Cost-Effectiveness Analysis of Branded Drugs With Market Demand and Insurance.

OBJECTIVES: Cost-effectiveness analysis of branded pharmaceuticals presumes that both cost (or price) and marginal effectiveness levels are exogenous. This assumption underlies most judgments of the cost-effectiveness of specific drugs. In this study, we show the theoretical implications of letting both factors be endogenous by modeling pharmaceutical price setting with and without health insurance, along with patient response to the prices that depend on marginal effectiveness. We then explore the implications of these models for cost-effectiveness ratios. METHODS: We used simple textbook models of patient demand and pricing behavior of drug firms to predict market equilibria in the drug and insurance markets and to generate calculations of the cost-effectiveness ratios in those settings. RESULTS: We found that ratios in market settings can be much different from those calculated in cost-effectiveness studies based on exogenous prices and treatment of all patients at risk rather than those who would demand treatment in a market setting. We also found that there may be considerable similarity in these market cost-effectiveness ratios across different products because drug firms with market power set profit-maximizing prices. CONCLUSIONS: We found that market cost-effectiveness ratios will always indicate an excess of benefits over cost. Insurance will lead to less favorable ratios than without insurance, but when insurers bargain with drug firms, rather than taking their prices as given, cost-effectiveness ratios will be more favorable.

Observational study assessing changes in timing of readmissions around postdischarge day 30 associated with the introduction of the Hospital Readmissions Reduction Program.

BACKGROUND: The Hospital Readmissions Reduction Program (HRRP) initially penalised hospitals for excess readmission within 30 days of discharge for acute myocardial infarction (AMI), congestive heart failure (CHF) or pneumonia (PNA) and was expanded in subsequent years to include readmissions for chronic obstructive pulmonary disease, elective total hip arthroplasty, total knee arthroplasty and coronary artery bypass graft surgery. We assessed whether HRRP was associated with delays in readmissions from immediately before the 30-day penalty threshold to just after it. METHODS: We included Medicare fee-for-service beneficiaries discharged between 1 January 2007 and 31 October 2015. Readmissions were assessed until December 31, 2015. The study period was divided into three phases: January 2007 to March 2009 (pre-HRRP), April 2009 to September 2012 (implementation) and October 2012 to December 2015 (penalty). We estimated additional readmissions between postdischarge days 31-35 compared with days 26-30 using a negative binomial difference-in-differences model, comparing target HRRP versus non-HRRP conditions at the same hospital in the same month in the pre-HRRP and penalty phases. RESULTS: HRRP was not associated with a significant difference in AMI readmissions between postdischarge days 31-35 versus postdischarge days 26-30 for each hospital in the penalty phase, as compared with non-HRRP conditions and the pre-HRRP phase (p=0.19). There were statistically significant increases in readmissions CHF (0.040%, 95% CI 0.024% to 0.056%, p<0.01), PNA (0.022%, 95% CI 0.002% to 0.042%, p=0.03) and stroke (0.035%, 95% CI 0.010% to 0.060%, p<0.01); however, these readmissions represent <0.01% of readmissions during this time period. CONCLUSION: We did not identify consistently significant associations between HRRP and delayed readmissions, and importantly, any findings suggesting delayed readmissions were extremely small and unlikely to be clinically relevant.

Characteristics of Physicians Participating in Medicare's Oncology Care Model Bundled Payment Program.

PURPOSE: The Oncology Care Model (OCM) is Medicare's first bundled payment program for patients with cancer. We examined baseline characteristics of OCM physician participants and markets with high OCM physician participation to inform generalizability and complement the ongoing practice-level evaluation of the OCM. METHODS: In this cross-sectional study, we identified characteristics of US medical oncologists practicing in 2016, using a national telephone-verified physician database. We linked these data with Dartmouth Atlas and Medicare claims data from 2011 through 2016 to identify characteristics of markets with high OCM participation. We used logistic regression to examine relationships between market characteristics and OCM participation. RESULTS: Of 10,428 US medical oncologists, 2,605 (24.9%) were listed in an OCM practice. There were no differences in sex or medical training between OCM participants and nonparticipants, although OCM participants were slightly younger. OCM participants practiced in larger (median daily patient volume, 80 v 55 patients) and urban practices (95.2% v 90.7%) and were less likely to be part of a health system (41.0% v 60.4%) or solo practice (45.5% v 67.4%; all P < .001). Participation was higher in southern and mid-Atlantic markets. Markets with high OCM physician participation had higher specialist density, hospital care intensity, and acute care use at the end of life (all P < .001). Market-level penetration of Accountable Care Organizations (adjusted odds ratio, 4.65; 95% CI 3.31 to 6.56; P < .001) and Medicare Advantage (adjusted odds ratio 2.82; 95% CI, 1.97 to 4.06; P < .001) were associated with higher OCM participation. CONCLUSION: In the first description of oncologists participating in the OCM, we found differences in practice demographics, care intensity, and exposure to nontraditional payment models between OCM-participating and nonparticipating physicians. Such provider-level differences may not be captured in Medicare's practice-level analysis.

Comparison Of Hospitals Participating In Medicare's Voluntary And Mandatory Orthopedic Bundle Programs.

We analyzed data from Medicare and the American Hospital Association Annual Survey to compare characteristics and baseline performance among hospitals in Medicare's voluntary (Bundled Payments for Care Improvement initiative, or BPCI) and mandatory (Comprehensive Care for Joint Replacement Model, or CJR) joint replacement bundled payment programs. BPCI hospitals had higher mean patient volume and were larger and more teaching intensive than were CJR hospitals, but the two groups had similar risk exposure and baseline episode quality and cost. BPCI hospitals also had higher cost attributable to institutional postacute care, largely driven by inpatient rehabilitation facility cost. These findings suggest that while both voluntary and mandatory approaches can play a role in engaging hospitals in bundled payment, mandatory programs can produce more robust, generalizable evidence. Either mandatory or additional targeted voluntary programs may be required to engage more hospitals in bundled payment programs.

Febuxostat: drug review and update.

INTRODUCTION: Gouty arthritis and hyperuricemia have ailed humans for centuries. Recent advances in understanding of the mechanism(s) of their development have changed our perception of the disease process. Despite these gains, the treatment options available are limited. The FDA approval of febuxostat for the treatment of hyperuricemia in gout has been a significant step forward. Since its approval in 2009, febuxostat has proven to be safe and efficacious although concerns remain regarding its long-term effects and superiority to other uricosuric agents, such as allopurinol. AREAS COVERED: A comprehensive literature review of PubMed and Ovid examining clinical trials and post-marketing studies yielded congruent findings on efficacy and safety in elderly populations and those with mild-to-moderate renal/hepatic impairment. A lack of literature and clinical studies was found with regard to comparison of febuxostat to FDA-approved high-dose allopurinol (> 300 mg), the safety of febuxostat in the treatment of severe renal/hepatic impairment and the benefit in the treatment of secondary cases of hyperuricemia. EXPERT OPINION: Febuxostat is effective in the treatment of mild-to-moderate renal/hepatic impairment with dramatic effects on the serum urate level. It can be used safely in patients with hypersensitivity reactions to allopurinol. Further research is needed to determine the long-term benefits and risks.