Chris Sampson’s journal round-up for 4th December 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.

Funding breakthrough therapies: a systematic review and recommendation. Health Policy Published 2nd December 2017

One of the (numerous) financial pressures on health care funders in the West is the introduction of innovative (and generally very expensive) new therapies. Some of these can be considered curative, which isn’t necessarily the best way for manufacturers to create a steady income. New funding arrangements have been proposed to facilitate patient access while maintaining financial sustainability. This article focuses on a specific group of innovative therapies known as ‘Advanced Therapy Medicinal Products’ (ATMPs), which includes gene therapies. The authors conducted a systematic review of papers proposing funding models and considered their appropriateness for ATMPs. There were 48 papers included in the review that proposed payment mechanisms for high-cost therapies. Three top-level groups were identified: i) financial agreements, ii) performance-based agreements, and iii) healthcoin (a tradable currency representing the value of outcomes). The different mechanisms are compared in terms of their feasibility, acceptability, burden, ‘financial attractiveness’ and their appeal to payers and manufacturers. Annuity payments are identified as relatively attractive compared to other options, but each mechanism is summarily shown to be imperfect in the ATMP context. So, instead, the authors propose an ATMP-specific fund. For UK readers, this will likely smell a bit too much like the disastrous Cancer Drugs Fund. It isn’t clear why such a programme would be superior to annuity payments or more inventive mechanisms, or even whether it would be theoretically sound. Thus, the proposal is not convincing.

Supply-side effects from public insurance expansions: evidence from physician labor markets. Health Economics [PubMed] Published 1st December 2017

Crazy though American health care may be, its inconsistency in coverage can make for good research fodder. The Child Health Insurance Program (CHIP) was set up in 1997 and then, when the initial money ran out 10 years later, the program was (eventually) expanded. In this study, the authors use the changes in CHIP to examine the impact of expanded public coverage on provider behaviour, namely; subspecialty training (which could become more attractive with a well-insured customer base), practice setting and prevailing wage offers. The data for the study relate to the physician labour market for New York state for 2002-2013, as collected in the Graduate Medical Education survey. A simple difference-in-differences analysis is conducted with reference to the 2009 CHIP expansion, controlling for physician demographics. Paediatricians are the treatment group and the control group is adult physician generalists (mostly internal medicine). 2009 seems to be associated with a step-change in the proportion of paediatricians choosing to subspecialise – an increased probability of about 8 percentage points. There is also an upward shift in the proportion of paediatricians entering private practice, with some (weak) evidence that there is an increased preference for rural areas. These changes don’t seem to be driven by relative wage increases, with no major change in trends. So it seems that the expanded coverage did have important supply-side effects. But the waters are muddy here. In particular, we have the Great Recession and Obamacare as possible alternative explanations. Though it’s difficult to come up with good reasons for why these might better explain the observed changes.

Reflections on the NICE decision to reject patient production losses. International Journal of Technology Assessment in Health Care [PubMedPublished 20th November 2017

When people conduct economic evaluations ‘from a societal perspective’, this often just means a health service perspective with productivity losses added. NICE explicitly exclude the inclusion of these production losses in health technology appraisals. This paper reviews the issues at play, focussing on the normative question of why they should (or should not) be included. Findings from a literature review are summarised with reference to the ethical, theoretical and policy questions. Unethical discrimination potentially occurs if people are denied health care on the basis of non-health-related characteristics, such as the ability to work. All else equal, should health care for men be prioritised over health care for women because men have higher wages? Are the unemployed less of a priority because they’re unemployed? The only basis on which to defend the efficiency of an approach that includes productivity losses seems to be a neoclassical welfarist one, which is hardly tenable in the context of health care. If we adopt the extra-welfarist understanding of opportunity cost as foregone health then there is really no place for production losses. The authors also argue that including production losses may be at odds with policy objectives, at least in the context of the NHS in the UK. Health systems based on privately-funded care or social insurance may have different priorities. The article concludes that taking account of production losses is at odds with the goal of health maximisation and therefore the purpose of the NHS in the UK. Personally, I think priority setting in health care should take a narrow health perspective. So I agree with the authors that production losses shouldn’t be included. I’m not sure this article will convince those who disagree, but it’s good to have a reference to vindicate NICE’s position.


Meeting round-up: The Role of the University of York in the Development of Health Economics

By Eleanor MacKillop and Sally Sheard

On 27th October 2017, some key British health economists were reunited to discuss the origins and development of their discipline. The event, held at the Centre for Health Economics at the University of York, formed part of the ‘Governance of Health’ project, led by Professor Sally Sheard at the University of Liverpool. Health economics (HE) now dominates British and foreign health policy and decision-making, as illustrated by the resource allocation formula, the formulation of the quality-adjusted life year (QALY), or the introduction of quasi-markets in the NHS, and NICE.

Witness seminars provide an opportunity for collective and public oral history. The event chronicled a history that has rarely been examined, and then only by economists. Using open questions, the witnesses explored the origins of British HE, relationships with the Department of Health (DH) and how it infiltrated other areas such as the NHS – the word ‘infiltrating’ was often repeated by witnesses.

Origins of health economics in the UK

For Tony Culyer, his personal experience of health economics began in 1964 when working with Mike Cooper at Exeter University. Mike Cooper had previously worked with Dennis Lees at Keele University and the Institute of Economic Affairs (IEA). For other witnesses, their first brush with economics as applied to health – the term ‘health economics’ was not used until much later – came through the MSc and PhD programmes at York. The creation of the University of York in 1963 allowed new disciplines such as economics to develop in a less rigid environment as compared to Oxbridge. A similar pattern emerged at the University of Aberdeen and Brunel University.

Dr Alan Haycox and Professor Karen Bloor sharing their stories

Why York rather than other more established centres? Several witnesses explained that there was a ‘snobbery’ and that HE was seen as ‘a waste of time’ and ‘not proper economics’. Another crucial event was the ‘coup’ of York of recruiting two leading economists – Alan Peacock and Jack Wiseman – to start an economics department which was first inaugurated as the Institute of Social and Economics Research (ISER) in 1964. However, as noted by some witnesses, the political inclinations of these two economists, who were close to the free-market-leaning IEA, may have hindered York’s early relationship with Government. The hiring of Alan Williams in 1968 – seen by many as, ‘inspirational and fascinating’ and equipped with ‘a relentless logic’ – was also a defining event in the development of economics at York. It is important to note that the first health economics centre was established at Aberdeen – the Health Economics Research Unit (HERU) in 1977 – and that the Centre for Health Economics (CHE) at York wasn’t inaugurated until 1983. More generally, the financial and economic context of the 1970s, with the oil shocks, devaluation of the pound and beginning of years of budget restrictions, was an obvious factor in making HE a helpful discipline for successive governments.

Health economics in government

David Pole, first Chief Economist for health in the Department of Health and Social Security (DHSS), was a key individual, entering the Department’s Economic Advisers’ Office (EAO) as a senior economic adviser in 1970, shortly followed by Jeremy Hurst. They tried to convince some hostile medical professionals and administrators of the merits of their approach. Ron Akehurst explained how the attempt by administrators to hide from the then Minister of State for Health – David Owen – a report on the geographical inequalities in the allocation of resources in the mid-1970s led the latter to liaise directly with David Pole and the EAO, and the emergence of the resource allocation formula. A former economic adviser in DH, Andrew Burchell, reminisced how David Pole and his successor Clive Smee were successful in identifying academic research that could be grafted onto policy – such as QALYs from the mid-1970s – and seizing opportunities as they arose.

Photograph of schema fusing painfulness and restriction of activity into a single dimension (TNA, MH166/927, Economics of Medical Care, ‘Health Indicators’ report submitted by Culyer, A., Lavers, R. and Williams, A. to the DHSS, p. 29, 1971)

The inauguration of CHE in 1983 and its funding as a DHSS research unit forged a closer relationship between York and government. Public Health England’s Chief Economist, Brian Ferguson, noted how Alan Maynard would often speak of ‘infiltrating the field and government’. More generally, York was successful at delivering research and reports that DH could use, such as Peter Smith’s work on the cost of teaching hospitals in the early 1970s and Ken Wright’s work on ambulances and social care.

Health economics in other contexts and key achievements

From the 1980s, witnesses Anne Ludbrook, Alan Haycox and Ron Akehurst worked as economists in Regional Health Authorities in England and Scotland. They talked about the difficulty of getting the HE message across to doctors and managers, and making decisions more transparent.

Ron Akehurst spoke about how he was commissioned by DH to run HE training courses for doctors. A number of other contributions were mentioned, but most witnesses agreed that NICE was the ‘single most important impact of health economics on policy’.

What we have learnt: three key messages from the Witness Seminar

  1. Opportunities created: Witnesses highlighted the importance of chance and the unpredictability of events which led to health economics playing an important role. The resource allocation formula or research on teaching hospitals’ costs provide examples of chance and the ways in which economists were prepared for playing a greater role in policy development.
  2. Role of charismatic individuals: David Pole, Clive Smee, Alan Williams, Tony Culyer and Alan Maynard were all seen as individuals – maybe even ‘policy entrepreneurs’ – who were capable of presenting convincing arguments to different audiences, be they politicians, administrators or the NHS, and able to negotiate between policy communities.
  3. An ongoing project: Although the panel noted the importance of Health Technology Assessment (HTA) today, Karen Bloor and others reminded us that HE isn’t a battle ‘won’ but instead an ongoing phenomenon developing into a multiplicity of branches.

Thanks to Michael Lambert and Phil Begley for their help editing this post

Paul Mitchell’s journal round-up for 6th 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.

A longitudinal study to assess the frequency and cost of antivascular endothelial therapy, and inequalities in access, in England between 2005 and 2015. BMJ Open [PubMed] Published 22nd October 2017

I am breaking one of my unwritten rules in a journal paper round-up by talking about colleagues’ work, but I feel it is too important not to provide a summary for a number of reasons. The study highlights the problems faced by regional healthcare purchasers in England when implementing national guideline recommendations on the cost-effectiveness of new treatments. The paper focuses on anti-vascular endothelial growth factor (anti-VEGF) medicines in particular, with two drugs, ranibizumab and aflibercept, offered to patients with a range of eye conditions, costing £550-800 per injection. Another drug, bevacizumab, that is closely related to ranibizumab and performs similarly in trials, could be provided at a fraction of the cost (£50-100 per injection), but it is currently unlicensed for eye conditions in the UK. This study investigates how the regional areas in England have coped with trying to provide the recommended drugs using administrative data from Hospital Episode Statistics in England between 2005-2015 by tracking their use since they have been recommended for a number of different eye conditions over the past decade. In 2014/15 the cost of these two new drugs for treating eye conditions alone was estimated at £447 million nationally. The distribution of where these drugs are provided is not equal, varying widely across regions after controlling for socio-demographics, suggesting an inequality of access associated with the introduction of these high-cost drugs over the past decade at a time of relatively low growth in national health spending. Although there are limitations associated with using data not intended for research purposes, the study shows how the most can be made from data routinely collected for non-research purposes. On a public policy level, it raises questions over the provision of such high-cost drugs, for which the authors state the NHS are currently paying more for than US insurers. Although it is important to be careful when comparing to unlicensed drugs, the authors point to clear evidence in the paper as to why their comparison is a reasonable one in this scenario, with a large opportunity cost associated with not including this option in national guidelines. If national recommendations continue to insist that such drugs be provided, clearer guidance is also required on how to disinvest from existing services at a regional level to reduce further examples of inequality in access in the future.

In search of a common currency: a comparison of seven EQ-5D-5L value sets. Health Economics [PubMed] Published 24th October 2017

For those of us out there who like a good valuation study, you will need to set yourself aside a good piece of time to work your way through this one. The new EQ-5D-5L measure of health status, with a primary purpose of generating quality-adjusted life years (QALYs) for economic evaluations, is now starting to have valuation studies emerging from different countries, whereby the relative importance of each of the measure dimensions and levels are quantified based on general population preferences. This study offers the first comparison of value sets across seven countries: 3 Western European (England, Netherlands, Spain), 1 North American (Canada), 1 South American (Uruguay), and two East Asian (Japan and South Korea). The authors in this paper aim to describe methodological differences between the seven value sets, compare the relative importance of dimensions, level decrements and scale length (i.e. quality/quantity trade-offs for QALYs), as well as developing a common (Western) currency across four of the value sets. In brief summary, there does appear to be similar trends across the three Western European countries: level decrements from levels 3 to 4 have the largest value, followed by levels 1 to 2. There is also a pattern in these three countries’ dimensions, whereby the two “symptom” dimensions (i.e. pain/discomfort, anxiety/depression) have equal importance to the other three “functioning” dimensions (i.e. mobility, self-care and usual activities). There are also clear differences with the other four value sets. Canada, although it also has the highest level decrements between levels 3 and 4 (49%), unusually has equal decrements for the remainder (17% x 3). For the other three countries, greater weight is attached to the three functioning dimensions relative to the two symptom dimensions. Although South Korea also has the greatest level decrements between level 3 and 4, it was greatest between level 4 and level 5 in Uruguay and levels 1 and 2 in Japan. Although the authors give a number of plausible reasons as to why these differences may occur, less justification is given in the choice of the four value sets they offer as a common currency, beyond the need to have a value set for countries that do not have one already. The most in-common value sets were the three Western European countries, so a Western European value set may have been more appropriate if the criterion was to have comparable values across countries. If the aim was really for a more international common currency, there are issues with the exclusion of non-Western countries’ value sets from their common currency version. Surely differences across cultures should be reflected in a common currency if they are apparent in different cultures and settings. A common currency should also have a better spread of regions geographically, with no country from Africa, the Middle East, Central and South Asia represented in this study, as well as no lower- and middle-income countries. Though this final criticism is out of the control of the authors based on current data availability.

Quantifying the relationship between capability and health in older people: can’t map, won’t map. Medical Decision Making [PubMed] Published 23rd October 2017

The EQ-5D is one of many ways quality of life can be measured within economic evaluations. A more recent way based on Amartya Sen’s capability approach has attempted to develop outcome measures that move beyond health-related aspects of quality of life captured by EQ-5D and similar measures used in the generation of QALYs. This study examines the relationship between the EQ-5D and the ICECAP-O capability measure in three different patient populations included in the Medical Crises in Older People programme in England. The authors propose a reasonable hypothesis that health could be considered a conversion factor for a person’s broader capability set, and so it is plausible to test how well the EQ-5D-3L dimension values and overall score can map onto the ICECAP-O overall score. Through numerous regressions performed, the strongest relationship between the two measures in this sample was an R-squared of 0.35. Interestingly, the dimensions on the EQ-5D that had a significant relationship with the ICECAP-O score were a mix of dimensions with a focus on functioning (i.e. self-care, usual activities) and symptoms (anxiety/depression), so overall capability on ICECAP-O appears to be related, at least to a small degree, to both health components of EQ-5D discussed in this round-up’s previous paper. The authors suggest it provides further evidence of the complementary data provided by EQ-5D and ICECAP-O, but the causal relationship, as the authors suggest, between both measures remains under-researched. Longitudinal data analysis would provide a more definitive answer to the question of how much interaction there is between these two measures and their dimensions as health and capability changes over time in response to different treatments and care provision.