Economic analysis of a new drug: potential savings in hospital operating costs from the use of a once-daily regimen of a parenteral cephalosporin

Measuring the costs of outreach motivational interviewing for smoking cessation and relapse prevention among low-income pregnant women

Background

Economic theory provides the philosophical foundation for valuing costs in judging medical and public health interventions. When evaluating smoking cessation interventions, accurate data on costs are essential for understanding resource consumption. Smoking cessation interventions, for which prior data on resource costs are typically not available, present special challenges. We develop a micro-costing methodology for estimating the real resource costs of outreach motivational interviewing (MI) for smoking cessation and relapse prevention among low-income pregnant women and report results from a randomized controlled trial (RCT) employing the methodology. Methodological standards in cost analysis are necessary for comparison and uniformity in analysis across interventions. Estimating the costs of outreach programs is critical for understanding the economics of reaching underserved and hard-to-reach populations.

Methods

Randomized controlled trial (1997-2000) collecting primary cost data for intervention. A sample of 302 low-income pregnant women was recruited from multiple obstetrical sites in the Boston metropolitan area. MI delivered by outreach health nurses vs. usual care (UC), with economic costs as the main outcome measures.

Results

The total cost of the MI intervention for 156 participants was $48,672 or $312 per participant. The total cost of $311.8 per participant for the MI intervention compared with a cost of $4.82 per participant for usual care, a difference of $307 ([CI], $289.2 to $322.8). The total fixed costs of the MI were $3,930 and the total variable costs of the MI were $44,710. The total expected program costs for delivering MI to 500 participants would be 147,430, assuming no economies of scale in program delivery. The main cost components of outreach MI were intervention delivery, travel time, scheduling, and training.

Conclusion

Grounded in economic theory, this methodology systematically identifies and measures resource utilization, using a process tracking system and calculates both component-specific and total costs of outreach MI. The methodology could help improve collection of accurate data on costs and estimates of the real resource costs of interventions alongside clinical trials and improve the validity and reliability of estimates of resource costs for interventions targeted at underserved and hard-to-reach populations.

Do drugs reduce utilisation of other healthcare resources?

BACKGROUND

Drug expenditures per capita have drastically increased over the last quarter century in Canada, with a share of overall healthcare costs rising from 8.8% in 1980 to 16.8% in 2002. Pressure to curb expenditure on drugs has increased accordingly, but containing drug expenditure might increase costs elsewhere in the healthcare sector.

OBJECTIVE

To measure substitution patterns between drugs and other healthcare resources over the last 25 years and thus assess whether containing drug costs might result in higher expenditure elsewhere in the healthcare system.

METHODS AND DATA

A production function approach was used, in which life expectancy was modelled as a function of per capita drugs and non-drug healthcare resources, among other factors. Estimates are used to calculate a marginal rate of substitution, or trade-off, between drugs and non-drug healthcare resources, for a given level of life expectancy in the population. The model is estimated from a societal perspective, with panel data techniques using Canadian provincial-level data on health expenditure and spending on physicians per capita for the period 1980-2002, as well as individual survey data on lifestyle habits such as cigarette consumption and body mass index.

RESULT

Using life expectancy at birth for males as the production function, increasing drug spending by Can 1.00 dollars (constant 2003 values) was accompanied by a decrease of Can 1.48 dollars in non-drug, non-physician healthcare resources over the study period, without affecting life expectancy at birth. Results using life expectancy at birth for females as the production function showed a decrease of Can 1.05 dollars in non-drug, non-physician healthcare resources over the same period.

CONCLUSION

Using life expectancy as a general health indicator, results suggest that increases in drug spending could be more than offset by decreases in other healthcare spending without affecting the health of the population. This suggests that better access to drugs may be an effective strategy to decrease overall healthcare costs. Freeing up healthcare dollars by reallocating spending towards drugs could provide opportunities for overall healthcare cost savings without negatively impacting the health of the population.

Evidence on antibiotic prophylaxis for cesarean section alone is not sufficient to change the practices of doctors in a teaching hospital

AIMS

To assess the pattern of prophylactic antibiotic use in cesarean sections, identify factors associated with single-dose prescriptions as evidence-based best practice, and evaluate the changes in use of single-dose compared with multiple-dose regimens and the variation of use between doctors after dissemination of evidence.

METHODS

An analytical descriptive study was conducted. The medical records of 432 women undergoing cesarean section from April to September 2001 after dissemination of evidence in a teaching hospital in Southern Thailand were reviewed. Use of single-dose prophylactic antibiotic was the main outcome measure. Patterns of prophylactic antibiotics, and factors associated with pregnant women and doctors, were analyzed and compared with baseline data among 463 women undergoing cesarean section in 1998. Multivariate logistic regression with random effects was used for analysis.

RESULTS

After the dissemination of evidence, the rate of single-dose prescriptions increased from 14.2 to 22.4% (P < 0.01), single-dose prescriptions decreased for patients who had experienced longer durations of ruptured membranes, and the timing of the administration of antibiotics improved, but multiple-dose and duration of postoperative prescriptions increased. The variation in prescribing antibiotics between doctors was significant (P < 0.001).

CONCLUSIONS

Knowledge of evidence alone does not improve practices uniformly. Consequently, other interventions are necessary to improve practices.

Obstetricians' attitudes, subjective norms, perceived controls, and intentions on antibiotic prophylaxis in caesarean section

Over 10% of current births in all countries of the world are delivered by caesarean section. Single-dose ampicillin or cefazolin administered after cord clamping has been proven to be effective for the prevention of post-caesarean infections as indicated in many randomised trials and reviews in the Cochrane Library. This study aimed to determine three determinants of behavioural intention using the theory of planned behaviour: attitudes, subjective norms, and perceived controls. Intentions were examined for five aspects of the use of antibiotic prophylaxis, namely whether or not antibiotics were used, used in all caesarean sections, after rather than before cord clamping, whether ampicillin/cefazolin or broader-spectrum antibiotics were used, and whether single or multiple doses were given. Fifty obstetricians selected from university, regional, and general hospitals in southern Thailand, were surveyed using a questionnaire and in-depth interview. Their intentions to use a single dose and to use in all cases were low, and this was related to negative attitudes and reference groups who did not approve of the single dose. The negative attitude was based on scepticism concerning the applicability of well-equipped trials from the developed world and fear of consequences of post-caesarean infections. Norms carried over from residency training had more long-term influence in their practice than newer information from books or journals. Perceived external controls on their practice were less predictive of intentions. Intentions were only partly predictive of behaviour. Changing attitudes, introducing evidence-based information into residency training and strengthening control systems in the hospital are essential to improve intentions.

Modelling for cost-effectiveness analysis

A model creates the framework for a cost-effectiveness analysis, allowing decision makers to explore the implications of using an intervention in different ways and under different conditions. To serve its purpose a model must produce accurate predictions and allow for substantial variation in the factors that influence costs and effects. This paper considers three aspects of modelling: validating effectiveness estimates; modelling costs; and the implications of common statistical forms. Validation procedures similar to those for effectiveness estimates are proposed for costs. Modellers need to pay more attention to ensuring that the pathway of events described by a model represents costs as well as it does effects. Modellers can also help improve the epidemiological and clinical research on which cost-effectiveness analyses depend by showing the implications for resource allocation of the statistical forms conventionally used in these fields.

The potential for clinical guidelines to impact appropriate antimicrobial agent use

Practice guidelines can help clinicians and microbiologists improve the quality and efficiency of health care. Numerous areas are in need of guideline development and development of quality improvement programs. These areas include antibiotic control, duration of antibiotic administration, use of narrowest spectrum, least toxic, lowest cost-effective antibiotic, use of rapid diagnostic tests, management of outpatient intravenous antibiotics, antibiotic prophylaxis for surgery, switching from intravenous to oral antibiotics, antibiotic selection for special situations, diagnosis of Lyme disease, and several other topics. IDSA, SHEA, CDC, NIH, and other organizations are cooperating to develop these guidelines.

The role of perspective in defining economic measures for the evaluation of medical technology

Perspectives in an economic analysis of medical technology reflect who makes decisions about the use of or payment for medical resources. Commonly used perspectives include those of providers, insurers, the individual, and society. Perspective is a critical determinant of study design, affecting the time horizon, types of resources considered, and economic cost measures assigned to those resources. Individuals involved in technology assessment for either research or policy-making purposes should be aware of the complexities of defining costs from different perspectives.

The clinical-economic trial: promise, problems, and challenges

The clinical-economic trial is a study design that is appearing with greater frequency in medical and public health literature. Some experienced investigators view these trials with skepticism; to policy makers they represent a promising step in the control of rising health care costs. The success of clinical-economic trials in meeting the important goal of more rational and efficient use of health care resources will depend on the strengths and limitations of the research method. As part of a report to the Office of Technology Assessment of the U.S. Congress on new health care assessment techniques, we describe the reasons why economic data collection and analysis are being considered in clinical trials, identify and discuss various designs and methods for gathering economic trial data, and evaluate the strengths and limitations of different methods for providing sound data for decision making on appropriate use of health care interventions. Because of the potential significance and increasing visibility of such research, experts in research methods should give more attention to methodological research for clinical-economic trials. Future efforts should be directed at comparing different techniques for collecting data, examining the incremental value of precision in economic measurements and ensuring appropriate interpretation of data from clinical-economic trials.

A methodology for the economic assessment of picture archiving and communication systems

Most economic studies of picture archiving and communication systems (PACS) to date, including our own, have focused on the perspectives of the radiology department and its direct costs. However, many researchers have suggested additional cost savings that may accrue to the medical center as a whole through increased operational capacity, fewer lost images, rapid simultaneous access to images, and other decreases in resource utilization. We describe here an economic analysis framework we have developed to estimate these potential additional savings. Our framework is comprised of two parallel measurement methods. The first method estimates the cost of care actually delivered through online capture of charge entries from the hospital's billing computer and from the clinical practices' billing database. Multiple regression analyses will be used to model cost of care, length of stay, and other estimates of resource utilization. The second method is the observational measurement of actual resource utilization, such as technologist time, frequency and duration of film searches, and equipment utilization rates. The costs associated with changes in resource use will be estimated using wage rates and other standard economic methods. Our working hypothesis is that after controlling for the underlying clinical and demographic differences among patients, patients imaged using a PACS will have shorter lengths of stay, shorter exam performance times, and decreased costs of care. We expect the results of our analysis to explain and resolve some of the conflicting views of the cost-effectiveness of PACS.

Methods of cost-effectiveness analysis: areas of consensus and debate

Methods of evaluating socioeconomic relationships have evolved over many years, and a number of specific approaches have been developed. Among the techniques available, cost-effectiveness analysis (CEA) has emerged as the most widely used and accepted method. Yet, despite considerable effort by the analytical community to refine this technique into one more useful for making health policy decisions, much debate and confusion still persist among analysts, readers, and policy-makers concerning methods standards and the overall usefulness of CEA in resource allocation decision making. Thus the purpose of this paper is to summarize, critically examine, and comment on existing recommended methods for socioeconomic evaluation of health care interventions. In particular, we examine an exhaustive set of component methods within the general area of cost-effectiveness and comment on areas of apparent consensus and debate. Our review reveals many areas of agreement and many yet to be resolved. Analysts generally agree on the components of the overall framework for an analysis; basic methodologic principles; the general treatment of costs; the principle of marginal analysis; the need for and general approach to discounting; the use of sensitivity analysis; the extent to which ethical issues can be incorporated; and the importance of choosing appropriate alternatives for comparison. The principal areas in which disagreement still persists are choice of study design, measurement and valuation of health outcomes including conversion of health outcomes to economic values, transformation of efficacy results into effectiveness outcomes, and the empirical measurement of costs.

Using cost-effectiveness analysis for formulary decision making: from theory into practice

The growth of expenditures on healthcare and pharmaceutical products is a concern to third-party payers because of the absence of market discipline (price signals that consumers face). Cost-effectiveness analysis is a method that allows third-party payers to systematically make judgements about the 'value for money' of these products. It moves beyond simple unit price comparisons of alternate interventions/products to consider the full stream of relevant cost and benefits. As formulary committees begin to adopt the systematic use of cost-effectiveness analyses to inform the debate, the exercise will move from an academic to a more practical application. This transition will require several important changes including defining the purpose of cost-effectiveness analysis, measurement of outcomes and data, format of reports, and contractual arrangements between the pharmaceutical industry and analysts. As more 'real world' experience is gained in the practical application of cost-effectiveness analysis, the quality of data will improve as will its value as an aid to decision making.

Cost savings through technological change in the administration of antibiotics

Once-daily antibiotics (ODAs) represent a technological change in hospital processes that can lead to substantial savings of scarce resources. In a three-hospital prospective study, five antibiotics were administered to 58 patients suffering from infections classified by major body system. Savings ranged from 10.9% to 38%, depending on hospital organization, method of delivery, and daily dose. Per-unit price proved a poor indicator of hospital cost, as variable delivery costs for labor and materials ranged from 11.6% to 39.5% of total costs.

Outcomes of cefazolin versus ceftriaxone therapy in treating lower respiratory tract infections in adults

OBJECTIVE

To determine whether choice of a first- versus third-generation cephalosporin as initial therapy for lower respiratory tract infections in hospitalized adults affects the course and duration of care, both of which may influence antimicrobial treatment cost.

DESIGN

Retrospective analysis of discharge abstracts and hospital pharmacy records.

SETTING

Forty-eight US acute-care hospitals.

PATIENTS

One thousand ninety-two hospitalized adults (aged > 17 y) with principal diagnoses of lower respiratory tract infections (DRGs 79-80, 89-90).

INTERVENTIONS

Cefazolin or ceftriaxone, given as sole antimicrobial therapy for at least one day.

MAIN OUTCOME MEASURES

(1) The number of patients who received another parenteral antibiotic anytime prior to hospital discharge; (2) the number of days during which patients received any parenteral antibiotic while in the hospital; and (3) the number of days patients remained hospitalized following the start of antibiotic therapy.

RESULTS

Patients treated with cefazolin (n = 763) were more likely to receive another parenteral antibiotic while in the hospital (30.3 vs. 20.7 percent; p < 0.001) and received more total days of therapy (7.2 vs. 6.7 d; p < 0.05) than those treated with ceftriaxone (n = 329). Although the time to hospital discharge did not differ in the full sample (9.2 d for both groups), it was greater among those receiving cefazolin (8.6 vs. 8.0 d; p < 0.05) when patients with lengths of stay exceeding 24 days were excluded from both groups.

CONCLUSIONS

In addition to acquisition cost, differences in course and duration of care should be considered when determining the most cost-effective choice for antimicrobial therapy.

Are prescription drug prices high?

The U.S. pharmaceutical industry has been criticized because its products are perceived to be too expensive, yet prescription medicines remain the least expensive form of therapy. At this time, we are experiencing a dramatic increase in the risks and costs of pharmaceutical research and development (R&D). An example may be seen in the R&D history of lovastatin. The U.S. pharmaceutical industry continues to lead the world in the discovery and development of important new medicines because it assumes greater financial risk and invests more of its sales dollar in R&D than virtually any other industry. Where such a risk is posed, there must continue to be the potential for profits. Pharmaceutical companies must set responsible prices, must keep price increases down, and must help improve access to important medicines.

Cost analysis of two clindamycin dosing regimens

A clinical trial of clindamycin 900 mg q8h admixed with gentamicin 1.5 mg/kg (eight-hourly group) versus clindamycin 600 mg q6h with gentamicin 1.5 mg/kg given separately (six-hourly group) was analyzed for relative cost containment. Acquisition costs were significantly higher for the six-hourly group for intravenous supplies ($181.5 +/- 47.8) when compared with the eight-hourly group ($67.6 +/- 21.6) (p less than 0.05). Nursing administration costs were greater for the six-hourly group ($28.6 +/- 7.5) compared with ($10.7 +/- 3.4) for the eight-hourly group (p less than 0.05). Also, significantly higher cost (p less than 0.05) was noted for pharmacist and technician manufacturing cost for the six-hourly group ($15.4 +/- 4.0) compared with the eight-hourly group ($13.3 +/- 4.3). Incorporating all appropriate costs, the mean total drug therapy costs were significantly greater (p less than 0.05) for clindamycin 600 mg q6h ($527.4 +/- 143.0) compared with clindamycin 900 mg q8h ($433.3 +/- 99.2). The dosing of clindamycin 900 mg q8h admixed with gentamicin 1.5 mg/kg is a more cost-effective method of drug delivery with similar efficacy and safety when compared with clindamycin 600 mg q6h with gentamicin given separately.

Containing costs of antimicrobials in the hospital: a critical evaluation

Because reimbursement of hospitals from patient sources for the cost of antimicrobial agents varies considerably according to the nature of the patient population, the actual savings potential of cost-containment efforts is proportional to the extent that costs are not reimbursed. Meaningful cost estimations include calculations for drug preparation, administration, necessary laboratory tests, toxicity, and acquisition. Savings in surgical antimicrobial prophylaxis may be estimated according to the type and volume of operations, history of usage excesses, and anticipated degree of cooperation of surgeons. In therapy, savings generally derive from restricting use of costly drugs. Studies that demonstrate similar outcomes of patient care in restricted and unrestricted settings are presently lacking. Such studies are essential for programs that promote change from parenteral to oral antimicrobials, because they may shorten the length of hospitalization. The outcome of antimicrobial cost-containment efforts in patient care should be monitored as a surveillance activity to be conducted by infection control practitioners involved with quality assessment.

Cost comparison of ceftazidime versus tobramycin/ticarcillin therapy in three hospitals

A retrospective review of 114 patient charts was conducted at three geographically different hospitals to compare the costs of ceftazidime (CTZ) with the combination of tobramycin and ticarcillin (T/T) in the treatment of hospital-acquired pneumonias and/or septicemias. Variables analyzed to determine the cost of the therapy included duration of treatment, dosage and number of doses administered, side effects, and laboratory tests. Time and motion studies were also performed and the results included in the algorithm. In two of the three hospitals, the computer-calculated cost of CTZ therapy was significantly less than for T/T therapy ($1194 vs. $1668 and $93 vs $629). In the third hospital there was no significant difference in the costs of the two treatments ($1079 for CTZ vs. $1066 for T/T). The cost of each regimen per patient day followed a similar pattern, with CTZ therapy being significantly less expensive in the same two hospitals. Patients receiving CTZ therapy realized an average cost savings of $29.70 per day at the three institutions. These savings appeared to be due to a reduction in laboratory and administration costs resulting from the decreased frequency of CTZ administration. We conclude that CTZ therapy was less costly than T/T therapy at three geographically different institutions when the cost of supplies, laboratory tests, and personnel time were taken into account.

Prospective cost analysis of moxalactam versus clindamycin plus gentamicin for endomyometritis after cesarean section

The direct and indirect costs associated with either moxalactam or clindamycin plus gentamicin as treatment for endomyometritis after emergent cesarean section were compared in an open, randomized prospective trial of 114 patients. A total of 58 patients were assigned to receive moxalactam, 2 g intravenously (i.v.) every 8 h for 5 doses, followed by 2 g every 12 h and prophylactic vitamin K (10 mg) intramuscularly, and 56 patients were assigned to receive clindamycin (600 mg) i.v. every 6 h plus gentamicin (1.5 mg/kg) i.v. every 8 h. Prothrombin times were measured in moxalactam-treated patients, and patients treated with clindamycin plus gentamicin had urinalyses and blood urea nitrogen and serum creatinine determinations performed before and after treatment. Also, gentamicin levels in serum were determined as clinically indicated. A satisfactory treatment response was defined as the resolution of signs and symptoms of endomyometritis within 3 days of the start of antibiotic therapy. Satisfactory responses were demonstrated in 78% of the moxalactam-treated patients and 84% of patients treated with clindamycin plus gentamicin. Mean hospital costs for laboratory tests ($30.30 versus $4.53) and mean patient charges for laboratory tests ($76.39 versus $27.81) and medications ($539.45 versus $421.82) were significantly higher in patients treated with clindamycin plus gentamicin (P less than 0.05), while mean medication costs to the hospital were greater in the moxalactam group ($255.47 versus $195.68; P less than 0.05). However, total patient charges and total hospital drug-associated costs were not significantly different for the two group. In this tudy, moxalactam was similar in efficacy and, despite its higher acquistion cost, was comparable in total hospital costs and patient charges to clindamycin plus gentacmicin in treating endomyometritis.

Bioavailability in human volunteers of three intramuscular formulations of cefonicid: a long-acting cephalosporin

Three different intramuscular formulations of cefonicid (a new long acting cephalosporin) have been tested for bioavailability in 12 healthy volunteers, using a triple crossover design. No significant differences were detectable between the bioequivalence of the three formulations in terms of area-under-curve and 24-h urinary excretion. However, one of the formulations (A) was absorbed significantly more rapidly from the site of injection, causing higher serum levels for up to 1.5 h after administration. A significantly greater urinary excretion was also found up to 8 h after administration of formulation A. All three formulations were well tolerated, and no side-effects or significant changes in laboratory tests were observed.

Antimicrobial prophylaxis for arthroplasty: a comparative study of cefonicid and cefazolin

A double-blind, multicenter trial compared cefonicid and cefazolin for prophylaxis against postoperative infection in 117 patients undergoing joint replacement. Cefonicid, which has an extended serum half-life, was administered once daily, while cefazolin was given every eight hours. The drug was administered one half to one hour before surgery and continued for up to 72 hours. Patients were observed throughout their hospitalization period and followed for 30 days after discharge. No evidence of wound or joint infection was observed in any of the patients who met the criteria for evaluation. Adverse reactions consisted mainly of infrequent gastrointestinal symptoms and laboratory abnormalities. Three patients died from causes unrelated to study medication. No differences between the two regimens were found with respect to safety or efficacy in the prevention of postoperative infection after arthroplasty. The effectiveness of once-daily administration should make cefonicid a highly cost-effective alternative to many of the more expensive first- and second-generation cephalosporin antibiotics currently used in hospital practice.

Cefonicid. A review of its antibacterial activity, pharmacological properties and therapeutic use

Cefonicid is a 'second generation' cephalosporin administered intravenously or intramuscularly. It is similar to cefamandole in its superiority to first generation cephalosporins against several enterobacteriaceae as well as its activity against Haemophilus influenzae, including beta-lactamase-producing strains. Its activity against Staphylococcus aureus is similar to that of cefoxitin and inferior to cefamandole and first generation cephalosporins. It has excellent in vitro activity against Neisseria gonorrhoeae, but is inactive against Pseudomonas, Acinetobacter, Serratia, and Bacteroides fragilis. Due to high achievable plasma concentrations and a relatively long half-life, in most clinical trials cefonicid has been administered once daily. It was comparable in efficacy with cefamandole or cefazolin in the treatment of patients with urinary tract, lower respiratory tract, and soft tissue and bone infections. It has also been compared with penicillin in the treatment of uncomplicated gonorrhoea. Results from a small series of patients with endocarditis appear to indicate that cefonicid should not be used in patients with serious staphylococcal infections. Single doses of cefonicid given preoperatively appear to offer a similar degree of protection against post-surgical infection as multiple doses of other antibiotics, but further data from studies involving larger numbers of patients are needed to confirm these impressions. Patients who require prolonged antibiotic therapy, such as those with osteomyelitis being treated as outpatients after a relatively short inpatient course, could benefit from the once daily dose regimen of cefonicid.

Cost analysis of antibiotics in the management of perforated or gangrenous appendicitis

Costs associated with treating patients for gangrenous or perforated appendicitis were compared. Patients received single agent therapy with cefoperazone or cefamandole or combination antibiotics consisting of clindamycin and serum level-adjusted gentamicin. Forty-eight patients received cefamandole, 47 received cefoperazone, and 52 received combination clindamycin and gentamicin. Costs to the pharmacy for drugs were greater for the combination therapy; however, the higher failure rate associated with the cephalosporins created greater expenses for the single agent therapy than for combination therapy.