With The Passage of Health Reform, How Many Dollars Are Being Used To Save A Life?

In the tumult leading up to the passage of health reform, one of the more compelling arguments used by supporters was that the lack of insurance was leading to the death of 'hundreds of thousands' of Americans. In the dust-up followed over just how studies like this, this and this should be interpreted, the rhetoric dipped into research methodology while the Disease Management Care Blog's liberal colleagues scored points with some 'you-have-blood-on-your-hands' political jabs.

After all, it was hard to argue with the research. The studies showed a very strong association between the lack of health insurance and mortality that could not be explained by any other sources of known bias. Proponents of the Democrats' plan correctly argued that prospective clinical trials on health insurance would be unethical and take too long. Instead, anecdotes, experience, common sense and a judgment about the reasonableness of the association was good enough to argue that lives were at stake.

The DMCB supports the use of that type of reasoning. It should be similarly applied to assessing the strong association between population-based disease/care management and insurance cost savings.

But that's not the purpose of this post. Now that health reform is the law of the land and we have a credible cost analysis, your intrepid DMCB is willing to tread where few will go. It asks if the price tag of $940,000,000,000 is worth spending to save 'hundreds of thousands' of persons' lives. A quick calcuation says that's $94 billion a year to save 22,000 persons a year who, but for lack of insurance, die every year. That works out to $4,272,727 per person. If the DMCB highballs the lives saved without including other costs alledgly not included in the health reform bill, it's $2,088,888.

The DMCB will be the first to point out that that figure doesn't tell the whole story. In addition to lives saved per single year, there are the additional years of life expectancy minus the additional cost of caring for survivors plus tax revenues from their gainful employement. There are also many lives improved, including fewer complications from treatable disease and increased quality of life, minus lives lost with better (albeit questionable) access to health care. In addition, expansions in health care seem to lead to additional demand, which indirectly but significantly increases cost. Finally, there is the time value of money. Reconciling all of that would require some high octane health services research using dollars per quality adjusted life year. That's currently out of the DMCB's reach.

But it does raise an important point about health reform. While it has considerable benefit, it also comes at a significant cost. That has little meaning to individuals and their families who are confronting life threatening disease, but Americans and their elected representatives (i.e., the ones who, effective March 23, 2010, are now apparently responsible for running the health care system) will need to continually ask if we are getting our money's worth. Prior to the advent of health reform, $100,000 per year life saved was considered reasonable. The DMCB thinks that with the hundreds of billions of dollars going into health reform, we just decided, as a society, that $100,000 is not enough. We're willing to spend more - a lot more.

Last thought: there is no right or wrong answer to the number of dollars that should be spent to save one year of life, to save failing schools, increase employment, reverse failed nation-states, shore up our financial system, keep the sea lanes open, enable home ownership, preserve our infrastructure and resurrect our manufacturing base. The DMCB has personally presided over the consumption of hundreds of thousands of dollars in the care of its patients. Unfortunately, however, no matter how well intentioned we are about the many needs out there, other considerations that are outside of our direct control are looming.

That may force us to reconsider things in the not too distant future.

Spandex, Pounds, QALYs Rationing and Health Reform.

Years ago, the young and impressionable Disease Management Care Blog was struck by the appearance of a decidedly overweight person clad in tight spandex. An insightful friend remarked the appearance reminded him of 50 lbs. of potatoes in a 40 lb. bag. That summed things up pretty well.

And so it also is for Washington DC's attempt to offer a generous public insurance health benefit inside of a limited budget. Writing in this week's New England Journal of Medicine, Drs. Baiker and Chandra review the numbers and the politics of Uncomfortable Arithmetic - Whom to Cover versus What to Cover. While it could be argued that we have a) a moral obligation and/or b) a long term return on investment to be gained from covering 'everyone,' the authors point out that a) there is only so much Federal budget and b) covering everyone for everything is a poor use of money.

Given this uncomfortable reality, the authors argue that a more rational approach may be to ration low 'value' care by promoting the coverage of services that lead to a) higher numbers or b) higher quality years life gained at an attractive cost (a figure in Table 2 quotes $100,000 per year of additional high quality life expectancy).

If you're saying 'uh oh, QALYs again?' you're right. While these are simply mathematical expressions of the trade-offs we intuitively make when we're thinking about gains in life expectancy ('how much time, doc?') and the quality of those years (will I be able to get out of bed and walk?), the authors in this essay argue their use will become unavoidable. It may be rationing, but 'we will have to engage in the difficult discussions required to choose whom and what our public insurance programs should offer.'

The DMCB gets the argument but doubts this will gain much ballast outside the medical academosphere. There are two issues at play:

1) There doesn't appear to be much disagreement over the ultimate need to 'ration.' Rather, the authors' premise is that everyone agrees rationing should ultimately be a function of some enlightened and dispassionate public entity. Disagreeing with that assumption, a significant number of our citizens and policy experts would argue that rationing is better handled by an unfettered market. That perspective can be summed up by the proposals to regulate a stripped down minimum benefit designed to prevent bankruptcy and leave it up to insurers and providers to compete (across State lines) for the consumers' to 'buy up.' Vouchers could be used to help persons afford a plan that exceeds the minimum.

2) The current bevy of Congressional Committee Chair Barons are unlikely to countenance No. 1, above, so the DMCB offers up another reason to doubt that Drs. Baicker and Chandras' perspectives will ever see the light of day: voters don't understand the numeracy of researchy trade-offs in years, quality and dollars. What's more, Tea Party-like activists will quickly seize on their obtuseness to fashion even more rhetorical poison. The Committee Chairs may be insulated from this, but the rank and file members of Congress are looking at the 2010 elections with an increasinly grumpy electorate.

Most regular persons understand that more spandex is no substitute for losing weight or having too many potatoes for too little bag. While it may be a minority of voters who believe that it's up to individuals to figure out how to lose weight (arugment number 1), a majority are unlikely to have patience with the ratios of how much spandex is necessary to adequately contain a certain amount of girth and pounds.

*Image from Wikipedia

Disease Management: Return on Investment or Value?

In yesterday’s post, the Disease Management Care Blog ended with an observation that maybe, just maybe, ‘disease management’ may not save money. That apostasy is the bad news. The good news is that disease management may represent a great deal for the average health care dollar.

Just how does one dollar-ize the value of one point drop in A1c versus coronary artery stenting versus a mammogram? Like it or not, it comes down to the gain of additional years of life and the quality of life in those years, both of which can be reconciled and combined in a single measure called ‘quality adjusted life years’ or ‘QALYs.’ The DMCB recognizes that getting a brain wrapped around the concept of a QALY can be mind numbing for average purchasers, politicians, consumers, providers, practitioners, but it can be really handy once you get the hang of it.

And readers of the DMCB may want to get the hang of it. That’s because of interest in an autonomous ‘federal health board’ by the U.S. Senate Finance Committee and Congressional Budget Office as well as by the Federal Reserve. While the details of how such a politically insulated body would function is still unknown and if the concept survives Congressional and Presidential scrutiny, it is possible that it would use some measure of longevity and quality of life metrics to recommend and/or adjudicate health care coverage options for the Medicare and Medicaid programs. Commercial insurers would probably fall in line.

For an example of how QALYs can be used to prioritize the use of health care resources, check out this article that shows hypertension control among persons with diabetes saves money, while blood glucose control results in better quality/longevity but at an increasing cost that depends on age. The DMCB is aware that ridding the system of unwarranted variation, waste, defensive medicine and fraud could help pay for hypertension AND blood glucose control, but that’s not the point. The point is that BP control, blood glucose control and cholesterol control among persons with diabetes costs, on average, between –negative $1959/QALY to $51,000/QALY – which represents great value whether there is or isn’t variation, waste or fraud. If versions of disease management can deliver those outcomes at these or even lower prices, its future under a 'Health Fed' will be assured – even if it doesn’t save money.

Coronary artery stents may represent another particularly attractive deal in terms of the money spent per unit of life and quality, but also note no one is arguing that coronary artery stents ‘save’ money. They deliver value. In contrast, check out the value of admittedly more accurate but also pricey digital mammography. It does a better job of detecting cancer but is the price worth it?

Bob Stone of Healthways has it right in this recent editorial appearing in Disease Management. His recommended third approach of assuring access to optimized evidence-based care makes a lot of sense, assuming the evidence not only points to effectiveness but cost-effectiveness. If a Health Fed comes to pass, the population health industry can be confident that the outcomes it delivers at its prevailing fees for A1c and BP control in chronic illness will pass muster without having to contend with notions of ‘return on investment.’

If the DMCB was developing strategy on behalf of the disease management vendors with paid lobbyists, it'd be pushing an independent federal agency that aggressively and objectively evaluates the cost-effectiveness of health care interventions. And if 'Health Fed' legislation actually gained momentum, the DMCB would advise investors to go long on the industry.

Does Preventive Care Save Money? QALYs, New England Journal and what it means for population health

According to a very interesting article in the New England Journal of Medicine, candidates for U.S. President are naively assuming that increased health care quality will translate into bazillions of dollars of savings that will reduce health care costs and lead to lower health insurance premiums, longer healthier lives, increased productivity, economic expansion, diversion of resources to combat global warming, cleaner dirt, less heinousness and being excellent to each other. I share Bill and Ted’s style of optimism, so I was a more than a little disappointed in this whoa, wait-a-minute, not-so-fast reality check.

The Journal’s analysis was based on the obscure notion of QALYs. Like many readers of the disease management blog, I also struggle with the concept. So, I made obeisance at the altar of the great and powerful medical terminology and created my own cairn of explanation. If you can get past it, the disease management blog offers some additional thoughts on what this means for the field of population-based health care.

“Quality Adjusted Life Years” are abbreviated as “QALYs.” If you are in perfect health for one year, congratulations, you are the owner of one QALY. You are well on your way to achieving that Holy Grail of Long Life as defined by health services researchers: 100 QALYs.

Suppose, however, that your health is less than perfect for one year. Under the QALY system, the value of that decreased quality can be mathematically described as a fraction of one QALY. This makes sense: being disabled for a year is less valuable than being in good health for a year. Defining that fraction can be arbitrary but lower the health status, the lower the QALY.

This coin of the realm is usually calculated in terms of trade-offs: if you lived longer (more years) but at decreased health (disability), how many extra years would it take to equal the value of one year of perfect health? For example, if you became blind in exchange for living longer, how much longer life would you demand in exchange? It may be that it would require another ½ year. So, 1.5 years of being blind is just as “valuable” as 1 year of perfect health. The inverse (mathematically expressed as a reciprocal) may put it into better perspective (pun intended): being blind but in otherwise good health for a year is worth 1/1.5 or .66 QALYs. Being blind shaves off 1/3 of the quality of life.

As I understand it, QALYs are determined by conducting surveys and asking people to hypothetically “trade” longevity in exchange for decreased quality. It can appear silly, but the good thing about QALYs is that this system levels the playing field and allows researchers to compare and contrast the benefit of different treatments for different illnesses. For example, which results in more QALYs for men age 70?: prostate surgery for treatment of prostate cancer or performing bypass surgery for angina?

You can also toss in the cost. Returning to the blindness example above, if there were a treatment that could avoid the blindness that cost $100, that would work out to $100/.33 QALYs or $300 per additional QALY. It can be far more complicated than that (you have to carry the math out over a person’s life expectancy and factor in the cost of inflation for example) but hopefully you get the point.

Note that the calculation of QALYs implies that greater quality comes at a price. It is possible to have an intervention that simultaneously reduces cost and improves health. For example, flu shots decrease costs and improve health, so the QALY calculation breaks down. It’s “less” than $0 per QALY

Check out this example from JAMA from back in 2000. Eye screening for persons with diabetes resulted in 3 to 21 days (a fraction of a year) of sight. When calculated on a per QALY basis, the amount of money spent was calculated to range from just of $40,000 per additional QALY to over $200,000.

If may interest you to know that the cost of hemodialysis is about $50,000 per QALY gained. That has become a benchmark. If an intervention costs more than $50,000, that could be considered “expensive.” For an excellent discussion of the conundrum around this, check out this commentary.

According to the party poopers in the New England Journal of Medicine, if one uses dollars per QALY to scrutinize the candidates’ rhetoric, “the vast majority” of medical interventions generally regarded as quality translate into more dollars of cost for every QALY gained. This includes screening for diabetes and high blood pressure

What does this mean?

Unfortunately, it is too easy to just read the headline and conclude “prevention doesn’t work.” Trying to overcome that by putting the authors use of $/QALYs into perspective doesn’t really overcome the damage. That being said, here are some points that I think should be kept in mind:

• $/QALY are not used by patients and their doctors in the real world of clinical practice, so using $/QALY to assess their decision making doesn’t add a lot of insight. In other words, researchers should use whatever metric is being used by patients in their decision making.
  

• Ditto insurers. They live by the medical loss ratio and actuarial trend.

• QALY models are subject to lots of assumptions, especially at the lower ends of the QALY scale. If a person moves from one level of burden from a chronic illness to another level, QALY’s may not adequately portray the trade off. It’s less useful in chronic illness.

• Societal decision-making on the value of medical interventions is based on far more inputs than QALYs For example, breast cancer screening for all women age 40-80 years can cost $58,000/QALY. We still think it’s a bargain. The calculus is far more sublime.

• The $ numerator is often standardized without accounting for the cost efficiencies that are possible through disease management programs that promote self-care or alternative levels of care (for example, nurses).

• The QALY denominator fails to take into account the added quality from having a greater sense of control over disease as well real value that patients place on their relationships/community with the healthcare team.