The Value of Investment in Health Care

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The Value of Investment in Health Care

• Better Care, Better Lives

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The increase in health spending is a frequent
topic of debate
U.S. Health Care Expenditures per Person (2000
U.S. )
Source Health United States 2002, Consumer
Price Index (All Items)
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but the value of this investment is seldom part
of the discussion.
CBO Issues Warning on Rising Health Care Costs
Senate Republicans in Albany Eye Big Medicaid Cuts
Medicare Revamp Fails to Cure Angst Over Costs
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New evidence finds our nations health care
dollars are well spent.

• Overall, each additional health dollar spent
  produced a return of 2.40-3.00 in
• Deaths avoided
• Increased longevity
• Advances in care have improved outcomes and
  quality of life in common diseases
• Heart attack
• Type-2 Diabetes

• Stroke
• Breast cancer

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Experienced Research Team

• MEDTAP International global health services
  research firm
• Bryan R. Luce, Ph.D., M.B.A
• Founder, Chairman, MEDTAP International
• Former Director, Office of Research and
  Demonstrations, US Health Care Financing
  Administration
• Frank Sloan, Ph.D.
• Director, Center for Health Policy, Law and
  Management, Duke University
• Josephine Mauskopf, Ph.D.
• Global Director of Health Economics, RTI Health
  Solutions

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Multi-faceted Research Approach

• Overall value of investment 1980 to 2000
• Dollar value of gains in annual population health
  outcomes versus
• the increase in annual health care expenditures
• Focus on four common diseases Heart attack,
  type 2 diabetes, stroke, and breast cancer
• Advances in care
• Improvements in outcomes
• Overall value of investment for the Medicare
  population
• Value of specific medical breakthroughs

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Conservative Estimates

• Estimates of value
• Value of gain of 1 year of life 100,000
• Value of less disability and increased
  productivity not in overall estimate
• Benefits and harms of non-health care changes
  even out

Source Nordhaus (2002), Blomquist (2001) e.g.
smoking, obesity, exercise, environment
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Overall Value of Investment Findings

• Since 1980, per capita expenses are up 2,254,
  but
• Overall death rate is down 16
• Life expectancy from birth is up by 3.2 years
• Disability rates are down 25 for people over 65
• 56 fewer days are spent in the hospital

Health gains of 2.40 to 3.00 per dollar
invested
Value of this improvement not quantified.
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Overall Value of Investment Findings
470,000 more deaths
Where would we be in 2000 without healthcare
advances?
2.3 million more disabled persons
2254 per capita in savings
206 million more days in hospital
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Findings Four Common Diseases

• Heart attack
• Type 2 Diabetes
• Stroke
• Breast Cancer

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Why these four?
U.S. Population Affected by Conditions Studied,
in millions, 2003

• Common conditions
• High disability and death rates
• Nearly all at risk for one of these diseases
• Medical breakthroughs have improved outcomes
• Value of investment not documented

Source American Heart Association
www.diabetes.org www.cdc.gov/nchs
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Heart Attack
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Heart AttackAdvances in Care

• Improvements in drug therapy
• Blood flow restored more quickly (clot-busters)
• Blockages better prevented (anti-platelets,
  cholesterol lowering drugs)
• Advances in surgical techniques
• PTCA reopens arteriesmore effective, less
  invasive
• Stents keep blood vessels open
• Advances in diagnostic technologies
• Electrocardiograms and diagnostic imaging provide
  more rapid, precise diagnoses

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Heart AttackAdvances in Care

• In the 1970s
• 5-7 days in critical care 3-4 weeks in general
  ward
• Complete bed rest for several weeks
• Minimal understanding of risk factors/ preventive
  measures

• Today
• Total hospital stay of 5-7 days
• People up and around within days
• Key risk factors like cholesterol and
  hypertension are routinely managed

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Heart AttackImprovement in Outcomes
Death Rate Due to Heart Attack (Age-adjusted,
per 100,000)

• Mortality cut nearly in half
• Death within 30 days cut from 1 in 4 to 1 in 8

Source www.cdc.gov/nchs
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Costs and Outcomes for Medicare Heart Attack
Patients
Value of improved outcomes (12 gain in life
expectancy) --minus--
Increase in treatment costs (Medicare plus
out-of-pocket) Net benefit in dollars
28,632 26,093 2539
Value of 1.10 per dollar invested
Five-year costs 1985-1989 versus 1995-1999,
Medicare plus out-of-pocket Source Analysis of
Medicare Part A and Part B and National
Long-Term Care Survey data (1982-2000)
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Heart Attack Value of Specific Medical
Breakthroughs
Breakthroughs vs. Current Standard
Treatment Range in Value per Dollar Invested

• Beta-blockers
• Mobile coronary care units
• Statin therapy
• Angiography
• Rt-PA
• Angioplasty w/stenting

Source Published literature
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Type 2 Diabetes
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Type 2 DiabetesAdvances in Care

• Improvements in drug therapy
• Insulin therapy lasts longer and is more
  convenient
• New classes of drugs with fewer side effects
• Advances in diagnostic technologies
• Hemoglobin A1c testing and glucose monitoring
  kits allow more accurate, less invasive readings
• Advances in surgical techniques
• Laser surgery and vitrectomy procedures treat eye
  disease
• Dialysis and transplant surgery lengthen and
  improve life

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Type 2 DiabetesAdvances in Care

• In the 1970s
• Insulin agents short-acting inconvenient dosing
  schedules
• Frequent needles sticks to test glucose levels
• Limited understanding of need to control blood
  pressure and cholesterol
• Limited treatment options for complications

• Today
• More effective options for insulin long acting
  and more convenient
• Glucose tests without puncturing the skin
• Better management of all aspects of disease
  reduces chances of complications
• Surgical options for diabetic eye and kidney
  disease improve quality of life

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Type 2 DiabetesImprovement in Outcomes

• Advances support tight management of disease
  better outcomes
• Tight glucose control decreases mortality by 10,
  complications by 25
• Tight blood pressure control decreases mortality
  by 32, heart failure by 56, stroke by 44
• Gains in employment and productivity with drug
  therapy to manage disease

Higher incidencelinked to increased rates of
obesityhas led to increased mortality rates
(up 39) eye, kidney, and nerve disease
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Costs and Outcomes for Medicare Type 2 Diabetes
Patients
Value of improved outcomes (7 gain in life
expectancy) --minus--
Increase in treatment costs (Medicare plus
out-of-pocket) Net benefit in dollars
16,930 11,337 5,593
Value of 1.49 per dollar invested
Five-year costs 1985-1989 versus 1995-1999,
Medicare plus out-of-pocket Source Analysis of
Medicare Part A and Part B and National
Long-Term Care Survey data (1982-2000)
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Type 2 Diabetes Value of Specific Medical
Breakthroughs
Breakthroughs vs. Current Standard
Treatment Range in Value per Dollar Invested
36.00

• Tight control of glucose, blood pressure, and
  cholesterol
• Statins
• Ace inhibitors
• Screening and treatment of diabetic retinopathy

Source Published literature
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Stroke
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StrokeAdvances in Care

• Improvements in drug therapy
• Blood flow restored more quickly (clot-busters)
• Better-tolerated, more effective drugs to control
  blood pressure
• Advances in surgical techniques
• PTCA reopens arteriesmore effective, less
  invasive
• Carotid endarterectomy clears plaque in carotid
  arteries
• Advances in diagnostic technologies
• Improvements in brain imaging, such as weighted
  imaging, magnetic resonance angiography

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StrokeAdvances in care

• In the 1970s
• Treatment options limited disability rates high
• Typical discharge to nursing home
• Limited diagnostic technologies
• Limited surgical options for prevention

• Today
• With rt-PA more stroke victims resume normal life
• Acute and subacute rehabilitation widely
  available
• New imaging technologies offer faster more
  precise diagnosis
• Carotid endarterectomy and implanted microcoil
  devices can prevent stroke

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StrokeImprovement in Outcomes
Death Rate Due to Stroke (Age-adjusted, per
100,000)

• Mortality cut by 37 percent
• Faster diagnosis
• Stroke-related disability after 3 months reduced
  by up to 30 percent with rt-PA

Source www.cdc.gov/nchs
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Costs and Outcomes for Medicare Stroke Patients
Value of improved outcomes (10 gain in life
expectancy) --minus--
Increase in treatment costs (Medicare plus
out-of-pocket) Net benefit in dollars
24,903 16,035 8,868
Value of 1.55 per dollar invested
Five-year costs 1985-1989 versus 1995-1999,
Medicare plus out-of-pocket Source Analysis of
Medicare Part A and Part B and National
Long-Term Care Survey data (1982-2000)
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Stroke Value of Specific Medical Breakthroughs
Breakthroughs vs. Current Standard
Treatment Range in Value per Dollar Invested

• Clopidogrel
• Ticlopidine
• rt-PA
• Carotid endarterectomy

Yields a savings in treatment costs
Source Published literature
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Breast Cancer
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Breast CancerAdvances in Care

• Improvements in drug therapy
• Adjuvant chemotherapy more tolerant, less toxic
• Better-tolerated hormonal treatments
• Advances in surgical techniques
• Breast-conserving surgery
• Less-invasive biopsy
• Advances in diagnostic technologies
• Earlier diagnosis

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Breast CancerAdvances in Care

• In the 1970s
• Chemotherapy required hospitalization
• Chemotherapy poorly tolerated
• Mastectomies were the norm
• Few drug therapies existed
• Mammography not in widespread use

• Today
• 90 of chemotherapy is outpatient
• New drugs reduce nausea
• Breast conserving surgery performed with
  reconstruction
• New drugs offer higher cure rates and less
  toxicity
• Routine mammography leads to earlier diagnosis

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Breast CancerImprovement in Outcomes

• Mortality cut by 21 percent
• Five-year overall survival rates increased from
  76.9 to 86.6
• Risk of developing metastatic disease declined
  from 40 to 15

Death Rate Due to Breast Cancer (Age-adjusted,
per 100,000)
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Costs and Outcomes for Medicare Breast Cancer
Patients
Value of improved outcomes (8 gain in life
expectancy) --minus--
Increase in treatment costs (Medicare plus
out-of-pocket) Net benefit in dollars
22,341 4,676 17,665
Value of 4.80 per dollar invested
Five-year costs 1985-1989 versus 1995-1999,
Medicare plus out-of-pocket Source Analysis of
Medicare Part A and Part B and National
Long-Term Care Survey data (1982-2000)
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Breast Cancer Value of Specific Medical
Breakthroughs
Breakthroughs vs. Current Standard
Treatment Range in Value per Dollar Invested
36.81

• Letrozole
• Breast-conserving surgery
• Biennial mammography
• Adjuvant chemotherapy
• Stereotactic core biopsy

Source Published literature
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Policy Recommendations

• HHS should include a measure of health benefits
  gained in its annual report on health care
  spending
• Further study is needed on the role of innovation
  in improving health
• Employers and health care providers should
  account for the benefits of a healthier workforce
• Discussions of coverage for uninsured should
  consider value of investing in health care for
  all Americansnot just the costs