Past CHE seminars 2005

1 December 2005

Title: Surveillance for Barrett's Oesophagus: reflections on value of information
Speaker: Dr Ken Stein FFPH, Senior Lecturer in Public Health Medicine, Peninsula Medical School, University of Exeter

Abstract: An economic evaluation of the cost-effectiveness of surveillance for Barrett's Oesophagus was carried out for the NHS HTA Programme to inform further research prioritisation. The evaluation concluded that surveillance, which is currently carried out in 75% of gastroenterological services in the UK, is unlikely to be cost-effective and that the expected value of perfect information (population) is close to, or less than, the potential cost of a suitable randomised controlled trial. Despite this, the NCCHTA is currently commissioning such a primary study. The case study highlights some unresolved issues in EVPI methodology and raises interesting questions about approaches to health technology assessment and research prioritisation where a technology is already extensively diffused.

02 November 2005

Title: Evaluating PbR: some preliminary findings
Speaker: Shelley Farrar. Health Economics Research Unit, University of Aberdeen

Abstract: ‘Payment by Results’ (PbR) is a major change in the system of funding hospitals in the National Health Service in England, whereby hospitals are remunerated according to the type and volume of activity they undertake. Here we report the findings from the first round of a series of interviews with key stakeholders. We examine the process of implementing PbR and analyse its effects on local health economies. The interviews raised many interesting issues – some confirming, but others contrasting with, theoretical hypotheses as to the incentive effects of PbR and its impacts on hospital activity, efficiency and competition.

06 October 2005

Title: Technology diffusion and health care productivity: angioplasty in the UK
Speaker: Professor Alistair McGuire, Department of Economics, City UniversityAuthors of paper: McGuire, A, M. Raikou (LSE) and F. Windmeijer (University of Bristol)

Abstract: The adoption of new medical technologies is argued to be a contributory factor to the rising cost of health care although there is little empirical work devoted to exploring the mechanism of how this process works. This study builds on recent research by Cutler and Huckman to establish the degree to which a new technology, percutaneous transluminal coronary angioplasty (PTCA), substitutes for an older one (Culter, D. and Huckman, R., 2003, Technological development and medical productivity: the diffusion of angioplasty in New York state, Journal of Health Economics, 22, 187-217). Using patient specific data over a 15-year follow-up period the mortality and morbidity impacts of PTCA relative to coronary artery by-pass grafting (CABG) are established. In considering the substitution process hospital level data and control for medical management of CHD improves on the empirical specification suggested by the earlier research and this present study explicitly tests the dynamics underlying the process of substituting one hospital technology for another. Such improvements give robust empirical estimates of the degree to which PTCA has substituted for CABG, as opposed to expanding surgical treatment to the potential patient population. It is shown that the UK witnessed lower degrees of substitution of PTCA for CABG and a greater implied degree of treatment expansion than found in the USA analysis. Thus PTCA, although acting to reduce treatment costs through the process of substitution for the more expensive procedure is inferred to increase overall costs through increasing the potential patient population that could be treated for CHD with surgery.

08 September 2005

Title: Evaluation for public health interventions: decision rules with multiple objectives and multiple constraints By Karl Claxton, Mark Sculpher and David Epstein - University of York.
Speaker: Karl Claxton

Abstract: Purpose: To demonstrate that a social decision making approach to evaluation can be generalised to interventions which have multiple objectives and impact on multiple constraints within and beyond the health sector.
Background: The UK National Institute for Health and Clinical Excellence (NICE) has been given additional responsibilities for issuing guidance on public health interventions and national policies which will have an impact across public sector budgets and the wider economy. This poses the question whether the existing approach to the evaluation of health technologies within the health sector is sufficient to inform decisions across budget holders with multiple objectives and constraints.
Methods: The arguments put forward as to whether a social decision making or 'welfarist' approach to evaluation will be sufficient are examined. These include the existence of broader outcomes than health (e.g crime and education), multiple budget holders, and external effects on the wider economy (e.g productivity). We identify the generalisations of existing decision rules which are required.
Results: Current decision rules in CEA are based on maximising a single objective subject to a single exogenous budget constraint whereas a welfarist analysis regards budgets to be endogenous. Both fail to fully address the allocation problem posed by public health interventions. We demonstrate that a mathematical programming solution to this problem is possible but the information requirements make it impractical. Instead we propose a simple compensation test for interventions with multiple and cross sectoral effects. However, rather than compensation based on individual preferences, it should be based on the net benefits falling on different sectors. The valuation of outcomes is based on the shadow prices of the existing budget constraints which are implicit in existing public expenditure and its allocation across different sectors. We show that it is not necessary to pay compensation for each decision if the net compensation required is accounted for over a budget period and informs the marginal changes in subsequent allocations between sectors.
Conclusions: A generalisation of decision rules to multiple sectors is required based on compensation valued in a way which is consistent with the existing allocation between the public sector(s) and the wider economy. A 'welfarist' societal perspective is not sufficient; rather, a multiple perspective evaluation which accounts for costs and effects falling on each sector is required.

21 July 2005

Title: The virtual consulting room - a 21st century model for reengineering the NHS
Speaker: Professor Owen Epstein. Royal Free and UCL Medical School

Abstract: Reform in the NHS has focused on structural change, patient choice, targets and payment for service. None of these initiatives addresses the fundamental disequilibrium between demand for specialist consultation and supply of fully trained specialists. Without radical redesign of the primary-secondary care interface to establish a new equilibrium, it is unlikely that the NHS reformers will achieve the goal of providing patients with an efficient healthcare journey. Professor Epstein has addressed this problem by developing the 'Virtual Consulting Room' (VCR), which, by exploiting the connectivity of Intranets and the Internet, offers a radical redesign of the primary-secondary care interface. The seminar will develop the theme of radical innovation and reengineering in healthcare to meet the needs of a modern health service. The innovative methodology for engaging healthcare professionals in this project will be discussed and the VCR will be demonstrated.

9 June 2005

Title: Seeing the NICE Side of Cost-Effectiveness Analysis
Speaker: Dr Stirling Bryan, Health Economics Facility, Health Service Management Centre, University of Birmingham
Authors: Dr Stirling Bryan, Iestyn Williams, Shirley McIver

Abstract: Over recent years there has been repeated expression of concern about the apparent lack of use of cost-effectiveness analyses (CEAs) in health resource allocation decisions. Given that the central problem addressed by the discipline of economics is 'resource scarcity' this is both surprising and concerning. The National Institute for Clinical Excellence (NICE) was established in the UK with a remit of making national coverage decisions concerning the adoption of health technologies. The Institute can be viewed as an experiment in the explicit use of CEA to inform national health policy - an independent economic analysis is commissioned for every appraisal topic. This paper reports findings from the first in-depth empirical investigation into the use of economic evaluation by the NICE Appraisals Committee. The research reported in this paper was qualitative in nature. Fieldwork was conducted over a 12-month period and focused on seven new appraisal topics. In each case, literature made available to the committee was analysed, formal meetings were observed and a sample of 30 committee members were interviewed. Data were collated, analysed and triangulated on an ongoing, iterative basis by all three authors. The data analysis has yielded six main themes:

The information drawn upon by the committee
Committee procedures and processes
Committee composition and the roles of committee members
How the information is processed in order to arrive at a judgment
Conceptual issues concerning economic analyses
Practical issues relating to the economic analyses received by the committee

Each of these is discussed in the paper.

12 May 2005

Title: Did the HMO revolution cause hospital consolidation?
Speaker: Douglas Wholey, Honorary Visiting Senior Research Fellow at the National Primary Care Research and Development Centre, Manchester.From the Division of Health Services Research and Policy, School of Public Health, University of Minnesota, U.S.A.

Abstract: During the 1990s US healthcare markets underwent a significant transformation. Managed care rose to become the dominant form of insurance in the private sector. Also, a wave of hospital consolidation occurred. In 1990, the mean population-weighted hospital Herfindahl-Hirschman Index (HHI) in a Health Services Area (HSA) was .31. By 2000, the HHI had risen to .37. This paper explores whether the rise in managed care caused the increase in hospital concentration. We use an instrumental variables approach with 10-year differences to identify the relationship between managed care penetration and hospital consolidation. Our results strongly imply that the rise of managed care did not cause the hospital consolidation wave. This finding is robust to a number of different specifications.

A copy of the paper is available herepdf wholeypaper

14 April 2005

Title: Hospital volume and quality care: selective -referral or practice makes perfect?
Speaker: Gabriel Picone, Department of Economics, University of South Florida

Abstract: Physicians in hospitals that treat a large number of patients will gain experience about the most effective treatment methods. One would expect this expertise to be reflected in better health outcomes for these patients (practice-makes-perfect hypothesis). However, using observational data, a selection bias arises since patients prefer the perceived 'better' quality hospital, creating a spurious correlation between volume and outcomes (selective-referral hypothesis). In this study, using data from the Cooperative Cardiovascular Project (CCP), we estimate the effect of hospital volume on quality of care for patients with acute myocardial infarction (AMI). Our main instrument is the differential distance between the closest hospital to the patient and the nearest high volume hospital. Hospital volume is measured by the number of AMI patients admitted to the hospital in the year prior to the patient's admission. We conclude that after controlling for selective-referrals, admission to a higher volume hospital leads only to a small reduction in mortality and higher readmission rates for urban patients.

A copy of the paper is available here pdf picone