 40 yr male

$135,116/LY– Exercise ECG 40 yr female $364,170/LY


Cost-Effectiveness League Tables

American Society for Internal Medicine and American College of Physicians used CEA in recommendations concerning:– hypertension– exercise ECG– screening

breast prostate cervical


Are CEA Studies Being Used?

MAJOR midwest hospital with strong ties to managed care organizations and industry

Used it over last few years for policy– hepatitis B screening for neonates– Smoking cessation– cystic fibrosis– flu inoculation reminders– anticoagulation clinic– lipid management– some drug formulary decisions


Are CEA Studies Being Used?

Activities on CE

Lewin Study A study at Group Health Cooperative

in Puget Sound Area Covered dietitian services as a

supplemental benefit for Medicare enrollees covered under risk contract

Examined use and costs over time of services in this Medicare population with diabetes and CVD who did and did not use RD servicesJudith Barr, ScD; Director, National Education and Research Center for Outcomes Assessment in HealthcareNortheastern University, Boston MA

Activities on CE

Lewin Study For DM patients using RD services

hospital admissions were reduced by 9.5% and MD visits by 23.5%

For CVD the use of RD services was associated with an 8.6% decrease in hospital utilization and a 16.9% decrease in MD visits.


Barriers and Limitations

ExpectationsTrainingSupportOutcomes difficult to measureTime of follow-upCo-MorbiditiesResearch training

Strengths

Documentation of worthBenchmark for change

Objectives:



promote CE studies

Cost-Effectiveness and Outcomes Research Setting value to what we do.

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