The Fiscal Consequences Attributed to Changes in Morbidity and Mortality Linked to Investments in Health Care: A Government Perspective Analytic Framework 

Connolly MP, Kotsopoulos N, Postma M., Bhatt A.
Value in Health. 2017;20(2):273-277.

Governments have an enormous economic and political stake in the health of their populations. Population health is not only fundamental to economic growth but also affects short-term and long-term government expenditure on health care, disability, and other social programs and influences direct and indirect tax receipts. Fiscal transfers between citizen and state are mostly ignored in conventional welfare economics analyses based on the hypothesis that there are no winners or losers through transference of wealth. However, from the government perspective, this position is flawed, as disability costs and lost taxes attributed to poor health and reduced productive output represent real costs that pose budgetary and growth implications. To address the value of health and health care investments for government, we have developed a fiscal health analytic framework that captures how changes in morbidity and mortality influence tax revenue and transfer costs (e.g., disability, allowances, ongoing health costs). The framework can be used to evaluate the marginal impact of discrete investments or a mix of interventions in health care to inform governmental budgetary consequences. In this context, the framework can be considered as a fiscal budget impact and/or cost-benefit analysis model that accounts for how morbidity and mortality linked to specific programs represent both ongoing costs and tax revenue for government. Mathematical models identical to those used in cost-effectiveness analyses can be employed in fiscal analysis to reflect how disease progression influences public accounts (e.g., tax revenue and transfers).

Budget Impact of Increasing Market Share of Patient Self-Testing and Patient Self-Management in Anticoagulation

Stevanović J, Postma MJ, Le HH.
Value in Health. 2016;19(4):383-390.

Patient self-testing (PST) and/or patient self-management (PSM) might provide better coagulation care than monitoring at specialized anticoagulation centers. Yet, it remains an underused strategy in the Netherlands. 

Budget-impact analyses of current and new market-share scenarios of PST and/or PSM compared with monitoring at specialized centers were performed for a national cohort of 260,338 patients requiring long-term anticoagulation testing. A health care payer perspective and 1- to 5-year time horizons were applied. The occurrence of thromboembolic and hemorrhagic complications in the aforementioned patient population was assessed in a Markov model. Dutch-specific costs were applied, next to effectiveness data derived from a meta-analysis on PST and/or PSM. Sensitivity and scenario analyses were performed to assess uncertainty on budget-impact analysis results. 

Increasing PST and/or PSM usage in the national cohort from the current 15.4% to 50% resulted in savings ranging from €8 million after the first year to €184 million after 5 years. Further increases in the use of PST and/or PSM produced greater savings. Sensitivity analyses revealed budget-impact model sensitivity to the baseline and relative risks of thromboembolic complications. Unfavorable budget impact was found in scenarios exploring an increase in the use of PST alone as well as an increase in the market share of PST and PSM in patients with atrial fibrillation. 

Overall study findings indicated that PST and PSM are more favorable alternatives to monitoring at specialized centers in patients without atrial fibrillation.

Concerns Around Budget Impact Thresholds: Not All Drugs Are the Same

Ciarametaro M, Abedi S, Sohn A, Ge C., Odedara N, Dubois R.
Value in Health. 2017;20(2):230-233.

The use of budget thresholds is a recent development in the United States (e.g., the Institute for Clinical and Economic Review drug assessments). Budget thresholds establish limits that require some type of budgetary action if exceeded. This research focused on the advisability of using product-level budget thresholds as fixed spending caps by examining whether they are likely to improve or worsen market efficiency over status quo. 

The aim of this study was to determine whether fixed product-level spending caps are advisable for biopharmaceuticals. 

We systematically examined 5-year, postlaunch revenue for drugs that launched in the United States between 2003 and 2014 using the IMS MIDAS database. For products launched between 2011 and 2014, we used historical revenue as the baseline and trended out 60 months postlaunch based on exponential smoothing. Forecasted fifth-year revenue was compared to analyst reports. Fifth-year revenue was compared against a hypothetical $904 million spending cap to determine the amount of annual spending that might require reallocation. Descriptive statistics of 5-year, postlaunch revenue and annual spending requiring reallocation were calculated. 

Adhering to a $904 million product-level spending cap requires that approximately one-third of new drug spending be reallocated to other goods and services that have the potential to be less cost-effective due to significant barriers. 

Fixed product-level spending caps have the potential to reduce market efficiency due to their independence from value and the presence of important operational challenges.

Budget Impact Analysis of Prolonged Half-Life Recombinant FVIII Therapy for Hemophilia in the United States

McMullen S, Buckley B, Hall E, II, Kendter J, Johnston K.
Value in Health. 2017;20(1):93-99.

Hemophilia A is a factor VIII deficiency, associated with spontaneous, recurrent bleeding episodes. This may lead to comorbidities such as arthropathy and joint replacement, which contribute to morbidity and increased health care expenditure. Recombinant factor VIII Fc fusion protein (rFVIIIFc), a prolonged half-life factor therapy, requires fewer infusions, resulting in reduced treatment burden. 

Use a budget impact analysis to assess the potential economic impact of introducing rFVIIIFc to a formulary from the perspective of a private payer in the United States. 

The budget impact model was developed to estimate the potential economic impact of adding rFVIIIFc to a private payer formulary across a 2-year time period. The eligible patient population consisted of inhibitor-free adults with severe hemophilia A, receiving recombinant-based episodic or prophylaxis treatment regimens. Patients were assumed to switch from conventional recombinant factor treatment to rFVIIIFc. Only medication costs were included in the model. 

The introduction of rFVIIIFc is estimated to have a budget impact of 1.4% ($0.12 per member per month) across 2 years for a private payer population of 1,000,000 (estimated 19.7 individuals receiving treatment for hemophilia A). The introduction of rFVIIIFc is estimated to prevent 124 bleeds across 2 years at a cost of $1891 per bleed avoided. 

Hemophilia A is a rare disease with a low prevalence; therefore, the overall cost to society of introducing rFVIIIFc is small. Considerations for comprehensively assessing the budget impact of introducing rFVIIIFc should include episodic and prophylaxis regimens, bleed avoidance, and annual factor consumption required under alternative scenarios.

Incorporating Budget Impact Analysis in the Implementation of Complex Interventions: A Case of an Integrated Intervention for Multimorbid Patients within the CareWell Study

Soto-Gordoa M, Arrospide A, Merino Hernández M, Mora Amengual J, Fullaondo Zabala A, Larrañaga I, de Manuel E, Mar J.
Value in Health. 2017;20(1):100-106.

To develop a framework for the management of complex health care interventions within the Deming continuous improvement cycle and to test the framework in the case of an integrated intervention for multimorbid patients in the Basque Country within the CareWell project. 

Statistical analysis alone, although necessary, may not always represent the practical significance of the intervention. Thus, to ascertain the true economic impact of the intervention, the statistical results can be integrated into the budget impact analysis. The intervention of the case study consisted of a comprehensive approach that integrated new provider roles and new technological infrastructure for multimorbid patients, with the aim of reducing patient decompensations by 10% over 5 years. The study period was 2012 to 2020. 

Given the aging of the general population, the conventional scenario predicts an increase of 21% in the health care budget for care of multimorbid patients during the study period. With a successful intervention, this figure should drop to 18%. The statistical analysis, however, showed no significant differences in costs either in primary care or in hospital care between 2012 and 2014. The real costs in 2014 were by far closer to those in the conventional scenario than to the reductions expected in the objective scenario. The present implementation should be reappraised, because the present expenditure did not move closer to the objective budget. 

This work demonstrates the capacity of budget impact analysis to enhance the implementation of complex interventions. Its integration in the context of the continuous improvement cycle is transferable to other contexts in which implementation depth and time are important.

Budget Impact Analysis of Against Colorectal Cancer In Our Neighborhoods (ACCION): A Successful Community-Based Colorectal Cancer Screening Program for a Medically Underserved Minority Population

Kim B, Lairson DR, Chung TH, Kim J, Shokar NK.
Value in Health. 2017;20(6):809-818.

Given the uncertain cost of delivering community-based cancer screening programs, we developed a Markov simulation model to project the budget impact of implementing a comprehensive colorectal cancer (CRC) prevention program compared with the status quo. 

The study modeled the impacts on the costs of clinical services, materials, and staff expenditures for recruitment, education, fecal immunochemical testing (FIT), colonoscopy, follow-up, navigation, and initial treatment. We used data from the Against Colorectal Cancer In Our Neighborhoods comprehensive CRC prevention program implemented in El Paso, Texas, since 2012. We projected the 3-year financial consequences of the presence and absence of the CRC prevention program for a hypothetical population cohort of 10,000 Hispanic medically underserved individuals. 

The intervention cohort experienced a 23.4% higher test completion rate for CRC prevention, 8 additional CRC diagnoses, and 84 adenomas. The incremental 3-year cost was $1.74 million compared with the status quo. The program cost per person was $261 compared with $86 for the status quo. The costs were sensitive to the proportion of high-risk participants and the frequency of colonoscopy screening and diagnostic procedures. 

The budget impact mainly derived from colonoscopy-related costs incurred for the high-risk group. The effectiveness of FIT to detect CRC was critically dependent on follow-up after positive FIT. Community cancer prevention programs need reliable estimates of the cost of CRC screening promotion and the added budget impact of screening with colonoscopy.

Contribute to Value in Health

  • Submit a manuscript/revision
  • Become a peer reviewer
  • Check manuscript status

Scholar One


Your browser is out-of-date

ISPOR recommends that you update your browser for more security, speed and the best experience on Update my browser now