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The Value of Investment in Health Care. Better Care, Better Lives. The increase in health spending is a frequent topic of debate…. U.S. Health Care Expenditures per Person (2000 U.S. $). Source: Health United States 2002, Consumer Price Index (All Items).

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the increase in health spending is a frequent topic of debate
The increase in health spending is a frequent topic of debate…

U.S. Health Care Expenditures per Person (2000 U.S. $)

Source: Health United States 2002, Consumer Price Index (All Items)

but the value of this investment is seldom part of the discussion
…but the value of this investment is seldom part of the discussion.

CBO Issues Warning on Rising Health Care Costs

Senate Republicans in Albany Eye Big Medicaid Cuts

Medicare Revamp Fails to Cure Angst Over Costs

new evidence finds our nation s health care dollars are well spent
New evidence finds our nation’s health care dollars are well spent.
  • Overall, each additional health dollar spent produced a return of $2.40-$3.00 in:
    • Deaths avoided
    • Increased longevity
  • Advances in care have improved outcomes and quality of life in common diseases
    • Heart attack
    • Type-2 Diabetes
  • Stroke
  • Breast cancer
experienced research team
Experienced Research Team
  • MEDTAP International – global health services research firm
    • Bryan R. Luce, Ph.D., M.B.A
      • Founder, Chairman, MEDTAP International
      • Former Director, Office of Research and Demonstrations, US Health Care Financing Administration
    • Frank Sloan, Ph.D.
      • Director, Center for Health Policy, Law and Management, Duke University
    • Josephine Mauskopf, Ph.D.
      • Global Director of Health Economics, RTI Health Solutions
multi faceted research approach
Multi-faceted Research Approach
  • Overall value of investment 1980 to 2000
    • Dollar value of gains in annual population health outcomes versus…
    • …the increase in annual health care expenditures
  • Focus on four common diseases: Heart attack, type 2 diabetes, stroke, and breast cancer
    • Advances in care
    • Improvements in outcomes
    • Overall value of investment for the Medicare population
    • Value of specific medical breakthroughs
conservative estimates
Conservative Estimates
  • Estimates of value:
    • Value of gain of 1 year of life = $100,000*
    • Value of less disability and increased productivity not in overall estimate
  • Benefits and harms of non-health care changes even out**

*Source: Nordhaus (2002), Blomquist (2001)

**e.g. smoking, obesity, exercise, environment

overall value of investment findings
Overall Value of Investment: Findings

Since 1980, per capita expenses are up $2,254, but:

  • Overall death rate is down 16%
  • Life expectancy from birth is up by 3.2 years
  • Disability rates are down 25% for people over 65*
  • 56% fewer days are spent in the hospital

Health gains of $2.40 to $3.00 per dollar invested

*Value of this improvement not quantified.

overall value of investment findings9
Overall Value of Investment: Findings

470,000

more

deaths

Where would we be in 2000 without healthcare advances?

2.3

million

more

disabled

persons

$2254 per

capita

in

savings

206

million

more

days in

hospital

findings four common diseases
Findings: Four Common Diseases
  • Heart attack
  • Type 2 Diabetes
  • Stroke
  • Breast Cancer
why these four
Why these four?

U.S. Population Affected by Conditions Studied,

in millions, 2003

  • Common conditions
  • High disability and death rates
  • Nearly all at risk for one of these diseases
  • Medical breakthroughs have improved outcomes
  • Value of investment not documented

Source: American Heart Association; www.diabetes.org; www.cdc.gov/nchs

heart attack advances in care
Heart Attack:Advances in Care
  • Improvements in drug therapy
    • Blood flow restored more quickly (clot-busters)
    • Blockages better prevented (anti-platelets, cholesterol lowering drugs)
  • Advances in surgical techniques
    • PTCA reopens arteries—more effective, less invasive
    • Stents keep blood vessels open
  • Advances in diagnostic technologies
    • Electrocardiograms and diagnostic imaging provide more rapid, precise diagnoses
heart attack advances in care14
In the 1970s…

5-7 days in critical care; 3-4 weeks in general ward

Complete bed rest for several weeks

Minimal understanding of risk factors/ preventive measures

Today…

Total hospital stay of 5-7 days

People up and around within days

Key risk factors like cholesterol and hypertension are routinely managed

Heart Attack:Advances in Care
heart attack improvement in outcomes
Heart Attack:Improvement in Outcomes

Death Rate Due to

Heart Attack

(Age-adjusted, per 100,000)

  • Mortality cut nearly in half
  • Death within 30 days cut from 1 in 4 to 1 in 8

Source: www.cdc.gov/nchs

costs and outcomes for medicare heart attack patients
Costs and Outcomes for Medicare Heart Attack Patients

Value of improved outcomes:

(12% gain in life expectancy)

--minus--

Increase in treatment costs*:

(Medicare plus out-of-pocket)

Net benefit in dollars:

$28,632

$26,093

$2539

Value of $1.10 per dollar invested

*Five-year costs 1985-1989 versus 1995-1999, Medicare plus out-of-pocket

Source: Analysis of Medicare Part A and Part B and National Long-Term Care Survey data (1982-2000)

heart attack value of specific medical breakthroughs

$38.44

Heart Attack: Value of Specific Medical Breakthroughs

Breakthroughs vs. Current Standard Treatment

Range in Value per Dollar Invested

  • Beta-blockers
  • Mobile coronary care units
  • Statin therapy
  • Angiography
  • Rt-PA
  • Angioplasty w/stenting

Source: Published literature

type 2 diabetes advances in care
Type 2 Diabetes:Advances in Care
  • Improvements in drug therapy
    • Insulin therapy lasts longer and is more convenient
    • New classes of drugs with fewer side effects
  • Advances in diagnostic technologies
    • Hemoglobin A1c testing and glucose monitoring kits allow more accurate, less invasive readings
  • Advances in surgical techniques
    • Laser surgery and vitrectomy procedures treat eye disease
    • Dialysis and transplant surgery lengthen and improve life
type 2 diabetes advances in care20
In the 1970s…

Insulin agents short-acting; inconvenient dosing schedules

Frequent needles sticks to test glucose levels

Limited understanding of need to control blood pressure and cholesterol

Limited treatment options for complications

Today…

More effective options for insulin; long acting and more convenient

Glucose tests without puncturing the skin

Better management of all aspects of disease reduces chances of complications

Surgical options for diabetic eye and kidney disease improve quality of life

Type 2 Diabetes:Advances in Care
type 2 diabetes improvement in outcomes
Type 2 Diabetes:Improvement in Outcomes
  • Advances support tight management of disease; better outcomes**
    • Tight glucose control decreases mortality by 10%, complications** by 25%
    • Tight blood pressure control decreases mortality by 32%, heart failure by 56%, stroke by 44%
    • Gains in employment and productivity with drug therapy to manage disease

*Higher incidence—linked to increased rates of obesity—has

led to increased mortality rates (up 39%)

**eye, kidney, and nerve disease

costs and outcomes for medicare type 2 diabetes patients
Costs and Outcomes for Medicare Type 2 Diabetes Patients

Value of improved outcomes:

(7% gain in life expectancy)

--minus--

Increase in treatment costs*:

(Medicare plus out-of-pocket)

Net benefit in dollars:

$16,930

$11,337

$5,593

Value of $1.49 per dollar invested

*Five-year costs 1985-1989 versus 1995-1999, Medicare plus out-of-pocket

Source: Analysis of Medicare Part A and Part B and National Long-Term Care Survey data (1982-2000)

type 2 diabetes value of specific medical breakthroughs
Type 2 Diabetes: Value of Specific Medical Breakthroughs

Breakthroughs vs. Current Standard Treatment

Range in Value per Dollar Invested

$36.00

  • Tight control of glucose, blood pressure, and cholesterol
  • Statins
  • Ace inhibitors
  • Screening and treatment of diabetic retinopathy

Source: Published literature

stroke advances in care
Stroke:Advances in Care
  • Improvements in drug therapy
    • Blood flow restored more quickly (clot-busters)
    • Better-tolerated, more effective drugs to control blood pressure
  • Advances in surgical techniques
    • PTCA reopens arteries—more effective, less invasive
    • Carotid endarterectomy clears plaque in carotid arteries
  • Advances in diagnostic technologies
    • Improvements in brain imaging, such as weighted imaging, magnetic resonance angiography
stroke advances in care26
In the 1970s…

Treatment options limited; disability rates high

Typical discharge to nursing home

Limited diagnostic technologies

Limited surgical options for prevention

Today…

With rt-PA more stroke victims resume normal life

Acute and subacute rehabilitation widely available

New imaging technologies offer faster more precise diagnosis

Carotid endarterectomy and implanted microcoil devices can prevent stroke

Stroke:Advances in care
stroke improvement in outcomes
Stroke:Improvement in Outcomes

Death Rate Due to Stroke

(Age-adjusted, per 100,000)

  • Mortality cut by 37 percent
  • Faster diagnosis
  • Stroke-related disability after 3 months reduced by up to 30 percent with rt-PA

Source: www.cdc.gov/nchs

costs and outcomes for medicare stroke patients
Costs and Outcomes for Medicare Stroke Patients

Value of improved outcomes:

(10% gain in life expectancy)

--minus--

Increase in treatment costs*:

(Medicare plus out-of-pocket)

Net benefit in dollars:

$24,903

$16,035

$8,868

Value of $1.55 per dollar invested

*Five-year costs 1985-1989 versus 1995-1999, Medicare plus out-of-pocket

Source: Analysis of Medicare Part A and Part B and National Long-Term Care Survey data (1982-2000)

stroke value of specific medical breakthroughs
Stroke: Value of Specific Medical Breakthroughs

Breakthroughs vs. Current Standard Treatment

Range in Value per Dollar Invested

  • Clopidogrel
  • Ticlopidine
  • rt-PA*
  • Carotid endarterectomy*

*Yields a savings in treatment costs

Source: Published literature

breast cancer advances in care
Breast Cancer:Advances in Care
  • Improvements in drug therapy
    • Adjuvant chemotherapy – more tolerant, less toxic
    • Better-tolerated hormonal treatments
  • Advances in surgical techniques
    • Breast-conserving surgery
    • Less-invasive biopsy
  • Advances in diagnostic technologies
    • Earlier diagnosis
breast cancer advances in care32
In the 1970s…

Chemotherapy required hospitalization

Chemotherapy poorly tolerated

Mastectomies were the norm

Few drug therapies existed

Mammography not in widespread use

Today…

90% of chemotherapy is outpatient

New drugs reduce nausea

Breast conserving surgery performed with reconstruction

New drugs offer higher cure rates and less toxicity

Routine mammography leads to earlier diagnosis

Breast Cancer:Advances in Care
breast cancer improvement in outcomes
Breast Cancer:Improvement in Outcomes

Death Rate Due to

Breast Cancer

(Age-adjusted, per 100,000)

  • Mortality cut by 21 percent
  • Five-year overall survival rates increased from 76.9% to 86.6%
  • Risk of developing metastatic disease declined from 40% to 15%
costs and outcomes for medicare breast cancer patients
Costs and Outcomes for Medicare Breast Cancer Patients

Value of improved outcomes:

(8% gain in life expectancy)

--minus--

Increase in treatment costs*:

(Medicare plus out-of-pocket)

Net benefit in dollars:

$22,341

$4,676

$17,665

Value of $4.80 per dollar invested

*Five-year costs 1985-1989 versus 1995-1999, Medicare plus out-of-pocket

Source: Analysis of Medicare Part A and Part B and National Long-Term Care Survey data (1982-2000)

breast cancer value of specific medical breakthroughs
Breast Cancer: Value of Specific Medical Breakthroughs

Breakthroughs vs. Current Standard Treatment

Range in Value per Dollar Invested

$36.81

  • Letrozole
  • Breast-conserving surgery
  • Biennial mammography
  • Adjuvant chemotherapy
  • Stereotactic core biopsy

Source: Published literature

policy recommendations
Policy Recommendations
  • HHS should include a measure of health benefits gained in its annual report on health care spending
  • Further study is needed on the role of innovation in improving health
  • Employers and health care providers should account for the benefits of a healthier workforce
  • Discussions of coverage for uninsured should consider value of investing in health care for all Americans—not just the costs