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The Value of The Value of Investment in Health Investment in Health
CareCare
Better Care, Better Lives
The increase in health spending is a frequent topic of debate…
$2,207
$3,541
$4,461
1980 1990 2000
U.S. Health Care Expenditures per Person (2000 U.S. $)
Source: Health United States 2002, Consumer Price Index (All Items)
…but the value of this investment is seldom part of the discussion.
CBO Issues Warning on Rising Health Care Costs
Senate Republicans in Albany Eye Big Medicaid Cuts
Medicare Revamp Fails to Cure Angst Over Costs
New evidence finds our nation’s health care dollars are well spent.
Overall, each additional health dollar spent produced a return of $2.40-$3.00 in: Deaths avoided Increased longevity
Advances in care have improved outcomes and quality of life in common diseases Heart attack Type-2 Diabetes
Stroke Breast cancer
Experienced Research Team
MEDTAP International – global health services research firm Bryan R. Luce, Ph.D., M.B.A
Founder, Chairman, MEDTAP International Former Director, Office of Research and Demonstrations,
US Health Care Financing Administration
Frank Sloan, Ph.D. Director, Center for Health Policy, Law and Management,
Duke University
Josephine Mauskopf, Ph.D. Global Director of Health Economics, RTI Health
Solutions
Multi-faceted Research Approach
Overall value of investment 1980 to 2000 Dollar value of gains in annual population health
outcomes versus… …the increase in annual health care expenditures
Focus on four common diseases: Heart attack, type 2 diabetes, stroke, and breast cancer Advances in care Improvements in outcomes Overall value of investment for the Medicare
population Value of specific medical breakthroughs
Conservative Estimates
Estimates of value: Value of gain of 1 year of life = $100,000* Value of less disability and increased
productivity not in overall estimate Benefits and harms of non-health care
changes even out**
*Source: Nordhaus (2002), Blomquist (2001)**e.g. smoking, obesity, exercise, environment
Overall Value of Investment: Findings
Since 1980, per capita expenses are up $2,254, but:
Overall death rate is down 16% Life expectancy from birth is up by 3.2 years Disability rates are down 25% for people
over 65* 56% fewer days are spent in the hospital
Health gains of $2.40 to $3.00 per dollar invested
*Value of this improvement not quantified.
Overall Value of Investment: Findings
$2254 per $2254 per capitacapita
ininsavings savings
470,000470,000moremore
deathsdeaths
2.32.3millionmillionmoremore
disableddisabledpersonspersons
206206millionmillionmoremore
days indays inhospitalhospital
Where would we be in 2000 without healthcare advances?
Findings: Four Common Diseases
Heart attack Type 2 Diabetes Stroke Breast Cancer
Why these four?
Common conditions High disability and
death rates Nearly all at risk for
one of these diseases
Medical breakthroughs have improved outcomes
Value of investment not documented
17
2.2
4.7
7.6
HeartAttack
Type 2Diabetes
Stroke BreastCancer
U.S. Population Affected by Conditions Studied, in millions, 2003
Source: American Heart Association; www.diabetes.org; www.cdc.gov/nchs
Heart Attack
Heart Attack:Advances in Care
Improvements in drug therapy Blood flow restored more quickly (clot-busters) Blockages better prevented (anti-platelets,
cholesterol lowering drugs) Advances in surgical techniques
PTCA reopens arteries—more effective, less invasive
Stents keep blood vessels open Advances in diagnostic technologies
Electrocardiograms and diagnostic imaging provide more rapid, precise diagnoses
Heart Attack:Advances in Care
In the 1970s… 5-7 days in critical
care; 3-4 weeks in general ward
Complete bed rest for several weeks
Minimal understanding of risk factors/ preventive measures
Today… Total hospital stay
of 5-7 days
People up and around within days
Key risk factors like cholesterol and hypertension are routinely managed
Heart Attack:Improvement in Outcomes
Mortality cut nearly in half
Death within 30 days cut from 1 in 4 to 1 in 8
345.2
186.9
1980 2000
Death Rate Due to Heart Attack(Age-adjusted, per 100,000)
Source: www.cdc.gov/nchs
Costs and Outcomes for Medicare Heart Attack Patients
*Five-year costs 1985-1989 versus 1995-1999, Medicare plus out-of-pocketSource: Analysis of Medicare Part A and Part B and National Long-Term Care Survey data (1982-2000)
Value of improved outcomes:
(12% gain in life expectancy)
--minus--
Increase in treatment costs*:
(Medicare plus out-of-pocket)
Net benefit in dollars:
$28,632
$26,093
$2539Value of $1.10 per dollar invested
Heart Attack: Value of Specific Medical Breakthroughs
Beta-blockers Mobile coronary care
units Statin therapy Angiography Rt-PA Angioplasty w/stenting
Breakthroughs vs. Current Standard Treatment
Range in Value per Dollar Invested
$1.42
At Least As Much As
$38.44
Source: Published literature
Type 2 Diabetes
Type 2 Diabetes:Advances in Care
Improvements in drug therapy Insulin therapy lasts longer and is more convenient New classes of drugs with fewer side effects
Advances in diagnostic technologies Hemoglobin A1c testing and glucose monitoring kits
allow more accurate, less invasive readings Advances in surgical techniques
Laser surgery and vitrectomy procedures treat eye disease
Dialysis and transplant surgery lengthen and improve life
Type 2 Diabetes:Advances in Care
In the 1970s… Insulin agents short-
acting; inconvenient dosing schedules
Frequent needles sticks to test glucose levels
Limited understanding of need to control blood pressure and cholesterol
Limited treatment options for complications
Today… More effective options for
insulin; long acting and more convenient
Glucose tests without puncturing the skin
Better management of all aspects of disease reduces chances of complications
Surgical options for diabetic eye and kidney disease improve quality of life
Type 2 Diabetes:Improvement in Outcomes
Advances support tight management of disease; better outcomes** Tight glucose control decreases mortality
by 10%, complications** by 25% Tight blood pressure control decreases
mortality by 32%, heart failure by 56%, stroke by 44%
Gains in employment and productivity with drug therapy to manage disease
*Higher incidence—linked to increased rates of obesity—has led to increased mortality rates (up 39%)**eye, kidney, and nerve disease
Costs and Outcomes for Medicare Type 2 Diabetes Patients
*Five-year costs 1985-1989 versus 1995-1999, Medicare plus out-of-pocketSource: Analysis of Medicare Part A and Part B and National Long-Term Care Survey data (1982-2000)
Value of improved outcomes:
(7% gain in life expectancy) --minus--
Increase in treatment
costs*:(Medicare plus out-of-
pocket)
Net benefit in dollars:
$16,930
$11,337
$5,593Value of $1.49 per dollar invested
Type 2 Diabetes: Value of Specific Medical Breakthroughs
Tight control of glucose, blood pressure, and cholesterol
Statins Ace inhibitors Screening and
treatment of diabetic retinopathy
Breakthroughs vs. Current Standard Treatment
Range in Value per Dollar Invested
$3.00
At Least As Much As
$36.00
Source: Published literature
Stroke
Stroke:Advances in Care
Improvements in drug therapy Blood flow restored more quickly (clot-busters) Better-tolerated, more effective drugs to control blood
pressure Advances in surgical techniques
PTCA reopens arteries—more effective, less invasive Carotid endarterectomy clears plaque in carotid
arteries Advances in diagnostic technologies
Improvements in brain imaging, such as weighted imaging, magnetic resonance angiography
Stroke:Advances in care
In the 1970s… Treatment options
limited; disability rates high
Typical discharge to nursing home
Limited diagnostic technologies
Limited surgical options for prevention
Today… With rt-PA more stroke
victims resume normal life Acute and subacute
rehabilitation widely available
New imaging technologies offer faster more precise diagnosis
Carotid endarterectomy and implanted microcoil devices can prevent stroke
Stroke:Improvement in Outcomes
Mortality cut by 37 percent
Faster diagnosis Stroke-related
disability after 3 months reduced by up to 30 percent with rt-PA
96.2
60.8
1980 2000
Death Rate Due to Stroke(Age-adjusted, per 100,000)
Source: www.cdc.gov/nchs
Costs and Outcomes for Medicare Stroke Patients
*Five-year costs 1985-1989 versus 1995-1999, Medicare plus out-of-pocketSource: Analysis of Medicare Part A and Part B and National Long-Term Care Survey data (1982-2000)
Value of improved outcomes:
(10% gain in life expectancy)
--minus--
Increase in treatment costs*:
(Medicare plus out-of-pocket)
Net benefit in dollars:
$24,903
$16,035
$8,868Value of $1.55 per dollar invested
Stroke: Value of Specific Medical Breakthroughs
Breakthroughs vs. Current Standard Treatment
Range in Value per Dollar Invested
$2.00
$6.00
At Least As Much As
Source: Published literature
Clopidogrel Ticlopidine rt-PA* Carotid
endarterectomy*
*Yields a savings in treatment costs
Breast Cancer
Breast Cancer:Advances in Care
Improvements in drug therapy Adjuvant chemotherapy – more tolerant,
less toxic Better-tolerated hormonal treatments
Advances in surgical techniques Breast-conserving surgery Less-invasive biopsy
Advances in diagnostic technologies Earlier diagnosis
Breast Cancer:Advances in Care
In the 1970s… Chemotherapy required
hospitalization Chemotherapy poorly
tolerated Mastectomies were the
norm
Few drug therapies existed
Mammography not in widespread use
Today… 90% of chemotherapy is
outpatient New drugs reduce nausea
Breast conserving surgery performed with reconstruction
New drugs offer higher cure rates and less toxicity
Routine mammography leads to earlier diagnosis
Breast Cancer:Improvement in Outcomes
Mortality cut by 21 percent
Five-year overall survival rates increased from 76.9% to 86.6%
Risk of developing metastatic disease declined from 40% to 15%
32.3
25.4
1980 2000
Death Rate Due to Breast Cancer(Age-adjusted, per 100,000)
Costs and Outcomes for Medicare Breast Cancer Patients
*Five-year costs 1985-1989 versus 1995-1999, Medicare plus out-of-pocketSource: Analysis of Medicare Part A and Part B and National Long-Term Care Survey data (1982-2000)
Value of improved outcomes:
(8% gain in life expectancy) --minus--
Increase in treatment
costs*:(Medicare plus out-of-
pocket)
Net benefit in dollars:
$22,341
$4,676
$17,665
Value of $4.80 per dollar invested
Breast Cancer: Value of Specific Medical Breakthroughs
Letrozole Breast-conserving
surgery Biennial mammography Adjuvant chemotherapy Stereotactic core biopsy
Breakthroughs vs. Current Standard Treatment
Range in Value per Dollar Invested
$3.27
At Least As Much As
$36.81
Source: Published literature
Policy Recommendations
HHS should include a measure of health benefits gained in its annual report on health care spending
Further study is needed on the role of innovation in improving health
Employers and health care providers should account for the benefits of a healthier workforce
Discussions of coverage for uninsured should consider value of investing in health care for all Americans—not just the costs