HERC Health Economics Seminar- 13 -Department of Veterans Affairs

**Department of Veterans Affairs**

**HERC Health Economics Cyberseminar**

**04-18-2012**

**Budget Impact Analysis: A Worked Example**

**Patricia Sinnot, PhD**

Moderator:  Well, welcome everybody to the HERC [inaudible] seminar today.  We have Patsi Sinnott here who is the economist here and she is going to be working through an example of budget impact analysis.  I am—[inaudible].  Take it away Patsi.

Patricia Sinnott:  Great.  Is my screen up?

Female:  Yes, it is.

Moderator:  Yes, it is.

Patricia Sinnott:  Great.  Welcome everybody.  I see some old friends on the list.  It’s nice to see you there.  This seminar came about because we had several responses from a previous presentation on budget impact analysis asking for a worked example.

So here we go.  I just—a few comments here.  We want to review basic things just to get everybody up to speed.  The example I’m using is a budget impact analysis for counseling program.  So it’s a primary intervention.  It’s the cost of the counseling services.  Then we want to spend a little time talking about the policy implications and how this might be used. A few things.  The budget impact analysis evaluates a scenario rather than an individual action.  The comparison is always usual care and it includes sensitivity analysis.

The budget impact analyses are for budgeting, primarily, purposes to encourage people to adopt, to eliminate any hurdles that variation in cost might provide, or anxiety about cost might provide.  It always takes the buyers perspective.  It’s always a short term horizon, so a long term modeling is not necessary.  Costs aren’t discounted and savings in the far future cannot help recoup the initial or startup costs.  Just as a reminder, the budget impact analysis does not measure utility.  There are no qualities and no intervention outcomes included in the budget impact analysis.  The budget impact analysis is primarily done when the effectiveness is proven excuse me and in some cases, when the cost effectiveness has been shown.

But in some cases, as you all know, adoption, may be decided the basis of effectiveness and not cost-effectiveness.  So it may be that a budget impact analysis is requested or proposed at the end of the effectiveness study.  And just a brief comment about the framework: you’re looking at the intervention.  Any changes in usual process of care; changes in access or throughput of patients.  You want to estimate any cost to operate and potential savings, and then also keep in mind how these might change over time.  Are there potential efficiencies, and do these operations that you studying the implementation or the administration of the intervention are they different across facilities and how generalizable will your results be.  So the conceptual design that’s used most often comes from an article by Mauskopf from ISPOR, the International Society for Pharmacoeconomics and Outcomes Research.  This diagram gives you a kind of—the framework to move from the current environment to the new environment and if you look at the bottom notwithstanding the spelling error in difference, the difference between current and new is what you estimate as the budget impact.

So I’ve reformatted a bit to give us the diagram in another framework.  You know you’re going to look at how many patients are getting care.  How many—what is the cost of the current treatment regimen.  What is the cost of the treatment itself and the implementation?  And in some cases you may also be looking at co-pays and enrolment priorities and these are VA terms.  You might also be looking at VA funded transportation.  You also want to know whether or not the population is going to change.  In other words—the classic story of the lithotripsy.  Lithotripsy is efficient and cost effective when it’s treated only for—treats only the most serious problems.  But of course there’s always creep and it becomes easier to get it and more people creep into the treatment population because it’s an easier treatment.  So you have to think through that part of it when you’re estimating the budget impact.

And also what other healthcare resources are they getting?  Your comparison scenario really looks at again how many patients—new patients might be drawn into the system.  Will new patients choose different kinds of care?  And is the incidence or prevalence of the program changing over time.  So when you cost the intervention and those of you who were on the seminar last week might remember these folks.  You’re going to look at personnel cost including benefits, clinician time, support time both now and with the change.  You’re going to look at supplies.  You have to include the time in meetings and patient care meetings.  You need to consider what the equipment might be whether there’s DME or IT that needs to be included in the estimation of the intervention.  And really to think through that you’re considering all the staff time that goes into the intervention. You basically estimate labor costs by summarizing the time and then valuing it using various potential labor cost estimates.  VA you can use estimates of I think 70 different categories of personnel in VA.  You might use local salary data or VLS data to value the time.

This is the direct measurement methodology of estimating the labor costs and in VA you would look through at the NPPD and possibly your local A&MMS purchasing officer to find the cost of supplies and machines; DME, IT.  Just as a note, the NPPD gives you the purchase price of everything that’s ordered through Vista and the NPPD although it says prosthetics, and for those of us who come from the rehab field we might think of prosthetic arms and legs in VA this is the database that includes every item that is used to enhance physical performance.  So that means everything from stents to eyeglasses are on NPPD.  And then after you cost the intervention, you need to look at healthcare utilization and you’re interested to see whether or not utilization changes.  I’m sorry—somebody’s cutting the grass by my head.  And so you’ll look for encounters and in VA you can see them through our national data sets.  The DSS national Data Extracts for inpatient and outpatient pharmacy records.  You can also use the HERC average cost data.  And these are all described in regular HERC seminar series.  If you need more information you can go to the website and find more information about these data sources.

Then you need to estimate the cost of the implementation.  This is a—the question is really what needs to be done.  What do you plan to do to disseminate the intervention?  A new intervention.  And what will it cost to maintain that intervention.  So those of you who do implementation work, you’ll know that there’s clinician training and leadership engagement, a variety of technical experts.  In terms of costing these, you’re not going to be able to rely on any kind of standardized format.  You’re going to probably need to create diaries for someone. This is time, time, time and this is all labor costs.  You’re going to need to figure out a way to gather this information.

Moderator:  Hey, Patsi. 

Patricia Sinnott:  Yes.  

Moderator:  If I could just interject.  

Patricia Sinnott:  Sure.

Moderator:  There’s one person who actually has their hand raised but I’m not sure that they have the ability to ask a question—Don, can you ask a question?  I think it might be muted.  So—Don, what I would encourage you to do is type in the question and then I can ask it to Patsi.  Just to let you know, there was somebody who had their hand raised on the list here.

Patricia Sinnott:  Okey doke.

Moderator:  Just to encourage people if there are other questions, please type them into the questions and answers and we are happy to ask them and address them as we go.

Patricia Sinnott:  Okey doke.  So there are a variety of data collection tools and these can be used for both the costing of the intervention as well as the costing of the implementation and I just wanted to remind us.  And again, will the cost change over time?

So here’s an example.  This is an intervention that involved a one to one intervention with a counselor.  And we needed to gather data on every patient visit with every patient, including phone calls and e-mails.

This data collection template was created in CPRS to collect this information.  If you look at the top you’ll see this reflects who the counselor met with.  What the contact was, and how much time was spent in each of these various activities. At the bottom of the screen it says actually at the bottom of the pervious screen it says that there’s also a way to measure or define whether it was a group or individual activity.

This data was gathered weekly by a study coordinator and entered into the data set.  This weekly form was used to summarize the total amount of time for each of these various activities.  One thing I’ll note is that this form also reflects that this list of procedure codes listed the CPT codes that the counselors also entered.  And I mention this because when we went to itemize the healthcare utilization for each patient, we found that these entries were also showing up in the healthcare utilization.  We were double counting and we needed to extract that data from the summary utilization.

So we summed the total minutes for each subject in twelve months.  And we multiplied that times the hourly—VA average hourly salary.  I think it’s $51.35 for this type of counselor which includes benefits.  You can see here our hours distributed across our population and the cost of the intervention is outlined before.  You can see that—I have to close something here—great.  The cost of the intervention participant was $1821.  And you see the range of the population from I think one hour to 158 hours.

Okay.  I seem to be stalled on my screen.  Let me see if I can go back.  No.  Let me see if that makes a difference.  My screen is stalled I’m sorry—

Female:  Go to the lower left hand corner of your screen you can see some arrows.  Try using those.  There you go.

Patricia Sinnott:  So here’s our distribution of the cost again similar to the time.  So—here is our summary of the cost.  Summary hours and summary cost.  Our maximum cost for this provider was $8000.  We had a population of 81 veterans in this study.

So then we went and pulled the utilization for this population of patients, obviously in both arms of the study.  Those who received the counseling service and those who did not.  We used PTF and NPCD merged with DSS to estimate the total cost of VA care.  And this is where we found these entries for the counselors that we needed to extract.  Which was a kind of complicated endeavor because we hadn’t anticipated it.  We gathered twelve months of data from the date of enrollment and then estimated the utilization costs by type of care and you can see there’s a lot of variation.  The confidence intervals are very wide and the differences; although you see a big difference in in patient cost and the total utilization cost, nothing is significant.

Just a note, five participants in the usual care arm also received this kind of counseling service and one of them reported thirty five hours, almost thirty six hours and this was included in the cost of the estimation in these summaries.  And then we went to implementation costs.  And this particular study, implementation was not tracked individually because there were two full time coaches who worked with the counselors to train them and then to monitor their fidelity to the intervention that was being provided.  And it was estimated, which was the best we can do post hoc, that 30% of the counselor time was spent in training.

So we estimated the cost of the two full time coaches across all of the patients in the treatment arm.  And then also the 30% of time in the counselors or providers spent in this training and fidelity monitoring.  So we estimated this implementation cost at $6,087 per subject in the implementation arm.

Then our total costs are the difference between the total cost is $2991.  It’s not significant.  Again, I can see the important Y variation in the confidence interval.  You see in the intervention arm the cost of the intervention and the cost of the implementation.  Because we expect the time that the counselors had to spend in fidelity monitoring would be constant and that the cost of the intervention would be constant, we left those in the summaries for the budget impact analysis.  There might be alternative methods to do the implementation which might be train the trainers so that you did not have to pull time coach time and other ways that you might change the implementation so that it was less costly.

So then our budget impact results.  We then—we’re here at this point with non-significant difference in cost of $2900 or $3000.  The intervention total is more expensive.  This suggests that implementation of intervention will be budget neutral or cost neutral.

But, what if the difference is significant?  So we go back to the diagram here.  And I just want to show you how we’ve filled it out.  Just the population of patients who might receive this intervention is 42,000 in—before this intervention no one was being provided this intervention.  So there’s zero here.  We estimate no cost because no one is getting into the intervention.  So the cost of this service, not the total cost of the illness is zero.  So when we look at the change that’s to estimate the budget impact, there’s no change in the total population.  We estimate that 50% of the population will receive the intervention, and that is including the intervention cost and the implementation cost.  

And that difference is 2900 between the total cost and the utilization cost.  I’m sorry—let me say that again.  Between the total cost which includes the utilization—their healthcare utilization which gives us an estimate of $62 million to implement this intervention if in fact 50% of the population receive the intervention in one year, which seems highly unlikely.  I’m sure anyone who does the implementation research would agree.

Let me see—here we are at questions. And I wonder maybe we can open up for questions.

Female:  Most people are using their VOIP, so most of them do not have microphones.

Patricia Sinnott:  Okay.

Female:  So, if somebody has a question they can raise their hand if they’re on a phone or if they have a microphone we can unmute their line but most people they can type their questions using the goto webinar panel on the right hand side of their screen.  On the bottom there’s a Q&A page to send questions in.

Patricia Sinnott:  Todd, do you want to start with something.

Todd:  I’m looking to see if there’s any questions.  There’s no questions.  I’m just keeping the floor open.  Ah.  Here we go.  This may be a bit off topic, but how did the fidelity monitors monitor adherence to the correct intervention by the counselor or counselors?

Patricia Sinnott:  I can’t answer that.  I don’t know. But it includes e-mail and telephone counseling and chart review.

Todd:  Can you say a little bit more about the topic and why this would be an important issue?

Patricia Sinnott:  Which topic?  The intervention or—

Todd:  Monitoring the fidelity.

Patricia Sinnott:  Well, because of drift.   It’s one thing to implement a very closely monitored counseling intervention, or even a physical therapy intervention, but over time. without fidelity monitoring, what you will get is drift away from the evidence based intervention to.  This is what you’re concerned about.  You don’t want drift away from the evidence-based intervention.  Fidelity monitoring allows for just keeps people honest.  And it is a standard practice in various interventions.  Currently provided by the VA.  

Todd:  And I would very much agree with that, and I would say the one added thing is that in a study that I did a number of years ago, fidelity monitoring and in some sense working with—we were using outreach workers, but working with them to make sure that we were doing high quality was actually a large cost.  Not a small cost.  A very large cost.  So—

Patricia Sinnott:  Right.

Todd:  there’s another question.  Can we—are we assuming marginal cost optimality?

Patricia Sinnott:  What—

Todd: I’m not sure I understand the optimality point of it, but we are assuming that we are looking at marginal costs.

Patricia Sinnott:  Right.

Todd:  And it’s the short run cost curve versus the long run cost curve, if you’re familiar with those two different perspectives and the cost effect analysis—you’re looking at the long run where the average marginal cost is equivalent to the average cost.  There can be other things in the short run that’s not that.  There’s another question.  I can add that I just heard a presentation about an intervention in which counselors who adhered to the correct intervention got good results and those who didn’t got poor results.  This goes back to the fidelity monitoring, Patsi.

Patricia Sinnott:  Mh huh.

Todd:  With the result that until the analysis discovered this, they thought the intervention had no effect.

Patricia Sinnott:  Right.  Exactly.

Todd:  It sounds like and what the person raising that question sounds like there was variability and whether that’s site variability or in this case it was counselor variability.

Patricia Sinnott:  Right.

Todd:  Many of the clinical trials—do you want to talk about side effects.  It’s related.  We see a lot of variation in side effects.

Patricia Sinnott:  Right.  Particularly in VA research because we have the opportunity to look at so many different sites, we can see huge effects.  I’ve just been working on a project again which is a mental health intervention or treatment where the side effects are driving all the variations in cost and time.  And we can look at that by controlling for side effects and side effects interacted with the intervention.

Todd:  At times you can get a very complex regression model with those small samples.  You can get into over-fitting if you’re not careful.

Patricia Sinnott:  Right.  Yes, you can.

Todd:  Any other questions.  I’m looking.  I don’t see any other questions here.

Patricia Sinnott:  I see that Dr. Russell had her hand up.

Todd:  She typed in, too.  I don’t know if she can speak.  If she has access to the phone.  Do you have a question?

Patricia Sinnott:  I’ve asked those already.

Female:  She looks like she’s using the VOIP so she may not be able to speak on the line.

Patricia Sinnott:  Okay.

Todd:  Louise are you there?  All right.

Patricia Sinnott:  While we’re here, I just want to put up this last slide or two.  There are—

Todd:  More questions are coming in Patsi.  Just so that you know.

Patricia Sinnott:  Great.  So here are some resources, some great papers that I think are terrifically useful in figuring out or at least looking at examples of budget impact analysis and costing the implementation and then this last paper is the reference paper that we use for performing and reporting on budget impact analysis.

Todd:  One of the questions is, the template example you provided seems fairly straight forward for capturing the time study elements of a current budget impact analysis.  Do you have any advice for someone attempting to retrospectively construct estimated costs for different program elements using a staff survey?

Patricia Sinnott:  A what survey?

Todd:  A staff survey.  So imagine—

Patricia Sinnott:  Oh.

Todd:  For example, you didn’t collect it throughout the study but instead wanted to do this budget impact analysis at the end using survey the staff and ask them.

Patricia Sinnott:  So I’ll throw out some ideas and then you can, Todd.  You can, and let’s just talk about the intervention.  If the activity is well accounted for in VA for example, meaning that the accounting costs for the intervention are fairly mature and are reflected in the CPT code that you find in the administrative data, you might be able to double check or see if you can correlate the documented time that is in the CPT codes with the time in recollection.  But there are two caveats to that.  One is that the longer the recollection time is, the less accurate it will be.  Number one.  Number two, that VA medical center sites verify in their time description of standardized CPT codes.  We found this out in this study as well.  Remember, I showed you that not only were we detailing the counselors time with a CPRS template, but the counselors were also entering CPT codes for their time for a variety of reasons which I can’t explain.

What we found is that at some sites a thirty minute intervention, where the thirty minutes is defined in the CPG code, would be thirty minutes.  But in other sites, all codes were defined as fifteen minutes, even though in the CPT book they’d be thirty.  So you couldn’t rationalize across sites the use of those at the time.  Those would, be you know—it’s difficult, and I don’t know how else you can do it.  Any ideas?

Todd:  Yes.  So just to reiterate, the recall issue you bring up is a critical one.  I think what the regard to sort of the accuracy of the data, what you’re going to end up with is these very rough estimates, and it’s just going to be a limitation with your studies that you don’t have the precision that you would have if you were to do it on an ongoing basis.  That precision means two things.  One is, it means you can’t really do subgroup effects, because you don’t have precision individuals to say there are people at very high risk doing better.  Do they cost less over time?  Mary Goldstein and I wrote a paper on that.  The second thing that you lack precision on is, perhaps there is a learning curve to this intervention.  And the start up period was very slow.  Very costly.  Very inefficient to make—and it improved over time or possibly just the opposite.  They started out with a great bang and were very efficient and then deteriorated in efficiency over time.   What you’re probably going to get in this estimate is just the end, if you do a survey with your staff.  What it looked like at the very end, because they’re not going to remember three years ago or two years ago when the study started.

Patricia Sinnott:  And there may be administrative standards for the service.  So let’s say that your—the service that the providers are giving is something like a TMP exam.  In some cases it doesn’t matter how long it’s spent—how long the provider spends during the TMP exam.  There’s a single code or two codes or three codes that are always used for the exam.  You can’t differentiate between the first exam and the last in terms of the time.

Todd:  It also gets back to this issue of incentives placed in front of your course.  And we’ve often talked about in a study that it would be nice to compare staffed employees versus hourly paid employees but in most studies they just choose one or the other.  But those create very different incentives.

Patricia Sinnott:  Right.

Todd:  And that might affect the outcomes as well.

Patricia Sinnott:  Right.  And Zbase providers as well.  Like contracted in or contracted out.

Todd: Here’s another question for you.  Can we do a budget impact analysis in the absence of a control group?  Do you want me to take a shot at that?

Patricia Sinnott:  I would.  I would say yes.  If you have no intervention previously.  You want to take it—a stab.

Todd:  I would say the exact same thing.  So keep in mind that a cost effectiveness analysis much like a budget impact analysis is going to be relative.  We think of the incremental cost effectiveness ratio, we’re comparing at least two interventions.  Now one of them might be no intervention nor no additional care: usual care.  So in the budget impact analysis is the same scenario.  What you’re really saying is the status quo versus something else.  So perhaps your lack of a control group in the status quo and you’ll have to figure out what the status quo is.

Patricia Sinnott:  And who the status quo are, because if you are looking at the impact—the short term impact on health care utilization, then you need to have some comparison.  Right?

Todd:  Now.  I’m going to try to do something very technologically advanced here.  Louise Russell has a question and I think I just unmated her phone line if she’s on a VOIP or a phone.  Louise—

Louise Russell:  Can you hear me.

Patricia Sinnott:  Yes.

Todd:  We can hear you.

Louise Russell:  Oh wow.  Okay.   I was just about to type in a question; how did you know I was going to do that, Todd.

Todd:  We have great sense with our VA technology.

Louise Russell:  I was listening to the conversation particularly about comparing doing a budget impact analysis if you didn’t have a control group and the comparisons and I’ve been wondering all along, how much difference is there really between a budget impact analysis in the first three to five years of a cost effectiveness analysis based on a mark off [inaudible] which models events every year?

Patricia Sinnott:  You don’t have an outcome.

Louise Russell:  Yes.  You don’t have the outcomes, but the cost effectiveness model has the cost and maybe the cost effectiveness modeler didn’t spend as much time being careful about the cost and that’s an important distinction.

Patricia Sinnott:  Well, there’s some other issues about the cost.  Cost effectiveness analysis, you want to include indirect.  You want to include the societal perspective.  You’re looking at travel costs for the patient and care giver cost.  Things of that nature which you do not include in the budget impact because budget impact is the payers perspective.  If you’re doing a cost effectiveness analysis from the payers perspective only then the costs will be the same, but the costs will not be the same if you’re using a societal perspective.

Louise Russell:  That’s interesting.  It’s largely a matter of perspective.

Patricia Sinnott:  Mh huh.

Todd:  The other thing I would say, Louise is that it’s a distinction in the efficiency.  So cost effectiveness analysis, as I read the gold book is supposed to be submitted at constant returns to scale so when a program is fully efficient and working efficiently.  In two of the studies that I’ve been involved in.  One is looking at the VA central IRB the startup periods are precisely not working at efficient—the efficient boundary.  They’re very much at the startup cost where they’re trying to get everything off the ground.  The other thing that I was looking at was outreach workers for Cancer screening.  It’s a very small trial and the development of these educational materials for patients was very expensive for us but if we were to say we were the LA country then cheap at the margin.  That’s where you have to make a distinction.  The budget impact is sort of what’s relevant even in the inefficient.  And the cost effectiveness at the efficient.

Louise Russell:  I think another distinction may be, and it’s not a necessary distinction, but it’s one that occurs in practice, cost effectiveness analysis can take account of implementation costs, but they usually don’t.  They usually, as you say look at the long run costs, once everything is working smoothly and they don’t worry about what it costs to get things up and running.

Todd:  I think you’re right.

Patricia Sinnott:  I think there’s—go ahead.

Todd:  No go ahead, Patsi.

Patricia Sinnott:  I was just going to say except if there’s long term sustainability costs or you know this concept of fidelity monitoring where it would be more expensive possibly in the beginning and get to a steady state.

Todd:  And I think even in with some of the cost studies, the really good ones that I’ve seen they’ve had to make assumptions whether it’s about adherence or the proportion of people who don’t adhere are similar to the proportion that do adhere and in theory you could vary all of those for implementation studies and say you knew more information you could make it very specific to your facility.

Patricia Sinnott:  I don’t see that so much as the big difference between cost effectiveness and budget impact analysis.  In budget impact analysis you’re also going to be making some assumptions.  You don’t know once you roll this out to a larger number of people how many are actually going to accept it and how well the counselors are going to be trained and how faithful they’re going to be to the intervention.  But I do see a lot more emphasis on doing a careful job of measuring the cost in the first three years.  It doesn’t tend to be a matter of emphasis and cost effectiveness analysis when you have time to look at something [inaudible].

Todd:  That’s great.  Just want to thank you so much Louise for raising your hand and chiming in here. It’s great to have this new technology where we can actually listen to you.

Louise Russell:  Yes, it’s fun.  Thank you.  You can mute me again if you want.

Todd:  For many people who don’t know, Louise has presented here before and so she’s also been an expert in the field, so it’s great to have her onboard.  She’s at Rutger’s university so it’s also another amazing thing to be able to have people outside of the facility or outside of VA on board.

We have another question that has come in for you, Patsi.  Is next step to see if the intervention’s outcome benefits.  It’s worth the cost.

Patricia Sinnott:  That’s a cost effectiveness analysis, isn’t it?

Todd:  I guess the question then becomes on what time frame and what not.  I think even with the budget impact analysis it’s always a question about what’s the benefits relative to cost and so forth.

Patricia Sinnott:  Right.  Right, and so the policy question is really you know at the national level, you know at the kind of management level, but also at the local level and what you wanted.  one of the foci or the purposes of a cost effectiveness analysis is to help overcome any local barriers to adoption of a program that’s been shown to be effective, cost effective and is at a policy or operations level nationally and this is obviously VA speak here.  You don’t want to have everybody deciding on their own using different equations for deciding whether or not to implement the program.  This is a way to facilitate dissemination at a standard level.

Todd:  Great.  Another question is are you familiar with budget impact analysis of quality improvement initiatives?

Patricia Sinnott:  That would be similar to a budget impact analysis of the implementation or a return on investment kind of analysis.  Is that what you’re talking about?

Todd:  I’m assuming that’s what the question is.  VA is heavily involved in quality improvements and it’s got the whole query initiative and a lot of the query studies.  These are studies that have been shown or treatments that have been shown to be effective.  The question is how do we get them implemented.  And so that’s very much related and we do a lot of budget impact analysis beside this.

That’s all the questions we have.  Of course, people what is the layman’s phrase to say something is cost effective?  I feel like I should unmute Louise on this one in case there’s different answers on this one.  So Louise, I’ve unmated you.  Is there a layman’s phrase to saying something is cost effective.

Louise Russell:  I think a phrase.  I don’t know whether it’s what laymen use but that means and says more accurately what laymen mean when they say cost effective is cost saving.  And cost effectiveness analysts would use cost savings to mean something that actually saves more than it costs, but they use cost effective to mean something that is worth what it costs.  They’re almost using it more to say it’s cost beneficial.  Does that agree with your idea, Todd?

Todd:  Yes.  I hear it misused a lot.  I appreciate you starting with that.  And we can see what Patsi has to say, too.  The other thing that I often tell people is to make sure it’s relative to something.  It’s like, a treatment is not cost effective on its own.  A treatment doesn’t have value on its own.  It’s always in relation to something else.

Louise Russell:  That’s right.

Todd:  Whether it’s cost effective or cost beneficial, in England or the UK they might say the cost utility of it, the cost equality.  It’s relative.  What would you say Patsi?

Patricia Sinnott:  Right.  I see what Louise is referring to is kind of colloquial use of cost effective to mean cheaper.  And you know it’s a constant challenge from the analyst challenge to—

Louise Russell:  I think it also comes out of a history of cost effectiveness analysis.  I think fifty or sixty years ago when people started doing something that they called cost effectiveness analysis they were usually taking the objective as given and trying to find the cheapest way to do it.  And then we expanded the methodology to look at much more complicated questions where you were no longer trying to achieve an objective.  You might be trying to get more of something or less of something and there were tradeoffs and we kept using the same phrase.  I think the method changed underneath the name and originally it was much closer that we were looking for the cost saving option here.

Todd:  Of course there’s another question that comes up with a threshold.  Do we compare it with a threshold?  They say $50,000 which means $50,000 per quality.  Of course when people say look at treatments, frequently better treatments cost more but also offer benefits.  That threshold marker is subjective.  In the UK it’s usually much more objective and [Nice] in the UK and the formulary has set up this idea that it’s $30,000 per qualities—or 30,000 pounds per quality is what they’ll pay.  There’s been discussions about twice the GDP as your threshold.  The US it goes back—my understanding is it goes back to dialyses and some early analysis of dialyses that said $50,000 per quality.  Of course that’s not inflation adjusted.  And so this gets into a very fuzzy area of is there a threshold and what that threshold should be.  Patsi, Louise I’ve kept you unmated.

Patricia Sinnott:  I would say that in the US there is no threshold that is actually that I’m aware that is used in decision making.  But $50,000 threshold.  I’m glad you mentioned that it’s not inflation adjusted because it’s been around for twenty years and nobody has inflation adjusted it.  It tends to get mentioned in published articles, but I don’t know that anybody actually uses it in making decisions, do you?

Louise Russell:  No.

Todd:  Not in making decisions.  It’s probably used more in pricing than anything else.

Patricia Sinnott:  And certainly the choices if you look around at the times of things we do in the American medical system we’re doing lots and lots of things that cost way, way more than $50,000 for quality of life.

Todd:  Yes.  Screening, frequent screening.  If you did annual pap smears, for example, that’s one where it’s like $300,000 per quality.  Any other questions?  I think that’s it for our questions, and we’re approaching the top of the hour.  So if you have any questions, feel free to type them in.  We’ve got about sixty-five people remaining.  This has been a wonderful cyber seminar.  Thank you, so much, in advance, Patsi.  Do you want to put up, Heidi, the response surveys so we can get feedback?

Heidi:  Actually go to webinar.  It pops up when people leave the session.

Todd:  Okay.

Heidi:  So I don’t need to put it up any longer.

Todd:  Oh my goodness.

Heidi:  It’s built in.

Todd:  All these great new technologies.

Patricia Sinnott:  Okey Dokey.  Thanks everyone.

Todd:  Thanks again, Patsi.  Thanks again.

Patricia Sinnott:  Don’t hesitate to send us any questions if you have them.  And we look forward to the next time.  What’s next, Todd?

Todd:  Sorry—I think it’s Peter Kabuli presenting—who is it--?

Heidi:  It’s Julia Prentice.

Todd:  Julia Prentice from Boston University.  Thank you.

Heidi:  She will be presenting outpatient waiting time measures and patient satisfaction.  We’ll be sending registration material out to everyone shortly.

Todd:  Thanks, Heidi; you’re much faster at the draw than I was.

Heidi:  She sits right across the hall from me.  So—

Todd:  This will be easy.  Thank you all.

Patricia Sinnott:  Bye bye.

Heidi:  Talk to you next time.  Thank you Patsi.

**[End of Recording]**