economics of implementation: moving beyond traditional cea

Economics of Implementation: Economics of Implementation: Moving beyond Traditional CEAMoving beyond Traditional CEA

Mark SmithMark Smith

Paul BarnettPaul Barnett

VA Health Economics Resource CenterVA Health Economics Resource Center

Health Economics Resource CenterHealth Economics Resource Center 22

OutlineOutline

1.1. BackgroundBackground

2.2. Cost-effectiveness analysis (CEA)Cost-effectiveness analysis (CEA)

3.3. Business case analysis (BCA)Business case analysis (BCA)

4.4. QUERI economics researchQUERI economics research


Policy NeedsPolicy Needs

Need to improve evidence base for quality Need to improve evidence base for quality improvementimprovement

Need to find most cost-effective combinations ofNeed to find most cost-effective combinations of Best practicesBest practices Methods to implement them in actual practiceMethods to implement them in actual practice

Implementation researchImplementation research


Stages of ImplementationStages of Implementation

1. Define best practice1. Define best practice– Randomized controlled trials (RCTs)Randomized controlled trials (RCTs)– Literature reviewsLiterature reviews– Expert panels Expert panels

2. Disseminate best practice– Journal articles, booksJournal articles, books– ConferencesConferences– Presentations to cliniciansPresentations to clinicians– Presentations to managersPresentations to managers


Stages of ImplementationStages of Implementation

3. Implementation intervention3. Implementation intervention– Goal: to implement the best practice in a new settingGoal: to implement the best practice in a new setting

– Common methods:Common methods: Electronic clinical remindersElectronic clinical reminders Education: passive, active Education: passive, active Audit and feedbackAudit and feedback


Poll QuestionsPoll Questions

Are you affiliated with a QUERI center?Are you affiliated with a QUERI center?

Have you studied the cost of implementing Have you studied the cost of implementing a best practice, or will you soon?a best practice, or will you soon?


VA QUERI ProgramVA QUERI Program

Goal: To locate clinical best practices and to implement Goal: To locate clinical best practices and to implement them throughout the VA systemthem throughout the VA system

Structure: 10 research centers focused on diseases or Structure: 10 research centers focused on diseases or

conditions (conditions (e.g.e.g.: mental health; CHF): mental health; CHF)


VA QUERI ProgramVA QUERI Program

Oversight: Review board of VA policymakers, Oversight: Review board of VA policymakers, clinicians, researchers, and a VSO representative.clinicians, researchers, and a VSO representative.

- promotes policy relevant research- promotes policy relevant research

- promotes spread of findings to policymakers- promotes spread of findings to policymakers

in VA headquartersin VA headquarters

Status: At several centers, research has reached the Status: At several centers, research has reached the stage of regional or national roll-outstage of regional or national roll-out


Policy QuestionPolicy Question

Do the benefits justify the expense of the Do the benefits justify the expense of the implementation project, including both the implementation project, including both the clinical best practice clinical best practice andand the strategy to the strategy to implement it?implement it?


Two Types of AnalysisTwo Types of Analysis

Reference case CEA Reference case CEA – shows cost-effectiveness from societal shows cost-effectiveness from societal

perspectiveperspective

Business case analysis (BCA)Business case analysis (BCA)– shows cash flow, total program costshows cash flow, total program cost

from provider’s perspectivefrom provider’s perspective


OutlineOutline






Reference Case CEAReference Case CEA

Standard method for performing cost-effectiveness Standard method for performing cost-effectiveness analysis in healthanalysis in health

Promulgated by US Public Health Service task force Promulgated by US Public Health Service task force in 1996in 1996

Used to develop formularies and set practice Used to develop formularies and set practice guidelinesguidelines

Some properties:Some properties:– Societal perspective Societal perspective all costs counted all costs counted

– Outcome in QALYs Outcome in QALYs lifetime horizon lifetime horizon


CEA of Implementation ProjectsCEA of Implementation Projects

1.1. Measure cost of clinical effort (traditional CEA)Measure cost of clinical effort (traditional CEA)

2.2. Measure cost of implementation effort Measure cost of implementation effort

3.3. Distinguish cost of implementation from net cost Distinguish cost of implementation from net cost of best practice of best practice


Implementation Cost ElementsImplementation Cost Elements

Clinical best practiceClinical best practice– Inpatient, outpatient, Rx careInpatient, outpatient, Rx care– Patient-incurred costs: time spent obtaining care, Patient-incurred costs: time spent obtaining care,

home health carehome health care– Exclude development costsExclude development costs– Exclude research costsExclude research costs



Dissemination Dissemination – Staff time for creating and presenting resultsStaff time for creating and presenting results

– Travel to meetingsTravel to meetings

– SuppliesSupplies

QUERI definition of dissemination:QUERI definition of dissemination:““An active, versus passive, effort to communicate tailored An active, versus passive, effort to communicate tailored

information to target audiences with the goal of information to target audiences with the goal of engagement and information use.” engagement and information use.”

- Excludes journal articles, conference presentations- Excludes journal articles, conference presentations



Implementation interventionImplementation intervention

– IT costs IT costs (electronic clinical reminders)(electronic clinical reminders)

– Staff time Staff time (training; audit/feedback)(training; audit/feedback)

Consider start-up vs. maintenance costsConsider start-up vs. maintenance costs


Issues in Implementation CEAIssues in Implementation CEA

Adaptation over time due to Adaptation over time due to

- Formative evaluation- Formative evaluation

- Competing priorities- Competing priorities

Adaptation across locations due toAdaptation across locations due to

- Formative evalution- Formative evalution

- Differences in technology, staffing- Differences in technology, staffing


Implications of Adding ImplementationImplications of Adding Implementation

1. 1. The combination of implementation and best-The combination of implementation and best-practice may not be cost-effective. practice may not be cost-effective.

Hypothetical example: case management for heart Hypothetical example: case management for heart disease preventiondisease prevention- In RCT, $35,000 / QALY- In RCT, $35,000 / QALY

- When implemented with provider education component, - When implemented with provider education component,

$75,000 / QALY$75,000 / QALY



2. 2. If the combination isn’t cost-effective, If the combination isn’t cost-effective, consider whether the implementation consider whether the implementation intervention can be changed:intervention can be changed:

– Reduce the cost per provider/patientReduce the cost per provider/patient Less expensive staff ?Less expensive staff ? Less travel ?Less travel ? Simpler IT ?Simpler IT ?

– Limit it to a subset of providers/patientsLimit it to a subset of providers/patients



3. For the combination to be cost-effective, the 3. For the combination to be cost-effective, the best-practice intervention alone must be best-practice intervention alone must be highlyhighly cost-effectivecost-effective

If an RCT reveals moderate or high ICER, it is If an RCT reveals moderate or high ICER, it is very unlikely to be cost-effective when an very unlikely to be cost-effective when an implementation intervention is added to it.implementation intervention is added to it.


OutlineOutline






Business Case Analysis: OverviewBusiness Case Analysis: Overview

Definition: Analysis of provider’s expenditures for a Definition: Analysis of provider’s expenditures for a program over a short period (often 1-3 years), program over a short period (often 1-3 years), including the effect of any offsetting savings.including the effect of any offsetting savings.

QUERI context: QUERI context: – Perspective of VA Perspective of VA

– Counts the clinical intervention and the implementation Counts the clinical intervention and the implementation interventionintervention


Business Case Analysis: PerspectiveBusiness Case Analysis: Perspective

Reference case CEA: societal perspectiveReference case CEA: societal perspectiveBusiness case: provider/payer’s perspectiveBusiness case: provider/payer’s perspective

ExampleExample Reference case counts patient-incurred costs; Reference case counts patient-incurred costs; business case does not except to the extent that reputation, business case does not except to the extent that reputation, plan enrollment, or recruitment/retention are affect.plan enrollment, or recruitment/retention are affect.

Practical EffectPractical EffectInterventions will be less expensive in a business case Interventions will be less expensive in a business case analysis.analysis.


Business Case Analysis vs. CEABusiness Case Analysis vs. CEA

Reference case CEA: lifetime horizonReference case CEA: lifetime horizonBusiness case: shorter horizon (Business case: shorter horizon (e.g.e.g., 1 year), 1 year)

ExampleExample Reference case values NPV (=PDV) of all future costs and Reference case values NPV (=PDV) of all future costs and benefits; business case focuses on short-run costs only benefits; business case focuses on short-run costs only (typically 1-3 years). (typically 1-3 years).

Practical EffectPractical EffectReductions in health costs in far future do not offset initial Reductions in health costs in far future do not offset initial costs. costs.


Business Case Analysis vs. CEA Business Case Analysis vs. CEA

UtilityUtility- Typically ignored: BCA uses monetary outcomesTypically ignored: BCA uses monetary outcomes


Business Case Analysis: DrawbacksBusiness Case Analysis: Drawbacks

- Some benefits cannot easily be monetized- Some benefits cannot easily be monetized

- Probably cannot be published- Probably cannot be published

- Costs can vary from site to site- Costs can vary from site to site

- Consider creating a model that allows - Consider creating a model that allows

local prices to be inputlocal prices to be input

Complement of CEA, not substituteComplement of CEA, not substitute


Why Both CEA and BCA?Why Both CEA and BCA?

CEA addresses societal perspectiveCEA addresses societal perspective implementation won’t occur without proof implementation won’t occur without proof

that “best practice” is cost-effectivethat “best practice” is cost-effective

BCA addresses provider perspectiveBCA addresses provider perspective more influential in implementation more influential in implementation

decisionsdecisions


QUERI Economics OverviewQUERI Economics Overview

Cost analyses in > 50 projects across all QUERI Cost analyses in > 50 projects across all QUERI centerscenters- Randomized controlled trials (RCTs)Randomized controlled trials (RCTs)- Decision modelsDecision models- OtherOther


OutlineOutline






QUERI Economics StudiesQUERI Economics Studies

1. Development of best practice1. Development of best practice

Sanders G, et al. Cost-effectiveness of screening Sanders G, et al. Cost-effectiveness of screening for HIV in the era of highly active antiretroviral for HIV in the era of highly active antiretroviral therapy. therapy. NEJMNEJM 2005 2005

2. RCT of new intervention2. RCT of new intervention

Pyne J, et al. Cost-effectiveness of a primary care Pyne J, et al. Cost-effectiveness of a primary care depression intervention. depression intervention. JGIMJGIM 2003. 2003.



3. Review of cost studies3. Review of cost studiesKrumholz H, et al. Preventive cardiology: How can Krumholz H, et al. Preventive cardiology: How can we do better? Task Force #2 – The cost of we do better? Task Force #2 – The cost of prevention: Can we afford it? Can we afford not to prevention: Can we afford it? Can we afford not to do it? do it? J Am Coll Cardiology J Am Coll Cardiology 2002.2002.

4. Informatics4. InformaticsYu W, et al. Using GIS to profile health-care costs Yu W, et al. Using GIS to profile health-care costs of VA Quality Enhancement Research Initiative of VA Quality Enhancement Research Initiative diseases. diseases. J Medical SystemsJ Medical Systems 2004 2004



5. Cost of implementation5. Cost of implementation

Liu CF, et al. “What does it take to implement an Liu CF, et al. “What does it take to implement an evidence-based depression treatment in primary evidence-based depression treatment in primary care?” Presentation at HSR&D National Meeting. care?” Presentation at HSR&D National Meeting. March, 2005.March, 2005.


Looking AheadLooking Ahead

Studies on newer topics:Studies on newer topics:– Formative evaluation & costFormative evaluation & cost– Cost of dissemination & implementationCost of dissemination & implementation– Business case analysisBusiness case analysis

International collaboration:International collaboration:– Implementation ScienceImplementation Science journal (free, open access) journal (free, open access) www.implementationscience.comwww.implementationscience.com

Emphasis on complex issues, comorbid conditionsEmphasis on complex issues, comorbid conditions

http://www.implementationscience.com/

economics of implementation: moving beyond traditional cea

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