Paul Fishman PhD Professor Department of Health Services University of Washington Research supported by the Washington State Department of Health and the Washington Chapter of the American Academy of Pediatrics ID: 779200
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Slide1
Assessing the Economics of the Transforming Clinical Pediatrics Practices InitiativePaul Fishman, PhDProfessorDepartment of Health ServicesUniversity of Washington
Research supported by the Washington State Department of Health and the Washington Chapter of the American Academy of Pediatrics
Slide2Slide3CollaboratorsWashington State DOHAnne Farrell ShefferWashington Chapter of the American Academy of PediatricsSarah RaftonUniversity of Washington
Hannah Johnson
Canada Parish
Navind Oodit
Andrew Welcome
Slide4AgendaReview approaches to examining the cost of health services, clinical interventions and quality initiativesExamine the challenges of conducting economic analyses among childrenPresent findings from cost analyses of TCPi outcomes
Slide5AgendaReview approaches to examining the cost of health services, clinical interventions and quality initiativesExamine the challenges of conducting economic analyses among children
Present findings from cost analyses of TCPi outcomes
Slide6Economic Frameworks/Types of AnalysesCost of IllnessCost EffectivenessReturn on Investment
Net Cost or Cost Savings
Slide7Cost of IllnessDirect CostCosts incurred due to a disease or condition, such as for medical treatments or travel to obtain care.
Productivity or Social Costs
Impacts on productivity due to a disease or condition associated with lost or impaired ability to work or engage in leisure activities, or due to premature mortality. Productivity losses are often more complicated to measure and value than direct costs.
Rice DP. Estimating the cost of illness.
Am J Public Health Nations Health
. 1967;57(3):424–440. doi:10.2105/ajph.57.3.424
Slide8Cost Effectiveness AnalysisCost-effectiveness analysis (CEA) is a way to examine both the costs and health outcomes of one or more interventions. It compares an intervention to the status quo, another intervention or a hypothetical outcome by estimating how much it costs to gain a unit of a health outcome, like a life year gained, a death prevented or a specific target (e.g. number of children immunized)
CEA is comparative so an intervention can only be considered cost effective relative to something else.
To estimate CEA:
Calculate the net cost of a program or intervention minus averted medical and productivity costs, relative to
Changes in outcomes attributable to the intervention
Factors to consider include:Timing of when costs and outcomes occurAdjusting for differential costs and impacts among specific populations
Michael F. Drummond, Mark J.
Sculpher
,
George W. Torrance
,
Bernie J. O'Brien
,
Greg L. Stoddart
Methods for the Economic Evaluation of Health Care
Programmes
; Oxford University Press, 2005
Slide9Return on Investment AnalysisReturn on Investment (ROI) measures the gain or loss
generated by an investment relative to the amount of money invested.
Usually expressed as a percentage and is typically used to compare the efficiency of different public or private investments.
Calculated as:
ROI = (Current Value of Investment - Cost of Investment) / Cost of Investment
Slide10Net Cost or Cost SavingsWhat is the change in costs associated with a program or intervention
Ideally – we are examining the prospect that we are saving money as a result of an intervention?
Cost savings can come from lower direct or social/productivity costs
Must consider when cost saving may be realized – they may not appear for years and then these savings must be discounted to the present
Slide11Methodological Issue - DiscountingAdjusts the difference in timing of when event occurEvents that occur further in the future are worth less than those that occur today so there is a penalty for having to wait
Example: $1 today is worth more than $1 a year from now
Example: Adding a year of life today is worth more than adding a year of life in 20 years time
Discounting takes on great relevance with children because our financial and health related outcomes may not be realized for years after a successful intervention
Slide12Bending the Cost CurveOften comes up in policy debates:Reducing the rate of growth of expendituresNot a reduction in spending but spending less than we would have normally or had been expected to
Economists refer to this as
opportunity cost
savings – and reflect true savings if spending forecasts are accurate
Berwick DM, Nolan TW, Whittington J.
The triple aim: care, health, and cost. Health Aff (Millwood). 2008 May-Jun;27(3):759-69. doi: 10.1377/hlthaff.27.3.759.
Slide13AgendaReview approaches to examining the cost of health services, clinical interventions and quality initiativesExamine the challenges of conducting economic analyses among children
Present findings from cost analyses of TCPi outcomes
Slide14Challenges for Pediatric Health Economic Analyses: Access to Data Fragmentation of US health care creates unique challenges for evaluating health economic trends among childrenThe source of insurance among children also matters -
40%
of children are insured through Medicaid (up from 25% 10 years ago), which may limit analyses to state specific programs
Washington State = 38%
https://www.kff.org/other/state-indicator/children-0-18/?currentTimeframe=0&selectedDistributions=medicaid&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D
By contrast, research among older adults may use national Medicare data – easier to establish national trends
https://www.kff.org/medicare/state-indicator/medicare-beneficiaries-as-of-total-pop/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D
Slide15Challenges for Pediatric Health Economic Analyses: The Population EffectChildren have a lower prevalence of a wide range of health care needsAs a result population based analyses are difficult to power
For example, population asthma prevalence is 8 – 10%
Miller GF,
Coffield
E, Leroy Z, Wallin
R. Prevalence and Costs of Five Chronic Conditions in Children. J Sch Nurs. 2016;32(5):357–364. Wide range of low prevalence conditions followContrast with adults where one third have diabetes, 25% have arthritis and 13% have heart disease
https://www.cdc.gov/nchs/index.htm
Slide16Challenges for Pediatric Health Economic Analyses: Measuring the Impact of Quality ImprovementPediatric quality improvement efforts may not yield health and economic benefits for yearsDiscounting may reduce the perceived financial return on investment for these programs
Overlapping impact of pediatric quality improvement efforts
Co-interventions may make it difficult to determine how to allocate the costs and benefits of specific interventions
For example – the joint effect of well visits and preventive services, such as immunizations that often occur at these visits
The potential for preventive services to be economically undervalued, due to
Time period over which benefits become evidentPublic health dilemma of the economic advantage of cure over prevention
Slide17AgendaReview approaches to examining the cost of health services, clinical interventions and quality initiativesExamine the challenges of conducting economic analyses among children
Present findings from cost analyses of TCPi outcomes
Slide18TCPi Economic AnalysesGoalsIdentify opportunities to achieve cost savings associated with TCPi quality and clinical improvement targetsGenerate estimate of cost savings achieved by clinics participating in initiative
Project state-wide cost savings estimates and forecasts of likely TCPi relevant outcomes from payer perspective
Slide19Measures Include in This AnlaysisImproved childhood immunizations rates by 10%
Decreased avoidable ER encounters
Reduce unnecessary imaging
Slide20Methodological IssuesAssumptions and Challenges:Assigning unit cost valuesAccounting for statewide variation in cost
Current estimates based on mean of relevant procedure codes for Western Washington
Western Washington more expensive, leads to more conservative estimates of cost savings
Clinic specific fidelity to intervention and program goals
No data reporting when and how clinics implemented TCPi goals
Participating clinics change over time
Slide21Data Resources Molina provided data for children in clinics participating in TCPiEstimates for the actual experience of these childrenStatewide estimates based on entire pediatric Medicaid population
Slide22Slide23Measure: Childhood Immunization Rates – Increase by 10%Percentage of children 2 years of age who had four diphtheria, tetanus and acellular pertussis (DtaP); three polio (IPV); one measles, mumps and rubella (MMR); three H influenza type B(HiB); three hepatitis B (HepB); one chicken pox (VZV); four pneumococcal conjugate (PCV); two hepatitis A (
HepA
); two or three rotavirus (RV); and two influenza (flu) vaccines by their second birthday.
https://www.ncqa.org/hedis/measures/childhood-immunization-status/
Assesses adolescents 13 years of age who had one dose of meningococcal vaccine, one Tdap vaccine and the complete human papillomavirus vaccine series by their 13th birthday.
https://www.ncqa.org/hedis/measures/immunizations-for-adolescents/
Slide24Model Assumptions - IWidespread use of vaccines, frequently cited as among the most effective preventive health care measures, has resulted in dramatic decreases in the incidence of vaccine-preventable diseases and corresponding declines in morbidity and mortalityZhou, F., Shefer, A., Wenger, J., Messonnier
, M., Wang, L. Y., Lopez, A., ... &
Rodewald
, L. (2014). Economic evaluation of the routine childhood immunization program in the United States, 2009. Pediatrics, 133(4), 577-585.
Vaccines are one of the greatest achievements of biomedical science and public health and represent one of the most effective tools for the prevention of diseases
Centers for Disease Control and Prevention. Ten great public health achievements—United States, 1900-1999. MMWR Morb Mortal Wkly Rep. 1999;48:241-243 (CDC, 1999)Predominant use of vaccines have resulted in dramatic declines in the morbidity, disability, and mortality caused by infectious diseases: diphtheria, tetanus, pertussis, Haemophilus
influenzae type b (Hib), poliomyelitis, measles, mumps, rubella, hepatitis B virus (HBV), and varicellaCenters for Disease Control and Prevention. Ten great public health achievements—United States, 1900-1999. MMWR Morb Mortal Wkly
Rep. 1999;48:241-243 (CDC, 1999; Seward et al, 2002)
Seward JF, Watson BM, Peterson CL, et al. Varicella disease after introduction of varicella vaccine in the United States, 1995-2000. JAMA.2002;287:606-611.
Slide25Model Assumptions - IIThe Advisory Committee on Immunization Practices (CDC) has responsibility for establishing the list of vaccines available to infants and children and to adolescents eligible to receive vaccines through the Vaccines for Children ProgramCommittee on the Evaluation of Vaccine Purchase Financing in the United States. Financing Vaccines in the 21st Century: Assuring Access and Availability. Legislative history of vaccine policy. In Washington, DC: National Academies Press; 2004:45-47.
Some of the economic studies still being cited as evidence that older vaccines result in net savings are now more than 20 years old. The prices of these vaccines, their formulations and uses, and the cost of medical care for the diseases they prevent have changed across the years
Zhou, F.,
Santoli
, J.,
Messonnier, M. L., Yusuf, H. R., Shefer, A., Chu, S. Y., & Harpaz, R. (2005). Economic evaluation of the 7-vaccine routine childhood immunization schedule in the United States, 2001. Archives of pediatrics & adolescent medicine, 159(12), 1136-1144.
Slide26ResultsAmong 78.6 million children (born 1994–2013), vaccination will prevent an estimated 322 million illnesses, 21 million hospitalizations, and 732,000 premature deaths from vaccine-preventable illnesses over the course of their lifetimes, at a net savings of $295 billion in direct costs and $1.38 trillion in total societal costs Routine childhood immunization was estimated to prevent 4.1 illnesses and 0.27 hospitalizations per child over the course of their lifetimes Whitney, C. G., Zhou, F., Singleton, J., Schuchat
, A., & Centers for Disease Control and Prevention (CDC). (2014). Benefits from immunization during the vaccines for children program era—United States, 1994–2013. MMWR
Morb
Mortal
Wkly Rep, 63(16), 352-355.Routine childhood immunization with DTaP, Hib, IPV, MMR,
HepB, VAR, PCV7, HepA, and Rota among a cohort of 4,261,494 will prevent ∼42 000 early deaths and 20 million cases of disease prevention Program savings . ation program from the payers’ and societal perspectives were $13.5 billion and $68.8 billion, respectively (Zhou et al, 2014)
Zhou F, Shefer
A
,
Wenger J
,
Messonnier
M
,
Wang LY
,
Lopez A
,
Moore M
,
Murphy TV
,
Cortese M
,
Rodewald
L
. Economic evaluation of the routine childhood immunization program in the United States, 2009.
Pediatrics.
2014 Apr;133(4):577-85Z
Slide27Cost Savings from Improved Immunization RatesSource of per child reduced cost:The annual direct medical care cost savings per child in 2017 US dollars with a full immunization battery is $46.93 and the annual indirect cost savings is $238.77.
This estimate is calculated in the following way:
Per child immunized per year costs =
Lifetime estimates of reduced direct and indirect costs for a given birth year cohort of $13.5 billion and $68.8 billion respectively inflation adjusted to 2017 US dollars
divided by the number of American children in a typical birth cohort (3.6 million for 2016)divided by the average life expectancy in years of a child born in 2017 of 78.9 years.
Slide28TCPi ResultsMolina year end state-wide HEDIS report2017 year to year improvement of 3.0% or 146 additional childrenLower direct medical care costs of: $12,245
2018 year to year improvement of 1.9% or 85 additional children
Lower direct medical care costs of: $3,936
Projected state-wide results
15% of children insured through Medicaid in Molina data
If similar improvement across state: $278,081 in savings for calendar year 2017 $161,896 in savings for calendar year 2018
Slide29Immunization DiscussionThe HEDIS measure focuses on children 2 years and younger, thus the denominator excludes children that may be successfully immunized in later yearsSavings through improved immunization rates are year to year so higher rates will lead to greater and cumulative cost savings
Cost savings should include rates above expected – so if we are successful in raising population immunization rates we should factor in the savings relative to trend absent
TCPi
Slide30Measure: Reduce Avoidable ER VisitsEmergency department (ED) visits are costly and often reflect care that is better provided in primary care settingsDowd B,
Karmarker
M, Swenson T, et al. Emergency department utilization as a measure of physician performance.
Am J Med Qual
2014;29(2):135-43.Because some visits are preventable and avoidable, they may indicate poor care management, inadequate access to care, or poor choices on the part of patients
Enard KR, Ganelin DM. Reducing preventable emergency department utilization and costs by using community health workers as patient navigators. J Healthc Manag 2013;58(6);412-28.
ED visits for conditions that are preventable or treatable with appropriate primary care lower health system efficiency and raise costsAn estimated 13% to 27% of ED visits in the United States could be managed in physician offices, clinics, and urgent care centers, saving $4.4 billion annuallyWeinick RM, Burns RM, Mehrotra A. How many emergency department visits could be managed at urgent care centers and retail clinics? Health
Aff
2010;29(9):1630-6.
Slide31Measure: Reduce Avoidable ER VisitsWhat’s Possible - Large variation in the literature regarding the effectiveness of interventions to decrease unnecessary ED visits or hospitalizations.
Examples:
Continuous relationship with a primary care pediatric provider reduced ER visits in some settings from 22 – 58%
Christakis DA
,
Mell L, Koepsell
TD, Zimmerman FJ,
Connell FA
. Association of lower continuity of care with greater risk of emergency department use and hospitalization in children.
Pediatrics.
2001 Mar;107(3):524-9.
5-10% decrease in ER use with increased continuity of care
McBurney P
G
,
Simpson
KN
,
Darden PM
. Potential cost savings of decreased emergency department visits through increased continuity in a pediatric medical home.
Ambul
Pediatr.
2004 May-Jun;4(3):204-8.
Gatekeep within Maryland Medicaid program associated with a decrease in likelihood of any hospitalizations (OR= 0.89 CI: 0.83-0.97) AND avoidable hospitalizations (OR=0.81 CI: 0.79-0.84).
Gadomski
A
,,
Nichols M
. Impact of a Medicaid primary care provider and preventive care on pediatric hospitalization.
Pediatrics.
1998 Mar;101(3):E1.
Slide32Measure: Reduce Avoidable ER VisitsEvidence for cost-savings for interventions designed to decrease ER use
Cost reduction of 31.6% (Reasonable range 17.3%-54.3% for conditions with lowest to highest % reductions in spending over time)
Torio
CM,
Elixhauser
A, Andrews RM.Trends in Potentially Preventable Hospital Admissions among Adults and Children, 2005–2010: Statistical Brief #151.
Healthcare Cost and Utilization Project (HCUP) Statistical Briefs [Internet]. Rockville (MD): Agency for Healthcare Research and Quality (US); 2006 Feb-Mar 2013Estimated cost savings with continuity of care: $10,000-$30,000 per year for 2000 patients ($10-$30 per patient per year)
McBurney P
G
,
Simpson
KN
,
Darden PM
. Potential cost savings of decreased emergency department visits through increased continuity in a pediatric medical home.
Ambul
Pediatr.
2004 May-Jun;4(3):204-8.
Approximately $17 per patient per year saved in ER visit usage
Wang C,
Villar
ME, Mulligan DA, Hansen T.
Costvand
utilization analysis of a pediatric emergency department diversion project.
Pediatrics. 2005 Nov;116(5):1075-9.
Slide33Model AssumptionsDenominatorAll ER visits for members aged 1 year and older within the measurement period, excluding visits that resulted in same day inpatient admission
Numerator
All visits with any primary diagnosis code previously identified:
Tsai MH,
Xirasagar
S, Carroll S, et al. Reducing High-Users' Visits to the Emergency Department by a Primary Care Intervention for the Uninsured: A Retrospective Study. Inquiry. 2018;55:46958018763917
Slide34Avoidable ER Visits per year per 1000 Member MonthsFormula: (ER avoidable admits * completion factor) / (number of member months) * 12000.Interpretation
Avoidable visits defined by CA standard
Measures number of ER visits among insured population that could be avoided
Measure goes up (down) due to
More (less) avoidable ER visits among insured populationMore (less) than expected number of claims among insured population
Slide35Avoidable ER Visits -MethodsCost per visit based on mean of Western Washington values for visits of increasing severity5 different reimbursement values ranging from $535 - $1,671For children in Molina clinics participating in TCPi for year ending June, 2018
57.2 avoidable ER visits per 1,000 children
7,194 total avoidable ER visits
Slide36Avoidable ER Visits -ResultsUsing mean cost per ER visit:Cost savings for children in TCPi clinics for which Molina data is available: $6,962,98 in estimated cost savings for year ending June, 2018
Projecting to the entire statewide pediatric population insured through Medicaid:
$ 46,419,917 in estimated cost savings for year ending June, 2018
Slide37Avoidable ER Visits DiscussionImproved care coordination and linkages with primary care providers and teams will reduce the potential for avoidable ER visitsAs with immunizations we should consider the impact that long-term investments in primary care have on reduced ER visits and consider the deviation from trend as a source of cost savings
Slide38Measure: Reduce Unnecessary High End Imaging ProceduresEvidence based recommendations from Robert Wood Johnosn Foundation
Choosing Wisely
Computed tomography (CT) scans are not always necessary in the routine evaluation of abdominal pain
Neuroimaging (CT, MRI) is not necessary in a child with simple febrile seizure.
Computed tomography (CT) scans are not necessary in the immediate evaluation of minor head injuries; clinical observation/Pediatric Emergency Care Applied Research Network (PECARN) criteria should be used to determine whether imaging is indicated
Do not order advanced imaging studies (MRI or CT) for most musculoskeletal conditions in a child until all appropriate clinical, laboratory and plain radiographic examinations have been completed.
http://www.choosingwisely.org/
Slide39Measure: Reduce Unnecessary High End Imaging ProceduresCT performed in approximately 20%–34%, 20%–28%, and 15%–21% of pediatric ED visits for head injury, headache, and abdominal pain, respectively
Larson DB, Johnson LW, Schnell BM,
Goske
MJ, Salisbury SR, Forman HP.
Rising use of CT in child visits to the emergency department in the United States, 1995-2008.
Radiology. 2011 Jun;259(3):793-801. doi: 10.1148/radiol.11101939. Epub 2011Apr 5. et al 2011) Pediatric exposure to ionizing radiation in doses frequently administered by CT has been associated with 1 additional cancer per 10 000 exposed children.
Parker MW, Shah SS, Hall M, Fieldston ES, Coley BD, Morse RB. (Computed Tomography and Shifts to Alternate
ImagingModalities
in Hospitalized Children.
Pediatrics. 2015 Sep;136(3):e573-81.
Over half (52.7%) of Washington state children with suspected appendicitis had a CT scan as their first imaging study
Kotagal
M, Richards MK,
Flum
DR,
Acierno
SP,
Weinsheimer
RL, Goldin AB.
Use and accuracy of diagnostic imaging in the evaluation of pediatric appendicitis.
J
Pediatr
Surg. 2015 Apr;50(4):642-6 2015
Slide40Measure: Reduce Unnecessary High End Imaging ProceduresExisting interventions More complex interventions with multiple strategies to reduce unnecessary imaging demonstrate greater decreases in imaging
42% relative reduction in imaging from pre-post intervention periods
Successful decrease of CT for appendicitis observed
Hiscock H, Neely RJ, Warren H, Soon J, Georgiou A Methods to decrease unnecessary imaging depend on the health condition.
Reducing Unnecessary Imaging and Pathology Tests: A Systematic Review.
Pediatrics. 2018 Feb;141(2)Cost-savings for interventions designed to decrease imaging
Very sparse literature intervention relevant cost-savingsThe cost per appendicitis case at sites where ultrasound was the most common diagnostic method was 5.2% or $367 less than at the cost per case at sites where CT was the most common diagnostic method Kharbanda AB, Christensen EW, Dudley NC, Bajaj L, Stevenson MD, Macias CG, Mittal MK, Bachur RG, Bennett JE, Sinclair K, McMichael B, Dayan PS;
Economic Analysis of Diagnostic Imaging in Pediatric Patients With Suspected Appendicitis.
Pediatric Emergency Medicine Collaborative Research Committee of the American Academy of Pediatrics.
Acad
Emerg
Med. 2018 Jul;25(7):785-794.
Slide41Model AssumptionsFormula: (Number of imaging claims/number of member months) * 12000Interpretation
Measures relative usage of imaging among insured population
Slide42Reduced ImagingAmong children in TCPi participating clinics for which Molina provided dataNumber of images (PET/CT/MRI) performed in Year ending:June, 2016: 610June, 2017: 532
June, 2018: 510
Slide43Reduced Imaging - ResultsPercent of reduced imaging procedures consistent with recommendationsInitial estimates assuming all images are potentially avoidableValue for cost per imageStatewide average for abdominal CTs of varying contrast
$862.88
Year over year cost savings for Molina clinics:
2016 – 2017: $67,304
2016 – 2018: $18,983
Year over year cost savings statewide2016 – 2017: $ 448,6972016 – 2018: $ 126,555
Slide44Reduced Imaging - DiscussionLower baseline levels in the year to year assessment will reduce the perceived cost savings from lower high end pediatric imagingWe assumed that all advanced imaging among children are avoidableA final assessment would rely on clinical data to which we did not have access
Slide45ConclusionsOur analyses did not include the cost of the initiative so savings resultsThe greatest opportunity for lower costs will come from reduced unnecessary or avoidable proceduresProcess improvements are often more difficult to find savings because - as in most industries – quality, at least in the short run, is cost increasing
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