The Dollar or Disease Burden: Caps on Healthcare Spending May Save Money, but at What "Cost" to Patients?

OBJECTIVES: Various strategies to address healthcare spending and medical costs continue to be debated and implemented in the United States. To date, these efforts have failed to adequately contain the growth of healthcare cost. An alternative strategy that has elicited rising interest among policymakers is budget caps. As budget caps become more prevalent, it is important to identify which features are needed to ensure success, both in terms of cost reduction and health improvement. METHODS: We explored the impacts of different features of budget caps by comparing hypothetical service level and global budget caps across 3 annual budget cap growth strategies over a 10-year timeframe in 2005-2015 for 8 of the most commonly occurring conditions in the United States. Health was assessed by a measure of disease burden (disability-adjusted life years). RESULTS: The results indicate that budget caps have the potential for creating savings but can also result in patient harm if not designed well. As a result of these findings, 5 principles were developed for designing budget caps and should guide the use of budget caps to address medical spending. CONCLUSIONS: As public discussion grows about the use of budget caps to constrain health spending, it is critical to recognize that the budget cap design and the resulting healthcare provider behavior will determine whether there is potential harm to public health. Budget cap design should consider variability at the condition level, including patient population, improvements in health, treatment costs, and the innovations available, to both create savings and maximize patient health. In assessing the impact of healthcare spending caps on costs and disease burden, we demonstrate that budget cap design determines potential harm to public health.

Eligibility for Low-Dose Rivaroxaban Based on the COMPASS Trial: Insights from the Veterans Affairs Healthcare System.

INTRODUCTION: Low-dose rivaroxaban reduced major adverse cardiac and limb events among patients with stable atherosclerotic vascular disease (ASCVD) in the COMPASS trial. The objective of our study was to evaluate the eligibility and budgetary impact of the COMPASS trial in a real-world population. METHODS: The VA administrative and clinical databases were utilized to conduct a cross-sectional study to identify patients eligible for low-dose rivaroxaban receiving care at all 141 facilities between October 1, 2014 and September 30, 2015. Proportion of patients with stable ASCVD eligible for low-dose rivaroxaban and prevalence of multiple risk enrichment criteria among eligible patients. Pharmaceutical budgetary impact using VA pharmacy pricing. Chi-squared and Student's t tests were used to compare patients eligible versus ineligible patients. RESULTS: From an initial cohort of 1,248,214 patients with ASCVD, 488,495 patients (39.1%) met trial eligibility criteria. Eligible patients were older (74.2 vs 64.5 years) with higher proportion of hypertension (84.1% vs 82.1%) and diabetes (46.2% vs 32.9) compared with ineligible patients (p < 0.001 for all comparisons). A median of 38.7% (IQR 4.6%) of total ASCVD patients per facility were rivaroxaban eligible. Estimated annual VA pharmacy budgetary impact would range from $0.47 billion to $1.88 billion for 25% to 100% treatment penetration. Annual facility level pharmaceutical budgetary impact would be a median of $12.3 million (IQR $8.0-$16.3 million) for treatment of all eligible patients. Among eligible patients, age greater than 65 years was the most common risk enrichment factor (86.9%). Prevalence of eligible patients with multiple enrichment factors varied from 34.2% (one factor) to 6.2% (four or more). CONCLUSION: Over one third of patients with stable ASCVD may qualify for low-dose rivaroxaban within the VA. Additional studies are needed to understand eligibility in other populations and a formal cost-effectiveness analysis is warranted.

Comparing Outcomes for Female Total Knee Arthroplasty Patients Under Global Budget Revenue.

Maryland implemented the all-payer, rater-setting Global Budget Revenue (GBR) payment model in 2014 to reduce cost and improve quality. This study assessed the effect of GBR on total knee arthroplasty (TKA) outcomes by sex. Specifically, the authors assessed (1) demographics and (2) outcomes of males and females undergoing TKA before and after GBR implementation. The Maryland State Inpatient Database was queried from 2011 to 2016. There were 71,066 TKAs (male, n=25,413; female, n=45,634). For continuous and categorical variables, t testing and chi-square analyses were used, respectively. Difference-in-difference analyses using multiple regression compared changes in sex from the pre-GBR period (2011-2013) with the post-GBR period (2014-2016). The female proportion decreased (-1.9%; P=.040). Proportionally more TKA patients were Hispanic and Asian, from high-income areas, using Medicare and Medicaid, and morbidly obese (all P<.001). The mean length of stay (LOS), charges, and costs were decreased after GBR implementation (all P<.001). More patients were discharged routine and had fewer readmissions (both P<.001). There were fewer complications, including deep venous thromboses/pulmonary emboli, urinary tract infections, and blood transfusions (all P<.001). The difference-in-difference analyses suggested more females were discharged with home health care and had longer LOS than did males (both P<.001). The GBR appears to meet its main objective of cost reduction and improvements in quality of care. However, the proportion of females receiving TKA decreased, and their LOS did not improve as much as that of males. As other states consider global budgets, more research is needed to ensure this all-payer, rate-setting, capitated system does not cause decreased access to care. [Orthopedics. 2021;44(2):e266-e273.].

Budget impact analysis of darolutamide for treatment of nonmetastatic castration-resistant prostate cancer.

BACKGROUND: Darolutamide, a structurally distinct androgen receptor inhibitor approved for the treatment of men with nonmetastatic castration-resistant prostate cancer (nmCRPC), has been shown to increase metastasis-free survival among men with nmCRPC compared with placebo. This treatment has a novel chemical structure that may also have safety, tolerability, and efficacy advantages for men with nmCRPC. OBJECTIVE: To estimate the projected budget impact of including darolutamide on a U.S. payer formulary as a treatment option for men with nmCRPC. METHODS: A budget impact model was developed to evaluate darolutamide for nmCRPC for a hypothetical 1-million-member plan over a 5-year period. Costs (drug acquisition, drug administration, and treatment-related adverse events [AEs]) were estimated for 2 scenarios: with and without darolutamide treatment for nmCRPC. The budget impact of darolutamide was calculated as the difference in costs for these 2 scenarios. An analysis for high-risk nmCRPC also was conducted. The model included treatments recommended by the National Comprehensive Cancer Network (e.g., apalutamide and enzalutamide) and potential comparators that are used but are not specifically indicated for nmCRPC. All treatments were assumed to be administered in combination with a weighted average androgen deprivation therapy comparator (consisting of luteinizing hormone-releasing hormone [LHRH] agonists, LHRH antagonists, and first-generation antiandrogens). Market share estimates were derived from interviews with physicians treating men with nmCRPC. The model includes grade 3-4 AEs, and the rates were obtained from clinical trial data. Costs were taken from publicly available sources and varied in a one-way sensitivity analysis. RESULTS: For a plan with 1 million lives, there were approximately 90 incident cases of nmCRPC (46 high risk) each year, with 332 (109 high risk) treatment-eligible cases by year 5. Darolutamide's market share increased from 3.6% in year 1 to 18% in year 5. Given the utilization of other agents, introducing darolutamide along with other targeted therapies was predicted to increase the total budget by $158,640 ($0.0132 per member per month [PMPM]) in year 1, which decreased over time to a cost savings of $149,240 ($0.0124 PMPM) by year 5. The scenario with darolutamide showed reduced AE costs each year. Similar results were observed for the high-risk nmCRPC population. CONCLUSIONS: Adding darolutamide to a U.S. payer formulary for the treatment of nmCRPC can result in a manageable increase in the budget that is partly offset by AE costs in the first 4 years, followed by a cost savings by year 5. DISCLOSURES: This study was conducted by RTI Health Solutions under the direction of Bayer U.S. and was funded by Bayer U.S., which was involved in the design of the study; collection, analysis, and interpretation of the data; writing of the report; and the decision to submit the report for publication. Miles and Purser (and/or their institutions) are employees of RTI Health Solutions and received research funding from Bayer U.S. to develop the budget impact model. Appukkuttan and Farej are employees of Bayer U.S. Wen was an employee of Bayer U.S. at the time of the study. This study was presented as a poster at the AMCP Virtual Learning Event, April 20-24, 2020.

Addressing budget reduction and reallocation on health-related resources during COVID-19 pandemic in malaria-endemic countries.

The global COVID-19 pandemic has been affecting the maintenance of various disease control programmes, including malaria. In some malaria-endemic countries, funding and personnel reallocations were executed from malaria control programmes to support COVID-19 response efforts, resulting mainly in interruptions of disease control activities and reduced capabilities of health system. While it is principal to drive national budget rearrangements during the pandemic, the long-standing malaria control programmes should not be left behind in order to sustain the achievements from the previous years. With different levels of intensity, many countries have been struggling to improve the health system resilience and to mitigate the unavoidable stagnation of malaria control programmes. Current opinion emphasized the impacts of budget reprioritization on malaria-related resources during COVID-19 pandemic in malaria endemic countries in Africa and Southeast Asia, and feasible attempts that can be taken to lessen these impacts.

The impact of global budget payment reform on systemic overuse in Maryland.

BACKGROUND: Medical overuse is a leading contributor to the high cost of the US health care system and is a definitive misuse of resources. Elimination of overuse could improve health care efficiency. In 2014, the State of Maryland placed the majority of its hospitals under an all-payer, annual, global budget for inpatient and outpatient hospital services. This program aims to control hospital use and spending. OBJECTIVE: To assess whether the Maryland global budget program was associated with a reduction in the broad overuse of health care services. METHODS: We conducted a retrospective analysis of deidentified claims for 18-64 year old adults from the IBM MarketScan® Commercial Claims and Encounters Database. We matched 2 Maryland Metropolitan Statistical Areas (MSAs) to 6 out-of-state comparison MSAs. In a difference-in-differences analysis, we compared changes in systemic overuse in Maryland vs the comparison MSAs before (2011-2013) and after implementation (2014-2015) of the global budget program. Systemic overuse was measured using a semiannual Johns Hopkins Overuse Index. RESULTS: Global budgets were not associated with a reduction in systemic overuse. Over the first 1.5 years of the program, we estimated a nonsignificant differential change of -0.002 points (95%CI, -0.372 to 0.369; p = 0.993) relative to the comparison group. This result was robust to multiple model assumptions and sensitivity analyses. CONCLUSIONS: We did not find evidence that Maryland hospitals met their revenue targets by reducing systemic overuse. Global budgets alone may be too blunt of an instrument to selectively reduce low-value care.

Limitations and Challenges of Conducting Budget Impact Analyses in Rare Diseases: A Case Study of Alpha-1 Antitrypsin Deficiency.

OBJECTIVES: There are challenges in conducting a budget impact analysis (BIA) for rare disorders. Through this case study, we present some challenges and limitations of a BIA of managing patients affected with alpha-1 antitrypsin deficiency (AATD). We explored a conceptual basis and barriers for health services researchers interested in quantifying budget impacts of rare disease management program (DMP). METHODS: We developed a static budget impact cost calculator model in Microsoft Excel, obtaining the clinical impact of a DMP from the literature and translating it into costs using OLDW. Cost inputs and resource use was obtained from 2010 to 2015 claims data using the OLDW. Insurers' payments were calculated and categorized into the following cost buckets: physician visits, emergency room visits, inpatients stays, augmentation therapy, other prescription drugs costs, and other costs. RESULTS: Data were based on 6832 patients with alpha-1 antitrypsin deficiency identified among over 21 million OLDW enrollees observed between January 1, 2010, and December 31, 2015. The introduction of a DMP was estimated to decrease costs of the management of patients with alpha-1 antitrypsin deficiency by $13.5 million over 5 years. The savings attributed to the program over the 5-year time horizon are due to 2555 exacerbations, 5180 emergency room visits, 9342 specialist visits, and 105 358 general practitioner visits avoided. CONCLUSIONS: A comprehensive DMP for a rare condition might provide cost savings to a health plan. BIAs for rare disease may be more informative if they focus on DMPs rather than on individual drugs.

Optimal Allocation of Research Funds under a Budget Constraint.

Purpose. Health economic evaluations that include the expected value of sample information support implementation decisions as well as decisions about further research. However, just as decision makers must consider portfolios of implementation spending, they must also identify the optimal portfolio of research investments. Methods. Under a fixed research budget, a decision maker determines which studies to fund; additional budget allocated to one study to increase the study sample size implies less budget available to collect information to reduce decision uncertainty in other implementation decisions. We employ a budget-constrained portfolio optimization framework in which the decisions are whether to invest in a study and at what sample size. The objective is to maximize the sum of the studies' population expected net benefit of sampling (ENBS). We show how to determine the optimal research portfolio and study-specific levels of investment. We demonstrate our framework with a stylized example to illustrate solution features and a real-world application using 6 published cost-effectiveness analyses. Results. Among the studies selected for nonzero investment, the optimal sample size occurs at the point at which the marginal population ENBS divided by the marginal cost of additional sampling is the same for all studies. Compared with standard ENBS optimization without a research budget constraint, optimal budget-constrained sample sizes are typically smaller but allow more studies to be funded. Conclusions. The budget constraint for research studies directly implies that the optimal sample size for additional research is not the point at which the ENBS is maximized for individual studies. A portfolio optimization approach can yield higher total ENBS. Ultimately, there is a maximum willingness to pay for incremental information that determines optimal sample sizes.

Global Fund financing and human resources for health investments in the Eastern Mediterranean Region.

BACKGROUND: Despite the large investments in donor-related health activities in areas of the globe prone to tension and conflict, few studies have examined in detail the role of these donor investments in human resources for health (HRH). METHODS: We used a mixed-methods research methodology comprising both quantitative and qualitative analyses to analyze the Enhanced Financial Reporting System of the Global Fund to Fight AIDS, Tuberculosis and Malaria budget and expenditure data from 2003 to 2017 for 13 countries in the Eastern Mediterranean Region (EMR). We analyzed additional detailed budgetary data over the period 2015-2017 for a sub-set of these countries. Two country-case studies were conducted in Afghanistan and Sudan for a more in-depth understanding of the HRH-related activities that occurred as a result of Global Fund grants. RESULTS: The results show that US$2.2 billion Global Fund dollars had been budgeted and US$1.6 billion were expended over the period 2003-2017 in 13 Eastern Mediterranean countries. The average expenditures for human resources for health (training and human resources) as a percentage of total expenditure are 28%. Additional detailed budgetary data analysis shows a more conservative investment in HRH with 13% of total budgets allocated to "direct" HRH activities such as salaries, training costs, and technical assistance. HRH-related activities supported by the Global Fund in Afghanistan and Sudan were similar, including pre-service and in-services training, hiring of program coordinators and staff, and top-ups for clinical staff. CONCLUSIONS: HRH remains a key issue in strengthening the health systems of low- and middle-income countries. While this study suggests that Global Fund's HRH investments in the EMR are not lagging behind the global average, there appears to be a need to further scale up these investments considering this region's unique HRH challenges.

A quality improvement initiative for COPD patients: A cost analysis.

The objective of this analysis was to evaluate and report on the economic impact of implementing an integrated, quality, and operational improvement program on chronic obstructive pulmonary disease (COPD) care from acute through post-acute care settings. This initiative was established in a cohort of 12 hospitals in Alabama and sought to address COPD readmission through improved workflows pertaining to early diagnosis, efficient care transitions, and patient visibility across the entire care episode. Implementation of the initiative was influenced by lean principles, particularly cross-functional agreement of workflows to improve COPD care delivery and outcomes. A budget impact model was developed to calculate cost savings directly from objective data collected during this initiative. The model estimated payer annual savings over 5 years. Patients were classified for analysis based on whether or not they received noninvasive ventilation. Scenario analyses calculated savings for payers covering different COPD cohort sizes. The base case revealed annual per patient savings of $11,263 for patients treated through the quality improvement program versus traditional care. The model projected cumulative savings of $52 million over a 5-year period. Clinical incorporation of non-invasive ventilation (NIV) resulted in $20,535 annual savings per patient and projected $91 million over 5 years. We conclude that an integrated management program for COPD patients across the care continuum is associated with substantial cost savings and significantly reduced hospital readmissions.

Health versus other sectors: Multisectoral resource allocation preferences in Mukono district, Uganda.

OBJECTIVES: To elicit citizen preferences for national budget resource allocation in Uganda, examine respondents' preferences for health vis-à-vis other sectors, and compare these preferences with actual government budget allocations. METHODS: We surveyed 432 households in urban and rural areas of Mukono district in central Uganda.We elicited citizens' preferences for resource allocation across all sectors using a best-worst scaling (BWS) survey. The BWS survey consisted of 16 sectors corresponding to the Uganda national budget line items. Respondents chose, from a subset of four sectors across 16 choice tasks, which sectors they thought were most and least important to allocate resources to. We utilized the relative best-minus-worst score method and a conditional logistic regression to obtain ranked preferences for resource allocation across sectors. We then compared the respondents' preferences with actual government budget allocations. RESULTS: The health sector was the top ranked sector where 82% of respondents selected health as the most important sector for the government to fund, but it was ranked sixth in national budget allocation, encompassing 6.4% of the total budget. Beyond health, water and environment, agriculture, and social development sectors were largely underfunded compared to respondents' preferences. Works and transport, education, security, and justice, law and order received a larger share of the national budget compared to respondents' preferences. CONCLUSIONS: Among respondents from Mukono district in Uganda, we found that citizens' preferences for resource allocation across sectors, including for the health sector, were fundamentally misaligned with current government budget allocations. Evidence of respondents' strong preferences for allocating resources to the health sector could help stakeholders make the case for increased health sector allocations. Greater investment in health is not only essential to satisfy citizens' needs and preferences, but also to meet the government's health goals to improve health, strengthen health systems, and achieve universal health coverage.

Financial risk of seeking maternal and neonatal healthcare in southern Ethiopia: a cohort study of rural households.

INTRODUCTION: Ethiopian households' out-of-pocket healthcare payments constitute one-third of the national healthcare budget and are higher than the global and low-income countries average, and even the global target. Such out-of-pocket payments pose severe financial risks, can be catastrophic, impoverishing, and one of the causal barriers for low utilisation of healthcare services in Ethiopia. This study aimed to assess the financial risk of seeking maternal and neonatal healthcare in southern Ethiopia. METHODS: A population-based cohort study was conducted among 794 pregnant women, 784 postpartum women, and their 772 neonates from 794 households in rural kebeles of the Wonago district, southern Ethiopia. The financial risk was estimated using the incidence of catastrophic healthcare expenditure, impoverishment, and depth of poverty. Annual catastrophic healthcare expenditure was determined if out-of-pocket payments exceeding 10% of total household or 40% of non-food expenditure. Impoverishment was analysed based on total household expenditure and the international poverty line of ≈ $1.9 per capita per day. RESULTS: Approximately 93% (735) of pregnant women, 31% (244) of postpartum women, and 48% (369) of their neonates experienced illness. However, only 56 households utilised healthcare services. The median total household expenditure was $527 per year (IQR = 390: 370,760). The median out-of-pocket healthcare payment was $46 per year (IQR = 46: 46, 92) with two episodes per household, and shared 19% of the household's budget. The poorer households paid more than did the richer for healthcare, during pregnancy-related and neonatal illness. However, the richer paid more than did the poorer during postpartum illness. Forty-six percent of households faced catastrophic healthcare expenditure at the threshold of 10% of total household expenditure, or 74% at a 40% non-food expenditure, and associated with neonatal illness (aRR: 2.56, 95%CI: 1.02, 6.44). Moreover, 92% of households were pushed further into extreme poverty and the poverty gap among households was 45 Ethiopian Birr per day. The average household size among study households was 4.7 persons per household. CONCLUSIONS: This study demonstrated that health inequity in the household's budget share of total OOP healthcare payments in southern Ethiopia was high. Besides, utilisation of maternal and neonatal healthcare services is very low and seeking such healthcare poses a substantial financial risk during illness among rural households. Therefore, the issue of health inequity should be considered when setting priorities to address the lack of fairness in maternal and neonatal health.

Budget impact analysis of long acting injection for schizophrenia in Japan.

Aims: To estimate the budgetary impact of providing additional reimbursement for long acting injections for schizophrenia patients in psychiatric hospital settings in Japan to improve patient outcomes in schizophrenia.Methods: Budget impact analysis of change in reimbursement policy using a prevalence-based model over a five-year time horizon. The results are reported as net change in expenditure and consequent cost/savings in Japanese yen at the time of analysis.Results: The budget impact analysis shows that an increase in reimbursement for LAIs could lead to cumulative savings of an estimated 36.6 billion JPY over five years. These savings result from a decrease in hospitalization costs and an increased usage of LAI (assumed to be 10%). Based on the sensitivity analysis, the saving estimates are most sensitive to change in market share of generic and branded oral antipsychotics.Limitations: Historical data were used to estimate the future costs of drug and hospitalization; however, it is not the best predictor of future, hence a source of potential bias. A good level of treatment adherence with oral antipsychotics was assumed, which is generally not the case; therefore, we might have overestimated the effectiveness of oral atypical antipsychotics. Additionally, the drug cost due to reimbursement might have also been overestimated because in clinical setting, the increase of LAI use may not have reached 10% of the market share. Lastly, patients' behavior was derived from models, which may have loosely approximated the reality.Conclusions: An additional reimbursement for the use of LAI in schizophrenia patients is likely to be cost neutral/cost saving and should be considered as a policy option to improve patient outcomes and budget sustainability.

A novel method for predicting the budget impact of innovative medicines: validation study for oncolytics.

BACKGROUND: High budget impact (BI) estimates of new drugs have led to decision-making challenges potentially resulting in restrictions in patient access. However, current BI predictions are rather inaccurate and short term. We therefore developed a new approach for BI prediction. Here, we describe the validation of our BI prediction approach using oncology drugs as a case study. METHODS: We used Dutch population-level data to estimate BI where BI is defined as list price multiplied by volume. We included drugs in the antineoplastic agents ATC category which the European Medicines Agency (EMA) considered a New Active Substance and received EMA marketing authorization (MA) between 2000 and 2017. A mixed-effects model was used for prediction and included tumor site, orphan, first in class or conditional approval designation as covariates. Data from 2000 to 2012 were the training set. BI was predicted monthly from 0 to 45 months after MA. Cross-validation was performed using a rolling forecasting origin with e^|Ln(observed BI/predicted BI)| as outcome. RESULTS: The training set and validation set included 25 and 44 products, respectively. Mean error, composed of all validation outcomes, was 2.94 (median 1.57). Errors are higher with less available data and at more future predictions. Highest errors occur without any prior data. From 10 months onward, error remains constant. CONCLUSIONS: The validation shows that the method can relatively accurately predict BI. For payers or policymakers, this approach can yield a valuable addition to current BI predictions due to its ease of use, independence of indications and ability to update predictions to the most recent data.

Cervical cancer prevention in Indonesia: An updated clinical impact, cost-effectiveness and budget impact analysis.

INTRODUCTION: The clinical and economic impact of cervical cancer consistently become a serious burden for all countries, including Indonesia. The implementation of HPV vaccination policy for a big country such as Indonesia requires a strong commitment from several decision-makers. The aim of this study was to provide a comprehensive description on cost-effectiveness and the budget-impact of HPV vaccination policy in Indonesia. METHOD: A cohort Markov model was used to evaluate the cost and the clinical impact of HPV vaccination for 10 years old girls in Indonesia. The researchers consider two doses of all three available HPV vaccines adjusted with the HPV infection profilewith 95% vaccination coverage to estimate the national cervical cancer incidence and mortality. The Budget impact analysis explores three different scenarios covering (1) Two districts per year expansion, (2) oneprovince per year expansion and (3) achieving the National Immunization Program in 2024. RESULTS: Upon fully vaccinating almost 2.3 million 10-year-old girls, 34,723; 43,414; and 51,522 cervical cancer cases were prevented by Quadrivalent, Bivalent and Nonavalent vaccines, consecutively. Furthermore, the highest (591 cases) and lowest (399 cases) mortality were prevented by Nonavalent and Quadrivalent vaccines, respectively. Most of the vaccines were considerably cost-effective and only the Bivalent vaccine with the GAVI/UNICEF price which will be considered a cost-saving strategy.To provide national coverage of HPV vaccination in Indonesia, the government has to provide an annual budget of about US$49 million and US$22 million using the government contract price and GAVI/UNICEF price, respectively. CONCLUSION: HPV vaccination shows a cost-effective strategy and the budget required to provide this policy is considerably affordable for Indonesia.