Need for differential discounting of costs and health effects in cost effectiveness analyses.
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Cost-Benefit Analysis↗
Biomedical subjects
Frans F H Rutten
Publications and source records attributed to Frans F H Rutten.
The "health benefit basket" in the Netherlands.
This contribution describes the entitlements in Dutch health care and explores how these entitlements are determined and to whom they apply. The focus is on services of curative care. No comprehensive positive or negative list of individual services is included in formal laws. Instead, the legislation states only what general types of medical services are covered and generally the "usual care" criterion determines to which interventions patients are entitled. This criterion is not very restrictive and yields local variations in service provision, which are moderated by practice guidelines. It is conceivable, however, that the recent introduction of the DBC financing system will change the reimbursement and therefore benefit-setting policy.
Financing, Government↗
The cost effectiveness of lung transplantation compared with that of heart and liver transplantation in the Netherlands.
This study was performed to assess the main reasons for the unfavorable cost effectiveness of lung transplantation compared with that of heart and liver transplantation. Costs, effects, and cost-effectiveness ratios of Dutch lung, heart, and liver transplantation programs were compared. The data are based on three Dutch technology assessments of transplantation, with minor adjustments for time and methods. In result, mainly follow-up costs of lung transplantation are higher than costs of heart and liver transplantation-- 50,300 US dollars, 121,500 US dollars, and 95,300 US dollars, respectively--in the first 3 years after transplantation. The survival gain realized by lung transplantation is small (4.4 years) compared with heart (8.8 years) and liver (14.7 years) transplantation. Costs per life-year gained were 77,000 US dollars, 38,000 US dollars, and 26,000 US dollars for lung, heart, and liver transplantation, respectively. The unfavorable cost effectiveness of lung transplantation is largely related to a relatively small survival gain and high follow-up costs.
Cost-Benefit Analysis↗
The missing link: on the line between C and E.
In this paper it is argued that the separation of elements associated with the time spent by the patient is not conducted in a consistent way. This is the case for income (for which there at least has been some attention) and for other time elements like lost unpaid work, leisure and role-functioning. The use of general rather than specific preferences in health state assessments makes the separation of time-elements into costs and effects difficult. While costs are calculated specifically for the patient group under study, effects are normally derived from preferences in the general public. The characteristics of these two groups in terms of (the opportunity of) spending time on activities need not coincide. The use of specific time-group valuations of health states may be a good alternative to using general health state valuations.
Absenteeism↗
Unit costs of inpatient hospital days.
BACKGROUND: Costs of inpatient days in hospitals are frequently the main drivers of total treatment costs, and their unit cost can markedly affect the outcomes of an economic evaluation. In many countries, the availability of unit cost data is limited and unit costs are often based on data from hospitals participating in clinical trials. OBJECTIVE: To provide data about unit costs of inpatient hospital days in The Netherlands from a healthcare provider's perspective and to give an insight into the extent to which cost categories and total costs differ between hospitals. DESIGN: Unit costs were collected from 22 wards and 11 intensive care units (ICUs) of general and university hospitals involved in clinical trials with 'piggybacked' economic evaluations. Direct costs, such as costs of nursing and medical materials, were calculated by dividing the annual cost per category of the nursing department by the annual number of inpatient days. Indirect costs, such as overheads and accommodation, were allocated to the nursing departments by applying direct allocation. All costs were expressed in 1998 euros (EUR). RESULTS: The mean costs per inpatient day were EUR230 (range: EUR154-EUR311) in general hospitals and EUR323 (range: EUR209-EUR400) in university hospitals. The mean costs per inpatient day in an ICU were EUR1125 (EUR919-EUR1560). Between 38-48% of the total costs were made up of nursing costs. All cost categories showed wide variations between hospitals. CONCLUSIONS: The results of this study were used to develop standard costs for inpatient days in The Netherlands and may contribute to the comparability and generalisability of economic evaluations.
Critical Care↗
Multivariate Markov chain analysis of the probability of pregnancy in infertile couples undergoing assisted reproduction.
BACKGROUND: Estimating the probability of pregnancy leading to delivery and the influence of clinical factors on that probability is of fundamental importance in the treatment counselling of infertile couples. A variety of statistical techniques have been used to analyse fertility data, many borrowed from survival analysis. METHODS AND RESULTS: We propose an alternative method of analysis which is based on a discrete time Markov chain approach, with states 'pregnancy (leading to a delivery)', 'not pregnant', and 'censored' and in which the transition probabilities are dependent both on the clinical characteristics of the patient and the treatment given. CONCLUSIONS: We believe that the method of analysis presented here may be preferable to standard analyses in that it better reflects the clinical situation, it is a truly discrete time analysis applied to a discrete time situation, it explicitly models the censoring process (a process which in itself provides information of interest to the physician) and can be readily extended to a variety of clinical situations.
Age Factors↗
Standardisation of costs: the Dutch Manual for Costing in economic evaluations.
The lack of a uniform costing methodology is often considered a weakness of economic evaluations that hinders the interpretation and comparison of studies. Standardisation is therefore an important topic within the methodology of economic evaluations and in national guidelines that formulate the formal requirements for studies to be considered when deciding on the reimbursement of new medical therapies. Recently, the Dutch Manual for Costing: Methods and Standard Costs for Economic Evaluations in Health Care (further referred to as "the manual") has been published, in addition to the Dutch guidelines for pharmacoeconomic research. The objectives of this article are to describe the main content of the manual and to discuss some key issues of the manual in relation to the standardisation of costs. The manual introduces a six-step procedure for costing. These steps concern: the scope of the study;the choice of cost categories;the identification of units;the measurement of resource use;the monetary valuation of units; andthe calculation of unit costs. Each step consists of a number of choices and these together define the approach taken. In addition to a description of the costing process, five key issues regarding the standardisation of costs are distinguished. These are the use of basic principles, methods for measurement and valuation, standard costs (average prices of healthcare services), standard values (values that can be used within unit cost calculations), and the reporting of outcomes. The use of the basic principles, standard values and minimal requirements for reporting outcomes, as defined in the manual, are obligatory in studies that support submissions to acquire reimbursement for new pharmaceuticals. Whether to use standard costs, and the choice of a particular method to measure or value costs, is left mainly to the investigator, depending on the specific study setting. In conclusion, several instruments are available to increase standardisation in costing methodology among studies. These instruments have to be used in such a way that a balance is found between standardisation and the specific setting in which a study is performed. The way in which the Dutch manual tries to reach this balance can serve as an illustration for other countries.
Health Care Costs↗
Regulating the Dutch pharmaceutical market: improving efficiency or controlling costs?
In this paper, we describe the Dutch pharmaceutical market, which is heavily regulated by the government. Through the regulation of prices and promoting prudent use, the Dutch government tries to bring down the cost of pharmaceuticals, which increases every year at a higher rate than total health care expenditure. The complex system of regulation, especially aimed at cost containment, is not very effective, particularly with respect to controlling outpatient pharmaceutical expenditure. Moreover, the system has few incentives towards efficiency. Though the market share of generic pharmaceuticals is rapidly growing, pharmaceutical expenditure has not decreased accordingly. The discounts offered by wholesalers of generic products to pharmacists produce private rather than societal gains from generic prescriptions. Dismantling the current regulatory system, boosting competition and efficiency with insurers in a leading role, seems to be the way forward.
Cost Control↗
The drug budget silo mentality: the Dutch case.
This article provides a broad outline of developments in the Dutch health-care policy related to the costs, budgeting, and reimbursement of pharmaceuticals. In-hospital drugs costs are part of hospital budgets, whereas for the main part of costs, nonhospital drugs, no strict budget exists. The government sets a goal for the annual cost increase of nonhospital drugs, but has only limited means to enforce that goal. Two measures were implemented to reduce drug prices: a reference price system and a price law. Both measures had a modest and temporary impact on drug prices during the 1990s. In limiting the utilization of drugs, the package of reimbursed drugs has been restricted. This led to a shift from public to private costs and possible substitution of cheaper not reimbursed drugs by more expensive reimbursed drugs. An electronic prescription system was implemented to encourage rational prescription. Although 70% of the Dutch general practitioners reported to use the system, the estimated savings on drug costs appear to be modest and far less than expected. The use of economic evaluation for reimbursement decisions will increase. From 2005 onward a pharmacoeconomic study and budget impact analysis is formally required for new nonclustered drugs seeking a premium price. Furthermore, in the future the health-care insurers will get a more prominent role in limiting the costs of drugs and enhancing the efficient use of drugs within their overall budgets. Health-care insurers may choose which drugs to purchase and reimburse and they can negotiate drug prices with the pharmaceutical industry, wholesalers, and local pharmacists.
Budgets↗
Portfolio theory and cost-effectiveness analysis: a further discussion.
OBJECTIVES: Portfolio theory has been suggested as a means to improve the risk-return characteristics of investments in health-care programs through diversification when costs and effects are uncertain. This approach is based on the assumption that the investment proportions are not subject to uncertainty and that the budget can be invested in toto in health-care programs. METHODS: In the present paper we develop an algorithm that accounts for the fact that investment proportions in health-care programs may be uncertain (due to the uncertainty associated with costs) and limited (due to the size of the programs). The initial budget allocation across programs may therefore be revised at the end of the investment period to cover the extra costs of some programs with the leftover budget of other programs in the portfolio. RESULTS: Once the total budget is equivalent to or exceeds the expected costs of the programs in the portfolio, the initial budget allocation policy does not impact the risk-return characteristics of the combined portfolio, i.e., there is no benefit from diversification anymore. CONCLUSION: The applicability of portfolio methods to improve the risk-return characteristics of investments in health care is limited to situations where the available budget is much smaller than the expected costs of the programs to be funded.
Algorithms↗
A dollar is a dollar is a dollar--or is it?
It is normally stated that an economic evaluation should take the societal perspective and that this implies the incorporation of all costs and effects, regardless of where these occur. Nevertheless, this broad perspective may be in conflict with the narrower perspective of the health-care decision-makers we are usually trying to aid. In this article, it is argued that not all costs have to be considered equally important for health-care decision-making and that there is a discrepancy between the economically preferred societal perspective and the aim of aiding health-care decision-makers. This is related to the concept of local rationality. Three reasons why some costs may be considered more important for health-care decision-makers than others are: 1) relevance; 2) equity; and 3) responsibility. We suggest that it may be useful to adopt a two-perspective approach as a standard, presenting one cost-effectiveness ratio following a strict health-care perspective and one following the common societal perspective. The health-care perspective may assist the health-care policymaker better in achieving health-care goals, while the societal perspective indicates whether the local rationality of the narrow health-care perspective is also in line with societal optimality. More research on actual decisions should provide more insight into the relative weights attached to different types of costs.
Cost-Benefit Analysis↗