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PubMed2006

Cost utility of substituting enoxaparin for unfractionated heparin for prophylaxis of venous thrombosis in the hospitalized medical patient.

BACKGROUND: Both heparin and enoxaparin are effective for the prevention of venous thromboembolism (VTE) in medical patients. On the basis of price, heparin appears preferable because it is less expensive. However, choosing enoxaparin may have greater cost utility when the outcomes of heparin-induced thrombocytopenia (HIT) and heparin-induced thrombocytopenia with thrombosis (HITT) are considered. OBJECTIVE: To determine the cost utility of substituting enoxaparin for heparin from payer and institutional perspectives. DESIGN: A decision analysis model was used. Cost data were based on Medicare reimbursement and the medication and laboratory costs for a multi-institutional healthcare system. Quality-adjusted life years (QALYs) saved by preventing HIT/HITT through the use of enoxaparin were based on published data. Costs are expressed on a per-day basis, and the incremental cost of enoxaparin over that of heparin was used in the calculation of cost/QALY. A sensitivity analysis also was performed. SETTING: Inpatient medicine. PATIENTS: All medical patients for whom VTE prophylaxis was appropriate. INTERVENTIONS: Substitution of enoxaparin for heparin. MEASUREMENT: Cost/QALY. RESULTS: From a payer perspective, using enoxaparin resulted in a decrease in cost of 28.61 dollars over that of heparin and saved 0.00629 QALYs in the base case, resulting in a savings of 4550.17 dollars/QALY. The sensitivity analysis showed this finding of decreased cost and increased effectiveness to be consistent. From an institutional perspective, the use of heparin generally appeared less costly but was dependent on medication price, length of stay required, and bed utilization. CONCLUSIONS: From a payer and, by extrapolation, a societal perspective, cost-utility analysis supports the use of enoxaparin in place of heparin for the prevention of VTE in medical inpatients. From an institutional perspective, the decision is more complicated, but in most cases, the use of enoxaparin also is supported.

Costs and Cost Analysis↗

PubMed2005

Costs in rheumatology: results and lessons learned from the 'Hannover Costing Study'.

The objective of this study is to review the concept of the 'Hannover Costing Study' and to present and discuss the major insights generated during the course of the project. The costing study was performed in conjunction with a randomized controlled prospective trial assessing the effectiveness of a disease management module in rheumatoid arthritis (RA). A full set of clinical and cost data both from patient-reported and payer-derived cost data was developed. In particular the study included (1) the development of a matrix of cost domains which might be used as a common taxonomy in costing studies, (2) the descriptive analysis of payer derived cost data, (3) the analysis of cost data in patients with uncertain diagnosis; (4) the development and validation of a patient-reported costing instrument, and (5) an assessment of productivity costs. The following are the results (1) the developed matrix of cost domains included 16 separate cost domains: 7 outpatient, 3 inpatient, 4 other disease related, and 2 productivity domains; (2) the micro-costing analysis showed total direct costs of 3,815 per patient-year (standard error of mean, SEM: 267) and RA-related direct costs were 2,312 per patient-year; (3) in patients with uncertain diagnosis of RA and no treatment with 'Disease Modifying Antirheumatic Drugs' (DMARD) costs were significantly lower; (4) the comparison of patient-reported with payer-reported cost data generally supports the use of highly aggregated items to assess health care utilization in RA; (5) productivity costs in patients that are gainfully employed and in patients who receive RA-related retirement payments exceed RA-related direct costs. Furthermore, RA-patients reported their productivity losses adequately. The study added some additional insights to the following questions: What costs should be collected, what level of detail is required for that task, what patients should by analyzed, and what data sources should be used in further studies in RA.

Aged↗

PubMed2005

Influenza treatment with neuraminidase inhibitors: cost-effectiveness and cost-utility in healthy adults in the United Kingdom.

We assessed the cost-effectiveness and cost-utility of treating influenza with neuraminidase inhibitors (oseltamivir and zanamivir) from a health care payer's and societal perspective in the United Kingdom. A simulation model was developed to predict morbidity and mortality due to influenza and its specified complications, comparing neuraminidase inhibitors with usual care in an otherwise healthy adult population. Robustness of the results was tested by one-way and multiway as well as probabilistic sensitivity analyses. Treatment with either neuraminidase inhibitor results in reduced morbidity and faster return to normal activities. However, oseltamivir dominates zanamivir in cost-utility analysis due to its lower costs. Comparing oseltamivir with usual care, the costs are pound14.36 per day of normal activity gained and pound5,600 per quality-adjusted life-year gained from the healthcare payer perspective. Oseltamivir dominates usual care from the societal perspective. Treatment with oseltamivir is a cost-effective strategy for otherwise healthy adults in the UK from both the healthcare payer and societal perspective.

Acetamides↗

PubMed2005

Mathematical modeling and pharmaceutical pricing: analyses used to inform in-licensing and developmental go/No-Go decisions.

In the face of significant real healthcare cost inflation, pressured budgets, and ongoing launches of myriad technology of uncertain value, payers have formalized new valuation techniques that represent a barrier to entry for drugs. Cost-effectiveness analysis predominates among these methods, which involves differencing a new technological intervention's marginal costs and benefits with a comparator's, and comparing the resulting ratio to a payer's willingness-to-pay threshold. In this paper we describe how firms are able to model the feasible range of future product prices when making in-licensing and developmental Go/No-Go decisions by considering payers' use of the cost-effectiveness method. We illustrate this analytic method with a simple deterministic example and then incorporate stochastic assumptions using both analytic and simulation methods. Using this strategic approach, firms may reduce product development and in-licensing risk.

Cost-Benefit Analysis↗

PubMed2005

Negotiation advantages of professional associations in health care.

In several instances, third-party payers negotiate prices of health care services with providers. We show that a third-party payer may prefer to deal with a professional association than with the sub-set constituted by the more efficient providers, and then apply the same price to all providers. The reason for this is the increase in the bargaining position of providers. The more efficient providers are also the ones with higher profits in the event of negotiation failure. This allows them to extract a higher surplus from the third-party payer.

Health Care Costs↗

PubMed2004

Pharmacoeconomic assessment of oseltamivir in treating influenza--the case of otherwise healthy Danish adolescents and adults.

OBJECTIVE: To assess the pharmacoeconomics of treating influenza with oseltamivir in healthy Danish adolescents and adults. METHOD: Cost-effectiveness and cost-utility analyses were used to compare oseltamivir to usual care (symptomatic treatment with over the counter (OTC) medicine), considering both the societal and health care payer's perspectives. The population group studied was otherwise healthy adolescents and adults, aged 13 to 64. Danish data were collected to simulate results that are specific to Denmark. The economic model included first- and second-order Monte Carlo simulations. Sensitivity analyses were conducted to test the robustness of the analyses. MAIN OUTCOME MEASURE: The cost-effectiveness study was expressed as gain in cost per day to return to normal activity, and the cost-utility study as cost per QALY (quality adjusted life years) gained. RESULTS: From a societal perspective, oseltamivir was a dominant treatment compared to usual care. From a health care payer's perspective, the cost-effectiveness ratio was 12.3 euros per gain in day to return to normal activity and 5,063 euros/QALY gained. A sensitivity analysis leaving out hospitalisation, complications, and mortality showed increased cost-effectiveness and cost-utility ratios. However, treatment with oseltamivir remained cost-effective, assuming a willingness to pay for health benefits at 26,174 euros/QALY. CONCLUSION: Pharmacoeconomic analyses of influenza treatment with oseltamivir in an otherwise healthy Danish adolescent/adult population show that this treatment saves money for society and is associated with a relatively low cost from a health care payer's perspective. Treatment of influenza with oseltamivir would be cost-effective for healthy adolescents/adults in Denmark.

Acetamides↗

PubMed1986

Diffusion of surgical technology. An exploratory study.

The study presents an empirical analysis of the diffusion patterns of five surgical procedures. Roles of payer mix, regulatory policies, physician diffusion, competition among hospitals, and various hospital characteristics such as size and the spread of technologies are examined. The principal data base is a time series cross-section of 521 hospitals based on discharge abstracts sent to the Commission on Professional and Hospital Activities. Results on the whole are consistent with a framework used to study innovations in other contexts in which the decisions of whether to innovate and timing depend on anticipated streams of returns and cost. Innovation tends to be more likely to occur in markets in which the more generous payers predominate. But the marginal effects of payer mix are small compared to effects of location and hospital characteristics, such as size and teaching status. Hospital rate-setting sometimes retarded diffusion. Certificate of need programs did not.

Communication↗

PubMed1992

Global budgeting of hospitals in Hong Kong.

Policy-makers in industrialized countries face the dilemma of having to contain soaring hospital costs while resisting any reduction in the quality and quantity of hospital services. Among the many hospital financing systems, centralized control via global budgeting is advocated by some to be the most effective in containing hospital costs. Containing hospital costs, however, is but one aspect of the trade-off between cost containment and quality of care. The hospital financing system of Hong Kong provides some insights into the extent to which cost control can be achieved through global budgeting; and its impact on the accessibility of hospital care. The case of Hong Kong highlights three necessary conditions for effective cost control: (1) the payer must have a clear policy stance on overall public spending; (2) the payer must have a clear policy stance on the importance of hospital care relative to other goods and services; and (3) the payer must also have the will and ability to limit hospital spending within finalized global budgets. However, successful cost containment in Hong Kong affects the accessibility of hospital care. In a time of population growth and economic prosperity, new community needs seem to have preceded government plans and actions to build hospital facilities.

Budgets↗

PubMed1993

Net costs from three perspectives of using low versus high osmolality contrast medium in diagnostic angiocardiography.

OBJECTIVES: We conducted an economic analysis to assess the extent to which a reduction in adverse drug reactions induced by low osmolality compared with high osmolality contrast media during diagnostic angiocardiography would result in savings to hospitals, society and third-party payers that would offset the substantially higher price of low osmolality contrast medium. BACKGROUND: Substitution of low osmolality for high osmolality contrast media in the approximately 1 million diagnostic angiocardiographic procedures performed each year in the United States could substantially increase health care costs. Cost-effectiveness estimates should include savings that might occur through reduced costs of managing adverse drug reactions. METHODS: In a randomized clinical trial of 505 persons under-going diagnostic angiography with either high osmolality or low osmolality contrast medium, we measured and compared 1) material costs of contrast media, and 2) costs from three perspectives of incremental resources used to manage contrast-related adverse drug reactions. We also performed sensitivity analyses to examine the effect of different assumptions with regard to relative risk, absolute risk and costs of adverse drug reactions on estimates of net cost of use of high osmolality and low osmolality contrast media. RESULTS: One-hundred thirty-seven (54.2%) of 253 patients receiving high osmolality contrast medium and 44 (17.5%) of 252 patients receiving low osmolality contrast medium experienced adverse drug reactions. The average cost (from society's perspective) of resources used to manage adverse drug reactions per patient undergoing angiography was significantly (p = 0.0001) greater for high osmolality (mean $249) versus low osmolality (mean $92) contrast medium. Differential costs (from the hospital's perspective) were $67 greater for high osmolality contrast medium. Charges and professional fees (from the payer's perspective) were $182 greater for high osmolality (mean $312) than for low osmolality (mean $130) contrast medium (p = 0.42, NS). The higher differential and average costs of managing adverse drug reactions with high osmolality contrast medium offset 33% and 75%, respectively, of the $207 difference in mean material costs, but these estimates are sensitive to infrequent high cost cases. CONCLUSIONS: Although low osmolality contrast medium is not cost-saving in diagnostic angiocardiography, its higher price is partially offset by lower management costs of adverse drug reactions. The cost offset for the hospital is lower than that for society and may not be realized by third-party payers. These methods and results may be useful in establishing clinical and payment guidelines for use of alternative contrast media in diagnostic angiocardiography.

Angiocardiography↗

PubMed2006

Hospitalization for respiratory syncytial virus among California infants: disparities related to race, insurance, and geography.

OBJECTIVES: To evaluate population-based rates of Respiratory Syncytial Virus (RSV)-associated infant hospitalizations related to race/ethnicity, payer source, and geography in California. STUDY DESIGN: Retrospective analysis of RSV-coded infant hospitalizations were performed using the California patient discharge data for 1999 to 2003. All discharge records for infants younger than 1 year of age with an ICD-9-CM code for any RSV-related illness (466.11, 480.1, or 079.6) among any of the diagnosis fields were selected for analysis (n = 45,330). Rates were expressed as the number of RSV-associated hospitalizations per 1000 live births in the same calendar year. RESULTS: Infants enrolled in MediCal (California's version of the United States' national Medicaid program) had a relative risk of 2.03 (95% CI, 1.99 to 2.06) compared with non-MediCal payers (24.3 vs 12.0/1000 live births, respectively). The 1999 to 2003 rates per 1000 live births of RSV-associated hospitalizations for MediCal payers by race/ethnicity were: non-Hispanic white (34.9), African-American (27.9), Hispanic (21.8), Asian/Pacific Islander (12.5), and American Indian/Alaska Native (12.2). CONCLUSIONS: RSV was the leading cause of infant hospitalizations in California between 1999 and 2003. RSV hospitalization rates were highest among non-Hispanic white MediCal insured infants.

California↗

PubMed2006

Prevention of adhesion formation after radical hysterectomy using a sodium hyaluronate-carboxymethylcellulose (HA-CMC) barrier: a cost-effectiveness analysis.

OBJECTIVE: To evaluate the cost-effectiveness of an adhesion prevention strategy compared to routine care, in which no adhesion prevention measures are taken, through a decision analysis model in the clinical setting of patients undergoing radical hysterectomy and pelvic lymphadenectomy for Stage IB cervical cancer. METHODS: A decision analysis model compared two strategies to manage the risk of adhesion-related morbidity following radical hysterectomy for Stage IB cervical cancer: (1) routine care with no adhesion prevention measures, and (2) the intervention strategy with a HA-CMC anti-adhesion barrier. The cost-effectiveness of each strategy was evaluated from the perspective of society and that of a third party payer. RESULTS: From the perspective of society, the HA-CMC strategy had an overall cost per patient of $1932 and effectiveness of 7.901 QALYs and dominated the routine care strategy, which had a cost per patient of $3043 and effectiveness of 7.805 QALYs. From the perspective of a third party payer, the HA-CMC strategy had an overall cost per patient of $1247 and effectiveness of 7.987 QALYs and dominated the routine care strategy, which had a cost per patient of $1629 and effectiveness of 7.970 QALYs. A series of one-way sensitivity analyses confirmed the robustness of the model. CONCLUSIONS: Under a conservative set of clinical and economic assumptions, an adhesion prevention strategy utilizing a HA-CMC barrier in patients undergoing radical hysterectomy for Stage IB cervical cancer is cost-effective from both the perspective of society as a whole and that of a third party payer.

Carboxymethylcellulose Sodium↗

PubMed2000

Medical necessity and psychiatric managed care.

The concept of medical necessity is a provision of commercial insurance contracts and federal government Medicaid requirements that limits the payment to only those services that are essential for treating a person's sickness, injury, or condition. The concept of medical necessity is one tool used by third-party payers to contain their financial risk in a seemingly nonarbitrary manner. Also, the definitions of medical necessity used by commercial insurers or by the federal government reflect their product's or program's philosophies. Expanding commercial insurance or Medicaid psychiatric coverage would require changing those philosophies. As long as society is faced with a greater demand for health-related service than resources to meet them, such systems of rationing will be used. Even with full parity for psychiatric benefits, mechanisms will be used by payers to limit or control demand, thereby controlling financial risk. The short-term challenge for psychiatric advocates is to secure the most acceptable definitions of medical necessity from third-party payers. The long-term challenge for MH/SA advocates and for all health care advocates, is to develop a system that pays for the greatest number of quality services for the greatest number of people in need, in an affordable manner, regardless of diagnosis.

Behavior Therapy↗

PubMed1993

The choice of thrombolytic agents in the emergency department.

STUDY OBJECTIVE: To assess the choice of thrombolytic agents in emergency departments and whether administrators and third-party payers are influencing choices because of cost differences. DESIGN: A telephone survey. TYPE OF PARTICIPANTS: ED medical directors, stratifying for hospital ownership, size, and regions of the United States. MEASUREMENTS AND MAIN RESULTS: One hundred twenty-three ED medical directors completed the interview. Findings indicate that formularies include recombinant tissue-type plasminogen activator (rt-PA) in 94.3% of surveyed hospitals and streptokinase in 63.4%. Public hospitals were significantly less likely to have rt-PA on the formulary (P = .0001). Based on payer type, 68.9% to 77.5% of patients requiring thrombolysis receive rt-PA, with approximately 15% of EDs using it for 1% to 25% of patients and an additional 15% using it for 26% to 50% of patients. Fourteen medical directors (11%) reported that they delay treatment with rt-PA until authorization is provided by the health maintenance organization, and 40% indicated they would change their choice of agents if rt-PA was denied. Cardiologists were the primary decision makers regarding thrombolytic agents in all types of hospitals. CONCLUSION: Although rt-PA is the most frequently selected thrombolytic agent, significant practice variations exist among hospitals. To avoid interference from third-party payers and administrators, physicians may need to make decisions regarding such expensive agents in more objective forums (eg, pharmacy and therapeutics committees) and be better prepared to defend the resulting practice guidelines.

Decision Making, Organizational↗

PubMed2002

The cost-effectiveness of varicella vaccination in Canada.

A deterministic realistic age-structured model was used to predict the impact of vaccination on the incidence of varicella and zoster. Unit costs, estimated from literature, were applied to the predicted health outcomes. Various vaccination programs were investigated and a sensitivity analysis was performed. Assuming no impact of vaccination on zoster, varicella vaccination is estimated to cost 45,000 dollars, 51,000 dollars and 18,000 dollars per life-year gained from the health payer's perspective for infant, infant with catch-up campaign, and preteen programs, respectively. From the societal perspective, mass infant varicella vaccination was estimated to be highly cost saving in Canada. Importantly, infant varicella vaccination could result in a short- to medium-term increase of zoster incidence and thus cause vaccination to be highly cost-ineffective (118,000 dollars per life-year gained) under the health payer's perspective. From a health payer's perspective the preteen vaccination is the only strategy that is deemed cost-effective. The cost-effectiveness of infant vaccination rests heavily on the unknown relationship between varicella and zoster.

Adolescent↗

PubMed2003

The cost-effectiveness of routine childhood varicella vaccination in Germany.

This study explores the economic value of a routine varicella vaccination program for Germany. An age-structured decision analytic model was used to assess the benefits, costs and cost-effectiveness of an immunization program for a period of 30 years. Three interventions were compared with no vaccination: universal vaccination of around 15 months old healthy children, vaccination of susceptible adolescents (11-12 years of age), and the combined strategy. The analysis was conducted from both the societal perspective and the payers', i.e. sickness funds, perspective. Input data were mainly derived from a retrospective survey (analyzed were 1334 patient records) and from a seroprevalence study (n = 4602 sera). Using a coverage rate of 85% and a vaccine efficacy rate of 86% routine children vaccination could prevent around 611,000 varicella cases and over 4700 major complications per year. Average yearly cost savings for the society are 51.3 million Euro. The benefit-cost ratio (BCR) is 4.12. From the third-party payer's perspective, the BCR is 1.75 which is a consequence of significant reimbursement of parent's lost earnings by German sickness funds. The adolescent vaccination strategy has a favorable BCR ratio of 8.44 from the societal perspective, but clearly inferior medical effects. The combined vaccination strategy showed similar results as the children strategy. Routine childhood varicella vaccination appears to be a highly efficient strategy to reduce the burden of varicella and results in significant savings for both the society and the payers.

Adolescent↗

PubMed2003

Cost-benefit analysis of routine childhood vaccination against chickenpox in Taiwan: decision from different perspectives.

Cost-benefit analysis was conducted to determine whether it is worthwhile to initiate a routine varicella vaccination program in Taiwan from different perspectives. Using the human capital approach, the discounted net cost for vaccination program was New Taiwan Dollars (NTD) 281 million from health care payer's perspective. Taking indirect costs into account, the net saving due to vaccination program was NTD 425 million from the societal perspective. In terms of benefit-cost ratio, a mass varicella vaccination program could only save NTD 0.34 in discounted costs for each dollar incurred in a vaccination program from health care payer's perspective whereas save NTD 2.06 from the societal viewpoint. Results based on the willingness-to-pay (WTP) method showed the Net Present Value (NPV) of the vaccination program was estimated as -NTD 272 million. We conclude that a routine varicella vaccination program is worthwhile from the societal perspective but neither from health care payer's nor from consumer decision based on the perspective of WTP.

Chickenpox↗

PubMed2000

Economic aspect of health care systems. Advantage and disadvantage incentives in different systems.

European health care delivery systems illustrate the effect of economic incentives on health care delivery. Each country faces the issue of trying to balance the desire for economic efficiency with comprehensive, quality medical care. Without careful use of economic incentives achievable with central control, one gets to pick only two of the three desired goods--high quality, low cost, and comprehensive coverage. In the United States, payment approaches for health care have been undergoing tremendous changes since the early 1980s. These changes have escalated during the 1990s. The basic approach for reimbursing hospital care has been completely restructured by many payers for care, and payment approaches for physicians and long-term care providers also are being restructured. Financing approaches vary from provider to provider and payer to payer, and financing approaches will continue to evolve over time. In the traditional fee-for-service reimbursement system, the incentive to physicians is to do more because more services lead to more revenue. The use of incentives to influence health care practitioners' behavior is common. Incentives are generally financial in nature and expose health care providers to some risk or reward for certain patterns of behavior. Some common incentives used in managed care include capitation payment, in which a physician is paid a fixed fee, regardless of the number of services administered; bonus distribution; and withhold accounts, through which a practitioner stands to gain or lose some amount of money for overuse or underuse of medical resources against budget. In many countries, a strengthening of the position of primary care providers can be observed: Finland, Germany, Greece, Italy, the Netherlands, Norway, Sweden, the United Kingdom, and now the United States. General practitioners are assumed to function as a gatekeeper to second-line care, such as specialist care, prescription drugs, and hospital care. A further step is to give the primary care providers financial responsibility for the costs of the follow-up care provided by others to their patients. By examining the health care systems of other countries, the potential negative impact of such an approach on the use of specialists can be seen. The negative impact of these approaches on patient care is clear when dermatologists and general practitioners are compared in the delivery of dermatologic health care.

Delivery of Health Care↗

PubMed2002

The burden of chronic obstructive pulmonary disease.

Chronic obstructive pulmonary disease (COPD) is a disease state characterized by chronic airflow limitation that is not fully reversible, with a precise definition varying between different management guidelines. The burden of COPD is considerable from all relevant viewpoints. From the perspective of society, the mortality is already considerable, and it is likely to increase from the sixth to the third most common cause of death worldwide by 2020. From the patient's perspective, COPD is responsible for disability that restricts many everyday activities, such as walking up stairs. The burden of COPD on physicians includes increasing consultations for the condition. From the perspective of healthcare payers, COPD represents an increasing burden, primarily due to the costs incurred when exacerbations require hospital treatment. Despite this considerable burden, there are many signs that the impact of COPD is not recognized. Research on COPD is currently underfunded in relation to the impact of the disease; patients only present late with symptoms; physicians may fail to diagnose the condition and healthcare payers may be failing to support treatment approaches that could reduce the number of costly hospital exacerbations. Reasons for this overall poor recognition of the burden of COPD include lack of recognition of the disease, difficulties in diagnosis, poor knowledge of COPD and nihilistic attitudes towards the condition and its treatment. Awareness of COPD could be improved with education of the public and healthcare professionals. Long-term epidemiological studies showing the impact on morbidity and mortality of different treatment approaches would also influence the setting of priorities by healthcare payers.

Attitude of Health Personnel↗