What Have We Learned Fro

Economic Analyses of Prevent

Louise B. Russell, PhD

Health Economics Cyber Seminar 

VA Health Economics Resource Center

January 19, 2011
Economic Evaluat

The Prevention Agenda

• “Healthy People 2010 is a comprehensiv

disease prevention and health promotion objectives for the Nation to achieve over decade of the new centur

y [] . ... 

[It

] identif

wide range of public health priorities”. http://www.healthypeople.gov/About/hpfact.htm

• In the health reform debate, prevention 

promoted as a way to control medical co

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Economic Evaluat

History and Expectations

• Prevention has brought major gains in healt

lifespan over the last two centuries.

• Today’s leading causes of death – heart dise

cancer diabetes cancer

, diabetes 

– can now be prevented or 

• Prevention’s appeal

– Better to avoid disease/injury than repair it– Prevent the disease, prevent treatment costs– Expectation: Better health, lower medical spending

• But does it reduce medical spending?Institute for Health/Department of Economics
Economic Evaluat

Radio advertisement

• Man scheduled to undergo bypass surgery • Cost of the surgery: $50 000 Cost of the surgery: $50

,000 

• Wouldn’t it be better to avoid surgery throug

prevention? By losing weight quitting smokprevention? By losing weight

, quitting smok

exercising, taking medications to reduce blopressure and cholesterol? 

• Better for health•

C eape o t e ed ca syste heaper f

or 

t

h

e medical syste

m

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Economic Evaluat

But – prevention is more compl

• Medical science can only identify those at ri

heart disease, a much larger group than tho

will someday be candidates for bypass surge

• Prevention must be delivered to all people a

often repeatedly over many years

, to pre

to pre

some from developing disease 

→ costs mo

• Some develop disease anyway, since preven

100% effective; some do not develop it eveprevention 

→ all receive prevention, but not 

experi i ence savings.

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Economic Evaluat

Cost-effectiveness Analysis

First applied to health and medicine in the Weinstein MC, WB Stason. Hypertension: A Po

Perspective (Cambridge MA: Harvard University P

• Blood pressure medication extends life and 

treatment costs for heart disease and stroke

• But th ld f d he accumulate

d costs o

f me

dication ov

years are greater than the savings

• P ti t th t t t Prevention cos

t

s more than trea

tmen

t

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Economic Evaluat

Is Prevention Better than Cur

Russell LB. Is Prevention better than Cure? (WDC: Brookings 1986) DC: Brookings, 1986).• Examined vaccines, blood pressure medicat

screening lifestyle change screening

, lifestyle change.

• Prevention usually adds to medical spending

When is prevention worth the co

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Economic Evaluat

Outline of the rest of the ta

• How cost-effectiveness analysis (CEA) a

the cost question

• Review of prevention CEAs• Features that make prevention more, or 

cost-effective

• Patients’ time, the forgotten cost

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Economic Evaluat

Three Types of Prevention

• Primary prevention prevents the disease fr

occurring, e.g., vaccines.

• Secondary prevention detects risk factors, 

clinical disease, and intervenes to prevent fu

dl h d evelopment, e.g., anti

hypertensive me

dica

cancer screening.

• T ti er ary preventi i t t t tion i

n

tervenes t

o prevent o

moderate consequences of established diseablindness from diabetes.

• Focus here: primary and secondary preventInstitute for Health/Department of Economics
Economic Evaluat

How CEA addresses the cost que

• CEA compares the costs and health outcome

alternatives (example, next slide)

• Usually counts only medical sector costs

– Could count other costs and the societal perspectiv– But medical costs are the point at issue

• Difference in costs and health outcomes be

alternatives: net costs and net health effec

• Cost-effectiveness ratio: net cost divided 

health effect, e.g., net cost per year of healtsaved

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Economic Evaluat

Annual Costs and Healthy Days per pati

Guided self-management vs. traditional asthma ca

Lahdensuo A et al. British Medical Journal. 1998;316:1138-1

Costs/Health effects

Selfmanagement Traditional 

C li ounseling 348 179 Peak flow meter 32 0 Drugs 613 623 Physician visits 47 80 Hospital stays 33 52 TOTAL COSTS 1074 935 HEALTHY DAYS 359.2 344.3 Cost effectiveness ratio: $3 380 per healthy yearInstitute for Health/Department of Economics

-effectiveness ratio: $3

,380 per healthy year
Economic Evaluat

Terminology

• An intervention is cost-saving if its net costs a

negative. No cost

-effectiveness ratio is calc

• An intervention is cost-effective if it costs mor

alternative but improves health and is judgegood value for money.

• World Health Organization guideline

– cost-effective: < 3 times per capita GDP 

($ , ), y 140

,000 in the U.S.), for each 

year of l

– very cost-effective: < GDP per capita ($4

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Economic Evaluat

Recent Review of Prevention C

Cohen JT, PJ Neumann, MC Weinstein. New England JourMedicine. 2008;358:661-663.• Tufts-New England Medical Center CEA Regi• 599 CEA studies published in 2000-2005• 279 prevention comparisons• 1221 treatment comparisons• Less than 20% of preventive interventions, 

similar share of treatment interventions

, red

medical spending.

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Economic Evaluat

Cost per healthy year of life sav

Higher cost, less health

> $1 million

$100K to <250

K

$250K to < 1 million

$10K t < 50K

$50K to < 100

K 

< $10

K

$10K t

o < 50K

0 10 20 30 

Cost-saving

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Percent of interventions
Economic Evaluat

What makes prevention more cost-e

• Component costs• Risk 

p p rofile of 

patients

• Frequency of intervention

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Economic Evaluat

Blood pressure medication

Weinstein, Stason. Hypertension: A Policy Perspective

• Medication is a better value for those whose 

pressure at diagnosis is higher.

Edelson JT et al. Long-term cost-effectiveness of varioumonotherapies for mild to moderate hypertension. JournAmerican Medical Association. 1990;263:407-413 • No medication is cost

-saving

• Some are more cost-effective than others• Diuretics

, y py, currentl

y the first line of therapy, 

among the most cost-effective.

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Economic Evaluat

Blood pressure medication

Updated to 2007$ in LB Russell, Prevention’s Potent

Cost per life-year in people aged 35-6

with tou h tear di 2007$ disease, 2007$

p p ro

pranolol

( ) beta blocker

) 

hydrochlorothiazide (diuretic) 

nifedipine (calcium channel blocker) 

prazosin hydrochloride (alpha blocker) 

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Economic Evaluat

Statins to reduce cholestero

Prosser LA et al Cost Prosser LA et al. Cost

-effectiveness of cholesterol effectiveness of cholesterol

-lowerin

lowerin

according to selected patient characteristics. Annals of InMedicine. 2000;132:769-779.• Cost-effectiveness of statins varies wide

patients’ risk profile

– LDL– Blood pressure– Smoking– HDL– Existing heart disease

• Health gains and treatment savings are 

for people at greatest risk.

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Economic Evaluat

STATINS: STATINS: cost per healthy year in cost per healthy year in people 55 people 55

-

No CHD at baseline, high LDL cholesterol

Men, LDL 4.2-4.9 mmol/L (160-189 mg/dL)

DBP<95, nonsmoker, HDL>1.3 (49) DBP

≥95, smoker, HDL<0.9 (35) 

Women, LDL 4.2-4.9 mmol

/ ( L 

(160-189 mg/ ) dL

)

DBP<95, nonsmoker, HDL>1.3 (49) DBP

≥95, smoker, HDL<0.9 (35) 

No CHD at baseline very high LDL cholesterol No CHD at baseline, very high LDL cholesterol

Men, LDL

≥ 4.9 mmol/L (

≥190 mg/dL)

DBP<95, nonsmoker, HDL>1.3 (49) DBP

≥95 k , smo

ker, HDL 0 9 (35) HDL

<

0.9 (35) 

Women, LDL

≥ 4.9 mmol/L (

≥190 mg/dL)

DBP<95, nonsmoker, HDL>1.3 (49) DBP

≥95, smoker, HDL<0.9 (35) 

CHD at baseline

Men

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Women 
Economic Evaluat

Cervical cancer screening

Eddy DM. Screening for Cervical Cancer. Annals of Intern

1990;113:214-226

• Another classic CEA• Screening frequency is a major determin

cost-effectiveness

• Compare interventions by intensity not 

Compare interventions by intensity

, not 

no intervention (here, no screening)

• Example: screening every 3 years vs. ev

years

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Economic Evaluat

Cervical cancer screening

Cost 

per lifey, $ ear 2007

$

at 3 years vs. no screening $ 4

at 2 

years vs. 3 1

, 

29

annually vs annually vs. at 2 years 2 years 3 27

3

,27

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Economic Evaluat

Pneumococcal pneumonia vac

Sisk JE et al. Annals of Internal Medicine. 2003;12:960-9

• At $16 per person (1995$) -- about $25 tod

vaccination against pneumococcal pneumon

medical spending for adults 50-64 with congheart failure, chronic lung disease, diabetesother chronic conditions

• The 2010 cost/dose, excluding administratio

– $19 for the US Centers for Disease Control – $38 for private US purchasers.

• Vaccination would be cost

-saving at the CDC 

saving at the CDC 

not at the private price

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Economic Evaluat

What about those 5:1 savings cl

• CEAs of childhood vaccinations typically esti

– savings in parents savings in parents time ’ valued at the wage rate , valued at the wage rate– children’s future earnings

• They compare vaccination costs with medica

medica

savings in parents’ time, and children’s futuearnings.

• The reported ratio: all dollars saved to dolla• Often a vaccination strategy that saves whe

time/earnings are considered costs the medsystem more than it saves.

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Economic Evaluat

Example of 5:1 savings

Li TA l C Lieu TA et

al. Cost-eff i f i i ll 

ffectiveness

of 

a routine varicell

a va

program for US children. JAMA. 1994;271:375-81.• Abstract: including parents Abstract: including parents time and childre

’ time and childre

earnings, varicella vaccine “would save morfor every dollar invested”. 

• Next line: medical costs of vaccination are g

than medical savings. 

• Medical costs: vaccination saved 90 cents fo

dollar spent (Table 4, “health care payer’s perspect

• Assumed a private-sector price of $35 per d

(1990$), about $75 today. Current private-

price is $84

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.
Economic Evaluat

Patients’ Time: The Forgotten 

• Societal perspective, recommended by the P

Cost

-Effectiveness in Health and Medicine, i

costs and health effects for all who are signiaffected by the intervention.

• Costs = real resources• Unpaid time of patients and caregivers is a r

resource. 

– Affects patients Affects patients decisions ’ decisions– Taken from other uses

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Economic Evaluat

S lf e -moni i f bl d l itoring

of blood 

gluc

Russell, Safford. Am J Managed Care. 2008;14:395-396

Cost per healthy year,

2006$

Without patient With 

time 

O d il Once d

ail

y $7 856 , $4

$4

Three times daily 6 601 , 3

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Economic Evaluat

Opportunity Costs (Russell LB Prevention’s Pote

(Russell LB, Prevention’s Pote

2007$ $/

Chickenpox vaccine, pre-school children 

Screening for colorectal cancer

white men, sigmoidoscopy at 55 

white men, sigmoidoscopy every 10 years vs. at 55 2

Mammography 

women aged 50-79, every 2 years 3

MRI f

o oe r w

o

m

en with BR

CA1

mammography alone 2

mammography plus MRI 514

Screenin

g for diabetes

adults 55 with high blood pressure vs. no screening 5

all adults 55 vs. those with high blood pressure 53

Screenin

g once for HIV

prevalence 1.0% 34

prevalence 0.1% 6

Diet/exercise to prevent diabetes, high-risk adults 19

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Smoking cessation, average of 15 programs 
Economic Evaluat

ReferencesCohen JT, PJ Neumann, MC Weinstein. Does preventive care save money

economics and the presidential candidates. New England Journal of M

2008;358:661

-663.

Cost-Effectiveness in Health and Medicine. MR Gold, JE Siegel, LB Russe

eds. (New York, NY: Oxford University Press, 1996).

Eddy DM. Screening for Cervical Cancer. Annals of Internal Medicine. 199

Economic Models of Colorectal Cancer Screening in Average-Risk Adults. 

Russell, J Wagner, eds. (Washington DC: National Academies Press, 

Edelson JT et al. Long-term cost-effectiveness of various initial monothe

to moderate hypertension. Journal of the American Medical Associati

1990;263:407-413.

Lahdensuo A et al. Randomised comparison of cost effectiveness of guide

management and traditional treatment of asthma in Finland. British 1998;316:1138

-1139.

Lieu TA, Cochi SL, Black SB, et al. Cost-effectiveness of a routine varice

program for US children. JAMA. 1994;271:375-381.

Prosser LA et al. Cost-effectiveness of cholesterol-lowering therapies acc

selected patient characteristics selected patient characteristics. Annals of Internal Annals of Internal Medicine 2000;13

Medicine. 2000;13

Russell LB. Completing costs: patients’ time. Medical Care. 2009;47:S89

Care Costs: In Pursuit of Standardized Methods and Estimates for RePolicy Applications).

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Economic Evaluat

References continued References, continuedRussell LB. Educated Guesses: Making Policy about Medical Screening Te

CA: University of California Press, 1994).

Russell LB. Is Prevention better than Cure? (Washington DC: Brookings, 

Russell LB. Preventing chronic disease: an important investment, but don

savings. Health Affairs. 2009;28:42-45.

Russell LB. Russell LB. Prevention Prevention s Potential for Slowing ’s Potential for Slowing the Growth of Medical Spen

owth of Medical Spen

Coalition on Health Care, 2007.

Russell LB, Y Ibuka, KG Abraham. Health-related activities in the America

Survey. Medical Care. 2007;45:680-685.

Russell LB MM Safford Importance of reco Russell LB, MM Safford. Importance of recognizing patient’s time as a co

gnizing patient’s time as a co

management (letter). American Journal of Managed Care. 2008;14:3

Sisk JE et al. Cost-effectiveness of vaccination against invasive pneumoc

among people fifty through sixty-four years of age: role of comorbid 

race. A l f I l M di i Annals

of Internal M

edi

cine. 2003 12 960 2003;12:960

-968.

Weinstein MC, WB Stason. Hypertension: A Policy Perspective (Cambridg

University Press, 1976).

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