Value-Based Medicine

Cost-Effectiveness Reality for the Clinician

With passage of the Affordable Care Act, physicians will see an increasing emphasis on comparative effectiveness and cost effectiveness. Because both may well affect reimbursements in the future, it is imperative that the physician understand both, as well as know what to look for in these analyses to assure true comparability. Let's look at each measure in turn.

Comparative Effectiveness

Certainly the most accurate form of comparative-effectiveness analyses integrates the quality-of-life (QOL) or length-of-life benefits (human value), or both. In ophthalmology, human value equates to quality-of-life improvement gained, but not so in medical specialties where therapies directly contribute to longer lives. Often, clinical trials do not include QOL measures. When they do, the outcomes may not be designed to be comparable within medical specialties, much less across specialties.

How does the physician know whether comparative-effectiveness studies are really comparable with each other? For starters, look carefully at the methodology used to measure the degree of human value.

Using the QALY (quality-adjusted life-year) to measure patient preferences for the relevant health states allows one to assess the total benefit a particular therapy achieves. Take note of the source used in gathering these data. Utilities quantifying the QOL associated with a disease could be acquired from a variety of sources: patients, ophthalmologists, other providers, researchers, etc. Responses can differ greatly.

I find that preferences obtained from patients who have experienced the health state that is being measured are most useful. Research from The Center for Value-Based Medicine found that mild AMD caused a 17% decrement in QOL of the average patient, similar to that encountered with moderate cardiac angina. Moderate AMD caused a 32% decrease in the average patient's QOL, similar to that associated with severe cardiac angina or a fractured hip. Very severe AMD caused a 60% decrease in the patient's QOL, similar to that encountered with a severe stroke.

Of particular note is that patients with varying degrees of AMD were found to have QOL impairment ranging from 96% to 750% greater than that which treating ophthalmologists estimated for the disease.¹ So even practicing ophthalmologists underestimate the patient-perceived value of vision.

The utility instrument the methodology uses to measure the improved QOL — time tradeoff, standard, gamble willingness-to-pay, or multi-attribute tools such as the EuroQol-5D and Health Utilities Index — must also be consistent for comparisons. Utilities obtained by interview can differ dramatically from those obtained in a written survey.

Cost-effectiveness Analyses

We must strive to provide our patients with treatments that yield the greatest value gained — that improve their vision and, hence, quality of life. Sometimes more than one intervention can achieve similar benefits. In such cases, given our world of escalating healthcare costs, the prices of treatments become more relevant.

Cost-effectiveness analyses use preference-based comparativeeffectiveness outcomes and align them with the associated costs. When reviewing these studies, check that the source of cost information is consistent among the studies.

For example, the average national Medicare costs can differ greatly from the costs of any of the many commercial insurers or local Medicaid costs. Value-Based Medicine methodology describes cost-effectiveness analyses that utilize patient preferences, national Medicare costs and other standardizations. I offer a strong note of caution when looking at registries of analyses: A clear understanding of which costs are included in each analysis will likely prove elusive.

How About Costs?

Keep in mind that different cost perspectives exist, among which are third-party insurer costs, also known as direct medical costs. These are the costs an insurer would expect to pay and are the easiest to acquire and compare.

The most encompassing cost perspective is the societal one associated with an intervention. However, that can be difficult to standardize among studies. Societal costs include: direct medical costs; direct non-medical costs, such as caregivers, transportation and housing; and indirect costs, such as time lost at work.

You can see that the specific costs evaluated in the various cost-effectiveness studies are essential to understand in order to determine comparability among analyses.

The direct medical cost of cataract surgery is typically less than $2,700, the cost that Medicare sees, and a bargain at that! Our discussions of the cost effectiveness of sight-restoring interventions, including cataract surgery, often miss the delineation of the many dollars returned to us in the form of less trauma, depression, caregiver needs, residence changes, transportation and lost wages.

While maintaining consistency among analyses when using a societal perspective in cost-effectiveness research is difficult, I hope we'll see this perspective used more often. I look forward to the return on investment of ophthalmic interventions discussed, defended and applauded. OM

Reference

Brown GC, et al. The burden of age-related macular degeneration: A value-based medicine analysis.
Trans Am Ophthalmol Soc. 2005:103:173-186.

Melissa M. Brown, MD, MN, MBA, is president and CEO of the Center for Value-Based Medicine in Philadelphia. She can be reached via e-mail at mbrown@valuebasedmedicine.com. Value-Based Medicine is a registered trademark of the Center for Value-Based Medicine.