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PART II Value Added Care: Costs and Charges – Where to Begin? Dmitry Dukhovny, MD MPH Instructor...
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Transcript of PART II Value Added Care: Costs and Charges – Where to Begin? Dmitry Dukhovny, MD MPH Instructor...
PART IIValue Added Care:
Costs and Charges – Where to Begin?
Dmitry Dukhovny, MD MPHInstructor in Pediatrics, Harvard Medical School
Neonatologist, Beth Israel Deaconess Medical Center QI/Teaching Value Curriculum
February 12, 2013
Acknowledgment
Carl J. Shapiro Institute for Education and Research at BIDMC
John Zupancic DeWayne Purlsey Jane Smallcomb EPIC – Economics in Perinatalogy
Investigators’ Collaborative
Conflicts of Interest
I have no conflicts of interest
Agenda
PART I November 27th, 2012– Basics and Definitions of Cost-Effectiveness
Analysis– Choosing Wisely Approach
PART II February 12th, 2013– Costs and Charges: Where to Begin?– Case discussions/costing excercise
Objectives
1. To understand the key components of costs in an economic evaluation
2. To review local and national sources for costs
Game of Numbers
$2.8 trillion
20%
$360 billion
$800 billion
$24.3 billion
Annual US Health Expenditure
% of GDP by 2021
Annual administrative costs
Annual waste/inefficient care
Cost of the Big Dig
http://www.wbur.org/2012/07/12/7-things-that-cost-less-than-the-big-dig
How can we can Neonatology more efficient?
1. Decrease cost
2. Improve or not change quality
3. Don’t push anything off to someone else (e.g. PICU, primary care, family)
-will avoid the issue of causing problems later in life by not doing anything about it now (i.e. delayed diagnosis)
David Cutler, BIDMC Epi confernece 2/7/2013
What can you do to reduce the demand for
Neonatologists?
David Cutler, BIDMC Epi confernece 2/7/2013
International Health Care Spending: 1980-2007
Note: $US PPP = purchasing power parity.Source: Organization for Economic Cooperation and Development, OECD Health Data, 2009 (Paris: OECD, Nov. 2009) (from the Commonwealth Fund: “Mirror Mirror on the Wall” June 2010 Report).
Commonwealth Fund 2010 Report
Ideas from Choosing Wisely Discussion
Cardiac Evaluations
24 hour electrolytes
Hypoglycemia Management
SPR Workshop: Dollars and SPR Workshop: Dollars and Sense Sense
CONSEQUENCCONSEQUENCEE
COSCOSTT
© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic
SPR Workshop: Dollars and SPR Workshop: Dollars and Sense Sense
Cost-Effectiveness Study
Cost-Effectiveness = Costs of Treatment A – Costs of Treatment B
Effects of Treatment A – Effects of Treatment B
© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic
SPR Workshop: Dollars and SPR Workshop: Dollars and Sense Sense
Framing: Perspective
Whom do the decision makers care about?– Society– Government– Third party payer– Hospital/Accountable Care Organization– Patient/Parent
© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic
SPR Workshop: Dollars and SPR Workshop: Dollars and Sense Sense
Framing: Time Horizon
Over what period are costs and effects measured?
© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic
SPR Workshop: Dollars and SPR Workshop: Dollars and Sense Sense
Time Sequence
Time
Costs
00
Start-up costs
Include if investment required
Initial Intervention Costs
Future Costs
Include intervention related costs, induced costs, averted costs
© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic
SPR Workshop: Dollars and SPR Workshop: Dollars and Sense Sense
Types of Resource CostsHealth Care Related Costs
– Direct Medical Costs Variable: Drugs, personnel, tests Fixed: Land, equipment
Non-Health Care Related Costs– Direct Non-Medical Costs
Child care, parking, meals, gym membership
Productivity Costs – “Absenteesim”
Work absence of family or patient due to illness
– “Presenteeism” Decreased productivity of family or patient due to illness
– Employment choices due to condition (eg CP)© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic
Behavior of the Various Cost Layers in the Health Care System.
Rauh SS et al. N Engl J Med 2011. DOI: 10.1056/NEJMp1111662
SPR Workshop: Dollars and SPR Workshop: Dollars and Sense Sense
Which Costs Should Be Included?
FramingPerspectiveTime Horizon
Include all goods and services that may change because of the intervention
© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic
SPR Workshop: Dollars and SPR Workshop: Dollars and Sense Sense
Perspective
Health Care
Related
Non-Health Care
Related
Productivity
Society + + +
Government + - +/-Third party payer + - -
Hospital + - -Patient - + +
© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic
SPR Workshop: Dollars and SPR Workshop: Dollars and Sense Sense
Valuing Resources
Opportunity Cost Functioning Market
– Simple: the cost is whatever is paid BUT, market assumptions often violated
Pricing of drugs while under patent Prices set administratively Charges ≠ costs
© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic
SPR Workshop: Dollars and SPR Workshop: Dollars and Sense Sense
Measuring Costs
Bottom Up Micro-Costing
– Sum of labor and non-labor inputs
– Potentially more precise
– Burdensome– Sensitive to site
specific details
Top Down Gross-Costing
– Diagnosis Group– Per diem – Less accurate– Simple– More generalizable
© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic
SPR Workshop: Dollars and SPR Workshop: Dollars and Sense Sense
Perspective
Whom do the decision makers care about?– Society– Government– Third party payer– Hospital/Accountable Care Organization– Patient/Parent
© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic© 2012 Dukhovny, Lorch, Profit, Kamholz, Zupancic
Costing Pitfalls
Costs ≠ Charges– Charges are inflated 50-300+ % of true costs– Costs ≠ Payment (perspective)
Validity of Sources Numbers from different years
– Convert costs to 1 yr/1 currency
Sources for Costs
Local Administrative Data– Patient Billing Forms (UBO4)
Regional/National Administrative Data– Kids’ Inpatient Database (KID)– Pediatric Health Information System (PHIS)– MA (http://hcqcc.hcf.state.ma.us/)
PHIS EXAMPLE
Berry et al, JAMA 305 (7), 2011
Readmissions within 365 days
Berry et al, JAMA 305 (7), 2011
KID EXAMPLE
Patrick et al, JAMA 307 (18), 2012
Increased NAS Admissions:2000 to 2009
Patrick et al, JAMA 307 (18), 2012
Increased NAS Admissions:2000 to 2009
Patrick et al, JAMA 307 (18), 2012
NAS LOS and Charges:2000 to 2009
Patrick et al, JAMA 307 (18), 2012
NAS Payers:2000 to 2009
Patrick et al, JAMA 307 (18), 2012
Task for the Day
10-15 minutes in small groups Share with the group (5 minutes each)