April 2009

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Let’s say that you’re interested in running a Markov model, but are not mathematically savvy.  Gijs Hubben has come up with a solution in his Basecase website.  The online software allows you to customize the drug costs, medical assessment and procedure costs associated with the disease.  If available, you can use other academic models as well in your assumptions.

 You can see an example of the software at using the classic Gastroesophageal Reflux Disease (GERD) model (see Basecase example).  This model is based on the models of Briggs et al. (2002) and Goeree et al. (1999).

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U.S. School Closures, Online Learning

Map

Quotation

  • “Ill-informed optimism is no better than ill-informed gloom.” - Stephanomics Blog

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El Universal reports that Mexican police have arrested 13 individuals accused of selling surgical masks on the street.  Should the government arrest individuals selling surgical masks?

Any capitalist would in general support the ability of individuals to trade cash for the goods they desire.  However, the case of the surgical mask may be different.  Surgical masks are now being given away for free by the Mexican government.  Thus, the vendors are hoarding free surgical masks and selling them at a profit.  The price of a surgical mask on the street is between $10-$50 pesos ($0.75 to $3.50 USD).  The goal of preventing the sale of masks is to make the hoarding of the government-purchased masks unprofitable.  

In the long run, a surge in demand for surgical masks will increase the price and drive up production.  However, during a pandemic such as the swine flu, the short run supply of surgical masks is fixed; production cannot increase fast enough to keep up with demand.  Thus it seems that have the classic case of a shortage: demand is high and the government is trying to hold down prices–in this case to zero.  However, the real cause of the shortage is short-run in nature; production has not yet been able to catch up with short-run demand.  

What if the government did not purchase the masks first and give them away?  What if they instead just allowed the private market to work?  If surgical masks help prevent getting swine flu, then the price of surgical masks would rise dramatically. Manufacturers of surgical masks would receive the same amount of money, but instead of getting paid by the government, they would be paid by firms.  Firms would be the winners in that they could resale the masks at a profit.    Wealthy and middle class households would be able to purchase the masks and poor families would not.  Overall consumer spending would likely increase.  Instead of paying for the surgical masks through government purchases (i.e., taxes), they would they would pay firms. Since, firms would increase their prices and this would lead to a transfer from consumers to firms.  Overall, we would still have the same number of surgical masks but the distribution of them would be skewed towards wealthier individuals, since they could afford the higher prices.

Let us look at a different situation. CNN reports that surgical masks’s “…real value seems to be in keeping people who are already ill from spreading the virus, rather than protecting healthy people.”  In this case, demand for high-priced surgical masks may actually be low.  This is classic case of externalities.  Your willingness to pay for a surgical mask is low because they may not protect you against the flu, but your willingness to pay for others to wear a surgical mask may be higher.  In this case, government subsiding surgical mask sales–or in this case, buying surgical masks and reselling them at a zero price–gives individuals more of an incentive to wear the masks.  

Social pressure may drive up your willingness to pay for masks.  If your peers shun you because you refuse to wear a mask, you may be willing to pay for a surgical mask even if it doesn’t provide you with any health benefits.

Another reason to maintain the zero price is to prevent corruption.  If individuals can sell surgical masks at a profit, government workers will have an incentive to give away surgical masks to their friends.  Their friends can collect rents from their receipt of a large quantity of free masks.

Carl Coleman say no.  

Working during a pandemic is a supererogatory behavior — i.e., acts that are commendable if done voluntarily, but that go beyond what is expected.  Coleman argues that “…while health care professionals can legitimately be sanctioned for violating voluntarily-assumed employment or contractual agreements, they should not be compelled to assume life-threatening risks based solely on their status as licensed professionals. In place of singling out health care professionals for punitive measures, the Article argues that policy-makers should institute mechanisms to promote volunteerism.”

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The latest edition of the Health Wonk Review is up at Health Care Policy and Marketplace Review.

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Chapter 7 of Decision Modelling for Health Economic Evaluation looks at the calculating the Expected Value of Sample Information (EVSI).  In particular, EVSI can answer the question of optimal sample sizes.

The Wrong Way

How do scientists currently decide on sample sizes?  Often they will do one of the following:

(i) estimate potential grant funding for the project, take away the fixed costs and dived by marginal cost to find the sample size you can afford, and or estimate the patients you will be ale to recruit; (ii) solve for the effect size which can be detected at 5 per cent significances and 80 per cent power.

The Right Way

Researchers face a tradeoff when deciding on the optimal sample size.  Collecting data from larger samples is more costly, but it can provide more detailed information with less uncertainty.  The net benefit of further research involves the probability the new research will alter the current status quo treatment.

For instance, a trial with a sample size of 1 would be very inexpensive.  However, because of the limited amount of information it will confer, the prior distribution will dominate; in other words, it is extremely unlikely that a sample size of 1 will provide enough evidence to overturn the status quo.

We need to know what the expected net benefits will be once we know the outcome of the research.  Assume that there are j treatment alternatives. Let θ be the true parameter of interest and D be estimate of θ from the new trial. If we knew what outcome of the new trial would be we could calculate:

  • maxj Eθ|D NB(j,θ)

However, we do not know the outcome of the new trial. Thus, we need to maximize this function over our prior distribution of what we believe we will get for an estimate of D.

  • ED maxj Eθ|D NB(j,θ)

Thus, the EVSI is simply the difference of these two terms:

  • {ED maxj Eθ|DNB(j,θ)} – {maxj Eθ|DNB(j,θ)}

Zanamivir Example – Conjugate Distributions

Zanamivir is a drug used to treat influenza.  Let us say we want more information regarding the probability that a patient is influenza positive (pip).  Our posterior distribution based on the results of our trial will be called rip. Let us assume:

  • pip ~ Beta(α,β)
  • rip ~ Binomial(pip,n)

Then the predicted posterior distribution will be:

  • pip’ ~ Beta(α+rip,β+n-rip)

In this model, “as the sample size increases we are more uncertain ab out where the posterior distribution might lie. It is now much more likely that the posterior will change the decision.”

Zanamivir Example – Normal Distribution

Let us assume we want to know more information about how zanamivir effects the total reduction in symptom days (rsd).  Based on earlier evidene, our prior is that:

  • rsd ~ N(μ002)

For each sample from this prior distribution, we must predict the sample results (μs) from our new trial. The sample mean of our new trial will be distributed:

  • μs~ N(rsd,σ2/m)

Our posterior distribution is now:

  • rsd’ ~ N{[(μ002 + μss2)/(1/σ02 + 1/σs2)], n/σ2 + 1/σ02}

Using this distribution, we can now calculate EVSI.

Costs

While the benefits are more complicated, it is also important to include the costs of research.  This costs include the fixed costs of the proposed research, the incremental costs of treating people with the new practice compared to the status quo, and additional reporting costs.

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Marketplace discusses whether or not NIH funded studies should be make available for free.

  • Duke University law professor James Boyle: “The Web works great for porn or for shoes, or for flirting on social networks. But it doesn’t work really well for science. We haven’t done for science what we did on the rest of the Web, which is basically to have this open Web with everything linked together.”
  • Laura Jannek is a med student at Case Western: “I mean this is how capitalism works, right? The strong companies are the ones who can adapt to the changing environment, and you can’t prevent information technology from progressing as it is.”

Information is a public good. When research is funded by the government, the socially optimal solution is to make this information available for free to the public. Open access is the way to go.

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You have just done a study comparing the cost-effectiveness of drug A and drug B.  Should you just rest on these laurels or is further research on drug B warranted.  Decision Modelling for Health Economic Evaluation claims that there are 3 criteria that should determine whether or not you decide to collect more information:

  • The expected cost-effectiveness of drug B given current information.  Let us assume that drug A is far superior to drug B.  In this case the value of future information is likely low.  Even if drug B turns out to be somewhat more cost-effective than previous estimates had indicated, because drug A was far superior to drug B, it is unlikely that new information will make drug B better than drug A.  Thus, if the prior information tells us that there is a large difference in the expected cost effectiveness in the two drugs, it is unlikely that additional information will change that decision.
  • The uncertainty surrounding prior cost-effectiveness estimates.  The more uncertain the prior estimates the more valuable is any new information.  If prior estimates are believed to be very accurate, than there is likely little value in collecting more information.
  • The slope of the loss function which values the consequences of an error.  This basically means how important this decision is in the grand scheme of things.   If the drug would be a potential cure for AIDS, then it is very important to get this decision right.  If the treatment is for a very rare, very mild allergy, then additional information would be less valuable than in the AIDS drugs.

EVPI – Normal Distribution

Mathematically, if we assume a normal distribution, we can calculate the expected value of perfect information (EVPI) as follows:

  • EVPI = λ * σ0*L(|η0|/σ0)

 λ is the cost effectiveness threshold, η0 is the prior mean incremental net health benefit, σ02 is the prior variance of the incremental net health benefit, and L(⋅) is the loss function.

EVPI – Nonparametric Approach

To calculate the expected value of perfect information (EVPI) in a non parametric setting, we simply run a simulation based on our prior parameter estimates.  We ask what would be the difference in outcomes based on used the current drug of choice against choosing the perfect drug for each patient for each iteration.

Let us look at an example with 2 treatments.  We see that option B currently has a higher expected value. If we went with option B in every iteration, the expected benefit would be £13.  However, in iterations 2, 4, and 5, option A is actually superior.  If we choose optimally each time (i.e., Treatment A for 2, 4, and 5 and Treatment B for 1 and 3), the expected payoff would be £13.8.  Thus, the value of the additional information would be £0.8 per patient.  If the cost of the research was less than £0.8*number of effected patients, then we should do the research.

We can also look at this situation when there are multiple treatments (see example).  Let us say that using current information, treatment B is still the best choice, but now we also have to consider options C and D.  In this example, option B still has the highest expected value £13.  However, if we choose the optimal drug at each iteration, then our payoff would be £14.4.  Thus the EVPI would be £1.4.  

One item to note in this example: we see that treatment D is never optimal for any iteration.  Thus, it does not pay to do any additional research for treatment D since it is very unlikely to unseat treatment B as the optimal choice.  It may be worthwhile–depending on the cost of the research–to investigate treatment C since it dominates treatment B in iterations 1 and 4.

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Where has the swine flu been detected?   A map of the H1N1 Swine Flu lists all confirmed, unconfirmed, and negative cases of the swine flu around the world.

Mexico City has decided to close all restaurants in the capital, only allowing them to serve food ‘to go.’    Restaurant associations are asking for the restaurant ban to be lifted.

Confirmed cases of swine flu have now been reported in Israel and New Zealand.

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