The Value of Investment in Health Care Better

The Value of Investment in Health Care Better Care, Better Lives

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)

…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

New evidence finds our nation’s 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

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

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

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

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.

Overall Value of Investment: Findings Where would we be in 2000 without healthcare advances? 470, 000 more deaths 2. 3 million more disabled persons $2254 per capita in savings 206 million more days in hospital

Findings: Four Common Diseases § § Heart attack Type 2 Diabetes Stroke Breast Cancer

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

Heart Attack

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

Heart Attack: Advances in Care Today… In the 1970 s… § 5 -7 days in critical care; § Total hospital stay of 57 days 3 -4 weeks in general ward § Complete bed rest for § People up and around within days several weeks § Key risk factors like § Minimal understanding cholesterol and of risk factors/ hypertension are preventive measures routinely managed

Heart Attack: Improvement in Outcomes Death Rate Due to Heart Attack (Age-adjusted, per 100, 000) § § Source: www. cdc. gov/nchs Mortality cut nearly in half Death within 30 days cut from 1 in 4 to 1 in 8

Costs and Outcomes for Medicare Heart Attack Patients Value of improved outcomes: $28, 632 (12% gain in life expectancy) --minus-Increase in treatment costs*: $26, 093 (Medicare plus out-of-pocket) Net benefit in dollars: $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)

Heart Attack: Value of Specific Medical Breakthroughs vs. Current Standard Treatment Range in Value per Dollar Invested $38. 44 § § § Source: Published literature Beta-blockers Mobile coronary care units Statin therapy Angiography Rt-PA Angioplasty w/stenting

Type 2 Diabetes

Type 2 Diabetes: Advances in Care § Improvements in drug therapy § § § Advances in diagnostic technologies § § Insulin therapy lasts longer and is more convenient New classes of drugs with fewer side effects Hemoglobin A 1 c 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

Type 2 Diabetes: Advances in Care In the 1970 s… Today… § Insulin agents short-acting; inconvenient dosing schedules § More effective options for insulin; long acting and more convenient § Frequent needles sticks to test glucose levels § Glucose tests without puncturing the skin § Limited understanding of need to control blood pressure and cholesterol § Better management of all aspects of disease reduces chances of complications § Limited treatment options for complications § Surgical options for diabetic eye and kidney disease improve quality of life

Type 2 Diabetes: Improvement 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 incidence—linked to increased rates of obesity—has led to increased mortality rates (up 39%) **eye, kidney, and nerve disease

Costs and Outcomes for Medicare Type 2 Diabetes Patients Value of improved outcomes: $16, 930 (7% gain in life expectancy) --minus-Increase in treatment costs*: $11, 337 (Medicare plus out-of-pocket) Net benefit in dollars: $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)

Type 2 Diabetes: Value of Specific Medical Breakthroughs vs. Current Standard Treatment Range in Value per Dollar Invested $36. 00 § § Source: Published literature Tight control of glucose, blood pressure, and cholesterol Statins Ace inhibitors Screening and treatment of diabetic retinopathy

Stroke

Stroke: Advances in Care § Improvements in drug therapy § § § Advances in surgical techniques § § § Blood flow restored more quickly (clot-busters) Better-tolerated, more effective drugs to control blood pressure PTCA reopens arteries—more 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

Stroke: Advances in care In the 1970 s… Today… § Treatment options limited; disability rates high § With rt-PA more stroke victims resume normal life § Typical discharge to nursing home § Acute and subacute rehabilitation widely available § Limited diagnostic technologies § New imaging technologies offer faster more precise diagnosis § Limited surgical options for prevention § Carotid endarterectomy and implanted microcoil devices can prevent stroke

Stroke: Improvement in Outcomes Death Rate Due to Stroke (Age-adjusted, per 100, 000) § § § Source: www. cdc. gov/nchs Mortality cut by 37 percent Faster diagnosis Stroke-related disability after 3 months reduced by up to 30 percent with rt-PA

Costs and Outcomes for Medicare Stroke Patients Value of improved outcomes: $24, 903 (10% gain in life expectancy) --minus-Increase in treatment costs*: $16, 035 (Medicare plus out-of-pocket) Net benefit in dollars: $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)

Stroke: Value of Specific Medical Breakthroughs vs. Current Standard Treatment Range in Value per Dollar Invested § § Source: Published literature Clopidogrel Ticlopidine rt-PA* Carotid endarterectomy* *Yields a savings in treatment costs

Breast Cancer

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

Breast Cancer: Advances in Care In the 1970 s… Today… § Chemotherapy required hospitalization § 90% of chemotherapy is outpatient § Chemotherapy poorly tolerated § New drugs reduce nausea § Mastectomies were the norm § Breast conserving surgery performed with reconstruction § Few drug therapies existed § New drugs offer higher cure rates and less toxicity § Mammography not in widespread use § Routine mammography leads to earlier diagnosis

Breast Cancer: Improvement in Outcomes Death Rate Due to Breast Cancer (Age-adjusted, per 100, 000) § § § 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%

Costs and Outcomes for Medicare Breast Cancer Patients Value of improved outcomes: $22, 341 (8% gain in life expectancy) --minus-Increase in treatment costs*: $4, 676 (Medicare plus out-of-pocket) Net benefit in dollars: $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)

Breast Cancer: Value of Specific Medical Breakthroughs vs. Current Standard Treatment Range in Value per Dollar Invested $36. 81 § § § Source: Published literature Letrozole Breast-conserving surgery Biennial mammography Adjuvant chemotherapy Stereotactic core biopsy

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 Americans—not just the costs