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The marginal benefits of healthcare spending in the Netherlands: Estimating cost-effectiveness thresholds using a translog production function.

ABSTRACT: New technologies may displace existing, higher-value care under a fixed budget. Countries aim to curtail adoption of low-value technologies, for example, by installing cost-effectiveness thresholds. Our objective is to estimate the opportunity cost of hospital care to identify a threshold value for the Netherlands. To this aim, we combine claims data, mortality data and quality of life questionnaires from 2012 to 2014 for 11,000 patient groups to obtain quality-adjusted life-year (QALY) outcomes and spending. Using a fixed effects translog model, we estimate that a 1% increase in hospital spending on average increases QALY outcomes by 0.2%. This implies a threshold of €73,600 per QALY, with 95% confidence intervals ranging from €53,000 to €94,000 per QALY. The results stipulate that new technologies with incremental cost effectiveness ratios exceeding the Dutch upper reference value of €80,000 may indeed displace more valuable care.

SUBMITTER: Stadhouders N

PROVIDER: S-EPMC6851736 | biostudies-literature | 2019 Nov

REPOSITORIES: biostudies-literature

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The marginal benefits of healthcare spending in the Netherlands: Estimating cost-effectiveness thresholds using a translog production function.

Stadhouders Niek N Koolman Xander X van Dijk Christel C Jeurissen Patrick P Adang Eddy E

Health economics 20190830 11

New technologies may displace existing, higher-value care under a fixed budget. Countries aim to curtail adoption of low-value technologies, for example, by installing cost-effectiveness thresholds. Our objective is to estimate the opportunity cost of hospital care to identify a threshold value for the Netherlands. To this aim, we combine claims data, mortality data and quality of life questionnaires from 2012 to 2014 for 11,000 patient groups to obtain quality-adjusted life-year (QALY) outcomes ...[more]

PMID: 31469510

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Project description:BackgroundDrug manufacturers have developed "evergreening" strategies to compete with generic medication after patent termination. These include marketing of slightly modified follow-on drugs. We aimed to estimate the financial impact of these drugs on overall healthcare costs and also to examine the impact of listing these drugs in hospital restrictive drug formularies (RDFs) on the healthcare system as a whole ("spillover effect").Methods and findingsWe used hospital and community pharmacy invoice office data in the Swiss canton of Geneva to calculate utilisation of eight follow-on drugs in defined daily doses between 2000 and 2008. "Extra costs" were calculated for three different scenarios assuming replacement with the corresponding generic equivalent for prescriptions of (1) all brand (i.e., initially patented) drugs, (2) all follow-on drugs, or (3) brand and follow-on drugs. To examine the financial spillover effect we calculated a monthly follow-on drug market share in defined daily doses for medications prescribed by hospital physicians but dispensed in community pharmacies, in comparison to drugs prescribed by non-hospital physicians in the community. Estimated "extra costs" over the study period were €15.9 (95% CI 15.5; 16.2) million for scenario 1, €14.4 (95% CI 14.1; 14.7) million for scenario 2, and €30.3 (95% CI 29.8; 30.8) million for scenario 3. The impact of strictly switching all patients using proton-pump inhibitors to esomeprazole at admission resulted in a spillover "extra cost" of €330,300 (95% CI 276,100; 383,800), whereas strictly switching to generic cetirizine resulted in savings of €7,700 (95% CI 4,100; 11,100). Overall we estimated that the RDF resulted in "extra costs" of €503,600 (95% CI 444,500; 563,100).ConclusionsEvergreening strategies have been successful in maintaining market share in Geneva, offsetting competition by generics and cost containment policies. Hospitals may be contributing to increased overall healthcare costs by listing follow-on drugs in their RDF. Therefore, healthcare providers and policy makers should be aware of the impact of evergreening strategies.

Project description:BackgroundHigh-cost patients account for a disproportionate share of healthcare spending. The proportion and distribution of potentially preventable spending among subgroups of high-cost patients are largely unknown.ObjectiveTo examine the distribution of potentially preventable spending among high-cost Medicare patients overall and potentially preventable spending associated with each high-cost category.DesignA cross-sectional study. We merged Medicare claims and social determinants of health data to group patients into high-cost categories and quantify potentially preventable spending.PatientsA total of 556,053 Medicare fee-for-service and dual-eligible beneficiaries with at least one healthcare encounter in the New York metropolitan area in 2014.Main measuresHigh-cost patients were mapped into 10 non-mutually exclusive categories. The primary outcome was episodic spending associated with preventable ED visits, preventable hospitalizations, and unplanned 30-day readmissions.Key resultsOverall, potentially preventable spending accounted for 10.4% of overall spending in 2014. Preventable spending accounted for 13.3% of total spending among high-cost patients and 4.9% among non-high-cost patients (P < 0.001). Among high-cost patients, 44.0% experienced at least one potentially preventable encounter compared with 11.4% of non-high-cost patients (P < 0.001), and high-cost patients accounted for 71.5% of total preventable spending. High-cost patients had on average $11,502 in potentially preventable spending-more than 20 times more than non-high-cost patients ($510). High-cost patients in the seriously ill, frail, or serious mental illness categories accounted for the highest proportion of potentially preventable spending overall, while end-stage renal disease, serious illness, and opioid use disorder were associated with the highest preventable spending per patient.ConclusionPotentially preventable spending was concentrated among high-cost patients who were seriously ill, frail, or had a serious mental illness. Interventions targeting these subgroups may be helpful for reducing preventable utilization.

Dataset Information

The marginal benefits of healthcare spending in the Netherlands: Estimating cost-effectiveness thresholds using a translog production function.

Publications

The marginal benefits of healthcare spending in the Netherlands: Estimating cost-effectiveness thresholds using a translog production function.

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