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Product evaluation: theoretical and practical considerations.

Products and equipment consume a substantial proportion of hospital or health service budgets. This is particularly the case in areas which use a high volume of consumables and technology, such as critical care. With cost containment strategies widely in force, the issue of using cost effective, quality products is becoming increasingly important. Hence, the evaluation of products should follow an objective and scientific process. This paper initially examines the theoretical basis of the cost/quality model, and compares product evaluation to the problem-solving and quantitative research processes. A flow diagram is then presented along with some practical considerations for achieving optimal quality and cost effectiveness in the evaluation of products.

Cost-Benefit Analysis↗

Dies endogeneity matter? A comparison of empirical analyses with and without control for endogeneity.

PURPOSE: Using data from the Cebu Longitudinal Health and Nutrition Survey, we perform an empirical investigation of the effects of endogeneity and unobserved heterogeneity in the analysis of health outcomes. METHODS: First, we lay a theoretical background for this analysis and develop a set of expectations regarding the effects of ignoring endogeneity. Then, by modeling the effect of infant-feeding patterns on time to resumption of menses, we perform parallel analyses with and without control for endogeneity. RESULTS: We show that in this analysis, as far as the effects of endogeneity are concerned, empirical results do accord with theoretical expectations. There are differences in parameter estimates between models, that lead to somewhat different interpretations. CONCLUSIONS: We discuss the importance and implications of these findings for epidemiological studies of health outcomes. We outline the steps involved in such an analysis and discuss the practical limitations of the methods, as well as the possible gains.

Amenorrhea↗

True costs of air medical vs. ground ambulance systems.

The economic model created in this paper replaces the existing University of Massachusetts Medical Center's New England Life Flight (NELF) helicopter ambulance service with a ground ambulance system to investigate comparative costs. The model is based on a less than 30-minute response time to the patient, similar medical team staffing and equal service area. The annual budgetary cost of the replacement ground network is $3,804,000 while the helicopter ambulance costs are $1,686,500 (based on 1991 dollars). The cost per patient transported is $4,475 for the ground system and $2,811 for the helicopter system. The comparison finds that the commonly held notion that condemns helicopters as an excessively expensive technology for patient transport is incorrect. Future research to address intermediate alternatives using similar analytical technology assessment techniques is recommended.

Aircraft↗

Does patient-centered care pay off?

BACKGROUND: Hospitals have adopted patient-centered practices that focus on patients' needs, values, and preferences in hopes of improving quality and controlling costs. Patient-centered practices are intended to involve patients in treatment decisions, increase communication between patients and care-givers, and increase interaction with family members and friends. Rapid adoption of these practices has occurred, even though little is known about the effects of patient-centered care on outcomes and cost. METHODS: A simultaneous equations regression model was developed to examine the reciprocal relationships between patient-centeredness, outcomes, and cost. A consortium of employers obtained data from 52 hospital units in southeastern Michigan. Two hundred randomly selected patients were sampled from all discharges on the medical, surgical, and obstetric units at each hospital for the first three months of 1997; the patients were sent the survey in May. Patient-centeredness was measured by patient reports of whether key clinical events occurred (The Picker Inpatient Survey). Outcomes were assessed by rates of unexpected mortality and complications. Cost was defined by self-insured purchaser payments. RESULTS: Hospital units that were more patient centered were associated with statistically significantly better outcomes and higher costs than those that were less patient centered. The joint relations between outcomes and cost were insignificant. CONCLUSIONS: Patient-centeredness was associated with better outcomes and higher cost. For either the short run or long run, managers, patients, and purchasers should determine whether the improvement in outcomes and patient satisfaction associated with becoming patient centered is worth the investment in costs.

Cost-Benefit Analysis↗

Modelling determinants of child mortality and poverty in the Comoros.

Based on the Demographic and Health Survey of the Comoros of 1996, the analysis of the determinants of child mortality reaches three conclusions. Firstly, differentiated analytical options generate partially convergent results and provide different dimensions of child mortality. Secondly, the study shows that the low standard of living of households in terms of assets is associated with high child mortality. Thirdly, the determinants of infant and infanto-juvenile mortality are relatively comparable. On the one hand, some common factors to both analytical options affect negatively child health: (i) geographical location in rural zones and/or on the islands of Anjouan and Mohéli; (ii) the low standard of living of households in terms of assets; (iii) some community elements, in particular morbidity, the insufficiency of vaccination and the absence of childbirth assisted by qualified persons. On the other hand, characteristics of mothers and births have an impact on infant and infanto-juvenile survival.

Comoros↗

Human capital, schooling and health.

A consensus has been forged in the last decade that recent periods of sustained growth in total factor productivity and reduced poverty are closely associated with improvements in a population's child nutrition, adult health, and schooling, particularly in low-income countries. Estimates of the productive returns from these three forms of human capital investment are nonetheless qualified by a number of limitations in our data and analytical methods. This paper reviews the problems that occupy researchers in this field and summarizes accumulating evidence of empirical regularities. Social experiments must be designed to assess how randomized policy interventions motivate families and individuals to invest in human capital, and then measure the changed wage opportunities of those who have been induced to make these investments. Statistical estimation of wage functions that seek to represent the relationship between wage rates and a variety of human capital stocks may yield biased estimates of private rates of return from these investments for a variety of reasons. The paper summarizes several of these problems and illustrates how data and statistical methods can be used to deal with some of them. The measures of labor productivity and the proxies specified for schooling and adult health are first discussed, and then the functional relationships between human capital and wages are described. Three types of estimation problem are discussed: (1) bias due to omitted variables, such as ability or frailty; (2) bias due to the measurement of an aggregation of multiple sources of human capital, e.g. genetic and socially reproducible variation, which may contribute to different gains in worker productivity; and (3) errors in measurement of the human capital stocks. Empirical examples and illustrative estimates are surveyed.

Educational Status↗

Height cycles in the 18th and 19th centuries.

Spectral analysis of the physical stature of Americans and Europeans in the 18th and 19th centuries reveals a cyclical structure similar to the traditional view of the business cycle: a longer cycle with a length of 7-10 years, and a shorter cycle with a length of 3-5 years. The correlation between height cycles and cycles of economic variables such as grain prices indicates an influence of economic cycles on physical stature. The phase shift between the cycles indicates that economic conditions are especially important for growth in infancy. In part, this result is due to a cumulative effect: born into a recessionary period, a child is likely to face several cyclical downturns during the growing years.

Adolescent↗

Trends in fertility and intermarriage among immigrant populations in Western Europe as measures of integration.

Demographic data on fertility and intermarriage are useful measures of integration and assimilation. This paper reviews trends in total fertility and intermarriage of foreign populations in Europe and compares them with the trends in fertility of the host population and the sending country. In almost all cases fertility has declined. The fertility of most European immigrant populations and of some West Indian and non-Muslim Asian populations has declined to a period level at or below that of the host society. Muslim populations from Turkey, North Africa and South Asia have shown the least decline. Intermarriage is proceeding faster than might be expected in immigrant populations which seemed in economic terms to be imperfectly integrated. Up to 40% of West Indians born in the UK, for example, appear to have white partners as do high proportions of young Maghrebians in France.

Acculturation↗

Dynamic programming to investigate financial impacts of mastitis control decisions in milk production systems.

An adaptive stochastic dynamic programming model was used to solve the optimum replacement decision problem for the dairy cow under a range of alternative mastitis control procedures. The model predicted that reducing milk yield losses and somatic cell count penalties by, using milking machine test, post-milking teat disinfection and dry cow therapy added approximately pounds sterling 4, pounds sterling 10 and pounds sterling 13 respectively to an original annuity equivalent net present value for the replacement heifer of pounds sterling 286. Assuming that these procedures also reduced involuntary culling due to mastitis by 50% added pounds sterling 8.90 to the annuity. This latter figure indicated that an important part of the benefit of mastitis control procedures might come from a reduction in the culling risk of persistent clinical cases. We concluded that the strength of the dynamic programming model in this context was that it provided an integrated evaluation of the various impacts of each alternative mastitis procedure in the long term, which is essential for correct economic evaluation of mastitis.

Animals↗

Modelling the population cost-effectiveness of current and evidence-based optimal treatment for anxiety disorders.

BACKGROUND: The present paper describes a component of a large population cost-effectiveness study that aimed to identify the averted burden and economic efficiency of current and optimal treatment for the major mental disorders. This paper reports on the findings for the anxiety disorders (panic disorder/agoraphobia, social phobia, generalized anxiety disorder, post-traumatic stress disorder and obsessive compulsive disorder). METHOD: Outcome was calculated as averted 'years lived with disability' (YLD), a population summary measure of disability burden. Costs were the direct health care costs in 1997-8 Australian dollars. The cost per YLD averted (efficiency) was calculated for those already in contact with the health system for a mental health problem (current care) and for a hypothetical optimal care package of evidence-based treatment for this same group. Data sources included the Australian National Survey of Mental Health and Well-being and published treatment effects and unit costs. RESULTS: Current coverage was around 40% for most disorders with the exception of social phobia at 21%. Receipt of interventions consistent with evidence-based care ranged from 32% of those in contact with services for social phobia to 64% for post-traumatic stress disorder. The cost of this care was estimated at dollar 400 million, resulting in a cost per YLD averted ranging from dollar 7761 for generalized anxiety disorder to dollar 34 389 for panic/agoraphobia. Under optimal care, costs remained similar but health gains were increased substantially, reducing the cost per YLD to < dollar 20 000 for all disorders. CONCLUSIONS: Evidence-based care for anxiety disorders would produce greater population health gain at a similar cost to that of current care, resulting in a substantial increase in the cost-effectiveness of treatment.

Anti-Anxiety Agents↗

Standardizing methodologies for economic evaluation in health care. Practice, problems, and potential.

There has been an exponential growth in the literature on economic evaluation in health care. As the range and quality of analytical work has improved, economic studies are becoming more influential with health care decision makers. The development of standards for economic evaluation methods would help maintain the scientific quality of studies, facilitate the comparison of economic evaluation results for different health care interventions, and assist in the interpretation of results from setting to setting. However, standardization might unnecessarily stifle methodological developments. This paper reviews the arguments for and against standardization, assesses attempts to date, outlines the main areas of agreement and disagreement on methods for economic evaluation, and makes recommendations for further work.

Evaluation Studies as Topic↗

Potential inconsistencies between cost-effectiveness and cost-utility analyses. An upstairs/downstairs socioeconomic distinction.

This paper indicates that certain economic evaluation methods (cost-effectiveness and cost-utility analyses) may yield inconsistent results. Along with the lack of formal grounding of these methods in economic "first principles," this finding suggests the possible benefit of greater reliance on the more formally developed method of cost-benefit analysis.

Cost-Benefit Analysis↗

The concept of cost in the economic evaluation of health care. A theoretical inquiry.

The costs included in economic evaluations of health care vary from study to study. Based on the theory of cost-benefit analysis, the costs that should be included in an economic evaluation are those not already included in the measurement of willingness to pay (net willingness to pay above any treatment costs paid by the individual) in a cost-benefit analysis or in the measurement of effectiveness in a cost-effectiveness analysis. These costs can be defined as the consumption externality of the treatment (the change in production minus consumption for those included in the treatment program). For a full economic evaluation, the consequences for those included in the treatment program and a caring externality (altruism) should also be added.

Attitude to Health↗

Health status index models for use in resource allocation decisions. A critical review in the light of observed preferences for social choice.

In the last two decades a number of health status index models have been developed for assessing the value of health outcomes in terms of quality-adjusted life years. The models can be tested by comparing their implications with direct observations of how societies think resources should be distributed across patient groups. This paper reviews empirical evidence of this kind from various countries and summarizes the evidence in three rules of thumb for selecting values for health states. Nine different models are judged relative to these rules of thumb. Eight of the models underestimate the strength of social preferences for treating the severely ill before the less severely ill. The ninth has a strong bias against states associated with emotional distress. As a consequence, none of the models can be seen as sufficient stand-alone instruments for valuing health outcomes. Instead, the models may be seen as complementary and adjustable parts of a tool kit that should also include the rules of thumb suggested in this paper.

Bias↗

Economic evaluation of HIV testing among intravenous drug users. An analytic framework and its application to Italy.

We performed an economic evaluation of HIV testing among intravenous drug users (IVDUs) in Italy using the analytical framework of cost-effectiveness analysis. A semi-Markov model was developed to calculate costs and life expectancy of a cohort of IVDUs with and without an annual HIV testing program. We also investigated the incremental cost-effectiveness of a hypothetical early treatment to prolong the life expectancy of HIV-infected asymptomatic subjects by 1 year. The testing program is cost saving in the low prevalence scenario (0.05), and costs L 14,000,000 (US $8,400) and L 55,800,000 (US $33,500) per year of life saved in areas of medium (0.3) and high (0.6) prevalence, respectively. The incremental cost-effectiveness of the hypothetical early treatment may compare favorably with other health care interventions. The program may be considered a cost-effective procedure in low and medium prevalence areas. Where prevalence is high, more evidence about the magnitude of the behavior change is needed. In these areas, the availability of an effective early treatment may become the economic rationale for implementing such a program.

Adult↗

A model for estimating the cost-utility of clinical audit. The example of thrombolysis for suspected acute myocardial infarction.

Economic evaluation of quality assurance programs is often called for but rarely reported. A study was designed to estimate the cost-utility of audit of thrombolysis in four U.K. district general hospitals, using the quality-adjusted life year. Although the results obtained were imprecise, the model used could be applied in future evaluations.

Cost-Benefit Analysis↗

A note on confidence intervals in cost-effectiveness analysis.

How to obtain confidence intervals for cost-effectiveness ratios is complicated by the statistical problems of obtaining a confidence interval for a ratio of random variables. Different approaches have been suggested in the literature, but no consensus has been reached. We propose an alternative simple solution to this problem. By multiplying the effectiveness units by the price per effectiveness unit, both costs and benefits can be expressed in monetary terms and standard statistical techniques can be used to estimate a confidence interval for net benefits. This approach avoids the ratio estimation problem and explicitly recognizes that the price per effectiveness unit has to be known to provide cost-effectiveness analysis with a useful decision rule.

Confidence Intervals↗

Estimating the costs of hip fracture and potential savings.

This paper examines the determinants of hip fracture costs and further evaluates potential savings in costs when the occurrence of hip fracture is prevented. The costs of hip fracture are comprised of direct costs from health care and the social welfare system. Data were collected for 1,080 postmenopausal women admitted from private residence for primary hip fracture surgery during the year of 1992 in the city of Stockholm, Sweden. It was found that the cost of hip fracture is significantly related to age, mortality the year after a fracture, type of fracture, costs 1 year before a fracture, and hospital admission. The savings in direct costs for an average woman surviving the year after a fracture amount to SEK 210,000.

Age Factors↗