Budgp y et Impact Analys

Methods & Data

Patsi Sinnott, PT, PhD

February 1, 2012
Budget Impact Analysis: Ove

 Analysis of expenditures for a pro

over a short period (often 1-3 yearincludin

g y

 the effect of an

y offsetti

savings. 

– Evaluates a scenario rather than a single 

Evaluates

a scenario rather than

a single 

– Includes comparison to the status quo– I l d iti it l i Inc

l

u

des sensiti

vity ana

lys

i

s
Budget Impact Analysis: Over

 To estimate feasibility/affordabilit For budgeting/forecasting  Wh ki ? What are your partners asking

?

– How much will this cost How much will this cost

– Now – later – much later? 
Budget Impact Analysis

Budget Impact Analysis

Framework

 Estimating

– The cost of the intervention– Changes in staffing schedules and u

Changes in staffing, schedules and u

technology

– Changes in pt. access/throughput/de– Potential Savings Potential Savings– Cost to operate
Budget Impact Analysis: Persp

 BIA takes the buyer/provider/paye

BIA takes the buyer/provider/paye

perspective.
Budget Impact Analysis: Ho

 BIA uses a short horizon – usually 

years at most.

 Long

-term modeling is unnecessa

term modeling is unnecessa

 Costs are not discounted Savings in far future cannot offset 

initial/start

-up or investment costs up or investment costs
Budget Impact Analysis: Ut

 BIA does not measure utility BIA does not measure utility. No need to survey patients. No calculation of QALYs.
C t l Di Conceptual Diagram

Source: Mauskopf et al. (2007)
Diagram redux

Current 

Environment

Key Factors Budget impact 

analysis

Impacts 

Total Incidence and Incidence and 

Population

Incidence and

prevalence

Incidence and

prevalence

Sick 

l i

% diagnosed 

d% d

Diagnosis and 

popu

lat

ion an

d

% treate

d treatment

Target 

Population

Current 

treatment 

New therapy or 

procedure

regimen

Resource

Utilization

Unit cost Unit costs 

Cost of Illness 
Reference Scenario/ Reference Scenario/

Current Environment

 Population1. How many patients are getting ca2 Who gets care? 2. Who gets care?

– essential: clinical characteristics – advanced: enrollment priority, VERA ca

– how many need VA-funded transportatio

3. What is the size of the target pop
Reference Scenario/ Reference Scenario/

Current Environment

 What treatment(s) are the current What treatment(s) are the current

population getting?

 What other healthcare resources is 

current l ti tti ? t popu

l

ation getting

?
Reference Scenario Reference Scenario

–

The Intervention(s)

 What is “the intervention”? Where is it provided? How often is it provided? How often is it provided? Who provides the care? What do the providers do when they a

“providing the care providing the care ?”

?

 What resources, technologies, etc are u
Comparison Scenario

 Relative to reference scenario, how will the

change?

– Demand for care (number of patients seeking c

– will new patients be drawn into the system? will new patients be drawn into the system?– will new patients become eligible for contract c

care, anything else outside VA?

– I th i id l h i Is the 

incidence or preva

lence c

hang

ing

– Future need for care, within BIA horizon– Copayments collected, VERA payments receiv
C iS i ompar

ison 

Scenar

i

o

 R l ti t f i h ill th R

e

l

ative 

to re

ference scenar

io, 

how will the

change?

– Staff mix & consequent costs

– mix of MDs, , NPs RNs– how will staff changes affect costs?

– S d h hd Space an

d ot

her over

hea

d costs

– clinical space requirements–

will b t d h d b ilt? ill new space 

be ren

t

e

d, purc

hase

d, or 

b

uilt?

– Technology p p urchase/re

pair costs 
Modeling

 Static models

– Simple calculation of cost impact from changin

two factors, holding everything else constant

– May be sufficient if the alternative and referenc

are qui i il te similar and prob bili i ll k babilities are well know

 Dynamic models Dynamic models

– Decision model, such as a Markov model: capt

uncertainty such as over impact on enrollment uncertainty, such as over impact on enrollment probability of clinical outcomes

– Discrete event analysis Discrete event analysis
BIA in Implementation Resea

 Include cost of implementation program C id ons er: 

– What implementation costs should be included? – Will implementation costs change/disappear ov– Can implementation be made more efficient?– How generalizable is the local implementation a

Y d d l l i i

You may nee

d to 

deve

lop a

lternat

ive scenar

io

other locations.
Budget Impact Analysis

Budget Impact Analysis

Framework

 Estimating

– Th f h i i The cost o

f t

he 

intervent

ion

–

C ges s g, sc edu es d u

hanges in 

staffing, sc

hedu

les an

d u

technology

– Ch i t /th h t/d 

Changes 

in p

t. access/throug

hput/de

– Potential Savin

g

s

– Cost to operate
Why Both CEA and BIA

 CEA addresses societal 

p p ers

pective

– implementation won’t occur without pro

“best practice best practice

” is cost is cost

-effective effective

 BIA addresses provider perspective BIA addresses provider perspective

– influential in implementation decisions
Costing in the BIA

 Using the perspective of VA:

– VA’s costs: yes– Patient’s costs: no (earnings, transportation, ti– Society’s costs:no (other payers, employer, ca

 Estimate the amount of change in units of c Estimate the amount of change in cost per u
Cost Data Sources: Encoun

 Decision Support System (DSS) National D

Extracts (NDEs) Extracts (NDEs)

– In

patient files 

– discharge (one record per stay) – bedsection (one record per bedsection segment o

– Outpatient files

– Encounters: one record per person Encounters: one record per person

-clinic

-day

– Pharmacy: one record per prescription
Cost Data Sources: Encoun

 HERC Average Cost data

– Inpatient files 

– discharge: can be linked to PTF discharge files – med/surg discharges and non-med/surg discharg

linked to PTF bedsection files

– Outpatient files

– encounters: can be linked to OPC– pharmacy: none except when delivered in clinic 

(use DSS or PBM pharmacy data)
C tD t S E 

Cos

t

D

a

ta 

Sources: 

Encoun

 HERC Average Cost data vs. DSS

– Uses Medicare relative value units (RVUs) not 

Uses Medicare relative value units (RVUs) not 

– Less granularity = more similarity in costs acro

encounters

 For comparison to DSS costs, see HERC 

publi i cat

ions:

– Go to HERC intranet web site– Ch P bli ti Choose 

P

ublications 

– Choose Technical Reports
Cost Data Sources: Staf

 Average hourly staff cost for 70+ occupatio

categories can be figured using either of two categories can be figured using either of two 

– DSS ALBCC– Financial Management System Financial Management System

OR Use HERC technical report #12 supplement

has figured them for FY2001-FY2008. 
Cost Data Sources: Supplies, Ma

 National Prosthetics Patient Database (NPP

– records purchase price of all items ordered thro

records purchase price of all items ordered thro

VISTA Prosthetics and Sensory Aids package 

– includes nearly all medical items for internal an

includes nearly all medical items for internal an

use, not just prosthetics or sensory aids (glassesaids)

– stored and handled by NPPD data manager at H

VAMC

 Your local A&MMS purchasing officer
Cost Data Sources: Indire

 PG Barnett, M Berger. Indirect Costs of Spe

VA M l H l h T HERC T h VA

Menta

l

Hea

l

t

h

Treatment. HERC

Tec

h

n

Report #6. (on HERC web site)

 Rosenheck R, Neale M, Frisman L. Issues i

esti ti th t f i ti t l h 

timating the cos

t o

f

innovative men

t

a

l

hea

programs. Psychiatric Quarterly 1995;66(1
S ii i A l Sens

i

t

i

v

ity 

Ana

lyses

 P t t t th b t f l

Purpose: 

to 

tes

t the ro

bus

tness o

f your resul

 Method: chan

gpy e assum

ptions in 

your model 

how the final outcome changes

 Univariate: change one at a time Univariate: change one at

a time

– Easy, but possibly misleading–

Not considered state-of-the-art

 Multivariate: change multiple assumptions a

– Probably will require software and/or a formal 

Probably will require software and/or

a formal 

– High credibility– Allows useful graphing Allows useful graphing
Summary

 BIA requires six items:1 Size and characteristics of patient population 1. Size and characteristics of patient population2. Usual care: current mix of care offered to current p3C f l . Cost of usual care

4. New care: mix of care under the new intervention

5. Cost of new care/intervention6. Use and cost of other health care services related to 

intervention and the condition under study

S M k f t l (2007) Source: Mauskopf et al. (2007)
Resources

 HERC web site (www.herc.research.va.gov

– Guidebooks [most on intranet site on

[most on intranet site on

– Technical reports [most on intranet site on– FAQ responses FAQ responses– Slides from training courses (cyber-seminars)

 VIREC web site (www.virec.research.va.go

– Research user guides (RUGs) on DSS, PTF, OP– Technical reports (pharmacy)
Resources

 Many articles on decision modelin

discrete event analysis appear in thjournals:

– Medical Decision Making– Health Economics– Value in Health
Resources

 ISPOR recommendations on BIA:

M k f J S lli SD A L t l Mauskopf J, Sullivan SD, Annemans L, et al. 

Principles of Good Practice for Budget Impact Analysis: RepISPOR Task Force on Good Research Practices – Budget Imp

Value in Health 2007;10(5):336-347.

 VA-funded literature review on bu

impact analysis:Luck J, , gg Parkerton P, Hagigi F.What is the business case for improving care for patients with conditions?Journal of General Internal Medicine Journal of General Internal Medicine 2007;22(Suppl 3):396 2007;22(Suppl 3):396-
Next HERC Course

“How can Cost Effectiveness Anal

How can Cost Effectiveness Anal

Made More Relevant to US He

C ?” are

Paul Barnett, PhD

February 29, 2012