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Diagnostic and therapeutic approaches for nonmetastatic breast cancer in Canada, and their associated costs.

In an era of fiscal restraint, it is important to evaluate the resources required to diagnose and treat serious illnesses. As breast cancer is the major malignancy affecting Canadian women, Statistics Canada has analysed the resources required to manage this disease in Canada, and the associated costs. Here we report the cost of initial diagnosis and treatment of nonmetastatic breast cancer, including adjuvant therapies. Treatment algorithms for Stages I, II, and III of the disease were derived by age group (< 50 or > or = 50 years old), principally from Canadian cancer registry data, supplemented, where necessary, by the results of surveys of Canadian oncologists. Data were obtained on breast cancer incidence by age, diagnostic work-up, stage at diagnosis, initial treatment, follow-up practice, duration of hospitalization and direct care costs. The direct health care costs associated with 'standard' diagnostic and therapeutic approaches were calculated for a cohort of 17,700 Canadian women diagnosed in 1995. Early stage (Stages I and II) breast cancer represented 87% of all incident cases, with 77% of cases occurring in women > or = 50 years. Variations were noted in the rate of partial vs total mastectomy, according to stage and age group. Direct costs for diagnosis and initial treatment ranged from $8014 for Stage II women > or = 50 years old, to $10,897 for Stage III women < 50 years old. Except for Stage III women < 50 years old, the largest expenditure was for hospitalization for surgery, followed by radiotherapy costs. Chemotherapy was the largest cost component for Stage III women < 50 years old. This report describes the cost of diagnosis and initial treatment of nonmetastatic breast cancer in Canada, assuming current practice patterns. A second report will describe the lifetime costs of treating all stages of breast cancer. These data will then be incorporated into Statistics Canada's Population Health Model (POHEM) to perform cost-effectiveness studies of new therapeutic interventions for breast cancer, such as the cost-effectiveness of day surgery, or of radiotherapy to all breast cancer patients undergoing breast surgery.

Age Factors↗

The role of risk adjustment in national health reform.

Efforts to contain health insurance costs through competitive strategies are undermined by the economic incentive facing buyers and sellers to avoid high-risk individuals. To deal with this problem, proponents of competitive strategies, in which cost containment would be achieved by having consumers move to the most efficient health plans, suggest developing risk-assessment methods and using them to make transfer payments from plans enrolling relatively healthier people to plans with relatively sicker ones. Effective risk adjustment is also of interest to payers such as Medicare, large employers offering multiple-choice programs, and risk-bearing providers seeking fair compensation. So far, however, the ability to predict the variability of future medical costs on an individual basis is very limited. In a market in which individuals are free to change plans annually, the potency of current risk-adjustment technology would leave plans with ample incentive to attract healthier people and to avoid sicker people. The state of current risk-assessment methods leads some analysts to advocate a mixed payment system, partly based on a risk-adjusted prospective payment and partly based on retrospective adjustments made once competing plans' actual experiences are known. New York State is trying such an approach. Many analysts emphasize the importance of other insurance reforms and the institutional framework in which risk adjustments might be made as key factors in helping such a process succeed.(ABSTRACT TRUNCATED AT 250 WORDS)

Actuarial Analysis↗

The quality of cost data. A caution from the Department of Veterans Affairs experience.

Many health care system, including that of the Department of Veterans Affairs (VA), are facing dramatic changes as they adapt to state-level reform legislation and move into managed care environments. As new costing systems are designed and as researchers seek to conduct cost-effectiveness studies to guide health policy, it is critical to examine the assumed validity of the measurement procedures on which these costing systems are based. The foundation for VA health care costing is the cost distribution report, which is created by combining data on expenditures and workload with local service chiefs' estimates of program staffing and resource use. To evaluate the accuracy of the cost distribution report, the authors compared data from the report to cost data obtained in three multisite studies. Substantial differences were found between the cost distribution report and these independent sources, suggesting that researchers should not place uncritical reliance on the cost distribution report. The accuracy of costing data in information systems being implemented by VA will be limited to the extent they rely on the existing VA cost distribution system. Several strategies can be used in studies with a cost component to compensate for imperfect cost distribution systems.

Accounting↗

Daily cost of an intensive care unit day: the contribution of mechanical ventilation.

OBJECTIVE: To quantify the mean daily cost of intensive care, identify key factors associated with increased cost, and determine the incremental cost of mechanical ventilation during a day in the intensive care unit. DESIGN: Retrospective cohort analysis using data from NDCHealth's Hospital Patient Level Database. SETTING: A total of 253 geographically diverse U.S. hospitals. PATIENTS: The study included 51,009 patients >/=18 yrs of age admitted to an intensive care unit between October 1, 2002, and December 31, 2002. INTERVENTIONS: None. MEASUREMENTS AND MAIN RESULTS: Days of intensive care and mechanical ventilation were identified using billing data, and daily costs were calculated as the sum of daily charges multiplied by hospital-specific cost-to-charge ratios. Cost data are presented as mean (+/-sd). Incremental daily cost of mechanical ventilation was calculated using log-linear regression, adjusting for patient and hospital characteristics. Approximately 36% of identified patients were mechanically ventilated at some point during their intensive care unit stay. Mechanically ventilated patients were older (63.5 yrs vs. 61.7 yrs, p < .0001) and more likely to be male (56.1% vs. 51.8%, p < 0.0001), compared with patients who were not mechanically ventilated, and required mechanical ventilation for a mean duration of 5.6 days +/- 9.6. Mean intensive care unit cost and length of stay were 31,574 +/- 42,570 dollars and 14.4 days +/- 15.8 for patients requiring mechanical ventilation and 12,931 +/- 20,569 dollars and 8.5 days +/- 10.5 for those not requiring mechanical ventilation. Daily costs were greatest on intensive care unit day 1 (mechanical ventilation, 10,794 dollars; no mechanical ventilation, 6,667 dollars), decreased on day 2 (mechanical ventilation:, 4,796 dollars; no mechanical ventilation, 3,496 dollars), and became stable after day 3 (mechanical ventilation, 3,968 dollars; no mechanical ventilation, 3,184 dollars). Adjusting for patient and hospital characteristics, the mean incremental cost of mechanical ventilation in intensive care unit patients was 1,522 dollars per day (p < .001). CONCLUSIONS: Intensive care unit costs are highest during the first 2 days of admission, stabilizing at a lower level thereafter. Mechanical ventilation is associated with significantly higher daily costs for patients receiving treatment in the intensive care unit throughout their entire intensive care unit stay. Interventions that result in reduced intensive care unit length of stay and/or duration of mechanical ventilation could lead to substantial reductions in total inpatient cost.

Adult↗

Direct patient treatment costs in the Allergology Service of a University Hospital.

Health resources are limited and consequently real cost generators must be identified to optimize resources. In the present article, we describe the structure of the Allergy Unit of the University Hospital Virgen de la Arrixaca in Murcia (Spain), the health area in which allergic patients are attended, and the final healthcare products generated. Based on the 2004-2005 budget, variable costing was used to calculate the costs of the healthcare products generated (first visits, subsequent visits, and diverse laboratory tests) by two of the three homogeneous functional groups (HFG), i.e., HFG of the ambulatory service and HFG of complementary tests. The following conclusions can be drawn: 1) the current system of variable costing provides information, which should be useful to health professionals; 2) the real cost generators in the microcosm of daily clinical practice should be identified to allow resource reallocation; 3) the costing system used enables modifications to be made that allow decision making on optimal use of the budget; 4) clinical management and complementary tests should go hand in hand with a view to optimizing resources.

Allergy and Immunology↗

Methods of determining the cost of health care in the Department of Veterans Affairs medical centers and other non-priced settings.

Cost is increasingly important in the evaluation of health care. Though charges are often used as a proxy for cost, some health care systems such as the Veterans Administration do little or no billing. This article describes, presents examples of, and evaluates four options for determining the cost of care within the Department of Veterans Affairs: measuring input costs, the Department's cost accounting system, the reimbursement system, and use of charges from a surrogate health care facility. Each approach is evaluated for accuracy, ability to compare the costs of different treatments, and effort required to estimate cost.

Accounting↗

A cost-utility analysis of second-line chemotherapy in metastatic breast cancer. Docetaxel versus paclitaxel versus vinorelbine.

The aim of this study was to determine the incremental effectiveness, the incremental health-related quality of life (differences in quality-adjusted progression-free survival between treatments), the incremental cost and the incremental cost-effectiveness and cost-utility ratios, for docetaxel, paclitaxel and vinorelbine, when these drugs were used as second-line treatment in patients with metastatic breast cancer. In the absence of comparative direct evidence of the relative efficacy of docetaxel, paclitaxel and vinorelbine in this setting, a model was designed to determine the effects of the 3 interventions on health outcome and cost. A Markov process model, based on 53 disease states, was thus constructed to evaluate the socioeconomics of the 3 treatment regimens. The model allows assessments from the start of second-line chemotherapy until death. Costs were evaluated from the combined view of the healthcare system and the patient. Direct nonmedical and indirect costs were excluded. Consumption per episode of care was estimated by retrospective analysis of 153 medical reports from 5 different hospitals. Hospital costs were allocated values from the national accounting costs by diagnosis-related group (DRG). The content of the health states was based on the multiattribute health states classification system (MASH). Preference values were assigned by application of a standard reference lottery using 20 oncological nurses as proxies for the patients. The health-related quality-of-life score was used as a quality adjustment weighting factor to calculate quality-adjusted progression-free survival associated with the 3 different regimens. Docetaxel reduces the time spent in progression, decreases the number of complications due to progressive disease and thereby provides better quality of life. It provides a benefit of 57 disease- and discomfort-free days compared with vinorelbine and 22 days compared with paclitaxel. Docetaxel may be thought of as self-financing as a result of savings in hospital admissions, providing net savings of 6800 French francs (FF; 1993 values) compared with expenditure associated with vinorelbine treatment and FF700 compared with the equivalent figures for paclitaxel.

Antineoplastic Agents↗

Non-inpatient costing study.

Flinders Medical Centre, a University teaching hospital located in the south of Adelaide, spends approximately 27% of its annual budget in the treatment of ambulatory patients. In an attempt to gain a better appreciation of the profile of resource use by this group of patients, the hospital undertook a detailed cost survey. This study has made it possible to identify the cost impact of ambulatory attendances on each of the service areas of the hospital and compare variation in cost within and between specialist clinics.

Ambulatory Care↗

Public hospital pathology--at what cost?

Public hospital laboratories have in the past fended off financial scrutiny and accountability on the grounds of their complexity and lack of compelling need. However, the cost of providing diagnostic laboratory services has now come under intense scrutiny because of budget reductions and options for private sector competition. Costing of pathology services is not difficult, but their organisation and outputs do have unique features that need to be understood and defined to ensure that the costing model used provides robust data that accurately reflects how resources are consumed. The cost data generated for diagnostic services can then be compared to the various benchmarks widely used for activity-based funding, such as the Commonwealth Medical Benefits Schedule and the pathology component of the AN-DRG Service Weights System, while the requirement and funding for other activities can be rationally determined.

Australia↗

Reimbursement comes of age. EMPOWER: a management information system.

A management information (MI) system for general and academic medical practices is imperative in a changing environment. Funded by a grant from the MGMA Academic Practice Assembly, EMPOWER is relevant to all types of medical practice. The software package supports financial/time allocation models, income/expense models and incentive cost center approaches.

Academic Medical Centers↗

Medicare program; schedule of per-beneficiary limitations on home health agency costs for cost reporting periods beginning on or after October 1, 1997--HCFA. Final rule with comment period.

This final rule with comment period sets forth, in accordance with section 4602 of the Balanced Budget Act of 1997, a new schedule of limitations on home health agency costs that may be paid under the Medicare program for cost reporting periods beginning on or after October 1, 1997. These limitations are in addition to the per-visit limitations that were set forth in our January 2, 1998 notice with comment period.

Centers for Medicare and Medicaid Services, U.S.↗

Calculating costs.

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Clinical Laboratory Techniques↗