Tough Choices: Values, Costs & Efficient Allocation to Improve - PowerPoint PPT Presentation

Tough Choices: Values, Costs & Efficient Allocation to Improve Quality

Welcome

Value and efficiency in health care: defining what we mean Stirling Bryan, PhD Director, Centre for Clinical Epidemiology & Evaluation, VCHRI Professor, School of Population and Public Health, UBC www.c2e2.ca

Overview • Introduction to economics – Or ‘How dismal is the dismal social science?’ • What do we mean by ‘value’? • Efficiency in health care – ‘Technical’ versus ‘Allocative’ – Marginal analysis 4

Background • Central problem addressed by the discipline of economics: – Resource scarcity • Central concept is ‘opportunity cost’: – The value of the benefits forgone by choosing to deploy resources in one way rather than in their best alternative use 5

‘Value’ in health care 6

‘Value’ in health care ‘In health care, the overarching goal for providers, as well as every other stakeholder, must be improving value for patients, where value is defined as the health outcomes achieved that matter to patients relative to the cost of achieving those outcomes.’ Porter & Lee (2013) 7

And, in our continuing effort to m inim ize surgical costs, I ’ll be hitting you over the head and tearing you open w ith m y bare hands. 8

Efficiency definitions • Technical efficiency – Are we doing it right? • Allocative efficiency – Are we doing the right things? • Marginal analysis – Are we doing too much (or too little)? 9

Technic ical al E Effic icie iency: pr producin ing the m max axim imum possible o e output f from the i e inputs u used ed This is ‘efficiency in production’ - largest possible outputs from given inputs - or, smallest possible inputs for given outputs 10

Technical Efficiency Programs to treat 100 people • Which program(s) can with depression be ruled out because of Hours of Drug therapy technical inefficiency? Program CBT doses A 2500 200 B 1500 250 C 1500 300 D 500 600 11

Technical Efficiency Programs to treat 100 people with depression Hours of Drug therapy Total program Program CBT doses cost A 2500 200 $304,000 B 1500 250 $185,000 C 1500 300 $186,000 D 500 600 $72,000 CBT = $120/hour Drugs = $20/dose 12

Cost-effectiveness plane Cost Difference A Output Difference B C D 13

Evaluating the Cost-Effectiveness of Fall Prevention Programs that Reduce Fall-Related Hip Fractures in Older Adults Journal of the American Geriatrics Society Volume 58, Issue 1, pages 136-141, 4 JAN 2010 DOI: 10.1111/j.1532-5415.2009.02575.x 14 http://onlinelibrary.wiley.com/doi/10.1111/j.1532-5415.2009.02575.x/full#f1

Allocative efficiency 15

Opportunity cost when it matters • Competing claims on health care resources: – Helicopter ambulance – Heart surgery – Hip replacement • What is the opportunity cost of purchasing a new helicopter ambulance? 16

Cost-effectiveness plane Drummond, et al. 2005. Methods for the economic evaluation of health care programmes : Oxford University Press 17

Cost Difference Effect Difference 18

The Time Investment Model Ovretveit, J. 2000. “The economics of quality--a practical approach.” Int J Health Care Qual Assur Inc Leadersh Health Serv 13(4-5): 200-7 19

Marginal analysis How much safety do we really want in health care? 20

Cost of safeguards and errors Warburton RN (2005) Patient safety — how much is enough? Health Policy 71(2):223–232 21

Summary • Value – Health outcomes that matter to patients relative to the cost of achieving those outcomes • Technical efficiency – Are we doing it right? Can we avoid throwing dollars down the toilet? • Allocative efficiency – Are we doing the right things? Hips, hearts, helicopters, falls prevention? • Marginal analysis – Are we doing too much (or too little)? How much safety do we really want? 22

Pre-forum survey Q4: Biggest savings to be had 60 50 40 30 20 10 0 Allocative efficiency Technical efficiency 23

Welcome & Opening Remarks 24

BC Healt alth T Technolo logy R Revi view: ew: Capturi ring Value ue f from H Health Technolo logies gies i in Lean an T Times Mar arc P Pelle lletie ier, F Fraser He Heal alth Kevin in S Samra, a, M Minist istry o of Healt lth http:/ ://www.h .health.g .gov.b .bc.c .ca/htr/

Purpose Today: 1. Outline the rationale for more aggressive, formal, objective HTA; 2. Outline our approach thus far in BC; 3. Speculate on the future.

Health Technology Review  Not new, but rising in prominence in most health systems;  Reflective of the relative success of managing pharmaceuticals through a more objective process;  Reflective of financial context.  Reflective of the critical need to more aggressively pursue value:  Effectiveness, Utility --- at both an individual and societal level.

Why focus on Non-drug Technologies?  38% of the change in healthcare spending in Canada over the period from 1996-2008 was due to technology change.  $5 billion dollars of the increase was due to drugs, while $23 billion (82%) due to non-drug sectors

Why focus on Non-drug Technologies?  Growing recognition of the:  Low value of many technologies;  Potential for unintended impacts of technologies;  Opportunity costs in fixed budget;  Variation in decision making across Hospitals and HAs

BC Health Technology Review  Established in 2011/2012  A process for making evidence-informed recommendations about public coverage of new non-drug, non-IT health technologies.  MOU committing to the process signed by all health authority CEOs

Making Choices “3T technology is the undisputed king of MRI”

Development of the HTR  Leadership Council initiated discussions on the need for a consistent process to assess emerging technologies in 2009  MOU signed in November 2011  Industry and patient consultations were carried out in September 2012  The first business case was reviewed in January 2013

Process Rationale Process Objectives   Support timely, evidence- No transparent, centralized process for non-drug health informed decision making technology coverage decision- about public provision making; dispersed, ad hoc  Efficiently allocate limited market entry health care funds in a fair,  A gap between evidence of equitable and transparent effectiveness and Health process Canada’s licensing based on safety  Review technologies that  An opportunity to balance reflect health authority and improving health outcomes with population needs the need to constrain health care costs

Why do we need an evidence informed process?  Dr. Google  Zamboni treatment - Millions spent on research worldwide  Physician Preference Items  Physician owned distributorships 34

Why do we need a process? 35

Non-Drug Technologies in Scope  New technologies used in direct patient care, screening or diagnosis; generally hospital based  Threshold of $25,000 per patient or $1,000,000 across the province  Screening criteria are described further in the Expression of Interest form  Deputy Minister of Health or Leadership Council can request that any technology be reviewed 36

Triple Aim and the HTR 1. Improving the patient experience of care (including quality and satisfaction); 2. Improving the health of populations; and 3. Reducing the per capita cost of health care. The HTR considers all of the above factors 37

Vision of the HTR Health technologies in the province are assessed in a coordinated and consistent manner informed by the available evidence, to help ensure citizens of British Columbia receive the best health care that the province can afford. 38

Role of HTAC  Provide recommendations to senior health executives on the uptake, diffusion, distribution or removal of non-drug health technologies.  Evaluate high budget, disruptive technologies with significant patient or system impact that are candidates to be diffused across health authorities.  Ensure that the use of ineffective, wasteful, or obsolete technologies are minimized and effective technologies that provide value for money are diffused into the system. 39

Business Case Components Overview of CADTH clinical condition & and cost technology; effectiveness jurisdictional scan report Value Criteria Costs Non-Scored Implementation Criteria Factors

Decision-Making Framework  Value (Scored and Weighted) Criteria  Health benefits  Non-health benefits  Condition severity  Environmental impact  Costs  Incremental costs and savings  Budget impact  Implementation costs  Sector costs 41

Reassessment in BC  Leadership Council directed HTAC to develop an initiative aimed at reviewing health technologies already diffused within the health system in November 2013.  A review of the existing literature on reassessment undertaken.  Draft framework completed and approved by LC.  Consultations with provincial agencies and committees are being initiated. 42