First-cycle blood counts and subsequent neutropenia, dose reduction, or delay in early-stage breast cancer therapy.

PURPOSE: If patients could be ranked according to their projected need for supportive care therapy, then more efficient and less costly treatment algorithms might be developed. This work reports on the construction of a model of neutropenia, dose reduction, or delay that rank-orders patients according to their need for costly supportive care such as granulocyte growth factors. PATIENTS AND METHODS: A case series and consecutive sample of patients treated for breast cancer were studied. Patients had received standard-dose adjuvant chemotherapy for early-stage nonmetastatic breast cancer and were treated by four medical oncologists. Using 95 patients and validated with 80 additional patients, development models were constructed to predict one or more of the following events: neutropenia (absolute neutrophil count [ANC] < or = 250/microL), dose reduction > or = 15% of that scheduled, or treatment delay > or = 7 days. Two approaches to modeling were attempted. The pretreatment approach used only pretreatment predictors such as chemotherapy regimen and radiation history; the conditional approach included, in addition, blood count information obtained in the first cycle of treatment. RESULTS: The pretreatment model was unsuccessful at predicting neutropenia, dose reduction, or delay (c-statistic = 0.63). Conditional models were good predictors of subsequent events after cycle 1 (c-statistic = 0.87 and 0.78 for development and validation samples, respectively). The depth of the first-cycle ANC was an excellent predictor of events in subsequent cycles (P = .0001 to .004). Chemotherapy plus radiation also increased the risk of subsequent events (P = .0011 to .0901). Decline in hemoglobin (HGB) level during the first cycle of therapy was a significant predictor of events in the development study (P = .0074 and .0015), and although the trend was similar in the validation study, HGB decline failed to reach statistical significance. CONCLUSION: It is possible to rank patients according to their need of supportive care based on blood counts observed in the first cycle of therapy. Such rankings may aid in the choice of appropriate supportive care for patients with early-stage breast cancer.

Modeling the cost-effectiveness of granulocyte colony-stimulating factor use in early-stage breast cancer.

PURPOSE: To model the cost-effectiveness (CE) of granulocyte colony-stimulating factor (G-CSF) in early-stage breast cancer when its use is directed to those most in need of the medication. METHODS: A conditional CE model was developed for the use of G-CSF based on a ranking of patient need as determined by patient blood counts during the first cycle of chemotherapy. In the base case, no G-CSF was used. In the alternative case, G-CSF was used in the following manner. If the risk of a neutropenic event (as defined by a predictive model based on nadir absolute neutrophil count [ANC] and hemoglobin decrease in cycle 1) was equal to or exceeded a predetermined critical value "T," then patients would receive G-CSF in cycles 2 through 6 of chemotherapy. If the risk of an event was less than T, patients would not use G-CSF unless an event occurred, at which time G-CSF would be administered with every subsequent cycle. RESULTS: A decision rule (T) that would allow the most needy 50% of early-stage breast cancer patients to receive G-CSF after the first cycle of chemotherapy resulted in a CE ratio of $34,297 dollars per life-year saved (LYS). If only the most needy 10% of patients received G-CSF, then the associated CE ratio was $23,748/LYS; if 90% of patients could receive the medication, the CE ratio would be $76,487/LYS. These estimates were relatively insensitive to inpatient hospital cost estimates (inpatient costs for fever and neutropenia of $3,090 to $7,726 per admission produced dollar per LYS figures of $34,297 to $32,415, respectively). However, the model was sensitive to assumptions about the shape of the relationship between dose reduction and disease-free survival (DFS) at 3 years. CONCLUSION: Providing G-CSF to the neediest 50% of early-stage breast cancer patients (as defined by first-cycle blood counts) starting after the first cycle of chemotherapy is associated with a CE ratio of $34,297/LYS, which is well in the range of CE ratios for treatment of other common medical conditions. Furthermore, conditional CE studies, based on predictive models that incorporate individual patient risk, allow one to define populations for which therapy is, or is not, cost-effective. Limitations of our present understanding of the shape of the chemotherapy dose-response curve, especially at low levels of dose reductions, affect these results. Further work is required to define the shape of the dose-response curve in early-stage breast cancer.

Access to kidney transplantation. Has the United States eliminated income and racial differences?

We analyzed the effect of patient and dialysis unit characteristics on access to kidney transplantation using several different approaches, including an analysis of individual patient data from a systematic random sample of 2900 new dialysis patients from each year 1981 to 1985 (14721 patients total). Additional analyses focused on the composition of transplant waiting lists and aggregate data from a 1984 census of 1133 dialysis and transplant units. White, male, young, nondiabetic, high-income patients treated in smaller units are more likely to receive a cadaver transplant under Medicare than are other kidney patients. Profit status of the dialysis unit was not found to be correlated to access to transplantation, although size of the unit may be correlated to access. Future analysis should focus on whether patient access has been inappropriately compromised. Possible factors unexplored in this analysis include differential patient preferences and medical suitability, as well as differential medical access.

The changing health care environment.

In 1985, the rate of growth of national health expenditures was more than twice the overall rate of growth in prices in the United States, while the percentage of health expenditures relative to the Gross National Product reached a record high of 10.7 percent. There have been almost no changes in the fraction of direct patient payments for medical care since 1980, or in the fraction paid by third parties or the government. Consequently, cost increases in the gross price of medical care are being transferred directly to the patient population. The expense associated with medical treatment and the availability of managed care systems (Health Maintenance Organizations and Preferred Provider Organizations, among others) have contributed to the increasing cost consciousness of patient and physician alike. One of the areas in which the spiralling costs of medical care are most deeply felt is in the treatment of hypertension. The direct costs for treating this condition, which affects more than 25 percent of the American population, exceed $8 billion annually. Furthermore, hypertension is a chronic condition in which the cost of treatment is continuously apparent to the patient. Moderate and severe hypertension is more likely to affect elderly and black patients, the people who are least able to pay for therapy. Difficulty in paying for therapy is becoming an increasingly important problem due to the trend among physicians to prescribe newer and more expensive antihypertensive drugs instead of the more commonly used diuretics and beta blockers. Due to the cost-conscious attitude of patients, the physician who chooses the more expensive drugs may run the risk of losing patronage among middle- and upper-income patients. In the case of lower-income patients, prescribing expensive drugs may result in noncompliance. In order to guard against incursions by managed care systems and ensure the best care for low-income patients, physicians must assume a cost-conscious attitude toward the treatment of hypertension.

Association of dialyzer reuse with hospitalization and survival rates among U.S. hemodialysis patients: do comorbidities matter?

The objective of this study was to determine whether the associations between reuse of hemodialyzers and higher rates of death and hospitalization persist after adjustment for comorbidity. This was a nonconcurrent cohort study of survival and hospitalization rates among 1491 U.S. chronic hemodialysis patients beginning treatment in 1986 and 1987. The impact of dialyzer reuse was compared across three survival models: an unadjusted model, a "base" model adjusted only for demographics and renal diagnosis, and an "augmented" model additionally adjusted for comorbidities. We found that reuse of dialyzers was associated with a similarly higher rate of death in analyses unadjusted for confounders (relative risk [RR] 1.25, 95% confidence interval [CI] 0.97-1.61), adjusted for demographics and renal diagnosis (RR 1.16, 95% CI 0.96-1.41), and analyses additionally adjusted for comorbidities (RR = 1.25, CI, 1.03, 1.52). Reusing dialyzers was also associated with a greater rate of hospitalization that was stable regardless of adjustment procedures. We conclude that higher rates of death and hospitalization associated with dialyzer reuse persist regardless of adjustment for demographic characteristics or baseline comorbidities. These findings amplify concerns that there exists elevated morbidity among hemodialysis patients treated in facilities that reuse hemodialyzers. Although the association we observed was not confounded by comorbidity, a cause-and-effect relationship between dialyzer reuse and morbidity could not be proved because of the inability to control for aspects of care other than dialyzer reuse.

The Clinton plan: what happened to the tough choices?

This paper points out four difficult choices embedded in the Clinton plan. First, universal coverage is achieved, but with regressive head-tax financing on many workers-since the cost of the employer mandate ultimately will fall on workers' wages. Perhaps such an approach can be made politically acceptable. Second, cost containment is entrusted to global spending limits, which will limit the rate of improvement in quality. Third, the offering of choice among a variety of health plans of different costs and quality, although desirable in itself, may lead to inequity. Finally, the plan's financing will make it difficult for voters to tell what trade-offs they are making, because employer mandates and budget cuts disguise choices.

Making a case for employer-enforced individual mandates.

An employer-enforced individual mandate has some substantial advantages over the mixed employer and individual mandate embodied in the Clinton administration's proposed health plan. Economic reasoning strongly suggests that almost all of the cost of an employer mandate will fall on workers and that in any case the incidence of an individual mandate is the same as that of an employer mandate. However, an individual mandate is easier for voters to understand, avoids administrative complexities and inequities, and eliminates the chance of adverse employment effects of mandated employer coverage.

When does curbing health costs really help the economy?

Growth in U.S. health spending has historically been associated with growth in prices paid to health care inputs in excess of economywide inflation and to increases in the employment of health inputs. Increases in input prices largely result in transfers from some citizens to others, while increases in employment mean less of other outputs--which is harmful if those other outputs are more valuable than medical services. Price increases are shown to account for 25 to 50 percent of U.S. medical spending growth in recent years.

Insurance and new technology: from hospital to drugstore.

This paper traces the relationship between insurance coverage and the technology-induced shift of the locus of medical care and medical spending from the inpatient to the outpatient setting. This shift was accompanied by an increase in the extent of private insurance coverage for outpatient treatments; technological change both caused the increase in coverage (for more costly treatments) and was affected by it (as lower user prices increased the demand for new types of care). Changes in insurance administration technology also facilitated the transformation. Some aspects of the change may have been inefficient, because of the presence of tax subsidy and legal requirements to cover costly new technologies of low effectiveness, but the transformation appears thus far to have worked better for private insurance than for Medicare.

Measuring community benefits provided by for-profit and nonprofit hospitals.

Nonprofit hospitals are expected to provide benefits to their community in return for being exempt from most taxes. In this paper we develop a new method of identifying activities that should qualify as community benefits and of determining a benchmark for the amount of community benefits a nonprofit hospital should be expected to provide. We then compare estimates of nonprofits' current level of community benefits with our benchmark and show that actual provision appears to fall short. Either nonprofit hospitals as a group ought to provide more community benefits, or they are performing activities that cannot be measured. In either case, better measurement and accounting of community benefits would improve public policy.

Financial incentives and drug spending in managed care.

This study estimates the impact of patient financial incentives on the use and cost of prescription drugs in the context of differing physician payment mechanisms. A large data set was developed that covers persons in managed care who pay varying levels of cost sharing and whose physicians are compensated under two different models: independent practice association (IPA)-model and network-model health maintenance organizations (HMOs). Our results indicate that higher patient copayments for prescription drugs are associated with lower drug spending in IPA models (in which physicians are not at risk for drug costs) but have little effect in network models (in which physicians bear financial risk for all prescribing behavior).

Market power, monopsony, and health insurance markets.

This paper details the potential adverse welfare consequences of monopsony power in health insurance markets. It is shown that the exercise of monopsony power in the medical services market can augment the monopoly rents of an insurer with market power in the insurance market, while at the same time inefficiently reducing supplier welfare. Cost-sharing by not-for-profit firms and its welfare consequences are also analyzed.

Physician response to fee changes with multiple payers.

This paper develops a general model of physician behavior with demand inducement encompassing the two benchmark cases of profit maximization and target-income behavior. It is shown that when income effects are absent, physicians maximize profits, and when income effects are very strong, physicians seek a target income. The model is used to derive own and cross-price expressions for the response of physicians to fee changes in the realistic context of more than one payer under the alternative behavior assumptions of profit maximization and target income behavior. The implications for public and private fee policy, and empirical research on physician response to fees, are discussed.

Competition and efficiency in the end stage renal disease program.

Estimated coefficients for medical service production or cost functions are subject to a 'competitive amenity bias' which may result in the failure to identify factors that affect economic efficiency. Our investigation of productivity of dialysis facilities did indeed indicate both the likelihood of bias and some qualitative results. These results suggest that it will be difficult to estimate cost and that variation in the level of reimbursement will, in competitive markets, affect the level of amenity delivered to patients. Incurred cost, amenity, and patient well-being will all vary positively with the reimbursement level. Determining the 'right' level of reimbursement requires a policy decision on how much total amenity society wishes to deliver to beneficiaries of public programs.

An efficient employer strategy for dealing with adverse selection in multiple-plan offerings: an MSA example.

This paper outlines a feasible employee premium contribution policy, which would reduce the inefficiency associated with adverse selection when a limited coverage insurance policy is offered alongside a more generous policy. The "efficient premium contribution" is defined and is shown to lead to an efficient allocation across plans of persons who differ by risk, but it may also redistribute against higher risks. A simulation of the additional option of a catastrophic health plan (CHP) accompanied by a medical savings account (MSA) is presented. The efficiency gains from adding the MSA/catastrophic health insurance plan (CHP) option are positive but small, and the adverse consequences for high risks under an efficient employee premium are also small.

Physician opportunity costs in physician practice cost functions.

Estimation of cost functions for physician firms is problematic because many physicians are self-employed, and the marginal opportunity cost of physician labor is not observed. In this paper, we show how to recover marginal costs and conventional measures of economies of scale from cost functions that condition on the amount of physician labor input. In addition, we introduce the new concepts of marginal nonphysician input costs and 'behavioral' economies of scale, which reflect the structure of costs when physician labor input moves along a utility-maximizing expansion path. Our results could be useful in the design of resource-based physician fee schedules.

Would you like suspenders to go with that belt? An analysis of optimal combinations of cost sharing and managed care.

When and why would it be efficient for a managed care insurance plan using managerial limits to add patient cost sharing? This paper uses a diagrammatic model to indicate that the use of patient point-of-service cost sharing can cause the managerial limits or guidelines to be less restrictive in limiting high value care for cases of severe illness. The model shows that cost-sharing is more likely to improve efficiency the greater the variation in illness severity and the smaller the degree of moral hazard. The model is extended to the case in which provider cost sharing is also used.

Benign moral hazard and the cost-effectiveness analysis of insurance coverage.

When a medical intervention is found to be cost effective, what level of insurance coverage should apply to it? The optimal level of coverage may be less than or greater than full coverage of medical care costs; a finding of cost effectiveness for a service does not necessarily imply v full coverage or coverage at the same rate as other services. If there is some imperfection in the ability to translate higher insurance benefits into higher insurer revenues, the optimal level of coverage will be greater the higher the degree of moral hazard applying to the service.

Estimating hospital costs. A multiple-output analysis.

This study explores a new approach to estimating the cost of inpatient and outpatient services provided by hospitals. Data from a nationwide survey of non-federal, short-term, U.S. hospitals are used to make cost estimates based on a multiple-output cost function. The results provide information on the structure of hospital costs, and include estimates of the marginal and average incremental cost of outpatient care. Because of the innovative specification of the cost function, the study is of interest for its methodology as well as empirical results.

Health maintenance organizations and hospital quality for coronary artery bypass surgery.

This study uses hospital discharge data for 1992-1994 to assess differences between HMO and insured non-HMO patients in California and Florida with regard to the quality of the hospitals used for coronary artery bypass graft (CABG) surgery. The authors found that commercially insured HMO patients in California used higher quality hospitals than commercially insured non-HMO patients, controlling for patient distance to the hospital. In contrast, commercially insured HMO and non-HMO patients in Florida were similarly distributed across hospitals of different quality levels, whereas Medicare HMO patients in Florida used lower quality hospitals than patients in the standard Medicare program. The authors conclude that the association between HMO coverage and hospital quality may differ across geographic areas and patient populations, possibly related to the maturity and structure of managed care markets.