CEA Policy Lecture2014

8/9/2019 CEA Policy Lecture2014

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Cost-efectivenessanalysis and health care

policyJulie Donohue, Ph.D.

Department o Health Policy &Management, !PH


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"utline

Do #e need cost-efectivenessanalysis$

Ho# do #e use cost-efectiveness%ndings to guide policy$

hy don't #e use cost-efectivenessino more$

hat can #e learn rom othercountries$


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Do #e need cost-

efectiveness analysis$

Health care spending in the

(!


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) large share o our economy isdevoted to health care

*n +, on healthcare #e spent

./0 o gross domestic product

123,4 per capita5

*n contrast, on education #e spent

.0 on primary, secondary, tertiaryeducation

SOURCES:Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group; and U.S. Departent of Coerce, !ureau of

"conoic Analysis and !ureau of the Census. O"CD


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e spend lots more than anyother country on health care

Anderson and Frogner 2008


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6et #e don't live as long as peoplein other countries

SOURCE: Aaron and Ginsburg Health Affairs 2009.

(By sae!


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hat are the do#nsides ogro#ing health care costs$

- Health insurance premiums go up

- e have less to spend on other

goods and services" 7ederal government

" !tate governments

" Households


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Health insurance premiums haveincreased much more than #or8ers'

earnings and in9ation

#rends in $ea%$ &are &oss and s'ending )aiser Fa*i%y Foundaion +ar&$ 2009


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)t ederal level:health care cro#ds out otherspending

2012 $

(billions)

2012 Share 2022 Share

Health care 2 3;4 ;0

Medicare Medicaid "ther

;?/+;3 +?

?0 0 0

+0+0 >0

!ocial !ecurity ?/ +0 +?0

"ther

Mandatory

? /0 >0

Discretionary ,>> >?0 +?0

@otal "utlays 2>,?> < 2;,+>?


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Gecent *"M report %nding

HGG-level Iuality is not consistentlyrelated to spending or utiliationamong either Medicare Aene%ciaries

or the commercially insured.K


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Ho# do #e use cost-efectiveness %ndings toguide policy$

ho should use CL) ino$

Ho# are health care costsdistriAuted$

Ho# do #e use CL) ino$


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ho should use cost-efectiveness inormation$

2004 Distribution of health spending by source of payment

Private

55.!Public

44.4!


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Comparative efectivenessresearch

) digression:


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CLG and cost-efectiveness

hen #e add data on 22 1cost-efectiveness5, CLG can help usallocate resources

hat should Ae covered Ay insurance$

7or #hom$

(nder #hat conditions$

Ho# much should consumers pay out opoc8et$


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(! has limited success in usingtechnology assessment

"regon Health Plan" is it Aetter or everyAody to have something than or some to

have a lot and others to have nothing$K

)gency or Health Care Gesearch and Policy 1no#)HGR5"


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Oimits on PC"G*


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hy don't #e use cost-

efectiveness ino more$

@ i d t i A l AA i


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@op industries Ay loAAyingependitures +/

O'ense&res.org

hat are the puAlic's


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hat are the puAlic'svie#s$

"n health care costs

"n #hether )mericans 1and theythemselves5 overtreated orundertreated

"n #ho should ma8e coveragedecisions


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Priorities or health reormeforts

)aiser /ea%$ #ra&?ing ;o%% Feb 2009


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6et the puAlic supportsincreased health spending

General Social Survey, 1973-2006

@ i i di l


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@oo many patients getting medicaltests & treatments that they don't

really need$

1;R)aiser Fa*i%y Foundaion/ar


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@oo many patients V"@ getting themedical tests & treatments that they

really need



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Disconnect Aet#een nationalvie#s and personal eperience



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*n last + years do you thin8 your doctorhas recommended:


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ho do you trust to reereeefectiveness$

#$ere $as been so*e dis&ussion abou $a


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@o sum up the politics

Oots o #ell-resourced interest groups#ho #ant to maintain the status Iuo

) puAlic #ho thin8s

" there are proAlems #ith the system, Aut

" they are getting really good care

" #e should proAaAly spend more not less

" government #on't ma8e the rightdecisions


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oals o health policy

" *mprove health 1reduce mortality andmorAidity, improve the Iuality o lie5

" LIuity W airness in the distriAution o health

care goods and services, in %nancing" LQciency W maimiing health suAEect to aAudget constraint

Vot something #e #ant or its o#n sa8e Aut

Aecause it helps us get more o #hat #e value@his is the goal emphasied Ay cost-efectiveness

analysis

P i l di


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Potential disputes overeIuity in coverage decisions

(sing CL) or Falue-


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Cost-efectiveness plane


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VL RuadrantX #hat is society #illingto pay per R)O6$

2;, per R)O6 Aenchmar8 oten cited

Ho#ever,


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hat can #e learn rom

other countries$


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V*CL 7unctions

Gecommends #ays to monitor clinicalperormance

*ssues clinical guidelines

" V*CL has issued / guidelines in last years

)ppraises clinical and cost-efectivenesso health technologies

" VH!' Primary Care @rusts #hich purchase carelocally are mandated to adopt V*CL'sappraisals


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Controversial coverage decisions

)vone or M! W not recommended or useAased on clinical and cost-efectiveness

" VH! adopted ris8 sharing scheme or

, patients !utent or 8idney cancer

Macugen or macular degeneration

" approved or use in one eye

Drugs or )lheimer's 1aricept5 only orpatients in early stages o disease

V*CL d i i t d t d


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V*CL decisions to date andimpact on costs

>> technology appraisals to dateMost are approved #ithout conditions

More than hal approved #ith restrictions

1limited to certain patient populations5Z;0 use restricted to clinical trials

Z0 not approved

*mpact on costs$@hey have gone up Ay +0 since

implementation o V*CL and other changes todelivery system


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C i i C


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CritiIues o V*CL1and similar eforts5

Places Aureaucrats Aet#een doctorsand patients

*t represents coo8 Aoo8K or onesie %ts allK medicine

Jeopardies physician autonomy

Gis8s #ith centralied decisionma8ing

" Lfect on G&D investments

Syre 200> 1eu*ann 200=


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Conclusions

Do #e need cost-efectiveness analysis$" 6L!. e can't aford not to in the long run

Ho# do #e use cost-efectiveness %ndings toguide policy$

" !hould at least use it to inorm Medicare coveragedecisions

hy don't #e use cost-efectiveness ino more$" *nterest groups and puAlic perceptions create Aarriers

hat can #e learn rom other countries$" challenge is to estaAlish the legitimacy o the

agencyNorganiation ma8ing the decisions

CEA Policy Lecture2014

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