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Prices, policies and youth smoking, May 2001.

Youth smoking continues to be an important public health problem. Many policy tools designed to reduce youth smoking are based on economic principles. This paper describes the economic and policy context of tobacco use aiming at reducing youth smoking and explains the economic rationale for tobacco control tools such as excise tax and price, clean indoor air laws, youth access laws and the broad provision of health information to the public. An overview of economic models of addiction provides the framework for empirical analysis of the impact of these policies. This is followed by a summary of the empirical evidence of the effectiveness of various tobacco control tools that are primarily economic in nature. The most consistent finding in this literature is that higher cigarette prices discourage youth smoking. Compared to the effects of cigarette taxation and price on youth smoking, the evidence on the effectiveness of the youth access laws and clean indoor air laws are still mixed and inconclusive. More research is needed to address issues such as: (1) the effects of gender, age, race and socio-economic status on the relationship between tobacco control policies and youth smoking; (2) better measurement of the outcome variables to account for the multi-dimensional nature of dependence; and (3) the effects of excise taxes and other tobacco control policies with regard to a host of dimensions of smoking such as initiation, cessation, and more generally the trajectories of tobacco use that would include patterns of progression, maintenance, regression, cessation, and relapse. More frequently collected longitudinal data than those currently available are needed to address the above issues. Understanding smoking behavior cannot be achieved without incorporating familial and other social contexts.

Adolescent↗

Reappraisal of non-invasive management strategies for uninvestigated dyspepsia: a cost-minimization analysis.

BACKGROUND: The benefits of the Helicobacter pylori test-and-treat strategy are attributable largely to the cure of peptic ulcer disease while limiting the use of endoscopy. AIM: To reappraise the test-and-treat strategy and empirical proton pump inhibitor therapy for the management of uninvestigated dyspepsia in the light of the decreasing prevalence of H. pylori infection, peptic ulcer disease and peptic ulcer disease attributable to H. pylori. METHODS: Using a decision analytical model, we estimated the cost per patient with uninvestigated dyspepsia managed with the test-and-treat strategy ($25/test; H.pylori treatment, $200) or proton pump inhibitor ($90/month). Endoscopy ($550) guided therapy for persistent or recurrent symptoms. RESULTS: In the base case (25%H. pylori prevalence, 20% likelihood of peptic ulcer disease, 75% of ulcers due to H.pylori), the cost per patient is $545 with the test-and-treat strategy and $529 with proton pump inhibitor, and both strategies yield similar clinical outcomes at 1 year. H. pylori prevalence, the likelihood of peptic ulcer disease and the proportion of ulcers due to H.pylori are important determinants of the least costly strategy. At an H. pylori prevalence below 20%, proton pump inhibitor is consistently less costly than the test-and-treat strategy. CONCLUSIONS: As the H. pylori prevalence, the likelihood of peptic ulcer disease and the proportion of ulcers due to H. pylori decrease, empirical proton pump inhibitor becomes less costly than the test-and-treat strategy for the management of uninvestigated dyspepsia. Given the modest cost differential between the strategies, the test-and-treat strategy may be favoured if patients without peptic ulcer disease derive long-term benefit from H.pylori eradication.

Anti-Bacterial Agents↗

Economic modelling of different treatment strategies for haemophilia A with high-responding inhibitors.

This paper reports a systematic review of the cost-effectiveness of treatment options in patients with haemophilia A with inhibitors. As very little relevant published evidence was identified, an economic modelling exercise was undertaken to calculate the cost-effectiveness of different strategies in the treatment of high-responding haemophilia A patients with inhibitors. A decision analysis approach was used to model the expected lifetime clinical outcomes and costs of the more common regimens currently used in UK in treating severe haemophiliacs with inhibitors. The model attempts to reflect the outcomes of clinical events, costs and life expectancy for each different treatment regimen for haemophilic boys with inhibitors who are high responders (defined as inhibitor level >/=10 BU) throughout their life. The basic model structure is centred on a Markov decision process, which was used to simulate, at quarter-yearly intervals, the movement through discrete health states and their complications. The model allows a comparison of cost-effectiveness between three immune tolerance induction (ITI) regimens (Bonn, Mälmo and Low-Dose protocols) and against a relevant 'on-demand' (OD) regimen. It also shows the cost-effectiveness of different OD regimens using different bypassing agents. The results of the economic modelling indicate that treating haemophilia A patients who have high-responding inhibitors OD with recombinant activated factor VII is cost-effective compared to treatment with activated prothrombin complex concentrates. However, when OD treatment regimens are compared with the three ITI protocols, the Malmö ITI protocol is the preferred treatment strategy, generating more quality adjusted life-years (QALYs) and less cost than either an OD regimen or the Bonn or Low-Dose ITI protocols.

Cost-Benefit Analysis↗

Using cost-effectiveness analysis to compare Hospital at Home and in-patient interventions. Part 2.

An economic analysis was conducted as an integral part of a comparison of the effectiveness and suitability of Hospital at Home (HaH) and in-patient interventions. The sample comprised 109 adult primary total joint replacement patients and 21 of their co-resident informal carers. Part 2 is principally a methodology paper and describes how nurses may use a variety of methods to compare cost between treatment modalities. A Cost-Effectiveness Analysis framework uses the data from Paper 1 to calculate the economic feasibility of HaH compared with traditional in-patient interventions as a worked example of how the principles of economic analysis can be used within health care research. The basic information for calculating cost of both interventions was obtained by multiplying the mean length of total treatment days by the cost per treatment day. However calculating and comparing cost for in-patient and HaH modalities was multifaceted and included costs incurred by patients and families as well as any shift in cost from tertiary to community and outpatient services. Application of the cost-effectiveness analysis framework demonstrated that not only was HaH more effective than in-patient care in several aspects, but also it was less costly because of a mean reduction in length of stay of 0.9 days per patient and a significant reduction in cost per treatment day because of removal of hospital overhead costs and reduced special duty payments even when offset against additional transport, community and outpatient costs.

Adult↗

Cost-effectiveness of ancrod treatment of acute ischaemic stroke: results from the Stroke Treatment with Ancrod Trial (STAT).

RATIONALE, AIMS AND OBJECTIVES: This paper describes a recent randomized controlled trial in which 42% of patients receiving ancrod attained a favourable outcome in comparison with 34% of controls. Although the above effect size corresponds to a number needed to treat (to achieve a favourable outcome) of approximately 13, intuition does not necessarily suggest what would be the overall impact of a treatment with this level of efficacy. METHODS: The objective was to evaluate the cost-effectiveness of ancrod. Cost-effectiveness analysis of data from the Stroke Treatment with Ancrod Trial (STAT) trial was carried out. The participants were 495 patients with data on functional status at the conclusion of follow-up. Short-term results were based upon utilization and quality of life observed during the trial; these were merged with expected long-term results obtained through simulation using the Stroke Policy Model. The main outcome measure was incremental cost-effectiveness ratio. RESULTS: Ancrod treatment resulted in both better quality-adjusted life expectancy and lower medical costs than placebo as supported by sensitivity analysis. The cost differential was primarily attributable to the long-term implications of ancrod's role in reducing disability. CONCLUSIONS: If ancrod is even modestly effective, it will probably be cost-effective (and, indeed, cost-saving) as well. The net population-level impact of even modestly effective stroke treatments can be substantial.

Adult↗

Malaria and property accumulation in rice production systems in the savannah zone of Côte d'Ivoire.

Irrigation stabilizes agricultural production and hence improves farmers' living standards and conditions. The permanent presence of water may, however, increase the burden of water-related parasitic diseases and counter the economic benefits of irrigation by reducing farmers' health. The purpose of this study was to assess the impact of malaria on farm household property, beyond the health risk (studied elsewhere). The research question was: by weakening individuals, does malaria reduce productive capacities and income workers, and consequently limit their property accumulation? To test this hypothesis, we use data on property (farming equipment, livestock and durable consumer goods) and Plasmodium falciparum indicators generated by a study carried out in 1998 in the Ivorian savannah zone characterized by inland valley rice cultivation, with a sample of nearly 750 farming households. Property is influenced by many factors related to the size of the family, the area under cultivation and high parasite density infection rate of P. falciparum. A significant negative correlation between high-density infection rate and the property values confirms that by reducing the living standards of households, malaria is a limiting factor for property accumulation.

Adult↗

Geographic delivery models for radiotherapy services.

The study described here was undertaken to quantify the societal cost of radiotherapy in idealized urban and rural populations and, hence, to generate a measure of impediment to access. The costs of centralized, distributed comprehensive and satellite radiotherapy delivery formats were examined by decomposing them into institutional, productivity and geographical components. Our results indicate that centralized radiotherapy imposes the greatest financial burden on the patient population in both urban and rural scenarios. The financial burden faced by patients who must travel for radiotherapy can be interpreted as one component of the overall impediment to access. With advances in remote-monitoring systems, it is possible to maintain technical quality while enhancing patient access. However, the maintenance of professional competence will remain a challenge with a distributed service-delivery format.

Catchment Area, Health↗

Cost-effectiveness of palivizumab in New Zealand.

OBJECTIVE: To establish the preterm infant hospitalization risks from respiratory syncytial virus (RSV) in New Zealand and the net cost per hospitalization averted by palivizumab. METHODS: The 437 infants born < 32 weeks' gestation in 1997 and treated at five major neonatal units were identified. Subsequent admissions during the next 2 years for bronchiolitis, pneumonia and croup were tracked, and information collected on RSV tests performed. Data on the length of stay and hospital costs were used to calculate the potential net cost per hospitalization averted associated with the use of palivizumab and the number needed to treat (NNT) to prevent one hospitalization. RESULTS: Estimated RSV readmission risk before 1 year corrected age in infants < 32 weeks' gestation discharged home on oxygen, and those " 28 weeks' gestation, or between 29 and 31 weeks' gestation with or without chronic lung disease was 42%, 23%, 19%, 10% and 8%, respectively. The NNT with palivizumab to prevent one hospitalization ranged from six to 26 across subgroups. Mean (range) net cost per hospitalization averted was 60,000 New Zealand dollars ($28,000-$166,700). In no subgroup would prophylaxis result in net cost saving. Prophylaxis for all NZ infants " 28 weeks' gestation would cost approximately $1,090,000 net and prevent 29 hospitalizations annually, being equivalent to $37,000 net per hospitalization averted, with eight infants treated to prevent one hospitalization. Alternative assumptions about cost and efficacy failed to alter these findings. CONCLUSION: If value is placed on preventing morbidity, the priority groups for palivizumab prophylaxis are preterm infants discharged home on oxygen, followed by preterm infants of 28 weeks' gestation or less.

Antibodies, Monoclonal↗

Determinants of nursing service in urban public hospitals: an economic perspective.

The purpose of the present study was to analyze the determinants of nurse staffing in urban public hospitals in Japan. The study sample included 51 public hospitals in 23 urban cities in 1996. Structural equation modeling was performed using the following: nurse-to-inpatient ratio; medical service and hospitalization fees; approved nurse staffing level; outpatient-to-inpatient ratio; subsidy-to-hospital-revenue ratio; and regional variation index of inpatient service expenditures. The nurse-to-inpatient ratio was associated with medical service fees reflecting patients' acuity levels and the subsidy-to-hospital-revenue ratio, but was not associated with the hospital income from hospitalization fees (the largest share of which consists of nursing fees). Public hospitals in areas with limited inpatient care resources had a higher level of approved nurse staffing and a higher subsidy-to-hospital-revenue ratio. A significant determinant of public hospitals' nurse staffing was local government-funded subsidization rather than the balance between nursing service fees and costs.

Health Expenditures↗

The projected health care burden of Type 2 diabetes in the UK from 2000 to 2060.

AIMS/HYPOTHESIS: To predict the incidence and prevalence of Type 2 diabetes in the UK, the trends in the levels of diabetes-related complications, and the associated health care costs for the period 2000-60. METHODS: An established epidemiological and economic model of the long-term complications and health care costs of Type 2 diabetes was applied to UK population projections from 2000 to 2060. The model was used to calculate the incidence and prevalence of Type 2 diabetes, the caseloads and population burden for diabetes-related complications, and annual NHS health care costs for Type 2 diabetes over this time period. RESULTS: The total UK population will not increase by more than 3% at any time in the next 60 years. However, the population over 30 will increase by a maximum of 11% by 2030. Due to population ageing, in 2036 there will be approximately 20% more cases of Type 2 diabetes than in 2000. Cases of diabetes-related complications will increase rapidly to peak 20-30% above present levels between 2035 and 2045, before showing a modest decline. The cost of health care for patients with Type 2 diabetes rises by up to 25% during this period, but because of reductions in the economically active age groups, the relative economic burden of the disease can be expected to increase by 40-50%. CONCLUSION/INTERPRETATION: In the next 30 years Type 2 diabetes will present a serious clinical and financial challenge to the UK NHS.

Adult↗

Modeling the use of triple combination therapy in five countries: nevirapine, Zidovudine, and Didanosine.

OBJECTIVE: In this study, we modify previously published models to estimate the short- and long-term consequences of nevirapine triple combination therapy use in five developed countries. Current pharmacoeconomic practice requires the de novo model development for each new therapy comparison. This approach is lengthy and costly, and it may yield models with very different structures. Standardized, detailed disclosure of model assumptions and parameters makes it possible to recycle published models with minor structural modifications to examine the efficiency of therapies based on new trial data. METHODS: Two well-publicized models of HIV therapy are modified to fit new trial data comparing double and triple combination therapy with nevirapine; model parameters are adjusted to represent clinical practice and cost structure in five countries. A short-term model uses trial data from advanced-stage patients to estimate first-year costs and consequences. A long-term model uses data from antiretroviral-naïve patients to estimate long-term cost-effectiveness. RESULTS: During the first year, for each 100 individuals treated with nevirapine triple combination therapy, 2.7 deaths and 30.8-31.4 opportunistic disease events would be averted compared to employing dual therapy. Additionally, 61% to 142% of the first-year costs of nevirapine therapy would be offset by other medical care costs savings [FF19,749, DM3,778, 3334 (x1000) lire, 293 (x1000) ptas, and US $3,569]. Compared to dual combination therapy, nevirapine triple combination therapy is predicted to yield incremental cost-effectiveness ratios (discounted at 3%) of FF101,057, DM30,709, 28,066 (x1000) lire, 1294 (x1000) ptas, and US $14,338. CONCLUSION: Published, well-constructed, and documented cost-effectiveness models can be reused to estimate the economic impact of therapies for HIV disease. Such models can also be used to provide insight into the factors that affect efficiency across countries. Our use of clinical trial data on nevirapine, together with published HIV economic models, provides support for the hypothesis that nevirapine is cost-effective under the cost structures of five developed countries.

AIDS-Related Opportunistic Infections↗

Implications of controlling for comorbid conditions in cost-of-illness estimates: a case study of osteoarthritis from a managed care system perspective.

OBJECTIVES: Current methods for estimating the cost of illness inconsistently control for the effect of comorbid conditions. This analysis examines the implications of controlling for comorbid conditions on the estimated cost of illness. These implications are illustrated using the cost of osteoarthritis as an example. METHODS AND DATA: Medical claims data from 1996 were obtained for inpatient, outpatient, and pharmacy services for members in four United HealthCare health plans. Total annual costs for osteoarthritis (OA) were compared to costs among an equal number of comparison members. Multivariate regression analysis was used to compare the natural log of costs between the OA and comparison groups under two alternative controls for comorbid conditions: no controls, and controls for all conditions. RESULTS: Controlling for no or all comorbid conditions resulted in estimates of the annual cost of members with OA that ranged between 261% and 151% of the cost of members without OA, respectively. CONCLUSIONS: Existing cost-of-illness estimates may seriously underestimate the true cost by including statistical controls for all comorbid conditions, or seriously overestimate the true cost by failing to control for enough comorbid conditions. In the case of OA, the range of potential bias is substantial.

Adolescent↗

Modeling costs and cost-effectiveness of different CMV management strategies in liver transplant recipients as a support for current and future decision making.

OBJECTIVES: To develop a generic decision-analytic model to predict health and economic outcomes of different management options for cytomegalovirus (CMV) infection and disease in liver transplant patients. METHODS AND DATA: The model considers different CMV management strategies, thereby emphasizing the important difference between infection and disease. The first strategy starts with prophylaxis prior to transplantation, followed by preemptive treatment if infection, based on positive CMV diagnostic tests, is confirmed. The second strategy is a preemptive strategy consisting of only testing followed by preemptive treatment. Finally, in the wait-and-treat strategy, antiviral treatment is only started when clinical signs of CMV disease appear. Management and resource-use data were obtained from clinical experts in large transplant centers in France, Germany, and the United Kingdom. Cost data were collected from the health care payer's perspective. A Bayesian revision technique was applied to distinguish effectiveness of current management options for CMV infection vs. CMV disease, an aspect that is currently underreported in literature. RESULTS: CMV prophylaxis in liver transplant recipients is generally more cost-effective than preemptive and wait-and-treat strategies. In order of importance, changes in drug costs, drug efficacy, specificity of CMV testing, cost of hospitalization, probability of CMV relapse and baseline CMV risk are the most important factors influencing the cost-effectiveness. CONCLUSION: This model describes different strategies applied for management of CMV in liver transplant patients and is useful both for current decision making, optimal disease management, and assessment of future research targets.

Antiviral Agents↗

A comparison of methods for analyzing health-related quality-of-life measures.

OBJECTIVES: Self-reported health status is often measured using psychometric or utility indices that provide a score intended to summarize an individual's health. Measurements of health status can be subject to a ceiling effect. Frequently, researchers want to examine relationships between determinants of health and measures of health status. Regression methods that ignore the censoring in the health status measurement can produce biased coefficient estimates. The authors examine the performance of three different models for assessing the relationship between demographic characteristics and health status. METHODS: Three methods that allow one to analyze data subject to a ceiling effect are compared. The first model is the classic Tobit model. The second and third models are robust variants of the Tobit model: symmetrically trimmed least squares and censored least absolute deviations (Censored LAD) regression. These models were fit to data from the Canadian National Population Health Survey. The results are compared to three models that ignore the presence of a ceiling effect. RESULTS: The Censored LAD model produced coefficient estimates that tended to be shrunk toward 0, compared to the other two models. The three models produced conflicting evidence on the effect of gender on health status. Similarly, the rate of decay in health status with increasing age differed across the three models. The Censored LAD model produced results very similar to median regression. Furthermore, the censored LAD model had the lowest prediction error in an independent validation dataset. CONCLUSIONS: Our results highlight the need for careful consideration about how best to model variation in health status. Based upon our study, we recommend the use of Censored LAD regression.

Age Distribution↗

Conditions for the near equivalence of cost-effectiveness and cost-benefit analyses.

The equivalence of cost-effectiveness analysis (CEA) and cost-benefit analysis (CBA) has been vigorously debated in the health economic literature. In this paper we review and refine the conditions for the equivalence of CEA and CBA. The previously stated conditions require that 1) each individual's willingness to pay (WTP) per quality-adjusted life year (QALY) is constant and does not vary with the magnitude of QALY gains, and 2) the WTP per QALY is identical for every individual in society. Based on mathematical programming formulations of CEA and CBA, we note that condition 2 can be replaced with two other conditions, which together are less restrictive than the requirement that every individual have the same WTP per QALY. Even with this less restrictive set of conditions, CEA and CBA are unlikely to be equivalent under real world conditions. When CEA and CBA do lead to different resource allocation decisions, the most appropriate framework for health economic analysis depends on the perspective regarding distribution issues. We also examine the equivalence of two different definitions of CEA provided in the literature and discuss the problems that could arise when there are multiple optima.

Attitude to Health↗

Comparing cost-effectiveness analyses of anti-hypertensive drug therapy for decision making: mission impossible?

The purpose of this literature review was to compare the methodology used in the most recently published cost-effectiveness studies of antihypertensive treatments, and to identify methodological strengths and weaknesses that indicate the study's potential as a useful, decision-making tool. Based on the results of a search of several databases, spanning the years 1995 to 2000, 10 cost-effectiveness studies were identified. Although the majority of the studies reported their cost-effectiveness ratio in "costs per year of life gained," the studies also considered a varying range of components including additional end points. The methodology used to measure effectiveness, the cost variables included, and the characteristics of the patient population varied significantly across studies. Due to this lack of conformity, it would be difficult, if not impossible, to compare the results and draw conclusions about the relative cost-effectiveness of different types of antihypertensive drug therapies. This lack of uniform comparison across studies is likely to draw criticism from both the clinical and health-care decision-making communities. Future studies within this field should be thorough and useful for decision making. It is suggested that short-term outcomes should include systolic and diastolic blood pressure measurements and long-term outcomes should include end points such as myocardial infarction, stroke, congestive heart failure and renal events. Other positive outcomes such as a more favorable side-effect profile, should be used to enhance the primary outcomes. Additionally, when subpopulations are considered in submodels, studies should address the issue of generalizability. Cost calculations should be transparent and related to the perspective of the study. Modeling the cost-effectiveness of a drug may be an acceptable method provided that data sources and assumptions are valid and transparent.

Adult↗

Cost-effectiveness and cost-utility of long-term management strategies for heartburn.

OBJECTIVES: To compare the expected costs and outcomes of seven alternative long-term primary care strategies for the management of patients with moderate-to-severe heartburn over a 1-year period. METHODS: A decision-analytic model was developed to estimate costs and effects (weeks with heartburn symptoms and quality adjusted life years [QALYs]) for each strategy. Meta-analyses were used to synthesize acute treatment and maintenance studies and physician surveys to collect information on patient management. The impact of uncertainty on the base case results was assessed using probabilistic sensitivity analysis. Probability distributions were defined for key model parameters and techniques of Monte Carlo simulation were used to draw values from these distributions. Cost-effectiveness acceptability curves (CEACs) conditional on the monetary value decision makers are willing to pay for a symptom-free day or QALY were created for each strategy. RESULTS: In the base case, no strategy was strictly dominated by any other strategy. However, two strategies (maintenance H2-receptor antagonists H2RA] and step-down proton pump inhibitor PPI]) were dominated through principles of extended dominance. The least costly and least effective strategy was intermittent H2RA, while maintenance PPI was the most costly and most effective. CONCLUSIONS: This analysis showed that the best way of managing patients with heartburn depends on how much society is willing to pay to achieve health improvements. Based on the commonly quoted threshold of US 50,000 dollars per QALY, the optimal primary care strategy for managing patients with moderate-to-severe heartburn symptoms is to treat the symptoms with a PPI followed by maintenance therapy with an H2RA to prevent symptomatic recurrence.

Canada↗