Kenneth Arrow and the changing economics of health care.
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The application of economic evaluation in healthcare, including vaccination programs, has increased exponentially since the 1980s. There are a number of aspects of economic evaluation of vaccine programs that present particular challenges to the analyst. These include the development of the appropriate epidemiological models from which to estimate the costs and benefits; the accurate prediction of uptake rates; the incorporation of quality adjusted survival gains; and the inclusion of intangible but nonetheless important benefits and costs associated with infectious disease and vaccination. The estimation of marginal intervention costs presents specific difficulties, especially for multivalent vaccines and valuing costs and benefits over time is heavily influenced by the choice of discount rate, which is still a controversial topic. Developments in the next 5 years are likely to address all of these issues and result in more sophisticated and accurate models of vaccination programs.
As increasing numbers of patients enroll in managed care plans, health care providers are faced with new operational and financial challenges. This article, the fourth in a series on the financial perils of managed care contracting, addresses issues related to diversification of risk and reinsurance.
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OBJECTIVES: This controlled, prospective, randomized study examined the clinical and potential economic impact of a 6-session Recreational Music-making (RMM) protocol on burnout and mood dimensions, as well as on Total Mood Disturbance (TMD) in an interdisciplinary group of long-term care workers. METHODS: A total of 112 employees participated in a 6-session RMM protocol focusing on building support, communication, and interdisciplinary respect utilizing group drumming and keyboard accompaniment. Changes in burnout and mood dimensions were assessed with the Maslach Burnout Inventory and the Profile of Mood States respectively. Cost savings were projected by an independent consulting firm, which developed an economic impact model. RESULTS: Statistically-significant reductions of multiple burnout and mood dimensions, as well as TMD scores, were noted. Economic-impact analysis projected cost savings of $89,100 for a single typical 100-bed facility, with total annual potential savings to the long-term care industry of $1.46 billion. CONCLUSIONS: A cost-effective, 6-session RMM protocol reduces burnout and mood dimensions, as well as TMD, in long-term care workers.
Results of an analysis of the cost-effectiveness of hypertension treatment in Sweden are presented. The cost per life-year gained decreases with age for both men and women and is relatively low for middle-aged and older men and women even in the blood pressure range 90-94 mmHg. The results indicate that it is in general cost-effective to treat middle-aged and older men and women in Sweden with a diastolic blood pressure > or = 90 mmHg, but that it is questionable whether it is in general cost-effective to treat younger men and women with mild hypertension. It is furthermore shown that ACE-inhibitors and calcium-antagonists may be cost-effective in some patient groups at a high risk of coronary heart disease, if they achieve the epidemiologically expected risk reduction for coronary heart disease. Since an improved risk reduction has not been demonstrated in clinical trials ACE-inhibitors and calcium-antagonists cannot, however, at present be recommended for hypertension treatment in any patient groups unless treatment with diuretics and beta-blockers is contraindicated.
Analyzes the relationship between human capital and fertility in West Germany, an economically developed homogenous society that has been characterized by low and declining birthrates, a rise in educational levels, and increasing female labor force participation for more than a decade and a half. The theoretical links between human capital and fertility are 1st explored within the framework of an informal household optimization model drawn from the economics of fertility literature. Cross sectional empirical relationships are then assessed using OLS regression techniques. The impact of educational measures on desired family size is found to be statistically weaker than in prior studies. Evidence is presented for the existence of a general time trend in tastes as a source of falling fertility. It is argued that these results may stem from the existence of strong norms and other special characteristics of the society, casting doubt on the validity of the economic model in such a setting.
This paper describes the Population Health Model (POHEM) developed by Statistics Canada and shows its usefulness in the evaluation of cancer control interventions and policy decision-making. Models of the costs of diagnosis and treatment of lung and breast cancer were developed and incorporated into POHEM. Then, POHEM was used to evaluate the economic impact of chemotherapy for advanced non-small cell lung cancer; reduced length of hospital stay following breast cancer surgery; and the provision of preventive tamoxifen to women at high risk of breast cancer. A lung cancer chemotherapy treatment decision framework was developed to rank order currently available chemotherapy regimens according to relative cost-effectiveness and cost-utility. Reducing post-surgical breast cancer hospitalisation with optimal home care support could produce major healthcare savings. However, the provision of preventive tamoxifen was estimated to have no population health benefit. This paper demonstrates that POHEM is an effective tool for performing economic evaluations of cancer control interventions and to inform healthcare policy decisions.
The German as well as the Swiss health care system are facing similar problems. However, in Switzerland different gatekeeper systems to improve the capacity and economic efficiency were successfully tried and tested. The main structures of gatekeeping are the HMO health centres and different GP systems. Central to this idea is the primary care physician functioning as a gatekeeper. He has to control the demands of medical services according to the patient's needs to fulfil integral, comprehensive and economic criteria. Although data processing has not yet been completed yet, first results show clear advantages of the gatekeeper system in respect of the costs and quality of health care compared with the customary Swiss health insurance. Although in Switzerland there are still relatively few persons insured according to the gatekeeper system, it is expected that particularly the family physician systems will expand considerably in the future. Reorganisation and rearrangements of the medical care providers are likely.
OBJECTIVE: This analysis evaluates the cost-effectiveness of valaciclovir prophylaxis using clinically and economically important health outcomes including graft failure, life-years, and quality-adjusted life-years (QALYs). METHODS: A Markov model was developed using a randomized, placebo-controlled trial of valaciclovir prophylaxis, together with a published epidemiological study and national renal transplant registry data. The model's population was stratified into two risk groups by donor/recipient cytomegalovirus (CMV) serostatus at transplantation: donor-positive/recipient-negative (D+R-) and recipient-positive (R+) patients. The model estimated costs and health outcomes over a 30-yr period from the perspective of Australian health care providers. RESULTS: The total health care cost was $3619 lower for D+R- patients receiving valaciclovir prophylaxis compared with those not receiving prophylaxis. D+R- patients receiving valaciclovir gained an extra 0.33 yr of life and 0.27 QALYs. R+ patients receiving valaciclovir prophylaxis gained an extra 0.07 yr of life and 0.05 QALYs, with an incremental cost of $914. This equates to $17 127 per QALY gained, which is highly cost-effective compared with other drugs and health interventions. CONCLUSIONS: Valaciclovir for the prophylaxis of CMV disease in renal transplant recipients is a cost-effective intervention, significantly reducing the burden of CMV disease to patients and health care providers.
The Care and Prevention Programme (CPP) began in 1998. It is based on the philosophy of primary health care, and has improved health among homosexually active men, including about a third of HIV-positive South Australians. The CPP was assessed using financial analysis and qualitative methods. Participants wanted to access care where they could feel comfortable and safe to talk about issues of sexuality and lifestyle. The CPP model is "economically" sustainable, but not "financially" sustainable within the Medicare Benefits Schedule. It is vulnerable to changes in political environment. The financing model for the CPP has been adapted by including state funding. General practitioners have adapted by lowering their personal incomes (but not quality of care). These adaptations have achieved fragile financial viability. Facilitators of sustainability for the CPP included: It is part of the community that it serves; The creation of deeply integrated networks of diversity-competent service providers; and "Virtuous non-adaptability" of service providers in refusing to compromise care standards despite financial pressure to do so. Threats to sustainability included: Difficulty maintaining a diversity-competent workforce skilled in HIV medicine; Marginal financial viability; and Political vulnerability.
This article is the first in a series called Common Cent$. There is a need for leaders and managers to have a basic understanding--Common Cent$--of elementary economics. The limited, retrospective view of the accountant must be supplemented by the broader, prospective view of the economist. The limits and scope of economics are defined. The First and Second Fundamental Theorems of Welfare Economics are introduced. The mythology behind the mechanism of action of Adam Smith's Invisible Hand is dissected, and the mechanism of the free market is explained in terms of the effect of marginal cost on net market efficiency. The apparently simple case of the effect of legislating a minimum wage on a free market is discussed. This provides an example of the real-world complexity of economies and of applying economic concepts to the business world.
The objectives of MS treatment are to avoid temporary disability due to relapses and to delay progression to permanent disability. There have been intense debates about whether new and costly MS treatments represent efficient use of resources, and which patients should be treated. Cost-effectiveness analysis attempts to estimate the trade-offs involved and to provide information that will assist the decision-making process. In chronic-progressive diseases, health gains and potential associated economic benefits are often most evident in the long term. Consequently, the potential impact of new treatments must be estimated, using models that project available knowledge into the future. These models can also explore scenarios that provide best value for money (e.g. by defining subgroups or criteria when treatment should be stopped). The different findings obtained by various cost-effectiveness studies of new MS treatments can be explained by the variations in methodological approaches, patient definitions and datasets used. The key is to communicate such differences transparently.
In Belgium, the breast cancer screening by mammography involves a great number of women. It is largely non organized and regarded to the small number of data, it is impossible to determine if this screening is useful and if it has a good "cost-benefit" ratio. This work studies the economical aspects of breast cancer screening in the belgian health care system. From information found in other countries, we build 4 models corresponding to an organized and a spontaneous screening. We studied the total processus from screening to diagnosis, including the quality assurance and the evaluation of effectiveness in the organized models. We then applied the reimbursements of the belgian health insurance in the models and compared the costs. It appears that a screening for breast cancer must be organized to give a best "cost-effectiveness" ratio. Pilot projects should be the best way to study the best organization modalities in Belgium.