# Presentation: 681326

## Budget Impact Analysis:Methods & DataMark W. Smith, PhDVA HSR&D Health Economics Resource Center795 Willow Road (152 MPD), Menlo Park, CA  94025 

## Budget Impact Analysis: Overview

- Analysis of provider’s expenditures for a program over a short period (often 1-3 years), including the effect of any offsetting savings.
- Evaluates a scenario rather than a single action
- Includes comparison to the *status quo*
- Includes sensitivity analysis

## Budget Impact Analysis: Perspective

- BIA takes the provider/payer’s perspective.
_*Meaning*_
- BIA excludes patient-incurred costs.
- 	* *but **
- BIA should reflect impacts on enrollment and retention that could result from affecting patients.

## Budget Impact Analysis: Perspective

- BIA takes the provider/payer’s perspective.
_*Practical Effects*_
- Ignoring patient and societal costs will make many interventions appear less expensive in a BIA than in a CEA.
- BIA can usually be done without surveying patients.

## Budget Impact Analysis: Horizon

- BIA uses a short horizon – usually a few years at most.
_*Practical Effect*_
- Long-term modeling of costs and clinical outcomes is unnecessary.
- Costs are not usually adjusted for inflation or discounting.
- Reductions in health costs in far future cannot offset initial costs.

## Budget Impact Analysis: Utility

- BIA does not measure utility.
_*Practical Effect*_
- No need to survey patients.
- No calculation of QALYs.
_*Limitation*_
- No way to capture changes in quality of life

## Budget Impact Analysis: Drawbacks

- - Some benefits cannot easily be monetized, such as reputation.
- - Prestigious journals often won’t publish them.
- - Costs can vary from site to site
- 		--> To increase usefulness, create a method for inputting local
- 		      parameters.
-   Complement of CEA, not substitute

## Why Both CEA and BIA?

- CEA addresses societal perspective
-  implementation won’t occur without proof that “best practice” is cost-effective
- BIA addresses provider perspective
-  influential in implementation decisions

## Reference scenario

- Describes current health care delivery method & outcomes
- 	- How many patients are getting care
- 	- Who gets care (clinical characteristics, copay status,
- 	   VERA payment level, etc.)
- 	- Among those who get care,
- 		* what care they get initially
- 		* what care they get later (through end of BIA horizon)
- 	- Total cost over time for this scenario

## Comparison scenario

- Describes alternative health care scenario.
- Relative to reference scenario, how will these change?
- 	- Demand for care (number of patients seeking care)
- 	- Future need for care, within BIA horizon
- 	- Copayments collected, VERA payments received
- 	- Staff mix & consequent costs
- 	- Space and other overhead costs
- 	- Technology purchase/repair costs

## Modeling

- Static models
- Simple calculation of cost impact from changing one or two factors, holding everything else constant
- May be sufficient if the alternative and reference scenarios are quite similar _and_ probabilities are well known
- Dynamic models
- Decision model, such as a Markov model:  captures uncertainty, such as over impact on enrollment or probability of clinical outcomes
- Discrete event analysis

## BIA in Implementation Research

- Include cost of implementation program
- Consider:
- 	- How long will implementation costs last?
- 	- How generalizable is the local implementation
- 	  approach?
- You may need to develop alternative scenarios for other locations.

## Cost Data Sources: Encounters

- Decision Support System (DSS) National Data Extracts (NDEs)
- Inpatient files
- discharge (one record per stay)
- bedsection (one record per bedsection segment of the stay)
- Outpatient files
- Encounters: one record per person-clinic-day
- Pharmacy: one record per prescription

## Cost Data Sources: Staff

- Average hourly staff cost for 70+ occupation categories can be figured using either of two sources:
- 	- DSS ALBCC
- 	- Financial Management System
- OR
- Use HERC technical report #12 supplement, which has figured them for FY2001-FY2006.
- 	** FY2007 and FY2008 coming in 2009 **

## Cost Data Sources: Supplies, Machines

- * National Prosthetics Patient Database (NPPD)
- 	- records purchase price of all items ordered through the VISTA
- 	   Prosthetics and Sensory Aids package
- 	- includes nearly all medical items for internal and external use,
- 		not just prosthetics or sensory aids (glasses, hearing aids)
- 	- stored and handled by NPPD data manager at Hines VAMC
- * Your local A&MMS purchasing officer

## Cost Data Sources: Indirects

- PG Barnett, M Berger. _[Indirect Costs of Specialized VA Mental Health Treatment](http://vaww.herc.research.va.gov/files/RPRT_119.pdf)_. HERC Technical Report #6.
-    (see handout; also on HERC web site)
- Rosenheck R, Neale M, Frisman L. Issues in estimating the cost of innovative mental health programs. *Psychiatric Quarterly* 1995;66(1):9-31
-    (see handout)

## Resources

- HERC web site (www.herc.research.va.gov)
- 	- Guidebooks
- 	- Technical reports
- 	- FAQ responses
- 	- Slides from training courses (cyber-seminars)
- VIREC web site (www.virec.research.va.gov)
- 	- Research user guides (RUGs) on DSS, PTF, OPC
- 	- Technical reports (pharmacy)

## Resources

- Many articles on decision modeling and discrete event analysis appear in these journals:
- 			*Medical Decision Making*
- 			*Health Economics*
-    			V*alue in Health*

## Resources

- HSR&D web site – cyber-seminar catalog, including downloadable recordings of seminars:
- 	http://www.hsrd.research.va.gov/for_researchers/ cyber_seminars/catalog.cfm
- Send questions on economic methods and data to HERC: herc@va.gov or 650-617-2630.