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109 Cards in this Set

  • Front
  • Back
Week 1
Introduction to the course, defining technology/innovation, and the importance of value
Session 1
Defining medical technology and its role in the health care system; Course goals and requirements
Session 1: Readings
-How and why us health care differs from that in other OECD countries.
-Fostering deliberations about health innovation: What do we want to know from publics?
Session 1: How and why us health care differs from that in other OECD countries.
UNITED STATES HEALTH CARE, OFTEN HAILED AS “THE
best health care system in the world,” is also
faulted for being too costly, leaving many millions of individuals uninsured, and having avoidable lapses in quality. Criticism often draws on comparisons with other countries of the Organization for Economic
Co-operation and Development (OECD).
Session 1: How and why us health care differs from that in other OECD countries. (cont'd.)

Compared with the average OECD country, US health care expenditures differ in 3 important ways.
First, as a percentage of gross domestic product, US expenditures are twice as high.
Second, the US share of health expenditures funded by government is much lower, 46% vs 75%.
Third, the mix of services provided (technology intense vs more basic care) is very different.
Session 1: How and why us health care differs from that in other OECD countries. (cont'd.)

Three basic differences between the United States and most other OECD countries might explain why health policy differs.
First, US individuals appear more distrustful of government, a distrust that has deep historical roots
Heterogeneity of the US population tends to strengthen resistance to redistribution. Diversity of race, religion, ethnic origin, and sometimes language contribute to a weaker sense of empathy for less fortunate members of society, whose identity may differ greatly from one’s own.
The third, and probably most important, difference between the United States and most OECD countries is the political system. Many observers attribute US failure to enact comprehensive health care reform to the opposition of “special interests,” such as pharmaceutical and device manufacturers, insurance companies, physicians (especially those in high-income specialties), and hospitals.
Session 1: How and why us health care differs from that in other OECD countries. (cont'd.)

Lessons for Future Reform
President Obama’s Affordable Care Act (ACA), if fully implemented, would involve significant redistribution with tens of millions of poor and sick persons obtaining health insurance paid for by others. If the ACA is pared back, there will be less redistribution and tens of millions of persons would not have coverage, and the more difficult task of controlling health costs would remain.
Session 1: Fostering deliberations about health innovation: What do we want to know from publics?
As more complex and uncertain forms of health innovation keep emerging, scholars are increasingly
voicing arguments in favour of public involvement in health innovation policy.
The current conceptualisation of this involvement is, however, somewhat problematic as it tends to assume that scientific facts form a ‘‘hard,’’ indisputable core around which ‘‘soft,’’ relative values can be attached.
This paper, by giving precedence to epistemological issues, explores what there is to know from public involvement. We argue that knowledge and normative assumptions are co-constitutive of each other and
pivotal to the ways in which both experts and non-experts reason about health innovations.
Session 1: Fostering deliberations about health innovation: What do we want to know from publics? (cont'd.)
Because knowledge and normative assumptions are different but interrelated ways of reasoning, public
involvement initiatives need to emphasize deliberative processes that maximise mutual learning within
and across various groups of both experts and non-experts (who, we argue, all belong to the ‘‘publics’’).
Hence, we believe that what researchers might wish to know from publics is how their reasoning is
anchored in normative assumptions (what makes a given innovation desirable?) and in knowledge about
the plausibility of their effects (are they likely to be realised?). Accordingly, one sensible goal of greater
public involvement in health innovation policy would be to refine normative assumptions and make
their articulation with scientific observations explicit and openly contestable. The paper concludes that
we must differentiate between normative assumptions and knowledge, rather than set up a dichotomy
between them or confound them.
Why do we care about looking at the impact of health care technology on the U.S. health care system?
(Andy's Review Session)
We have a limited amount of money
Session 2
Value: the cost and quality interaction in medical innovation
Session 2: Readings
-Cutler David, Your Money or Your Life, Chapters 1 -3 (pp.1-31) and 5 and 6 (pp.47-75).
-Assessing Cost-Effectiveness And Value As Imaging Grows: The Case Of Carotid Artery CT.
Session 2: Cutler David, CHAPTER 1

Why has mortality declined over the course of the 20th century?
Mortality has declined over the course of the twentieth century as a result of public health and nutritional improvements predominant in the period up to 1940, the development of antibiotics in the next two decades, and medical technology to treat cardiovascular disease and low-birth-weight infants especially since 1960.
What was the medical spending per person in 1950 vs. today?
In 1950 medical spending was only $500 per person (in today's dollars), and medical care accounted for a mere 4 percent of gross domestic product (GDP). Today, we spend nearly $5,00 per person on medical care, and medical care accounts for almost 15 percent of GDP.
Health involves ______ as well as ______.
Health involves quality as well as length of life.
A population that lives long but is in poor health is not (much) better off than one with a shorter but healthier life span.
Unit about 1950 the improvement in health was most significantly a result of improved _________, ______ ______ ____, and the _____ __ ________ ___________.
nutrition, basic public health, and the introduction of effective medications.
Session 2: Cutler David, CHAPTER 2

"Health is Priceless," the old saying goes. "If you don't hvave your health, what do you have?"
We are willing to do a lot for better health. We spend money on doctors, give up our favorite foods, devote hours to the gym, and seek out the latest medical advances, all in the name of better health.
The importance of health is ______.
uncontroversial.
But resources are limited, so we need a way to prioritize.
Improving the health of cardiovascular disease sufferers is valuable, but money spent on heart attacks cannot be spent caring for low-birth-weight infants, buying additional text-books, or cleaning up the environment. How are we to know if heart attack care is worth more than these other uses?
Currently, we do not make these decisions in any systematic way. All medical treatments that improve health are approved for use, generally at the doctor's discretion. As a result, we worry that we spend too much on medical care.
Health care in the UK and Canada
In the UK and Canada, by contrast, limits are placed on what can be done. The government determines how many surgical facilities are available, and doctors can only operate on so many patients. Those judged the highest priority receive operations.
Is this type of system better? Valuing health is an integral part of assessing this answer.
Many have attempted to place a value on life. Philosophers, religion, law, and economists.
The traditional economic analysis values health as the amount that a person will earn over their lifetime, although this methodology is not very appealing. It implies that there is no value to keeping older people alive, for example, because they are not working. Similarly, it implies that health to the rich is worth more than health to the poor, because the rich will produce goods of greater dollar value.
QALY
The concept of quality-adjusted life years (QALYs) is commonly used in the medical field as a way to quantify the effect of different health states.
Measuring and valuing health states.
Measuring health states is difficult; valuing them is even harder. How can we possibly value additional years of survival? We figure out how much a person would be willing to spend each year to guarantee their access to heart attack care if/when needed - probably closer to $5/year than $5,000/year.
Airbag example - value of life
It turns out that air bags save the life of one driver in 10,000. Paying $300 to save on person in 10,000 is equivalent to paying $3 million fo reach life saved. Thus, the air bag suggests that most people value a life at at least $3 million.

However, for our purposes, we care about years of life more than life as a whole, because medical interventions are frequently evaluated that way.
Heart attack treatment extending a patient's life by one year. QALY =$100,000
The value of a year is what is needed. We can translate values of remaining life into a year of life by dividing the number of years remaining. For example, a person who values their remaining life at $4 million and has a remaining life expectancy of 40 years implicitly values each year at $100,000. Such a value is typical. Most studies value a year of life at $75,000 - $150,000. Cutler uses $100,000, which is approximately in the middle.
Costs and benefits of Medical advance.
The methodology for evaluating medical care is complex in detail but simple in concept. Medical advance has a cost and a benefit. The cost is the money spent, which cannot be used for other goods that we want. The benefits are the value of a longer and higher-quality life to the person receiving the care, plus the effects of those health changes on others. Conceptually, that is all there is to it.
Why hypothetical heart attack treatment is worth it!
The cost of the therapy is $10,000 per person. The benefit is one year of quality-adjusted life. Valued at $90,000 per year (assuming the person would be retired anyway and collecting $10,000 in Social Security and Medicare), the treatment yields a value of $90,000. Accounting for the fact that some of the health benefits are not realized until the future lowers this value in today's terms, but not by a great deal. The net is about $80,000 of benefits. This is substantially greater than the cost. Thus, the technological advance is worth the money.

Cutler concludes: We spend a lot more on heat attack care than we used to, but we get even more in return.
Cutler's main finding:
We spend a lot on medicine, but we get more in return.

That is not to say that everything is good. There is a good deal of waste. But a central feature of the medical system is the increasing value it provides over time.
Session 2: Cutler David, CHAPTER 3

Low Birth-weight infant example
Baby's total health care cost: $192,634. This is above average for babies of her size ( atypical cost is about $100,000; Noelle was more expensive because of the various surgeries), but not unusually so.

Is it worth it to spend so much on babies like Noelle? If not spent on Noelle, the money could have bought health insurance for 40 poor families, or textbooks for several hundred children.
Unlike the extreme example of baby Noelle (last card), bills of that magnitude usually occur in only the very smallest babies. For low-birth-weight infants as a whole, medical costs in the neonatal period average about ________.
$30,000
Additionally, there are long-term medical costs of caring for low-birth-weight infants who suffer complications. A high-end estimate is that the additional lifetime costs of medical care needed for low-birth-weight infants is about ______.
$40,00 (roughly $1,000 per year).

In total, therefore, we spend perhaps $70,000 more on medical expenses per low-birth-weight infant than we did in 1950.
Value of Medical Care for low-birth-weight infants in additional years of life lived
A typical low-birth-weight survivor can expect to live about 70 years on average.
$70,000 of increased spending bought 13 years of quality-adjusted life (according to Cutler's research). For the severely impaired, the benefits of life extension are only $75,000. Adding up the additional years with this value yields a benefit of $350,000 per low-birth-weight infant. The $350,000 in benefits is substantially greater than the $70,000 in additional costs. In investment terms, every dollar invested has yielded $5 in better health.
Cutler concludes:
Technology for low-birth-weight infants is costly, but is clearly worth the cost.
Cutler urges that we focus on preventing ____-______-_____ _______ in the first place.
low-birth-weight babies
Session 2: Cutler David, CHAPTER 5

Modern methods for treating cardiovascular disease
There are enormous errors in the system. Some people get too much care, and others get too little. We do not achieve nearly the health gains that we might. Rectifying these errors would make the system work substantially better.
Treatment of heart attacks in 1950 compared to today
Treatment of heart attacks today is much more intensive.
Angioplasty
a balloon is inflated amid the clot in the artery to reopen the blocked artery
Stents
Wire mesh tubes called stents, developed in the 1990s, are now typically implanted to keep the artery open.
Development of intensive treatments...
has had a major effect on heart attack mortality. Death in the aftermath of a heart attach has fallen by nearly three-quarters since the 1950s, largely due to increased use of intensive therapies.
Single most important behavioral change of the past half century
smoking

other important factors: diet, alcohol consumption, and exercise
Has medical treatment for cardiovascular disease been worth the cost?
Yes!

For every dollar spent, we have realized a return of $4.
Canada vs. US
Canadian doctors cannot treat patients as intensively as their American counterparts do as a result of having ten times less bypass surgery facilities. Canadian doctors wind up prioritizing patients, deciding which should receive intensive surgical therapy and which should not. As a result, a typical heart attach patient is many times more likely to get bypass surgery or angioplasty in the US than in Canada.
And yet, survival after a heart attack is virtually identical in the two countries. Not everyone in the US needs such intensive care. Canada effectively limits care to those for whom the need is greatest.
The most important problem in cardiovascular disease care
Care that is valuable but is not provided or the "underuse of care."

Causes of underused care - physicians who do not prescribe the right drugs, patients who do not take recommended medications, and so on.

Common denominator = money
Money
There is no money to be made in making sure the right drugs are prescribed or in ensuring that patients take those medications. Indeed, the system discourages this outreach activity by reducing the income of providers when they do it and possibly exposing them to years of litigation.
Individuals make mistakes, but the system does not help. We will never get very good care until we change the system as a whole.
Session 2: Cutler David, CHAPTER 6

Spending more over time is worth it
However, the system falls short of its potential. The fate of the uninsured is problematic as well as the insured. Some people receive more care than is appropriate. Others get the right care, but receive it from providers who are not sufficiently experienced. Still others get too little care, especially in the management of chronic disease.
Central issue we face in forming health policy
Deciding whether medical spending increases are worth the cost
single-payer
A government-run medical system, as in Canada and as with Medicare in the US.
How do we assess value?
by assessing costs and benefits (as we have done with cardiovascular disease patients and low-birth-weight infants).
Medical care as a whole is ________ the cost
WORTH
The biggest problem
the status of the uninsured
Health insurance is the pass key to the medical system. people who lack insurance can't even get in the front door.
~40 million people are uninsured (mostly lower-middle working class)
The uninsured get worse care
significantly less likely to receive prevention and screening services than the insured; serious diseases are detected at a later stage for the uninsured than for the insured; and uninsured people who have chronic diseases are significantly less likely to have their health conditions appropriately managed.
The Institue of Medicine estimates that about 20,000 non-elderly adults die each year because they are uninsured.
________ to ______ people die each year because of medical errors occurring in hospitals
50,000 to 100,000

medical errors = one of the leading causes of death
Even though medical care spending will increase by 2050, we shouldn't worry because ____________
people in the future will earn more than people do today
Value: Are We Practicing “Flat of the Curve” Medicine?
(Lecture Notes)
• Flat of the curve medicine—reach a certain point where treatment doesn’t do anything at all
• Units of health investment
• Steeper the curve, less money needs to be spent, but the quality of health improves dramatically
• Fewer units of health when someone stays in the hospital for a long time, could actually get infections in the hospital and quality of health could actually decrease (more technology is not always better, because it increases risks)
• Cutler looks at this as a linear progression (more spending = better health), Cutler will subtract from 100% of a life year if there are bad outcomes associated with the treatments
Value =
(Lecture Notes)
health / spending

(how much health per dollar spent on medical care)
fee-for-service
US health care system
Week 2
Adoption of innovations: models and applications
Session 3
The role of economics and reimbursement in the adoption of innovations
Session 3: Readings
-Weisbrod - Technological change: Incentives matter!
-Diffusion of new technology and payment policies: coronary stents
-Implementing Evidence-Based Medicine Through Medicare Coverage Decisions.
Session 3: Weisbrod - Technological change: Incentives matter!

Conclusion
Expanding insurance coverage, which includes more people as well as a growing array of health care inputs, has provided an increased incentive to the R&D sector to develop new technologies and a growing incentive for subsets of consumers, who could benefit from particular new technologies, to seek a wider definition of what would be covered by insurance.
Session 3: Diffusion of new technology and payment policies: coronary stents
Medicare payment is often cited as a major driver of medical technology diffusion. Stakeholders claimed that beneficiaries would be denied access to stents because Medicare payment did not initially cover the cost of stents. Nevertheless, stents diffused rapidly, including to untested indications. Outcomes with stents improved over time, primarily because of a fundamental property of technology diffusion termed “reinvention,” in which new technology is modified by users. The traditional system of regulatory approval
and reimbursement does not account for this dynamic process. There has been no incentive for systematic collection of data to determine which modifications are most beneficial.
Rogers’ Elements of Diffusion Theory: What is Important to Advancing Knowledge?
Innovation
•Attributes of the technology, Reinvention, Expanded indications
Communication
•Channels, Heterophily?
Time
•Process, Adopter categories
Social system
•Structure, Norms, Opinion leaders, Types of decisions, Consequences
Rogers’ Elements of Diffusion Theory: What is Important to Advancing Knowledge?
(lecture notes)
•Innovation, Communication, Time, Social system
•Stent: keep artery open (bare-metal stents)
•Next reinvention: drug-releasing stents, gradually release medication to keep plaque from forming
•Clinical trials: based on very narrow findants (company that promotes device or drug funds these)
•FDA Trials for stents: based on the simplest patients
•Doctors in practice: expanded the number of people who they used stents on, used them in a broader way than the FDA approved them be be used
Weisbrod and the interactivity of the system
(lecture notes)
insurance increases the liklihood of R&D feeding into the healthcare system & R&D feeds into the need for insurance.
What does insurance do for R&D?
(lecture notes)
Incentivizes R&D to improve on quality regardless of costs.
Session 3: Implementing Evidence-Based Medicine Through Medicare Coverage Decisions.

Abstract
Management of technology diffusion to improve quality and constrain spending in health care remains an elusive goal. Along with efforts to improve the quality of evidence, providers and payers must ensure that evidence actually effects changes in practice. Medicare coverage policies grant, limit, and condition payment based on evidentiary standards. This paper identifies the sizable barriers to implementation of evidence-based medicine in Medicare and proposes policy solutions to address them.
Session 3: Implementing Evidence-Based Medicine Through Medicare Coverage Decisions.

Conclusion
Inevitably, and arguably appropriately, Medicare does influence medical practice. In a recent Modern Healthcare op-ed, Todd Sloane commented on the advisability of a comparative effectiveness center: “We submit that unless all payers and providers agree to use the new data to begin fine-tuning our system, it may be time for the federal government to step in and make them.” Medicare has the authority and the responsibility to implement its coverage policies. It is time to reform the infrastructure so that coverage policies will make a difference in the quality and cost of health care in Medicare.
Conclusion
(lecture notes)
Most Americans want to continue as world leader in development of technologies.
We will not restrict R and D, or have controlled prices or budget.
Reimbursement powerful but not absolute.
Appropriate use is goal.
Cost containment will require limiting or rationalizing use.
Session 4: Guest Lecture
Guest lecture - Farbod Hagigi, PhD | CEO and Founder | ClinicalBox
Week 3
Management of technology in the U.S. and abroad
Session 5
International management of technology
Session 5: Readings
-Quality, innovation, and value for money. NICE and the British National Health System.
- Determining the Value of Drugs - The Evolving British Experience.
-Exubera Case
Session 5: Quality, innovation, and value for money. NICE and the British National Health System.

The institute has 4 distinct programs producing various forms of what are collectively known as “NICE guidance”
(1) appraisals of individual or classes of health technologies (eg, pharmaceuticals, devices, procedures, diagnostic methods), taking account of both their clinical effectiveness and cost-effectiveness; (2) development of clinical guidelines, involving considerations of both clinical effectiveness and cost-effectiveness, for management of individual conditions or symptoms; (3) guidance on the safety and efficacy of interventional procedures (both diagnostic and therapeutic). This program is analogous to the functions of a national drug regulatory authority and does not evaluate costeffectiveness; and (4) a new (since April 2005) program of public health guidance including advice on the clinical effectiveness and cost-effectiveness of single interventions (eg, needle exchange for reducing the prevalence of blood-borne infections in intravenous drug users) and broader public health approaches for communities (eg, combinations of educational, regulatory, and zoning changes to reduce childhood injuries).
Abbreviated NICE guidance
1. Technology appraisals
2. Clinical Guidelines
3. Public Health guidelines (safety and efficacy of interventional procedures - like FDA)
4. Clinical and cost effectiveness of single interventions
Why wouldn't an institution like NICE work in the US?
In America, people are very against putting a dollar value on health care and health care technology
Other Developed Countries Technology Policy
(lecture notes)
•Centralized
•Top down allocations
•Government more directive (Australia, Canada, GB)
•Evaluation appraches differ
What account for differences in use of technology use?
(lecture notes)
•Variation in health care need
•Economic conditions
•Cultural and organizational features of a health care system
•National regulations
•Kidney dialsis dilusion in Jamaica
U.S. system: most expensive
(lecture notes)
•U.S. is most expensive system
•U.S. uses much more private money than other countries
•Why is the U.S. so much more expensive?
oWe do more testing.
oWe do 2 or 3 tests without even thinking about it.
oLayers and layers of testing.
oWe do not have more physicians, and we do not have more beds.
oWe pay more for drugs in the U.S.
oDiagnostic imaging
oLack of primary care physicians – people do not go to primary care physicians for regular visits
oEthnic background and access to care is horrifying
oRelationship between heart disease mortality and coronary revascularisation procedures (out outcomes are not much better than many other countries who use less technology than us)
NICE
(lecture notes)
•Body
•Guidance for the NHS to decide whether
•Responsible for taking into account clinical effectiveness and cost
•NICE
1.Appraisals of technology
2. Develop clinical guidelines (In U.S: FDA sometimes, insurance company has to approve it, professional societies—NIH, cholesterol guidelines—FDA body)
3. QUALY – around $35,000 - $46,000
U.S. health care reform – we cannot take cost into account
(lecture notes)
o device industries (ACA added a tax of 3%)
o people hate price controls in the U.S.
Exubera
(lecture notes)
•Disagree about the rate of elligible patients would be using exubera
•Inhaled insulin is not recommended
•Patient preference preferred exubera (theoretical)
•Randomaized clinical trials (RCTs)
Exubera & NICE
(lecture notes)
Decision: Inhaled insulin is not recommended as a routine treatment for people with Type 1 or Type 2 diabetes.
Cost-Effectiveness: NICE acknowledged that inhaled insulin was roughly equivalent to short- acting injected insulin in terms of its efficacy, but argued that the clinical data submitted by Pfizer failed to show sufficient cost effectiveness to warrant widespread use.
Session 6
U.S. management of technology: implementation and practice challenges
Session 6: Readings
-Effective Surgical Safety Checklist Implementation.
-Will disruptive innovations cure health care?
-How hospitals confront new technology.
Session 6: Effective Surgical Safety Checklist Implementation.

Results
Qualitative analysis suggested that effectiveness hinges on the ability of implementation leaders
to persuasively explain why and adaptively show how to use the checklist. Coordinated efforts to explain why the checklist is being implemented and extensive education regarding its use resulted in buy-in among surgical staff and thorough checklist use. When implementation leaders did not explain why or show how the checklist should be used, staff neither understood the rationale behind implementation nor were they adequately prepared to use the checklist,
leading to frustration, disinterest, and eventual abandonment despite a hospital-wide mandate.
Session 6: Will disruptive innovations cure health care?
(Andy's lecture)

Will disruptive innovations cure health care?
They overshoot the market, goes beyond what people need or want.
How does it move through the health care system?
It tries to “hit” the most people.
Why should we care about disruptive innovations in the health care system?
Make complex things simple vs. make simple things complex.
What about disrupting the health care workforce?
Low skilled ppl to do low skilled work & high skilled ppl to do high skilled work.
“Work to the top of their liscence.”
Allocated Efficiency: Putting the right workforce in the right spot.
Health Care is pushing the frontier towards achievements and outcomes that will never actually be realized.
Is there even an incentive to cure HIV or certain cancers? (think about the ACS and Susan G. Coman - would not get anymore donations)
Why do you think the health care system acts in this manner? (Hint: Think about the business of health care)
oDisincentive true innovation.
oThe price of inequality – Book. (We don’t have the regulation to make the market work properly.) Lobbyists have worked to make sure that regulation by government does not happen.
oPhysician discretion & patient safety
Possible soutions: Actually match clinical skills to problem difficulty
this implies an “upmarket” move for many clinicians.
Case Study: Effective Surgical Safety Checklist Implementation
•2 key findings of the authors
o Implementation matters!
o Leadership matters!

•How do the authors define implementation?
o “a series of ‘planned efforts to mainstream an innovation within an organization’ that serves as “the critical gateway between an organizational decision to adopt and intervention and routine use of that intervention.”

•What is the authors’ research question?
o What factors support highly effective checklist implementation processes among hospitals?

•What are some of these factors?
o Hands-on leadership (explaining why and showing how)
o Frontline decision making
o Dedicated resources
o Local modification (take a standard and adapt it)
o Feedback
Session 7
Measuring outcomes, cost effectiveness, and cost benefit analysis
Session 7: Readings
-Pharmacoeconomics
What is technology assessment?
-Evaluation of the clinical effectiveness and cost effectiveness of medical technology
-Medical, social, ethical and economic implications of the development, diffusion and use of technologies
-Has evolved over time, from safety and efficacy to sophisticated analyses
Assessment Techniques
Cost Minimization Analysis
Cost Benefit Analysis (CBA)
Cost Utility Analysis (CUA)
Cost of Illness Evaluation (COI)
Cost Effectiveness Analysis (CEA)
Decision Analysis
Measuring Costs
Direct costs
Indirect costs
Opportunity costs
Productivity costs
Cost of an illness
-Includes all of the above
-Medical, nonmedical
What is the cost of a new treatment?
Determining costs of a treatment
Specify ingredients or resources
Count number of units of each resource
Assign dollar value to each resource unit
Adjust for differences in time
Allow for uncertainty

Example: what is the cost of dialysis? Home dialysis?
Discounting
dollar is worth more presently than in the future.
(value of a dollar decreases over time)
Benefits
Direct
Indirect
Intangible
Outcomes Measures
Lower medical costs
Decreased costs of an illness
Improved health
Improved quality of life
Improved productivity
Additional knowledge
Decreased potential future costs
Measuring Effectiveness - Metrics
Common health indicators
•Hospitalization rates
•Reduction in length of stay
•# of readmission avoided
•Years of life saved

*Quality of life
-Time tradeoff
•How many years of life without your hand would you trade for years of perfect life?
-EuroQual 5D: instrument to assess quality of life in five different domains
•Mobility, Self care, Usual activity, Pain & discomfort , Anxiety & depression

Discounted Life Years (DLY) Gained, Disability Adjusted Life Years (DALYs) or Quality Adjusted Life Years (QALYs)*
Cost Benefit Analysis Steps
1. Identify intervention
2. Value of resources consumed
3. Identify and assign value to benefits
4. Sum all benefits / sum all costs
5. Net cost = Cost minus benefit
6. Benefit cost ratio = Benefits/cost
Cost Effectiveness Analysis
Compares two or more alternatives with an outcome
Inputs same as CBA
Outcomes: specific outcomes (blood pressure control), health status – measured by subjective, or objective (e.g. lab values)
Advantages over CBA? Disadvantages?
How do you know an intervention is cost effective? (What is your measure?)
Steps in Cost Effectiveness Analysis
1. Define problem (perspective)
2. Identify alternative interventions
3. Describe relationship between inputs and outputs
4. Identify and measure costs and outcomes
5. Interpret results
Measures
Cost / effectiveness ratio (difference in cost per successful outcome)
Cost Utility Analysis
Outcomes expressed in terms of QALYS
Allows for comparison across different programs, societal allocation
Avoids assigning a cost to a quality adjusted life year

Ex: life expectancy & QALY of no treatment, bypass surgery, and angioplasty comparison
Sensitivity Analysis
Issue of uncertainty
Sensitivity analysis is used to evaluate strength of results
Vary uncertain parameters and recomputed costs and health effects
Examine effects on decision