The cost effectiveness of implantable cardioverter-defibrillators: results from the Multicenter Automatic Defibrillator Implantation Trial (MADIT)-II.

OBJECTIVES: We sought to evaluate the cost implications of the implantable cardioverter-defibrillator (ICD), using utilization, cost, and survival data from the Multicenter Automatic Defibrillator Implantation Trial (MADIT)-II. BACKGROUND: This trial showed that prophylactic implantation of a defibrillator reduces the rate of mortality in patients who experienced a previous myocardial infarction and low left ventricular ejection fraction. Given the size of the eligible population, the cost effectiveness of the ICD has substantial implications. METHODS: Our research comprises the cost-effectiveness component of the randomized controlled trial, MADIT-II, based on utilization, cost, and survival information from 1,095 U.S. patients who were assigned randomly to receive an ICD or conventional medical care. Utilization data were converted to costs using a variety of national and hospital-specific data. The incremental cost-effectiveness ratio (iCER) was calculated as the difference in discounted costs divided by the difference in discounted life expectancy within 3.5 years. Secondary analyses included projections of survival (using three alternative assumptions), corresponding cost assumptions, and the resulting cost-effectiveness ratios until 12 years after randomization. RESULTS: During the 3.5-year period of the study, the average survival gain for the defibrillator arm was 0.167 years (2 months), the additional costs were 39,200 dollars, and the iCER was 235,000 dollars per year-of-life saved. In three alternative projections to 12 years, this ratio ranged from 78,600 dollars to 114,000 dollars. CONCLUSIONS: The estimated cost per life-year saved by the ICD in the MADIT-II study is relatively high at 3.5 years but is projected to be substantially lower over the course of longer time horizons.

Has price competition changed hospital revenues and expenses in New York?

This study analyzes the factors that influenced hospital expenses and revenues prior to and following the enactment of the New York State Health Care Reform Act of 1996 (HCRA)-the period from 1994-1999. HCRA was expected to encourage price competition which in turn was anticipated to lower hospital revenues and expenses. We measured the differential effects on hospital revenues and expenses in markets with varying degrees of competition. We also measured the relationship between hospital revenues and expenses and the increased concentration resulting from the formation of local hospital systems. We found that revenues and expenses both grew more slowly for hospitals located in more competitive markets; hospital systems that increased concentration tended to have higher revenues. In the short run at least, price competition induced by HCRA did constrain both hospital expense and revenue growth, although the increase in hospital mergers countered this trend.

Has competition lowered hospital prices?

On Jan. 1, 1997, New York ended its regulation of hospital prices with the intent of using competitive markets to control prices and increase efficiency. This paper uses data that come from annual reports filed by all health maintenance organizations (HMOs) operating in New York and include payments to and usage in the major hospitals in an HMO's network. We estimate the relationship between implied prices and hospital, plan, and market characteristics. The models show that after 1997, hospitals in more competitive markets paid less. Partially offsetting these price reductions were price increases associated with hospital mergers that reduced the competitiveness of the local market. Hospital deregulation was successful, at least in the short run, in using price competition to reduce hospital payments; it is unclear whether this success will be undermined by the structural changes taking place in the hospital industry.