Sam Watson’s journal round-up for 13th November 2017

Every Monday our authors provide a round-up of some of the most recently published peer reviewed articles from the field. We don’t cover everything, or even what’s most important – just a few papers that have interested the author. Visit our Resources page for links to more journals or follow the HealthEconBot. If you’d like to write one of our weekly journal round-ups, get in touch.

Scaling for economists: lessons from the non-adherence problem in the medical literature. Journal of Economic Perspectives [RePEcPublished November 2017

It has often been said that development economics has been at the vanguard of the use of randomised trials within economics. Other areas of economics have slowly caught up; the internal validity, and causal interpretation, offered by experimental randomised studies can provide reliable estimates for the effects of particular interventions. Health economics though has perhaps an even longer history with randomised controlled trials (RCTs), and now economic evaluation is often expected alongside clinical trials. RCTs of physician incentives and payments, investment programmes in child health, or treatment provision in schools all feature as other examples. However, even experimental studies can suffer from the same biases in the data analysis process as observational studies. The multiple decisions made in the data analysis and publication stages of research can lead to over-inflated estimates. Beyond that, the experimental conditions of the trial may not pertain in the real world – the study may lack external validity. The medical literature has long recognised this issue, as many as 50% of patients don’t take the medicines prescribed to them by a doctor. As a result, there has been considerable effort to develop an understanding of, and interventions to remedy, the lack of transferability between RCTs and real-world outcomes. This article summarises this literature and develops lessons for economists, who are only just starting to deal with, what they term, ‘the scaling problem’. For example, there are many reasons people don’t respond to incentives as expected: there are psychological costs to switching; people are hyperbolic discounters and often prefer small short-term gains for larger long-term costs; and, people can often fail to understand the implications of sets of complex options. We have also previously discussed the importance of social preferences in decision making. The key point is that, as policy is becoming more and more informed by randomised studies, we need to be careful about over-optimism of effect sizes and start to understand adherence to different policies in the real world. Only then are recommendations reliable.

Estimating the opportunity costs of bed-days. Health Economics [PubMedPublished 6th November 2017

The health economic evaluation of health service delivery interventions is becoming an important issue in health economics. We’ve discussed on many occasions questions surrounding the implementation of seven-day health services in England and Wales, for example. Other service delivery interventions might include changes to staffing levels more generally, medical IT technology, or an incentive to improve hand washing. Key to the evaluation of these interventions is that they are all generally targeted at improving quality of care – that is, to reduce preventable harm. The vast majority of patients who experience some sort of preventable harm do not die but are likely to experience longer lengths of stay in hospital. Consider a person suffering from bed sores or a fall in hospital. Therefore, we need to be able to value those extra bed days to be able to say what the value of improving hospital quality is. Typically we use reference costs or average accounting costs for the opportunity cost of a bed-day, mainly for pragmatic reasons, but also on the assumption that this is equivalent to the value of the second-best alternative foregone. This requires the assumption that health care markets operate properly, which they almost certainly do not. This paper explores the different ways economists have thought about opportunity costs and applies them to the question of the opportunity cost of a hospital bed-day. This includes definitions such as “Net health benefit forgone for the second-best patient‐equivalents”, “Net monetary benefit forgone for the second-best treatment-equivalents”, and “Expenditure incurred + highest net revenue forgone.” The key takeaway is that there is wide variation in the estimated opportunity costs using all the different methods and that, given the assumptions underpinning the most widely used methodologies are unlikely to hold, we may be routinely under- or over-valuing the effects of different interventions.

Universal investment in infants and long-run health: evidence from Denmark’s 1937 Home Visiting Program. American Economic Journal: Applied Economics [RePEcPublished October 2017

We have covered a raft of studies that look at the effects of in-utero health on later life outcomes, the so-called fetal origins hypothesis. A smaller, though by no means small, literature has considered what impact improving infant and childhood health has on later life adult outcomes. While many of these studies consider programmes that occurred decades ago in the US or Europe, their findings are still relevant today as many countries are grappling with high infant and childhood mortality. For many low-income countries, programmes with community health workers – lay-community members provided with some basic public health training – involving home visits, education, and referral services are being widely adopted. This article looks at the later life impacts of an infant health programme, the Home Visiting Program, implemented in Denmark in the 1930s and 40s. The aim of the programme was to provide home visits to every newborn in each district to provide education on feeding and hygiene practices and to monitor infant progress. The programme was implemented in a trial based fashion with different districts adopting the programme at different times and some districts remaining as control districts, although selection into treatment and control was not random. Data were obtained about the health outcomes in the period 1980-2012 of people born 1935-49. In short, the analyses suggest that the programme improved adult longevity and health outcomes, although the effects are small. For example, they estimate the programme reduced hospitalisations by half a day between the age of 45 and 64, and 2 to 6 more people per 1,000 survived past 60 years of age. However, these effect sizes may be large enough to justify what may be a reasonably low-cost programme when scaled across the population.

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Chris Sampson’s journal round-up for 3rd July 2017

Every Monday our authors provide a round-up of some of the most recently published peer reviewed articles from the field. We don’t cover everything, or even what’s most important – just a few papers that have interested the author. Visit our Resources page for links to more journals or follow the HealthEconBot. If you’d like to write one of our weekly journal round-ups, get in touch.

Role of cost on failure to access prescribed pharmaceuticals: the case of statins. Applied Health Economics and Health Policy [PubMed] Published 28th June 2017

Outside work, I find that people often like to tell me how to solve health economics problems. A common one is the idea that the NHS could save a load of money by enforcing prescription charges. It’s a textbook life-ain’t-that-simple situation. One of the reasons it isn’t that simple is that, if you start charging for prescriptions, people will be less likely to take their meds. That’s probably bad news for patients and for doctors. “But it’s only a few quid”. Well… As in many countries, Australians have to cough up a co-payment to fill their prescriptions. The size of the copayment depends on i) whether or not the patient is concessional (e.g. a pensioner) and ii) whether or not a threshold has been reached for total family prescription expenditure in one year. Concessional patients have a lower co-payment, a lower threshold and no co-payment once the threshold is met. This study looks at statin use in this context for 94,000 over-45s in New South Wales from 2005-2011. Separate logistic regressions are run for each of the 4 groups (concessional/non-concessional, pre-threshold/post-threshold) to predict statin adherence, controlling for a good range of sociodemographic and health-related variables. The size of the copayment comes out as the biggest barrier to adherence. More than 75% of people who weren’t adherent before reaching their threshold became so after reaching it – that is, once their co-payment was either much-reduced or zero. Poorest adherence was observed in non-concessional low-income people who hadn’t reached the threshold, who faced the highest co-payment. Income, age group and holding private insurance were also important determinants. In short, charging people for their statins, even if it isn’t much money, reduces the likelihood that they will take them. There is the possibility that adherence is correlated with the likelihood of having reached the threshold, which could undermine these results. I’m not entirely convinced that the analysis cuts the mustard, but I’ll let the more econometrically minded amongst you figure that out.

Conceptualizations of the societal perspective within economic evaluations: a systematic review. International Journal of Technology Assessment in Health Care [PubMed] Published 23rd June 2017

In my last round-up, I included a study looking at resource use measures for intersectoral costs and benefits; costs and benefits that occur outside the health sector. This week we have a study looking at how the inclusion of intersectoral costs and benefits influences results, and how researchers have interpreted the ‘societal perspective’. A systematic review was conducted for economic evaluations purporting to use a societal perspective, published since the CHEERS statement was released, including 107 studies. Only 74 provided a conceptualisation of the societal perspective. Reported conceptualisations of the societal perspective were grouped according to the specificity of their definition – 18 general, 50 specific, 6 both – and assessed using content analysis. Of these, 25 referred to a guideline or other source in their conceptualisation. A total of 10 general and 56 specific clusters of conceptualisations were identified, demonstrating major inconsistency. For some studies – namely trial-based economic evaluations in musculoskeletal or mental disorders – the authors dug deeper and extracted additional information. In both cases, where data were adequately reported, the intersectoral costs tended to make up more than 50% of total costs. But in general the specific intersectoral items were not fully reported and relevant costs (e.g. in education or criminal justice) were not identified. It probably won’t come as a surprise that the general impression is that a lot of researchers interpret the societal perspective – in practice, if not in theory – as health costs plus productivity losses. And usually, that’s not really good enough.

Annual direct medical costs associated with diabetes-related complications in the event year and in subsequent years in Hong Kong. Diabetic Medicine [PubMed] Published 21st June 2017

There are a lot of high-quality decision models built for the evaluation of interventions in diabetes. See Mt Hood. But some are still a bit primitive when it comes to estimating the costs associated with the many clinical pathways and complications associated with diabetes, especially when multimorbidity can be important. So studies like this are very welcome. This study contributes cost estimates for a wide range of complications (13, to be precise) for what should be a representative sample of (Chinese) people with diabetes. It includes public health care expenditure for more than 120,000 people with diabetes in Hong Kong, with 5-year follow-up. For private health care costs, a cross-section of 1275 people was recruited through other studies and provided information about service use by telephone. Fixed effects panel data regressions were used for the public medical costs. During the follow-up, 17% developed at least one complication. The models estimate the impact on total cost of new disease and existing disease separately, in order to identify first-year and subsequent-year cost estimates. Generalised linear models were used for the private health care costs. The base case of a 65-year old with no complications was US$1500/year in costs to the public purse. The biggest effect on costs was a first-year multiplier of 9.38 for lower limb ulcer (1.62 in subsequent years). Other costly complications were stroke, heart failure, end-stage renal disease and acute myocardial infarction. Private costs were much smaller, at $187 for the base case. These figures may prove useful to decision modellers, even outside the Hong Kong setting.

Financing and distribution of pharmaceuticals in the United States. JAMA [PubMed] Published 15th May 2017

The purpose of this article seems to be to demonstrate the complexity of the financing and distribution of pharmaceuticals in the US. It describes distributors, retailers and patients on the distribution side, and pharmacy benefit managers and health insurers on the financing side, with manufacturers in the middle. But the system that is shown in the article’s figure strikes me as surprisingly simple for an industry in which such vast amounts of money are sloshing around. It’s far more straightforward than any diagram you might see relating to the organisation of NHS services. I would imagine that a freer market would be associated with more complexity as upstarts might muscle-in on smaller corners of the market and become new intermediaries. But the article is still enlightening. It outlines some of the features of the market, particularly the high levels of concentration, characteristics of the key players and the staggering sums of money changing hands.

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