Should Health Economic Evaluations Undertaken from a Societal Perspective Include Net Government Spending Multiplier Effects?

The fiscal multiplier represents the ratio of the change in national income to an associated increase in government spending. Fiscal multiplier effects are commonly estimated to justify options for government spending. Multiplier effects are not considered in economic evaluations of healthcare, but alternate forms of healthcare spending are expected to have varying multiplier effects. This paper describes the estimation and application of net government spending multiplier effects to two published economic evaluations. Negative net multiplier effects are estimated for an evaluated pharmaceutical for the treatment of stable cardiovascular disease, with a resulting increase in the published incremental cost per quality-adjusted life-year (QALY) gained from AU$31,244 to 47,311. Positive net multiplier effects are estimated for an evaluated healthcare delivery model for frail older people, with a resulting decrease in the published incremental cost per QALY gained from AU$8129 to 7669. The inclusion of net multiplier effects in economic evaluations undertaken from a societal perspective can have important effects on the estimated value of evaluated health technologies and services. The potential for government spending on healthcare to crowd out existing spending is considered low, but further investigation of crowding-out effects is warranted.

Fluctuations in money availability within an income cycle impacts diet quality of remote Indigenous Australians.

OBJECTIVE: To consider the plausible nutritional impacts of fluctuations in money availability within an income cycle for remote Indigenous Australians. DESIGN: Community-level dietary intake (energy, micro/macronutrients) and expenditure on foods and beverages (F&B) were estimated over one year for three remote Indigenous Australian communities (Northern Territory, Australia) using monthly F&B transaction data. F&B that were likely to be consumed during a period within an income cycle when money was relatively limited (low money period (LMP) foods) were identified by panel consensus and scenario modelling was conducted to simulate the nutritional outcomes of a range of F&B selection responses to having an LMP. RESULTS: All scenarios resulted in reduced diet quality during the LMP relative to overall average diet values. Protein and fat energy percentages were reduced and carbohydrate energy percentage increased. Despite reduced expenditure, declines in energy intake were typically buffered due to the reduced energy cost ($AU/MJ) of the LMP diet. The micronutrient profile of the LMP diet was substantially poorer, such that additional key micronutrients dropped below population-weighted Estimated Average Requirements/Adequate Intakes. CONCLUSIONS: The modelling undertaken herein suggests that even a short period of low money within an income cycle may noticeably contribute to the reduced diet quality of remote Indigenous Australians and exacerbate lifestyle disease risk. Dietary strategies that are designed to respond to diets and expenditure during different income cycle periods, rather than the overall average diet and expenditure, should be considered for improving diet quality and reducing cardiometabolic disease risk in remote Indigenous Australians.

Travelling to the city for hospital care: access factors in country Aboriginal patient journeys.

OBJECTIVE: This study described the challenges for rural and remote Aboriginal people requiring transport to city hospitals for tertiary care. DESIGN: Semi-structured qualitative interviews. SETTING: South Australian rural and remote health services and tertiary hospitals. PARTICIPANTS: Twenty-eight urban health professionals from six hospitals and 32 health professionals from four rural and remote regions were interviewed. Twelve patients, three carers, four people responding as patient and carers, and one patient and carer couple were also interviewed, with eight elder women meeting as a focus group. MAIN OUTCOME MEASURES: The study identified specific structural barriers in urban health services or policy that prevented rural and remote Indigenous patients from receiving optimum care. RESULTS: Problems accessing transport were identified as the most significant factor affecting access to care by the majority of patients and staff. They reported that travel to an urban hospital was costly, and coordination of travel with care was poor. A further problem was travelling while unwell. CONCLUSIONS: Travelling to a city hospital is a significant barrier for rural and remote Indigenous patients. Arranging and supporting travel is a time-consuming work that is not recognised by the health care system.

Can the real opportunity cost stand up: displaced services, the straw man outside the room.

In current literature, displaced services have been suggested to provide a basis for determining a threshold value for the effects of a new technology as part of a reimbursement process when budgets are fixed. We critically examine the conditions under which displaced services would represent an economically meaningful threshold value. We first show that if we assume that the least cost-effective services are displaced to finance a new technology, then the incremental cost-effectiveness ratio (ICER) of the displaced services (d) only coincides with that related to the opportunity cost of adopting that new technology, the ICER of the most cost-effective service in expansion (n), under highly restrictive conditions-namely, complete allocative efficiency in existing provision of health care interventions. More generally, reimbursement of new technology with a fixed budget comprises two actions; adoption and financing through displacement and the effect of reimbursement is the net effect of these two actions. In order for the reimbursement process to be a pathway to allocative efficiency within a fixed budget, the net effect of the strategy of reimbursement is compared with the most cost-effective alternative strategy for reimbursement: optimal reallocation, the health gain maximizing expansion of existing services financed by the health loss minimizing contraction. The shadow price of the health effects of a new technology, ßc = (1/n + 1/d - 1/m)(-1), accounts for both imperfect displacement (the ICER of the displaced service, d < m, the ICER of the least cost-effective of the existing services in contraction) and the allocative inefficiency (n < m) characteristic of health systems.

Cost-effectiveness of using CYP2C19 genotype to guide selection of clopidogrel or ticagrelor in Australia.

AIMS: This study aims to assess the cost-effectiveness in Australia of screening CYP2C19 loss-of-function (LoF) alleles to guide selection of clopidogrel or ticagrelor for individuals with acute coronary syndrome who are likely to undergo coronary stenting. METHODS: Three treatment strategies were compared: universal clopidogrel therapy, universal ticagrelor therapy and genotyping CYP2C19 with use of ticagrelor for individuals with a LoF allele and clopidogrel for individuals without a LoF allele. Lifetime costs and quality-adjusted life years for each treatment strategy were estimated using a Markov model. The risks of events were primarily derived from the genetic substudy of the pivotal randomized controlled trial. RESULTS: CYP2C19 genotyping resulted in greater effectiveness and was cost-effective when compared with universal use of clopidogrel. However, universal use of ticagrelor was the most effective strategy overall and the incremental cost-effectiveness compared with the genotyping strategy was generally within what is considered acceptable. CONCLUSION: Ticagrelor is likely to be cost-effective even for individuals not carrying a CYP2C19 LoF allele.

Indirect estimation of the comparative treatment effect in pharmacogenomic subgroups.

Evidence of clinical utility is a key issue in translating pharmacogenomics into clinical practice. Appropriately designed randomized controlled trials generally provide the most robust evidence of the clinical utility, but often only data from a pharmacogenomic association study are available. This paper details a method for reframing the results of pharmacogenomic association studies in terms of the comparative treatment effect for a pharmacogenomic subgroup to provide greater insight into the likely clinical utility of a pharmacogenomic marker, its' likely cost effectiveness, and the value of undertaking the further (often expensive) research required for translation into clinical practice. The method is based on the law of total probability, which relates marginal and conditional probability. It takes as inputs: the prevalence of the pharmacogenomic marker in the patient group of interest, prognostic effect of the pharmacogenomic marker based on observational association studies, and the unstratified comparative treatment effect based on one or more conventional randomized controlled trials. The critical assumption is that of exchangeability across the included studies. The method is demonstrated using a case study of cytochrome P450 (CYP) 2C19 genotype and the anti-platelet agent clopidogrel. Indirect subgroup analysis provided insight into relationship between the clinical utility of genotyping CYP2C19 and the risk ratio of cardiovascular outcomes between CYP2C19 genotypes for individuals using clopidogrel. In this case study the indirect and direct estimates of the treatment effect for the cytochrome P450 2C19 subgroups were similar. In general, however, indirect estimates are likely to have substantially greater risk of bias than an equivalent direct estimate.

Review of the cost effectiveness of pharmacogenetic-guided treatment of hypercholesterolaemia.

Hypercholesterolaemia is a highly prevalent condition that has major health and cost implications for society. Pharmacotherapy is an important and effective treatment modality for hypercholesterolaemia, with 3-hydroxy-3-methylglutaryl coenzyme A reductase inhibitors ('statins') the most commonly used class of drugs. Over the past decade, there has been intensive research to identify pharmacogenetic markers to guide treatment of hypercholesterolaemia. This study aimed to review the evidence of incremental cost, effect and cost effectiveness of pharmacogenetic-guided treatment of hypercholesterolaemia. Three cost-effectiveness analyses (CEAs) were identified that studied the value of screening for genotypes of angiotensin I converting enzyme (ACE), cholesteryl ester transfer protein (CETP), and kinesin family member 6 (KIF6) prior to initiating statin therapy. For all three CEAs, a major limitation identified was the reproducibility of the evidence supporting the clinical effect of screening for the pharmacogenetic marker. Associated issues included the uncertain value of pharmacogenetic markers over or in addition to existing approaches for monitoring lipid levels, and the lack of evidence to assess the effectiveness of alternative therapeutic options for individuals identified as poor responders to statin therapy. Finally, the economic context of the market for diagnostic tests (is it competitive or is there market power?) and the practicality of large-scale screening programmes to inform prescribing in a complex and varied market may limit the generalizability of the results of the specific CEAs to policy outcomes. The genotype of solute carrier organic anion transporter family member 1B1 (SLCO1B1) has recently been associated with increased risk of muscle toxicity with statin therapy and the review identified that exploration of cost effectiveness of this pharmacogenetic marker is likely warranted.

Should financial incentives be used to differentially reward 'me-too' and innovative drugs?

Strategies to change the existing mix of innovative and 'me-too' drugs are intended to increase societal value of a given investment in R&D by providing an incentive for firms to invest in drugs that are more likely to be clinically innovative. How can financial incentives be used to change this mix? Will a strategy have its intended consequence or will it have the unintended outcome of reducing the rate at which the population burden of disease is reduced? The perspective of this review is a country such as Australia, Canada or the UK that has universal health insurance and a drug reimbursement process that is informed by economic evidence. A review of the literature was performed and the views of both the proponents and the opponents of such strategies and the mechanisms by which they could be implemented were summarized. The debate is based largely on hypothesized responses by firms to changes in incentives rather than empirical evidence. The main point of contention is whether a changed mix of new molecular entities (NMEs) increases or decreases the total amount of clinical innovation launched each year. The argument presented in this article is that, despite the limited empirical evidence, it is possible to improve our assessment of the likely costs and consequences of a proposed strategy by appealing to economic theory and observations about the reimbursement process. First, the empirical evidence supporting the view that changing a mix of drugs will improve clinical innovation is based on the average launched drug, not the marginal innovative drug otherwise not developed, and therefore could be misleading. Second, the dynamic and complex nature of evidence of clinical innovation will reduce the feasibility of using contractually based mechanisms to implement such a strategy. Also, a single country is unlikely to have an impact on R&D decisions, and variation in the per capita economic value of new drugs would make multi-jurisdiction contracts with one firm difficult to implement. Third, the quality of evidence of the clinical innovation of the lead drug could be reduced if there are fewer or no follow-on drugs. Finally, the existing inefficiencies in the process of displacement to finance new technologies from a capped budget reduces the efficiency with which any additional potential clinical innovation from NMEs will be translated to reduced population burden of disease. The article concludes that it is possible that such a strategy could be costly to implement, and the impact on global burden of disease uncertain in both direction and magnitude. This is likely to be the case even if the average clinical innovation content of innovative NMEs is higher than for me-too NMEs and the mechanisms designed to change the mix of NMEs are effective. Other options to improve the effectiveness with which pharmaceutical clinical innovation reduces burden of disease should be explored, including improved efficiency of both firm R&D and the process of disinvestment to finance new technologies.

Caring for a marginalised community: the costs of engaging with culture and complexity.

The Care and Prevention Programme (CPP) began in 1998. It is based on the philosophy of primary health care, and has improved health among homosexually active men, including about a third of HIV-positive South Australians. The CPP was assessed using financial analysis and qualitative methods. Participants wanted to access care where they could feel comfortable and safe to talk about issues of sexuality and lifestyle. The CPP model is "economically" sustainable, but not "financially" sustainable within the Medicare Benefits Schedule. It is vulnerable to changes in political environment. The financing model for the CPP has been adapted by including state funding. General practitioners have adapted by lowering their personal incomes (but not quality of care). These adaptations have achieved fragile financial viability. Facilitators of sustainability for the CPP included: It is part of the community that it serves; The creation of deeply integrated networks of diversity-competent service providers; and "Virtuous non-adaptability" of service providers in refusing to compromise care standards despite financial pressure to do so. Threats to sustainability included: Difficulty maintaining a diversity-competent workforce skilled in HIV medicine; Marginal financial viability; and Political vulnerability.

Assessing the impact of the Australia-United States Free Trade Agreement on Australian and global medicines policy.

On 1 January 2005, a controversial trade agreement entered into force between Australia and the United States. Though heralded by the parties as facilitating the removal of barriers to free trade (in ways not achievable in multilateral fora), it also contained many trade-restricting intellectual property provisions and others uniquely related to altering pharmaceutical regulation and public health policy in Australia. The latter appear to have particularly focused on the world-respected process of federal government reimbursement after expert cost-effectiveness evaluation, popularly known as the Pharmaceutical Benefits Scheme ('PBS'). It remains uncertain what sort of impacts--if any--the Australia-United States Free Trade Agreement ('AUSFTA') will have on PBS processes such as reference pricing and their important role in facilitating equitable and affordable access to essential medicines. This is now the field of inquiry for a major three year Australian Research Council ('ARC')-funded study bringing together a team of senior researchers in regulatory theory from the Australian National University and pharmacoeconomics from the University of Newcastle. The project proposes to monitor, assess and analyse the real and potential impacts of the AUSFTA in this area, providing Australian policy-makers with continuing expertise and options. To the extent that the AUSFTA medicines provisions may represent an important precedent in a global strategy by industry on cost-effectiveness evaluation of pharmaceuticals, the study will also be of great interest to policy makers in other jurisdictions.

Routine testing for mismatch repair deficiency in sporadic colorectal cancer is justified.

This study prospectively examines the accuracy of immunohistochemical staining in the identification of mismatch repair defective (MMRD) colorectal cancer in routine clinical practice. The potential impact of this information on decisions regarding adjuvant treatment and germline testing were quantified. A consecutive series of fresh tissue (836 cancers) was obtained from 786 individuals undergoing curative surgery for colorectal cancer at one institution. As part of normal practice, each tumour was screened for the expression of MLH1 and MSH2 by immunohistochemical staining (IHC) and relevant clinicopathological details were documented. Microsatellite instability (MSI) was assessed using standard markers. Overall, 108 (13%) tumours showed loss of staining for either MLH1 (92 tumours) or MSH2 (16 tumours). The positive predictive value of mismatch repair IHC when used alone in the detection of MSI tumours was 88%, and the negative predictive value was 97%. Specificity and positive predictive value were improved by correlation with microsatellite status. Tumour stage (HR 3.5, 95% CI 2.0-6.0), vascular space invasion (HR 1.9, 95% CI 1.2-3.0) and mismatch repair deficiency (HR 0.2, 95% CI 0.05-0.87) were independent prognostic factors in stages II and III disease. Screening by mismatch repair IHC could reasonably have been expected to prevent ineffective treatment in 3.6% of stage II and 7.6% of stage III patients. The frequency of germline mismatch repair mutations was 0.8%, representing six unsuspected hereditary non-polyposis colorectal cancer (HNPCC) cases. Routine screening of colorectal cancers by mismatch repair IHC identifies individuals at low risk of relapse, and can prevent unnecessary adjuvant treatments in a significant number of individuals. Abnormal immunohistochemistry should be confirmed by microsatellite testing to ensure that false-positive results do not adversely impact on treatment decisions.

Cost analysis of ambulatory blood pressure monitoring in initiating antihypertensive drug treatment in Australian general practice.

OBJECTIVE: To compare the cost of ambulatory blood pressure monitoring (ABPM) with the putative savings made through treatment avoided by identification and non-treatment of those with "white coat" hypertension. DESIGN: A cost analysis based on a model of four alternative strategies (no ABPM, yearly, two-yearly, or three-yearly monitoring) over a seven-year period applied to a case series from Australian general practice. PARTICIPANTS: 62 patients newly diagnosed by their GPs as having hypertension and requiring drug treatment. MAIN OUTCOME MEASURES: The proportion of patients shown to not need treatment. The discounted costs to the Pharmaceutical Benefits Scheme, Medical Benefits Scheme and patients. RESULTS: 16 of 62 patients (26%; 95% CI, 15%-37%) were normotensive on ABPM and did not require treatment. All monitoring strategies are more expensive in the first year, but the initial costs are offset by year 3 and the monitoring strategies are cost saving thereafter. Sensitivity analysis shows that this result holds across a range of costs of pharmacotherapy and proportion of patients with white coat hypertension. CONCLUSION: The additional costs of 24-hour ABPM in the first year are offset by savings associated with patients with white coat hypertension who would otherwise have been treated.

Fundholding: learning from the past and looking to the future.

Australian trials of healthcare initiatives that included fundholding models have not produced convincing quantitative evidence of health gains, but there is qualitative evidence of improved patient well-being and significant changes in service mix, which may produce longer-term health gains. Fundholding is most likely to improve patient outcomes when implemented within a broader healthcare initiative that has the potential to be more effective if financed outside existing funding structures. The most appropriate fundholder organisation depends on the nature of the initiative and the type of stakeholder engagement required, but technical and organisational skills will always be needed for balancing financial viability and additional patient services. Stakeholders' willingness to engage in fundholding depends on the anticipated budget impact, how they will use the savings generated, and whether workforce needs will be fulfilled. Before including fundholding in healthcare initiatives, there must be realistic prospective analyses and community debate. Monitoring and evaluation frameworks must also be in place to provide ongoing evidence of quality of care, health and well-being outcomes and financial implications for fund contributors.