Health Economics in a Nutshell: Health Economics in a Nutshell: A Blood Banking perspective

Evan M Bloch, MD, MSAssociate Clinical Investigator, BSRIAssistant Adjunct Professor, UCSF

Conferencia Regional Seguridad Sanguinea en America LatinaLima, Peru 30th March 2014

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Today’s Presentation

• The principles of health economics– What and why?

– Decision analysis

– Basic terminology: Quality Adjusted Life Years and Health state utilities

– How one evaluates “cost-effectiveness”?

– Benefits and limitations

• Health economics in the context of blood banking–Successes and setbacks–Example: Babesia microti

Health economics in 15minutes…•Similar to life in 35 seconds•Caveats: neither comprehensive nor complete•I’m no expert

Introduction to health economics: What and why?

What is health economics?•Systematic identification, enumeration and valuation of costs and benefits (or consequences) of health care interventions or programs: ‘value for money’•Welfare economics: Allocation of scarce resources in a way that maximizes benefit to society (social welfare theory)

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Why is it important?•Scarcity

– insufficient resources for all activities or interventions•Choice

– decisions between competing initiatives– by choosing to use resources in one way we forego using

the same resources in other ways

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Economics Do Matter Inflation Adjusted Red Cell Service Fees

ABC Newsletter 2008

Determinants of health prioritiesWhere does Health economics fit in?

Robinson, Health Policy, 1999;49:13-26

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How?Decision Analysis and Health Economics

Decision analysis Decision analysis is a systematic, quantitative, and

explicit approach for assessing the relative value of

different decision options

Decisions have to be made…Are there ways to optimize the outcome?

• assesses the probability and value of multiple outcomes• enables incorporation of data from multiple sources, makes assumptions

explicit, and quantifies the decision parameters• Highlights data strengths and deficiencies

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Health EconomicsTypes of analyses…what do they mean?Types of analyses…what do they mean?

Is it Worth Doing?•Cost-effectiveness: results expressed as a cost per natural unit e.g. infection prevented or lives saved•Cost-utility analysisCost-utility analysis: cost per QALY•Cost-benefit analysis: costs and benefits expressed as monetary values

Can we afford it?•Budget Impact Analysis (BIA)

Basic TerminologyQALYQALY: Quality-Adjusted Life Year

•is a measure of disease burdenGain in QALYs•The QALY is based on the number of years of life that would be added by the intervention

– both quality and quantity of life lived•QALY= year of life x health state utility

Health state utility Health state utility •Each year in perfect health is assigned the value of 1.0 down to a value of 0.0 for being dead

– the extra years that are not lived in full health (e.g. Blindness, amputation) incur a utility of between 0 and 1

– Based on perception of outcomes

DALYDALY: The Disability-Adjusted Life Year •alternative measure of overall disease burdenDALYs averted•expressed as the number of years lost due to ill-health, disability or early death

Terminology continued…

ICERICER: Incremental Cost-effectiveness RatioICER is the ratio of the change in costs to incremental benefits of a therapeutic intervention or treatment

CERCER: Cost-effectiveness RatioCER is the ratio of the costs to benefits of an intervention e.g. treatment, testing etc.

If there is nothing currently in place e.g. comparing the addition of new

testing with no testing…CER and ICER will be the same

The analysis: getting startedThe Decision Tree

Cost Option #1

Cost Option #2

Outcomes Outcomes

Probability Probability

The Decision Tree

Disposal of

blood

Donor deferral and loss

Test Cost

Treatment

Performance characteristics

PrevalenceDonors≠ General

population

Transmissibility

Testing No testing

Disease progression/

clinical sequelae

Infection averted

Loss of income

No Test Cost

Complications±death

Infection

The Decision Tree

Cost

Blood culture

Treatment

Leukoreduction No leukoreduction

Investigation

Febrile transfusion reactions

febrile reactions

No cost ofIntervention

Probability of febrile reactions

Health impact in utilities

Additional considerations Pitfalls and the complexity of analysis

Considerations•Life-expectancy in transfusion recipients•Risk varies by component

Methodology •Health states are dynamic•Inflation•Discounting: adjusting future costs and outcomes to present day value (money worth more today than it is in the future)

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How much is cost-effective?

• Historically, $50-100,000 per QALY gained (or DALY averted)• Per WHO, 3 x Gross Domestic Product (GDP) per capita

–US (~$150,000 per QALY)• Human component as to why one implements an intervention

–Ethics of resource allocation to certain populations, diseases etc.–Childhood leukemia vs. myelodysplastic syndrome–Breast cancer vs. prostate cancer

• What constitutes “cost-effective” differs based on perspective–Blood center vs. hospital vs. patient vs. society

• Effects on blood banking decision making has been limited–Implicit threshold of $1 million per QALY in the United States

Based on societal willingness to pay…

Cost Utility and Blood TransfusionsCost Utility League Table of Blood Safety Interventions

(USA Setting)

Intervention (Comparator) Cost per QALY($US)

Year of Publication

HCV Ab (no screen) Cost saving 1997

HIV Ab (no screen) 3,600 1988

WNV NAT (no screen) 520,000 – 897,000 2005

T cruzi Ab (no screen) 757,000 – 1,360,000 2010

PRT platelet concentrates (current screens) 458,000 – 1,816,000 2003

PRT platelets and plasma (current screens) 1,423,000 2010

Minipool HIV/HCV/HBV NAT (serology) 1,500,000 2004

Individual Donation HIV/HCV/HBV NAT (serology)

7,300,000 2004

Bacterial culture of platelets Not available

Syphilis and HTLVI/II Not available

Babesia Babesia microtimicroti See ExampleSee Example

• Trypansoma Cruzi – Chagas disease• Antibody screening for T. cruzi began in Jan 2007• Rate of true positives is 1:30,000 units nationwide• Analysis post implementation of universal testing:

– transfusion transmission very low – Shift to one time donor testing for T. cruzi – High cost and low enthusiasm for new testsHigh cost and low enthusiasm for new tests

West Nile Virus Epidemic (2002)– Risk per unit transfused during epidemic 2-

5/10,000– Within 1 year (2003) NAT testing initiated– Since NAT, transfusion transmission rare– 2003 to 2010: >3,000 WNV NAT-reactive units

Successes and Setbacks (USA)Responding to emerging infectious diseases

The cost utility analysis requires contemporary local or regional data

Quantifying the uncertaintyIt’s not all about cost

• 1-way sensitivity analysis– Evaluating the impact of a single variable on the CER e.g. prevalence– Provides a high and low estimate of the CER

• Tornado diagram– Series of 1-way sensitivity

analyses, shown graphically

• Monte Carlo method– Computer simulation to assess

collective uncertainty across all parameters

Transfusion Transmitted BabesiosisA Contemporary Example of cost-utility analysis

• Babesiosis = tick-borne Intra-erythrocytic protozoan infection• Majority of cases caused by B.microti

– widely endemic North Eastern and Upper Midwestern US• Increase in naturally acquired and transfusion-transmitted babesiosis• Over 162 transfusion associated cases since 1979 with 12 fatalities

– Any RBC containing product• Clinical

– Mild febrile illness: immunocompetent– Severe disease: at extremes of age, asplenic and

immunocompromised– hemolytic anemia, renal-, cardiorespiratory failure and death

We DON’T tend to transfuse the healthy

Cost-effectiveness ratios (cost per QALY):screening vs no screening, stratified by test modality and extent of geographic inclusion

Cost effectiveness ratio: intervention compared to no screening

Incremental cost effectiveness ratio (ICER):intervention compared to the preceding intervention

ELISA onlyELISA only  

Four state $2,615,000 ($290,000 - $10,540,000) $2,615,000 ($290,000 - $10,540,000)

Seven state $3,231,000 ($550,000 - $11,450,000) $5,424,000 ($-20,730,000 - $29,360,000)

Twenty state$6,685,000 ($1,610,000 -

$20,720,000) $11,720,000 ($3,560,000 - $69,980,000)

Fifty state$8,921,000 ($2,610,000 -

$29,420,000)$20,276,000 ($-246,330,000 -

$276,430,000)

ELISA + PCRELISA + PCR  

Four state $5,219,000 ($870,000 - $16,500,000) $5,219,000 ($870,000 - $16,500,000)

Seven state$6,582,000 ($1,250,000 -

$17,340,000) $11,436,000 ($-39,930,000 - $60,540,000)

Twenty state$14,228,000 ($3,520,000 -

$36,560,000) $25,374,000 ($8,790,000 - $93,720,000)

Fifty state$19,177,000 ($5,500,000 -

$55,870,000) $44,315,000 ($39,800,000 - $533,000,000)

Costs, consequences, and cost-effectiveness of strategies for Babesia microti blood donor screening strategies the US blood supply (unpublished)Alex J Goodell, Evan M Bloch, Peter J Krause and Brian Custer

The model highlights uncertainty surrounding estimates of transmissibility, disease progression, and epidemiology

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• Zero defect policy– The legacy of HIV and blood transfusion

• The lemming effect– Industry standards and the obligation to conform– Competitive environment

• Perception– Client hospitals and commercial ramifications of Transfusion

transmitted infection– Public: increased awareness

• Fear– Wasted resources: lessons learned from T.cruzi – Implementation of testing with incomplete data

and no exit strategy

Emotional decision making and blood safety

Conclusions

• Decision analysis/health economics valuable tool– Quantifies value of a given intervention

– Informs rational resource allocation

• Cost analyses are only one source of data that will drive decision-making – Not intended to be the single deciding factor

– Dynamic: changing over time

• It’s not all about the money– Highlights gaps in knowledge

– Quantifies the uncertainty and the potential impact