Unbiased Analysis of Today's Healthcare Issues

Quotation of the Day

Written By: Jason Shafrin - Oct• 27•14
We adore chaos because we love to produce order.



Written By: Jason Shafrin - Oct• 26•14

How do you implement a cost effectiveness analysis (CEA) for the implementation of evidence-based practices (EBP)?  This is the topic Fortney et al. (2014) address.  They review four types of CEAs.

  • Trial based CEA. Relies on traditional randomized controlled trials (RCT).   Because RCTs are expensive, they are typically run on a small sample of the population of interest.
  • Policy CEA. This approach combines the results of a previous RCT to measure benefits but measures cost using the results of an implementation trial. This approach improves the cost estimates for the manner in which the EBP would be implemented but assumes the RCT results are externally valid for the population of interest.
  • Budget impact analysis and systems-level CEA. These approaches use decision analytic modeling to estimate how the adoption of an EPB would impact the allocation of treatments to patients in routine care. It estimates the estimates the size of the population reached by the EBP, and the effect of implementation on costs, but clinical outcomes also come from RCTs. Systems-level CEA “predicts both costs and clinical outcomes by having an expert panel estimate the decline in the clinical effectiveness of the intervention when it is delivered as an EBP in routine care.”
  • Population Level CEA. This approach measures the ratio of incremental population-level costs and incremental population-level effectiveness relative to the current standard of care.


The authors test how the population-level CEA would work for a rollout of telemedicine-based collaborative care for depression in VA community-based outpatient clinics. The implementation trial focuses on improving adherence to depression medications. The approach used an implementation trial which matched 11 community-based outpatient clinics lacking on-site psychiatrists with 11 other Medical centers based on region, staffing and pre-period patient adherence.


The authors found that the incremental cost of a telemedicine-based collaborative care program for depression was low ($64), but the benefit was also low (0.002 QALY). The incremental cost effectiveness ratio (ICER) was $33,905.92/QALY but this was not statistically different from zero. The authors do not take into account convenience cost to the patient however (i.e., avoiding the need to commute); doing so could improve the ICER from society’s perspective even if not from the VA’s perspective.



Friday Links

Written By: Jason Shafrin - Oct• 24•14

Plus be sure to check out this week’s health wonk review over at Colorado Health Insurance Insider.

Regulatory Tsunami?

Written By: Jason Shafrin - Oct• 22•14

Medicare is working hard to make sure that doctors are efficiently providing high-quality care. Programs such as the Physician Quality Reporting System (PRQS) and the Value-Based Payment Modifier all are aimed to improve quality and lower cost.

The downside of such programs, however, is that the impose reporting burdens on physicians. For instance, Medicare can adjust a physician’s base payment rate based on:

  • Whether or not they are able to electronically prescribe medication
  • whether or not they fulfill “meaningful use” criteria of electronic medical records
  • the PQRS quality reporting system
  • The value-based payment modifier

Each of these systems overlaps and are phased in over time making it difficult for physicians to track how what their specific payment rate will be.  The AMA states:

The tsunami of rules and policies surrounding the penalties are in a constant state of flux due to scheduled phase-ins and annual changes in regulatory requirements.  In fact, the rules have become so complex that no one, often including the staff in charge of implementing them, can fully understand and interpret them.

In addition, CMS is moving from an ICD-9 system to an ICD-10 coding system, causing the number of codes available to increase from about 13,000 today to about 68,000 codes after the transition.

Payers must balance the desire to monitor provider quality without overburdening physicians with excess regulations and reporting requirements. Finding the correct balance between physicians, CMS’s, and patient desires is a delicate task.


Written By: Jason Shafrin - Oct• 21•14

PwC just released a report on wearable technology. Some findings from the health field include:

More than 80% of consumers said an important benefit of wearable technology is its potential to make health care more convenient.

Consumers have not yet embraced wearable health technology in large numbers, but they’re interested. More than 80 percent of consumers said an important benefit of wearable technology is its potential to make health care more convenient. Companies hoping to exploit this nascent interest will have to create affordable products offering greater value for both users and their healthcare partners.

While employers and health company executives expect wearables to provide valuable insights, few consumers are interested in using wearables to share health data with friends and family, and, citing concerns about privacy, consumers trust their personal physicians most with their health data. Therefore, companies should ensure privacy policies are crystal clear…Consumers will want to see those high [privacy] standards applied to health wearables data, especially as they become integrated into electronic medical records.

Keeping the consumer engaged beyond the first few weeks of use is an important part of any wearable strategy. Companies should consider novelty, rewards, incentives and truly actionable insights the user experience.

In Pontiac, Michigan, St. Joseph Mercy Oakland hospital has been running a pilot program on Visensia, a patient vital-sign monitoring system that analyzes data streams to produce care recommendations for clinicians. In the first four years mortality rates fell 35%, according
to Crain’s Detroit Business. Length of patient stay fell half a day.12

In general, consumers are concerned about cost, privacy and the ease of use of the technology. Fitness bands (Fitbit, Fuel band) are currently attracting the most attention from consumers. CNET has recommendations on the best of wearable tech, which extends beyond the health field.

The cost of Informal Elder Care

Written By: Jason Shafrin - Oct• 20•14

Many adults spend significant time caring for sick, elderly parents.  What is the cost of providing this informal care?  Would it be better to have family members outsource the care to formal caregivers?

A paper by Chari, Engberg, Ray and Mehrotra (2014) attempt to answer this question.  They use data from the  American Time Use Survey (ATUS), a time motion survey that tracks how individuals spend their day.  The opportunity cost of care is calculated s the product of the time spent providing care for an elderly parent and their wage.  For non-working adults, wages are imputed based on age, education, race and number of children.  To address the sample selection bias in the wage regression, a Heckman correction in which the propensity of working (the inverse mills ratio) is included as one of the regressors in the wage equation.

The authors compare the cost of informal care with the cost of unskilled care ($7.25, the federal minimum wage) and skilled care ($21, the wage of a home health aide).  Using this approach, the authors estimate that Americans spent 30 billion hours annually caring for elderly relatives.  The total annual opportunity cost of informal care was $522 billion.  The authors estimate the cost of replacing this care with unskilled workers is $221 billion, but the cost of replacing informal care with skilled workers (i.e., home health aides) is $642 billion.

The authors summarize their results as follows:

We find that informal care is mainly provided by working-age adults, who consequently bear most of the economic burden in terms of opportunity costs. Our findings underscore the importance of workplace flexibility policies being considered by a number of states that provide paid time off from work for caregivers, as well as programs such as Medicaid’s Cash and Counseling program that allows family caregivers to be paid for their assistance. Our estimates indicate that, in the aggregate, although the economic value of informal caregiving is substantially greater than what it would cost to replace this care with paid unskilled care, informal caregiving remains more economical than paid skilled care, suggesting that if the beneficiaries enrolled in Cash and Counseling programs prefer to receive care from family members, this may result in cost savings to Medicaid relative to a situation in which the care is provided by skilled replacements.

It is unclear whether informal caregivers provide superior or inferior care to formal caregivers. Elderly parents likely appreciate being cared for by people they know and adult caregivers may know the preferences of their parents much better. On the other hand, formal care givers–especially skilled caregivers–can draw on their experience caring for a variety of adults and could provide higher quality care. Thus, while this paper focuses on cost, much of the decision for using formal versus informal care will depend on the quality informal caregivers can provide and the preferences of adults and their elderly parents.


Do travel bans work?

Written By: Jason Shafrin - Oct• 19•14

According to Vox, the answer is ‘no’.  The reason isn’t because travel bans don’t work in theory; it is because in practice travel bans  are never perfectly enforceable and thus may cause more harm than they help.

But there’s a very clear problem with using a travel ban to stop Ebola: it renders useless the two best methods we have for stopping Ebola. Determined people will find ways to cross borders anyway, and if they don’t go through airports or they lie about where they came from, health officials can’t track their movements.

The article uses some examples of other travel bans.

Temporary flight bans and decreases in air travel following 9/11 provided a natural experiment in the impact of travel on seasonal influenza. Researchers found the reduced movement of people didn’t stop the flu; it only delayed it by a couple of weeks and led to a prolonged flu season. So the researchers didn’t find that restricting air travel prevented flu spread; only that it delayed it.

A paper from Brookings finds similar results.

Travel bans clearly are harmful to the short-run economy and are harmful in the long-run as well unless they prevent the spread of disease. Further, travel bans also prohibit aid from going to the areas most in need.

Friday Links

Written By: Jason Shafrin - Oct• 16•14

Cancer Care Myths

Written By: Jason Shafrin - Oct• 15•14

Below are excerpts from a recent Health Affairs paper by Goldman and Philipson (2014):

  • Myth #1: The War on Cancer has been a failure.  Survival rates for all cancers increased by almost four years during the period 19882000.
  • Myth 2: Detection, Not Treatment, Accounts For Most Of The Survival Gains.  During 19882000 almost 80 percent of the aforementioned survival gains were attributable to improvements in treatment, with the remaining 20 percent attributable to better detection.
  • Myth 3: Treatment Costs Are Unsustainable. …the focus should be on the price of health, not the price of health care services. [For example], HAART, which was introduced in the 1990s, dramatically increased longevity for HIV-positive patients, although at a significant financial cost to these patients…Ultimately, more than 93 percent of the benefits of developing the new treatment accrued to patients in the form of longer lives, rather than to manufacturers.
  • Myth 4: Cancer Treatment At The End Of Life Is Of Low Value.  One study estimated that patients with metastatic disease value treatment at levels twenty-three times higher than the cost of the therapy…coverage decisions based solely on median survival will neglect the great social value for a minority who live long after the trial ends.
  • Myth 5: Supportive Care is Overused.  Supportive care enables the administration of more aggressive chemotherapy regimens by avoiding or managing the debilitating effects of the toxicity.


CoR #219

Written By: Jason Shafrin - Oct• 15•14

Russell Hutchinson hosts the latest edition of the Cavalcade of Risk.  You can find a terrific collection of risk-related posts including topics such as how to measure nurse value added, worker’s comp premiums, and the commercialization of drones. I would like to call out in particular Hank Stern’s article examining whether or not your health insurance plan will cover Ebola-related expenses.