Sunday, November 28, 2010

Cost-effectiveness and decision making

NPR (and I'm sure other news sources) recently had a story about a drug called Truvada that has been shown to reduce the risk of contracting HIV.  This would be incredible news if the drug were cheap.  The simple fact, however, is that right now the drug costs $13,000 per year in the United States while the drug may cost less (because it is already available in generic forms) overseas.

One researcher says that given the high lifetime cost of having HIV (given the drug that are available to control it) Truvada (clearly an expensive drug) may still be as cost-effective as things that are done to prevent heart disease and cancer.

One person at the NIH has a comment attributed to him suggesting that cost-effectiveness analysis should guide private and government insurance coverage.  This is interesting as cost-effectiveness is not generally a criterion used in many government programs for the decision of whether to cover.  It is also interesting because a lot of cost-effectiveness studies focus on quality adjusted life years and there are many interpretations of whether the use of quality adjusted life years was explicitly excluded in the health care reform bill.  The case of Truvada could be thought to illustrate why government should have this tool at its disposal--particularly if there is a coverage policy that can be used to help with targeting the drug.

It is also critical to note the importance of sensitivity analyses. The article pointed out the difference in effectiveness of Truvada for those with very high adherence to the recommended regimen in contrast with those who only took the drug some of the time.  Another important sensitivity analysis would be the cost-effectiveness when the patent expires and generics are available even in the US.  Is it not clear what the policy should be when it is possible that there will be long-term cost-effectiveness even if the drug is not cost-effectiveness at the higher price level when the patent still applies.

And, while I may see this as evidence in favor of cost-effectiveness tools, others may see it as exactly the reason that either (a) we should totally leave even the ability to get the drug to the market (i.e. if you can afford it that is fine but it is too expensive for governments to cover) or (b) the drug should be covered but it should be the responsibility of the patient to be as forthcoming as possible about the many factors that influence adherence, the risk of contracting HIV, and feelings about side effect, and the responsibility of the provider to assess these and to determine whether Truvada or some other preventive method is best for each individual patient.  In fact, even with coverage, a provider should be making relatively similar decisions.

The key question for any coverage of Truvada is whether any decision maker can be given a strong incentive to consider the monetary costs in comparison with the benefits rather than just comparing the potential for clinical harms versus clinical improvements.

Wednesday, October 27, 2010

Testing for Legally Prescribed Drugs in the Workplace

A piece in the New York Times earlier this week tells the story of employers testing for legally prescribed drugs and then being able to terminate employees who are found to be on these drugs. There are economic, legal, and ethical considerations here.

From the perspective of an economic cost-benefit analysis, the first question is what is the workplace risk caused by individuals taking legally prescribed drugs? In certain situations (transportation and nuclear energy were noted in the article) the potential severity of the consequences of the risks of taking legally prescribed drugs that could be impairing is quite high. To address this, we have to determine how to identify whether a person is impaired. There is a cost to determining whether a person is impaired.

Additionally, we have to focus on the magnitude of the risk and the magnitude of the consequences of the risk being realized. These two together indicate the cost of not identifying and changing the risk.

Another question is whether the only solution for a person found to be taking drugs that are causing (or could be causing) impairment is termination. This is a particularly important question if the person who is found to be taking legally prescribed drugs that could be impairing is taking the drugs because of an on the job injury that occurred when the person was following all appropriate safety recommendations.

However, we must realize that there are many jobs that cause a risk to the people performing them and to others regardless of whether those performing the jobs are impaired because of prescription drugs. For example, how many automobile accidents occur at construction sites that may not have occurred if the construction were not going on? What an employer (and society--in terms of public policy) has to decide is how being impaired due to prescription drugs changes the risks and changes the decision making process about performing the jobs at all and who should perform them.

Tuesday, August 17, 2010

The role of pharmacists

An interesting piece in the New York Times points out the growing role for pharmacists as part of the health care system in the United States.  In addition to providing prescriptions, some pharmacists are now helping to monitor unsafe drug interactions more carefully, to monitor refills of prescriptions (as a proxy for whether the drugs are being taken), offering more counseling, teaching patients in individual and group sessions, and even offering classes that feature exercise.

Is this a good use of their time?  For the entire health care system it is probably a great deal as long as the activities of the physician and the pharmacist are coordinated.  In systems that are truly systems (where someone stands to benefit from the coordination) this should decrease costs as someone has the incentive to control the sum of the costs.  However, in unorganized systems it is not clear.

To study the incentives, we could simply determine whether there is a way to decrease costs while achieving the same objective (i.e. a cost minimization exercise focused on the patient's health) or we could do a cost-effectiveness analysis and ask whether giving the pharmacist more responsibility (and thinking about what training might be necessary to do so) results in higher or lower expenditures and better health.  Lower costs and better health--of course give them more responsibility.  Higher cost and better health--have to ask whether it is worthwhile.

As a side note, if extra training is required, someone has to bear the cost of extra training.  Note that the pharmacist and owner of at least one store have started a business to educate others.  This suggests that they see this as a profitable opportunity that should be adopted by others.  It will be interesting to follow the developments.

Monday, August 9, 2010

The Many Costs of Seeing a Doctor

An interesting article in the Baltimore Sun describes a new set of websites in England by which people can answer a questionnaire and receive a prescription without ever seeing the doctor.  This is not for patients with an established relationship to have a follow-up--this can be for people who literally have never met the physician before.

It is interesting to me that most of the medical professionals who are quoted in the article talk about this being useful for people who don't have access are who are in areas without easy access--or they don't like it at all.  While I am not a physician, I believe I would still tend to focus on at least trying to get to an urgent care center (if one of those is accessible) rather than using this type of service.  I tend to agree with whoever wrote the headline for the article--"if you don't have the time just click here" and would assume that many people who will use this service will be busy individuals who feel they don't have the time to both with going to see a physician in person if the issue can be taken care of over the internet.

When assessing something like this, we would simply have to hope that the questionnaire has enough points at which patients are directed to stop and go to see a physician that patients do not end up trading convenience against safety.   What risks to patient safety are we willing to experience to get faster care?  At the societal level?  At the individual level?  What if we have a serious shortage of physicians if payments to physicians really are cut as steeply as suggested under health care reform?  Hypothetically, the duration of the delay without access to this type of service could lead to a need for this type of service and it would really just be trading off one type of risk to safety (delayed care) with another type of risk to safety (care via the net).

Also, I would hate to think of the implications of any security failure if people are sending pictures of rashes, etc. over the web.  Yes, I once posted some pictures of my (then) 4 year old's foot which was infected, but I'm not sure what other body parts I would (or would not) be willing to send for fear of security issues.  That raises a whole different set of cost and benefit tradeoffs.

Tuesday, August 3, 2010

infant mortality rate in Baltimore

An article in the Baltimore Sun points out that the infant mortality rate among African Americans in Baltimore City in 2009 was 15.8.  If  we look to the CIA World Factbook table on estimated infant mortality rates in 2010, we find that this suggests that some of the population local to the school of public health at which I work has an infant mortality rate higher than Botswana and other middle and lower income countries.  The article in the Sun pointed out that the infant mortality rate in the county that surrounds Baltimore City is also relatively high, although not as high as in the City.

At least some of this seems to be due to placing infants in dangerous sleeping positions.  The article pointed out that 26 of the children who had died had been in dangerous sleeping postitions.  What would it be worth to save 26 children?  Since we don't know who these 26 will be in advance how much would we be willing to spend to counsel each child's parents and caregivers?  Should we count the lives saved?  Life years saved?  Quailty of life saved?

Regardless of what else could be done to reduce the infant mortality rate in the local African American population, counseling mothers, fathers, and other family members on proper sleeping positions is likely to be a highly cost-effective way of reducing this rate--at least as long as we can convince people to change the way that the children sleep.  Sometimes, despite the fact that people tend to know the facts about a problem, they are slow to change their behavior, even when it can affect a child's health.  The key is to figure out where the resources to try to bring changes in sleeping positions and other issues related to infant mortality will come from; what else individuals and the government may have to be put aside; and what else the parents, local health care providers, and local government need to do to improve infant health in the local population.

Wednesday, July 28, 2010

Blood supply

The safety of and the degree to which the blood supply can help individuals in need of transfusions in the United States is an issue that we hear about often.  We see the flyers for blood drives.  We often hear that there are chronic shortages of blood.  A piece in the Baltimore Sun points out that despite the concerns about shortages, not all blood in storage in hospitals just arrived.  In fact, it can be up to six weeks old.  Now there is concern that older blood may introduce risks for individuals who receive tranfusions.

Where is the economics here?  First, what does a shortage mean when at least some blood is around for six weeks and hospitals have protocols to use the oldest blood in storage so that none goes to waste?  A shortage may be for specific blood types (presumably less common ones) while others are in relatively strong supply.  The economic definition of shortage--a price at which the demand is greater than the supply--is difficult to interpret as so few consumers who need blood transfusions have any idea of the costs.

The economics is about how to use scarce resources.  What are the risks?  What are we willing to give up to reduce the risks?  And who will make those decisions?

If current studies establish that the risks of older blood for certain transfusions are real, would we be willing to risk wasting donated blood to assure safer transfusions?  If donors knew this, would they change their behavior?  Should price be involved in accessing safer blood?  How would we as a society or even medical professional agree on what the risk/benefit tradeoff should be?

From a cost-effectiveness point of view, if we look at the ways in which newer blood could change mortality or quality of life and compare that with the resources that might be wasted by discarding older blood donations, would we find this to be cost-effective?  It is almost certain that changes relative to the status quo in the United States would be more expensive even if they are more effective.  The persective (societal? patient? hospital? blood collection organization?) would also be crucial. 

Monday, July 19, 2010

What choices will we have with health reform in the United States?

An article in Saturday's New York Times described how some larger insurance companies are trying to figure out how to market plans that will offer a choice of lower premiums to have restricted choice of providers.  A comparison is made with the old limited choice discussion of the 1990's and early and health maintenance organizations.This is an interesting end result of the health care reform legislation.  Much of the conversation from the President during the debate in 2009 was about not being denied choice.  At this point, it all depends on what we think of as choice.

The choice in this case will be to pay more to get more choice of providers.  For those who want to pay more the choices of providers will be there.  For those who don't want to pay--or who don't have the resources to pay--they may only have options of plans with limited choices of providers.  Insurers have indicated that they are not seeking only to limit providers but to assure quality among the limited choice.

Research on earlier managed care plans suggested that the plans were good at containing costs in the short run but the plans did not necessarily limit the growth in costs.  Thus, having plans like these become more prevalent may be enough to save money for a while but may not change the eventual trajectory of costs. 

Is this the type of choice that the public thought it was going to receive?  Is encouraging insurers to figure out quality on behalf of their enrollees a likely solution for high quality care for patients in the long-run?  Do insurers have an incentive to compete on quality or on cost or both?  Can consumers recognize quality in an insurance plan?  Quality of medical care?  Is having plans that will limit choice and choose quality providers a likely solution for encouraging the provision of care that is cost-effective in the long-run?  Would another plan to align incentives of insurers and providers be more effective at controlling costs, providing high quality care, and encouraging the use of cost-effective procedures?  From whose perspective should the care be cost-effective, anyway?

These questions are not nececssarily easy to answer, but the general public in the United States will experience the consequences of the incentives that have been set for insurers and consumers in the coming years as the health care reform plan is implemented.

Tuesday, July 13, 2010

Sanitary habits and externalities

Last year I was at a meeting at the NIH campus and covered a sneeze with my upper arm. I was surprised when someone commented that they saw very few people do that.  I was very surprised that this would be true on the main campus of the National Institutes of Health.

Of course, we wouldn't expect people elsewhere to be any better.  A study from New Zealand highlighted in an article in the Baltimore Sun notes how few people made any attempt to cover a a sneeze or cough and how many of those who bothered to try actually did so with a bare hand.

Why would an economist be interested?  Both failing to cover a sneeze or cough and covering a sneeze or cough with a bare hand lead to externalities.  Different types of externalities but externalties nevertheless.

An uncovered sneeze or cough exposes others to the airborne viruses. A person who covers a sneeze or cough with a bare hand unfortunately does not keep the viruses to himself or herself but can spread them to doorknobs and other things touched.

The unfortunate thing from an economic point of view is that there is no easy way to provide alternative incentives--except perhaps social stigmatism.  However, if most people are doing this then it is not clear where the stigma would come from.

Perhaps the best we can hope for is better education about the risks and some way of internalizing the risks--at least to one's own family--and then a spillover from behavior toward one's own family to behavior to others.

If anyone could think of creative incentives that could be used in a cost-effective way to change this behavior, I'd be interested.

Tuesday, July 6, 2010

Side Effects of the Smallpox Vaccine

A piece in the New York Times this morning, described a risk from sexual contact with a member of the military who had been given the smallpox vaccination.  The smallpox vaccination does not use the smallpox virus--so no one has gotten smallpox.  The vaccination does use a virus called vaccinia.  The Centers for Disease Control has a website that discusses the vaccine and recommendations from 2001.  The website mentions a 1968 study suggesting that transmission to contacts results in 27 cases per million total vaccinations.  Not a major risk.  The piece in the New York Times mentioned a total of five known cases in the past twelve months from women who had sexual contact with a member of the military.  None of these cases were described (at least in the article) as passing it along to anyone else.  Vaccinia is described as not being a threat to an otherwise healthy individual but being a danger to those with a compromised immune system

How should this information affects our perception of the value of the vaccination?   This relatively small number of cases of infection (with none apparently leading to mortality) would probably not change the conclusion about the economic value of smallpox vaccination for members of the United States military.  The argument is not likely an easy economic argument in any case--the risk of smallpox as a terrorist weapon is not well defined for the general public.

Two things may be interesting to consider.  (1) Given the ongoing risk to contacts of vaccinated members of the military, would educating primary care providers about the potential for transmission be a cost-effective way of speeding up the process of diagnosis?  Possibly.  In the New York Times story mentioned at the start, the infected individual did need to see an infectious disease specialist to obtain a proper diagnosis.  (2) Whose perspective is of the most interest?  Certainly, the non-military contacts are important from society's perspective.  However, non-military contacts may not be as important from the point of view of the military.  Who makes the decisions?  Do they consider the economics?  And what perspective do they use when making these considerations?

All things to think about when there are risks to others in society from a vaccination program for the military for a threat to the military that is more than imagined but for which the general public has very limit information to assess the true level of the threat.    

Thursday, July 1, 2010

More on obesity

The Baltimore Sun carried an article with some interesting figures on obesity and parent's perceptions.  The figures presented note that the prevalence of obesity increased in 28 states last year and that eight states now have a prevalence of obesity over 30 percent (up from four last year) while more than two thirds of states have an obesity prevalence rate above 25 percent which no state had two decades ago.

Does this affect health care spending on a year by year basis?  Yes.

Does it affect health care spending over an entire lifetime?  Maybe.  People who are not obese may live longer and die from things that are more chronic so it is not entirely clear.

Are there important economic consequences to obesity?  Well, the costs mentioned above and potentially absenteeism or presenteeism at work.  Some jobs that may not be as easy or as safe as for non-obese individuals.  We could probably think of a few others.

What is most interesting in this article is near the middle.  Over one-third of children and teens are obese or overweight.  Yet, 84 percent of parents believe that their children are at a healthy weight--the issue may be with those who are only overweight and not obese.  Additionally, 80 percent of adults polled believe that childhood obesity is a problem.

For any method that we find to decrease the prevalence of obesity to be cost-effective (i.e. maybe cost saving, and if it is cost-increasing it brings enough additional health to make the extra spending worthwhile) is going to have to consider the difference between knowledge of the issue, perception about how a person or a person's family is affected by the issue, and related behavior.  Anyone wishing to study the potential cost-effectiveness of interventions will have to carefully consider whom to target; how to measure changes in knowledge, attitudes and behavior; how long to track the targeted population; and how to gather data on all the possible impacts of a healthy weight.

Thursday, June 24, 2010

McDonald's Happy Meals

Here is an article from the Baltimore Sun that talks about how the Center for Science in the Public Interest is planning to file suit against McDonald's for violating consumer protection laws by including toys in its Happy Meals.  Not surprisingly, I would not be in favor of such a lawsuit.

The basic economic principle is one of consumer sovereignty.  Consumers get to choose.  In this case, the parents have to make a choice on their children's behalf.  One argument is that parents should not always have to be "the bad guy" and tell their kids no.

However, in addition to simply having to be a responsible parent and guide their children's choices, parents do have other options.  Let's think of the many different approaches that parents can take in addition to just having to tell the kids "no" when they ask for a McDonald's Happy Meal and the parents are worried about how unhealthy it may be.  Although, when all is said and done, this is ultimately what parents who don't want their kids to have happy meals can and should do.

First, parents can limit the children's time watching television.  What else can kids do?  Play outside.  Read a book.  Play a boardgame.  Practice an instrument.  Use their imagination.  All of these options will take kids away from the advertisements and lead the children to be less tempted even to ask for a happy meal in the first place.

Second, parents can just avoid taking their kids to McDonald's in general.  If the kids have no expectation of ever going to McDonald's they will probably stop asking.

Third, parents can fix their kids good foods at home.  If kids are given a choice between having healthy, great tasting home cooked meals (and maybe even helping in the process) or having McDonald's, I bet many of the kids would choose the home cooked meal and stop asking for McDonald's.

Ultimately, the responsibility here is with the parent--to say no when a child asks for something that the parent thinks is not good and to teach the children not to ask for it in the first place.  For those parents who wish to provide a McDonald's meal for their children, the Happy Meal toy at least gives them something to help encourage the child to eat the entire meal and something to occupy the child when the child finishes their dinner first.

So, advertising to young children who really aren't able to make their own choices may be an annoyance to parents but does not seem like it should be something to sue over.

Monday, February 1, 2010

Rotavirus vaccine

There were pieces covering a study about the rotavirus vaccine in the Seattle Times and Reuters last week (as well as a few others).

The main theme of this set of pieces is that more than 500,000 children die each year because of diarrhea.  Diarrhea can be caused by a number of things, and rotavirus one of the key causes.  The vaccine (if administered to all children) is predicted to save as many as 2,000,000 lives over the next decade.

So, what does that translate into?  First, that means 200,000 kids each year could be saved.
Giving all children the vaccination would mean vaccinating 130 million children each year.  This is a lot of vaccinations.

According to a CDC website, the lesser price for a rotavirus vaccination is approximately $7 per dose in the private sector.  That is just for the vaccination--not including the cost of getting it to various places around the world, storing it properly, and administering it.  In any case, even at just $7 per dose that would be $910,000,000 to save 200,000 children.  In other words, $4550 per child saved.  Given the number of years of life we are talking about for each child (as most children who die from diarrhea are under age 5) this does not seem like an unreasonable price to pay--even in lower income countries.

So what do we have to consider:

(1) Even at just $7 per dose plus transport, storage, and administration, this may still be expensive for some low income country governments and this will have to be considered carefully.  Where will the money come from?

(2) How much is it worth to save a child?  What price are we willing to put on life?  Should we have to put a price on life?  If we did not, how would we make resource allocation decisions?

Not easy questions to answer.

Sunday, January 24, 2010

Restaurants and calories

There was a piece in the Wall Street Journal last week by Julie Jargon describing how restaurants have begun to count calories.  The article focuses on restaurants' efforts to develop lower calorie dishes that taste good and to advertise the fact that there are lower calorie dishes.  There is impending legislation that would require restaurants to label their items with calories.  However, the restaurants say that they are doing this because consumer demand for the information and for lower calorie dishes.

When consumers demand information or choices, then producers (in this case restaurants) respond.  Part of the reason that the producers respond is to differentiate their products and to try to capture (or retain) market share.  When the restaurants respond by producing lower calorie dishes and providing information there are all sorts of benefits.

First, consumers have healthier choices that they are demanding.

Second, while the restaurants are differentiating themselves to try to capture more market share, it could actually increase competition.  As the calorie information will have to be factual and the taste of the dishes is observable, consumers will have more information on which to make their decisions about where to eat a meal.  When consumers have more information to make decisions, this actually enhances competition.  As a result, this will force restaurants either to lower prices, continue to innovate, or find other ways to offer value to their customers.

Thus, this could be a winning situation for consumers in more than one way.  It will be interesting to see how the restaurant industry continues to evolve and affect consumer health as the effects of this new form of low calorie competition become more apparent over time.