What’s Been The Bang For The Buck? Cost-Effectiveness Of Health Care Spending Across Selected Conditions In The US

Health Care Spending Effectiveness: Estimates Suggest That Spending Improved US Health From 1996 To 2016

Health care spending effectiveness is the ratio of an increase in spending per case of illness or injury to an increase in disability-adjusted life-years (DALYs) averted per case. We report US spending-effectiveness ratios, using comprehensive estimates of health care spending from the Disease Expenditure Project and DALYs from the Global Burden of Disease Study 2017. We decomposed changes over time to estimate spending per case and DALYs averted per case, controlling for changes in population size, age-sex structure, and incidence or prevalence of cases. Across all causes of health care spending and disease burden, median spending was US$114,339 per DALY averted between 1996 and 2016. Twelve of thirty-four causes with the highest spending or highest burden had median spending that was less than $100,000 per DALY averted. Using decomposition results, we calculated an outcome-adjusted health care price index by assigning a dollar value to DALYs averted per case. When we used $100,000 as the dollar value per DALY averted, prices increased by 4 percent more than the broader economy; when we used $150,000 per DALY averted, relative prices fell by 13 percent, meaning that much of the growth in health care spending over time has purchased health improvements.

Cost-Effectiveness Analysis of Branded Drugs With Market Demand and Insurance

OBJECTIVES

Cost-effectiveness analysis of branded pharmaceuticals presumes that both cost (or price) and marginal effectiveness levels are exogenous. This assumption underlies most judgments of the cost-effectiveness of specific drugs. In this study, we show the theoretical implications of letting both factors be endogenous by modeling pharmaceutical price setting with and without health insurance, along with patient response to the prices that depend on marginal effectiveness. We then explore the implications of these models for cost-effectiveness ratios.

METHODS

We used simple textbook models of patient demand and pricing behavior of drug firms to predict market equilibria in the drug and insurance markets and to generate calculations of the cost-effectiveness ratios in those settings.

RESULTS

We found that ratios in market settings can be much different from those calculated in cost-effectiveness studies based on exogenous prices and treatment of all patients at risk rather than those who would demand treatment in a market setting. We also found that there may be considerable similarity in these market cost-effectiveness ratios across different products because drug firms with market power set profit-maximizing prices.

CONCLUSIONS

We found that market cost-effectiveness ratios will always indicate an excess of benefits over cost. Insurance will lead to less favorable ratios than without insurance, but when insurers bargain with drug firms, rather than taking their prices as given, cost-effectiveness ratios will be more favorable.

The Dollar or Disease Burden: Caps on Healthcare Spending May Save Money, but at What "Cost" to Patients?

OBJECTIVES

Various strategies to address healthcare spending and medical costs continue to be debated and implemented in the United States. To date, these efforts have failed to adequately contain the growth of healthcare cost. An alternative strategy that has elicited rising interest among policymakers is budget caps. As budget caps become more prevalent, it is important to identify which features are needed to ensure success, both in terms of cost reduction and health improvement.

METHODS

We explored the impacts of different features of budget caps by comparing hypothetical service level and global budget caps across 3 annual budget cap growth strategies over a 10-year timeframe in 2005-2015 for 8 of the most commonly occurring conditions in the United States. Health was assessed by a measure of disease burden (disability-adjusted life years).

RESULTS

The results indicate that budget caps have the potential for creating savings but can also result in patient harm if not designed well. As a result of these findings, 5 principles were developed for designing budget caps and should guide the use of budget caps to address medical spending.

CONCLUSIONS

As public discussion grows about the use of budget caps to constrain health spending, it is critical to recognize that the budget cap design and the resulting healthcare provider behavior will determine whether there is potential harm to public health. Budget cap design should consider variability at the condition level, including patient population, improvements in health, treatment costs, and the innovations available, to both create savings and maximize patient health. In assessing the impact of healthcare spending caps on costs and disease burden, we demonstrate that budget cap design determines potential harm to public health.

Disease Burden Following Non-Cardioembolic Minor Ischemic Stroke or High-Risk TIA: A GWTG-Stroke Study

BACKGROUND

Limited real-world data are available on outcomes following non-cardioembolic minor ischemic stroke (IS) or high-risk transient ischemic attack (TIA), particularly in the United States (US). We examined outcomes and Medicare payments following any severity IS or TIA as well as the subgroup with minor IS or high-risk TIA.

METHODS

Medicare beneficiaries >65 years were identified using US nationwide Get with the Guidelines (GWTG)-Stroke Registry linked to Medicare claims data. The cohort consisted of patients enrolled in Medicare fee-for-service plan, hospitalized with non-cardioembolic IS or TIA between 2011 and 2014, segmenting a subgroup with minor IS (National Institute of Health Stroke Scale [NIHSS] ≤5) or high-risk TIA (ABCD²-score ≥6) compatible with the THALES clinical trial population. Outcomes included functional status at discharge, clinical outcomes (all-cause mortality, ischemic stroke, and hemorrhagic stroke, individually and as a composite), hospitalizations, and population average inpatient Medicare payments following non-cardioembolic IS or TIA.

RESULTS

The THALES-compatible cohort included 62,518 patients from 1471 hospitals. At discharge, 37.0% were unable to ambulate without assistance, and 96.2% were prescribed antiplatelet therapy. Cumulative incidences at 30 days, 90 days, and 1 year for the composite outcome were 3.7%, 7.6%, and 17.2% and 2.4%, 4.0%, and 7.3% for subsequent stroke. The mean Medicare payment for the index hospitalization was $7951. The cumulative all-cause inpatient Medicare spending per patient (with or without any subsequent admission) at 30 days and 1 year from discharge was $1451 and $8105, respectively.

CONCLUSIONS

The burden of illness for minor IS/high-risk TIA patients indicates an important unmet need. Improved therapeutic options may offer a significant impact on both patient outcomes and Medicare spending.

Are quality-adjusted medical prices declining for chronic disease? Evidence from diabetes care in four health systems

Improvements in medical treatment have contributed to rising health spending. Yet there is relatively little evidence on whether the spending increase is "worth it" in the sense of producing better health outcomes of commensurate value-a critical question for understanding productivity in the health sector and, as that sector grows, for deriving an accurate quality-adjusted price index for an entire economy. We analyze individual-level panel data on medical spending and health outcomes for 123,548 patients with type 2 diabetes in four health systems: Japan, The Netherlands, Hong Kong and Taiwan. Using a "cost-of-living" method that measures value based on improved survival, we find a positive net value of diabetes care: the value of improved survival outweighs the added costs of care in each of the four health systems. This finding is robust to accounting for selective survival, end-of-life spending, and a range of values for a life-year or fraction of benefits attributable to medical care. Since the estimates do not include the value from improved quality of life, they are conservative. We, therefore, conclude that the increase in medical spending for management of diabetes is offset by an increase in quality.