Economics of Implementation: Moving beyond Traditional CEA

1. Economics of Implementation: Moving beyond Traditional CEA Mark Smith Paul Barnett VA Health Economics Resource Center

2. Outline • Background • Cost-effectiveness analysis (CEA) • Budget impact analysis (BIA) • QUERI economics research Health Economics Resource Center

3. Policy Needs • Need to improve evidence base for quality improvement • Need to find most cost-effective combinations of • Best practices • Methods to implement them in actual practice •  Implementation research Health Economics Resource Center

4. Stages of Implementation • 1. Define best practice • Randomized controlled trials (RCTs) • Literature reviews • Expert panels • Disseminate best practice • Journal articles, books • Conferences • Presentations to clinicians • Presentations to managers Health Economics Resource Center

5. Stages of Implementation • Problem: dissemination doesn’t work! • - Providers often ignore journal articles • - Continuing medical education changes little • - Handing out guidelines often fails, too • What to do? • - Implementation: a more structured approach Health Economics Resource Center

6. Stages of Implementation • 3. Implementation intervention • Goal: to implement the best practice in a new setting • Common methods: • Electronic clinical reminders • Education: passive, active • Audit and feedback • Often done as a quasi-experiment, with results published • Example: TIDES, ReTIDES in VA Health Economics Resource Center

7. Questions • Are you affiliated with a QUERI center? • Have you studied the cost of implementing a best practice, or will you soon? Health Economics Resource Center

8. VA QUERI Program • Goal: To locate clinical best practices and to implement them throughout the VA system • Structure: 9 research centers focused on diseases or conditions (e.g.: mental health; CHF) URL: http://www.hsrd.research.va.gov/queri/program.cfm Health Economics Resource Center

9. VA QUERI Program Oversight: Review board of VA policymakers, clinicians, researchers, and a VSO representative. • - promotes policy relevant research • - promotes spread of findings to policymakers • in VA headquarters • Status: At several centers, research has reached the stage of regional or national roll-out Health Economics Resource Center

10. Policy Question • Do the benefits justify the expense of the implementation project, including both the clinical best practice and the strategy to implement it? Health Economics Resource Center

11. Two Types of Analysis • Reference case CEA • shows cost-effectiveness from societal perspective • Budget impact analysis (BIA) • shows cash flow, total program cost from provider’s perspective Health Economics Resource Center

12. Outline • Background • Cost-effectiveness analysis (CEA) • Budget impact analysis (BIA) • QUERI economics research Health Economics Resource Center

13. Reference Case CEA • Standard method for performing cost-effectiveness analysis in health • Promulgated by US Public Health Service task force in 1996 • Used to develop formularies and set practice guidelines • Some properties: • Societal perspective  all costs counted • Outcome in QALYs  lifetime horizon Health Economics Resource Center

14. CEA of Implementation Projects • Measure cost of clinical effort (traditional CEA) • Measure cost of implementation effort • Distinguish cost of implementation from net cost of best practice Net cost = actual cost less any savings (e.g., from prevented care) Health Economics Resource Center

15. Implementation Cost Elements: 1 • Clinical Care • Include • Inpatient, outpatient, Rx care • Patient-incurred costs: time spent obtaining care, home health care Exclude • Development costs • Research costs Health Economics Resource Center

16. Implementation Cost Elements: 2 • 2. Dissemination - Staff time for creating and presenting results - Travel to meetings - Supplies QUERI definition of dissemination: “An active, versus passive, effort to communicate tailored information to target audiences with the goal of engagement and information use.” - Excludes journal articles, conference presentations Health Economics Resource Center

17. Implementation Cost Elements: 3 • 3.Implementation intervention • IT costs (electronic clinical reminders) • Staff time (training; audit/feedback)  Consider start-up vs. maintenance costs Health Economics Resource Center

18. Issues in Implementation CEA • Adaptation over time due to • - Formative evaluation • - Competing priorities • Adaptation across locations due to • - Formative evalution • - Differences in technology, staffing Health Economics Resource Center

19. Implications of Adding Implementation • 1. The combination of implementation and best-practice may not be cost-effective. Hypothetical example: case management for heart disease prevention - In RCT, $35,000 / QALY - When implemented with provider education component, $75,000 / QALY Health Economics Resource Center

20. Implications of Adding Implementation • 2. If the combination isn’t cost-effective, consider whether the implementation intervention can be changed: • Reduce the cost per provider/patient • Less expensive staff ? • Less travel ? • Simpler IT ? • Limit it to a subset of providers/patients Health Economics Resource Center

21. Outline • Background • Cost-effectiveness analysis (CEA) • Budget impact analysis (BIA) • QUERI economics research Health Economics Resource Center

22. Budget Impact Analysis: Overview • Definition: Analysis of provider’s expenditures for a program over a short period (often 1-3 years), including the effect of any offsetting savings. • QUERI context: • Perspective of VA • Counts the clinical intervention and the implementation intervention Health Economics Resource Center

23. Budget Impact Analysis: Perspective • Reference case CEA: societal perspective • Business case: provider/payer’s perspective • Meaning • CEA counts patient-incurred costs. • BIA excludes them except to the extent that reputation, plan enrollment, or recruitment/retention are affected. • Practical Effect • Interventions will be less expensive in a budget impact analysis. Health Economics Resource Center

24. Budget Impact Analysis vs. CEA • Reference case CEA: lifetime horizon • Budget impact analysis: shorter horizon • Meaning • Reference case values net present value (NPV) of all future costs and benefits. • Budget impact analysis focuses on short-run costs only (typically 1-3 years). • Practical Effect • Reductions in health costs in far future do not offset initial costs. Health Economics Resource Center

25. Budget Impact Analysis vs. CEA • Utility • BIA: typically ignored • CEA: used to estimate quality-adjusted life years (QALYs) Health Economics Resource Center

26. Budget Impact Analysis: Drawbacks - Some benefits cannot easily be monetized - Prestigious journals often won’t publish them - Costs can vary from site to site - Create a method for inputting local prices  Complement of CEA, not substitute Health Economics Resource Center

27. Why Both CEA and BIA? • CEA addresses societal perspective  implementation won’t occur without proof that “best practice” is cost-effective • BIA addresses provider perspective  more influential in implementation decisions Health Economics Resource Center

28. Outline • Background • Cost-effectiveness analysis (CEA) • Budget impact analysis (BIA) • QUERI economics research Health Economics Resource Center

29. QUERI Economics Overview Cost analyses in > 50 projects across all QUERI centers • Randomized controlled trials (RCTs) • Decision models • Other Health Economics Resource Center

30. QUERI Economics Studies • 1. Development of best practice • Sanders G, et al. Cost-effectiveness of screening for HIV in the era of highly active antiretroviral therapy. NEJM 2005 • 2. RCT of new intervention • Pyne J, et al. Cost-effectiveness of a primary care depression intervention. JGIM 2003. Health Economics Resource Center

31. QUERI Economics Studies • 3. Review of cost studies • Krumholz H, et al. Preventive cardiology: How can we do better? Task Force #2 – The cost of prevention: Can we afford it? Can we afford not to do it? J Am Coll Cardiology 2002. • 4. Informatics • Yu W, et al. Using GIS to profile health-care costs of VA Quality Enhancement Research Initiative diseases. J Medical Systems 2004 Health Economics Resource Center

32. QUERI Economics Studies • 5. Cost of implementation • Liu CF, et al. “What does it take to implement an evidence-based depression treatment in primary care?” Presentation at HSR&D National Meeting. March, 2005. Health Economics Resource Center

33. Looking Ahead • Studies on newer topics: • Formative evaluation & cost • Cost of dissemination & implementation • Budget impact analysis • International collaboration: • Implementation Science journal (free, open access) www.implementationscience.com • Emphasis on complex issues, comorbid conditions Health Economics Resource Center

34. Forthcoming article • Smith MW, Barnett PG. • QUERI and the economics of implementation studies. • Implementation Science (late 2007 or early 2008) Health Economics Resource Center