Long‐term care and hospital utilisation by older people: an analysis of substitution rates

Older people are intensive users of hospital and long‐term care services. This paper explores the extent to which these services are substitutes. A small area analysis was used with both care home and (tariff cost‐weighted) hospital utilisation for older people aggregated to electoral wards in England. Health and social‐care structural equations were specified using a theoretical model. The estimation accounted for the skewed and censored nature of the data. For health utilisation, both a fixed effects instrumental variables GMM model and a generalised estimating equations (GEE) model were fitted, the later on a log dependent variable with predicted values of social care utilisation used to account for endogeneity (bootstrapping was used to derive standard errors). In addition to a GMM model, the social‐care estimation used both two‐part and tobit models (also with predicted health utilisation and bootstrapping). The results indicate that for each additional £1 spent on care homes, hospital expenditure falls by £0.35. Also, £1 additional hospital spend corresponds to just over £0.35 reduction on care home spend. With these cost substitution effects offsetting, a transfer of resources to care homes is efficient if the resultant outcome gain is greater than the outcome loss from reduced hospital use. Copyright © 2009 John Wiley & Sons, Ltd.     

Estimating a cost‐effectiveness threshold for the Spanish NHS

The cost of generating a quality‐adjusted life year (QALY) within a National Health Service provides an approximation of the average opportunity cost of funding decisions. This information can be used to inform a cost‐effectiveness threshold. The aim of this paper is to estimate the cost per QALY at the Spanish National Health Service. We exploit variation across 17 regional health services and the exogenous changes in expenditure that took place as a consequence of the economic crisis over 5 years of data. We conduct fixed effect models and use an instrumental variable approach to test for potential remaining endogeneity. Our results show that health expenditure has a positive and significant effect on population health, with an average spending elasticity of 0.07. This translates into a cost per QALY of between 22,000€ and 25,000€. These values are below the cost‐effectiveness threshold figure of 30,000€ commonly cited in Spain.     

Health care funding levels and patient outcomes: a national study

BACKGROUND: Health care funding levels differ significantly across geographic regions, but there is little correlation between regional funding levels and outcomes of elderly Medicare beneficiaries. Our goal was to determine whether this relationship holds true in a non-Medicare population cared for in a large integrated health care system with a capitated budget allocation system. METHODS: We explored the association between health care funding and risk-adjusted mortality in the 22 Veterans Affairs (VA) geographic Networks over a six-year time period. Allocations to Networks were adjusted for illness burden using Diagnostic Cost Groups. To test the association between funding and risk-adjusted three-year mortality, we ran logistic regressions with single-year patient cohorts, as well as hierarchical regressions on a six year longitudinal data set, clustering on VA Network. RESULTS: A 1000 dollar increase in funding per unit of patient illness burden was associated with a 2-8% reduction in three-year mortality in cross sectional regressions. However, in longitudinal hierarchical regressions clustering on Network, the significant effect of funding level was eliminated. CONCLUSIONS: When longitudinal data are used, the significant cross sectional effect of funding levels on mortality disappear. Thus, the factors driving differences in mortality are Network effects, although part of the Network effect may be due to past levels of funding. Our results provide a caution for cross sectional examinations of the association between regional health care funding levels and health outcomes.     

THE IMPACT OF TECHNOLOGICAL INTENSITY OF SERVICE PROVISION ON PHYSICIAN EXPENDITURES: AN EXPLORATORY INVESTIGATION

Advances in technology and subsequent changes in clinical practice can lead to increases in healthcare costs. Our objective is to assess the impact that changes in the technological intensity of physician‐provided health services have had on the age pattern of both the volume of services provided and the average expenditures associated with them. We based our analysis on age‐sex‐specific patient‐level administrative records of diagnoses and treatments. These records include virtually all physician services provided in the province of Ontario, Canada in a 10‐year span ending in 2004 and their associated costs. An algorithm is developed to classify services and their costs into three levels of technological intensity. We find that while the overall age‐standardized level and cost of services per capita have decreased, the volume and cost of high technologically intensive treatments have increased, especially among older patients. Copyright © 2013 John Wiley & Sons, Ltd.     

Health and social care costs for young adults with epilepsy in the UK

Maintaining contact with services will help improve clinical and social outcomes as children with epilepsy move into their adult lives. This study has collated evidence on the extent to which young adults with epilepsy are supported by health and social care services posttransition, and the costs of such support. UK prevalence and service use data were taken from policy and research literature, as well as national data sets and reports. Costs were attached to these data to arrive at agency and overall total costs. There are approximately 42 000 young adults (18–25 years) with epilepsy costing the UK health and social care budgets £715.3 million per annum, on average £17 000 per young adult with epilepsy. A further £61 million falls to the social security budget. Most young adults with epilepsy will rarely use these services, but those with additional health needs have high and often long‐term support needs, including supported accommodation and personal care. Current resources used by these young adults are summarised but deficits in service availability can mean long waiting times and sub‐optimal treatment. Young adults also want more support to help them take advantage of education and employment opportunities and more information about managing the impacts of epilepsy on their lives. Improving services will cost money, but has the potential to lead to better outcomes for young adults.     

Medicaid expenditures for maternity and newborn care in America

An Alan Guttmacher Institute (AGI) survey of the Medicaid programs in each state and the District of Columbia found that some 542,000 low-income women have a Medicaid-subsidized delivery each year--about 15 percent of all women who give birth. The proportion ranges from three percent in Alaska to 25 percent in Michigan. The federal and state governments spend almost $1.2 billion annually for maternity care (including prenatal, postpartum and newborn care); the average expenditure per patient is $2,200. Tennessee reports the highest expenditure per patient ($3,500) and Louisiana the lowest ($1,300). Only the highest payments under Medicaid are close to charges for maternity care in the open market, a fact that results in a significant disincentive for physicians and hospitals to accept Medicaid patients. The $1.2 billion spent for Medicaid-subsidized maternity care compares with an estimated $11.5 billion spent for such care nationwide. Thus, Medicaid pays for about 10 percent of the nation's maternity care bill, although Medicaid subsidizes deliveries for 15 percent of all women who give birth. The figures for maternity care do not include Medicaid expenditures for neonatal intensive care, which, for the 17 states reporting data, average about $11,800 per infant. Although only about six percent of all newborns whose deliveries are subsidized by Medicaid require neonatal intensive care, such care is so expensive that it adds about 30 percent to all Medicaid expenditures for maternity care. Increased Medicaid payments for maternity care, including prenatal care, could have a positive impact on health outcomes for low-income mothers and their babies, and could reduce the necessity for massive and expensive medical treatment for newborns.     

Exploring the cost-effectiveness of advance care planning (by taking a family carer perspective): Findings of an economic modelling study

Advance care planning is considered an important part of high-quality end-of-life care. Its cost-effectiveness is currently unknown. In this study, we explore the cost-effectiveness of a strategy, in which advance care planning is offered systematically to older people at the end-of-life compared with standard care. We conducted decision-analytic modelling. The perspective was health and social care and the time horizon was 1 year. Outcomes included were quality-adjusted life years as they referred to the surviving carers. Data sources included published studies, national statistics and expert views. Average total cost in the advance care planning versus standard care group was £3,739 versus £3,069. The quality-adjusted life year gain to carers was 0.03 for the intervention in comparison with the standard care group. Based on carer's health-related quality-of-life, the average cost per quality-adjusted life year was £18,965. The probability that the intervention was cost-effective was 55% (70%) at a cost per quality-adjusted life year threshold of £20,000 (£30,000). Conducting cost-effectiveness analysis for advance care planning is challenging due to uncertainties in practice and research, such as a lack of agreement on how advance care planning should be provided and by whom (which influences its costs), and about relevant beneficiary groups (which influences its outcomes). However, even when assuming relatively high costs for the delivery of advance care planning and only one beneficiary group, namely, family carers, our analysis showed that advance care planning was probably cost-effective.     

Increased access to palliative care and hospice services: opportunities to improve value in health care

Context: A small proportion of patients with serious illness or multiple chronic conditions account for the majority of health care spending. Despite the high cost, evidence demonstrates that these patients receive health care of inadequate quality, characterized by fragmentation, overuse, medical errors, and poor quality of life. Methods: This article examines data demonstrating the impact of the U.S. health care system on clinical care outcomes and costs for the sickest and most vulnerable patients. It also defines palliative care and hospice, synthesizes studies of the outcomes of palliative care and hospice services, reviews variables predicting access to palliative care and hospice services, and identifies those policy priorities necessary to strengthen access to high‐quality palliative care. Findings: Palliative care and hospice services improve patient‐centered outcomes such as pain, depression, and other symptoms; patient and family satisfaction; and the receipt of care in the place that the patient chooses. Some data suggest that, compared with the usual care, palliative care prolongs life. By helping patients get the care they need to avoid unnecessary emergency department and hospital stays and shifting the locus of care to the home or community, palliative care and hospice reduce health care spending for America's sickest and most costly patient populations. Conclusions: Policies focused on enhancing the palliative care workforce, investing in the field's science base, and increasing the availability of services in U.S. hospitals and nursing homes are needed to ensure equitable access to optimal care for seriously ill patients and those with multiple chronic conditions.     

Supporting patients with long‐term conditions in the community: Evaluation of the Greater Manchester Community Pharmacy Care Plan Service

The Greater Manchester Community Pharmacy Care Plan (GMCPCP) service provided tailored care plans to help adults with one or more qualifying long‐term condition (hypertension, asthma, diabetes and COPD) to achieve health goals and better self‐management of their long‐term conditions. The service ran between February and December 2017. The aim of this study was to investigate the impact of the service on patient activation, as measured by the PAM measure (primary outcome). Secondary outcomes included quality of life (EQ‐5D‐5L, EQ‐VAS), medication adherence (MARS‐5), NHS resource use and costs, systolic and diastolic blood pressure, HDL cholesterol ratio levels and body mass index (BMI). A before and after design was used, with follow‐up at 6‐months. A questionnaire was distributed at follow‐up and telephone interviews with willing participants were used to investigate patient satisfaction with the service. The study was approved by the University of Manchester Research Ethics Committee. Quantitative data were analysed in SPSS v22 (IBM). A total of 382 patients were recruited to the service; 280 (73%) remained at follow‐up. Ten patients were interviewed and 43 completed the questionnaire. A total of 613 goals were set; mean of 1.7 goals per patient. Fifty percent of goals were met at follow‐up. There were significant improvements in PAM, EQ‐5D‐5L and EQ‐VAS scores and significant reductions in systolic blood pressure, BMI and HDL cholesterol ratio at follow‐up. Mean NHS service use costs were significantly lower at follow‐up; with a mean decrease per patient of £236.43 (±SD £968.47). The mean cost per patient for providing the service was £203.10, resulting in potential cost‐savings of £33.33 per patient (SD ± 874.65). Questionnaire respondents reported high levels of satisfaction with the service. This study suggests that the service is acceptable to patients and may lead to improvements in health outcomes and allows for modest cost savings. Limitations of the study included the low response rate to the patient questionnaire.     

Health care financing and health outcomes in Pacific Island countries

This paper provides empirical evidence on the relationship betweenper capita public health expenditure and three measures of healthoutcomes (infant and under-five mortality rates and crude deathrates) using cross-country data from seven Pacific Island countriesfor selected years between 1990 and 2002. The results of thefixed-effects estimation procedure, correcting for AR(1) errors,provide strong evidence that per capita health expenditure isan important factor in determining health outcomes. The elasticityof the infant mortality rate with respect to per capita healthexpenditure is –0.66. Based on this elasticity, a 10%increase in per capita health expenditure means that a countrysuch as Papua New Guinea, with a high infant mortality rate,would see a reduction of 3.6 infant deaths per 1000 live births,with an average reduction of 2.0 infant deaths per 1000 livebirths for the Pacific Island countries. The empirical resultsalso provide strong evidence that per capita incomes and immunizationare additional core factors that determine health outcomes.Some policy implications are drawn.     

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

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.     

Equity and efficiency in Italian health care

Health care finance and provision in Italy is unusual by international standards: public financing relies heavily on both general taxation and social insurance, and although the vast majority of expenditure is publicly financed, the majority of care is provided by the private sector. The system suffers, however, from a chronic failure to control expenditures and its record on perinatal and infant mortality is poor. Hospitals in Italy have a low bed-occupancy rate by international standards and the per diem system of reimbursing private hospitals encourages unduly long stays. Costs per inpatient day are high by international standards, but costs per admission are close to the OECD average. Ambulatory care costs are extremely low, but this appears to be due to the fact that GPs see so many patients that their role is inevitably mainly administrative. Consumption of medicines is extremely high, but because the cost per item is low, expenditure per capita is not unduly high. Despite the emphasis on social insurance, the financing system appears to be progressive. There is evidence of inequalities in health in Italy, and some evidence that health care is not provided equally to those in the same degree of need.     

Health Insurance and Health Care among the Mid‐Aged and Older Chinese: Evidence from the National Baseline Survey of CHARLS

We document the recent profile of health insurance and health care among mid‐aged and older Chinese using data from the China Health and Retirement Longitudinal Study conducted in 2011. Overall health insurance coverage is about 93%. Multivariate regressions show that respondents with lower income as measured by per capita expenditure have a lower chance of being insured, as do the less‐educated, older, and divorced/widowed women and rural‐registered people. Premiums and reimbursement rates of health insurance vary significantly by schemes. Inpatient reimbursement rates for urban people increase with total cost to a plateau of 60%; rural people receive much less. Demographic characteristics such as age, education, marriage status, per capita expenditure, and self‐reported health status are not significantly associated with share of out‐of‐pocket cost after controlling community effects. For health service use, we find large gaps that vary across health insurance plans, especially for inpatient service. People with access to urban health insurance plans are more likely to use health services. In general, Chinese people have easy access to median low‐level medical facilities. It is also not difficult to access general hospitals or specialized hospitals, but there exists better access to healthcare facilities in urban areas. Copyright © 2016 John Wiley & Sons, Ltd.     

Pure,White and Deadly… Expensive: A Bitter Sweetness in Health Care Expenditure

This paper analyses the impact of sugar availability/intake on diabetes expenditure and on total health care expenditure. Building this macroeconomic analysis upon the literature on the determinants of health care expenditure, we estimate a dynamic panel data model over a sample of 156 countries for the period 1995–2014. After controlling for the traditional determinants of health care spending, we find that an increase in sugar availability/intake leads to a significant rise in diabetes expenditure (per capita and per diabetic) and in the growth rate of total health care expenditure per capita. Moreover, we show that this causal relation is present in both developed and developing countries. Copyright © 2016 John Wiley & Sons, Ltd.     

IMPROVING EQUITY AND EFFICIENCY IN THE BUSH: A NEEDS-BASED METHOD FOR HEALTHCARE RESOURCE ALLOCATION IN REMOTE COMMUNITIES

ABSTRACT: Outback Australia still exists as a frontier economy, relying on public sector provision of the vast majority of services, including health care. In the Northern Territory (NT), high mortality ratios and hospitalisation rates reflect the poor health status of Aborigines who, in 1990-91, accounted for 25% of the population but 40% of hospital patients and 53% of hospital bed days. Funding for primary health care continues to be based on historical utilisation rates, which perpetuates the existing bias towards the urban hospital sector. Health care expenditure analysis suggests that current expenditure patterns fail to fulfil national goals of equity of access and allocation efficiency (maximisation of health outcomes) for the NT Aboriginal population.
This paper outlines a population needs-based resource allocation formula for remote communities, which takes account of three factors: mortality, cost of remoteness and demographic structure. National per capita health care utilisation data are used as a baseline and an allocation weighting is proposed based on the above three factors. This formula is then applied to a typical remote central Australian community. The cost-benefit implications of this alternative funding strategy are explored.     

Using discrete choice experiments to value informal care tasks: exploring preference heterogeneity

While informal care is a significant part of non‐market economic activity, its value is rarely acknowledged, perhaps reflecting a lack of market data. Traditional methods to value such care include opportunity and replacement cost. This study is the first to employ the discrete choice experiment methodology to value informal care tasks. A monetary value is estimated for three tasks (personal care, supervising and household tasks). The relationship between time spent on formal and informal care is also modelled and preference heterogeneity investigated using the Latent Class Model. Complementarity between supervising tasks and formal care is observed. Monetary compensation is important, with willingness to accept per hour values ranging from £0.38 to £0.83 for personal care, £0.75 for supervising and £0.31 to £0.6 for household tasks. Heterogeneity in preferences is observed, with monetary compensation being important for younger people, but insignificant for older individuals. Such heterogeneity is important at the policy level. Values are lower than those generated by opportunity cost and replacement cost methods, perhaps because of the limited ability of revealed preference methods to capture broader aspect of utility. Differences with contingent valuation methods are also observed, suggesting future research should investigate the external validity of the different methods. Copyright © 2010 John Wiley & Sons, Ltd.     

Healthcare financing in Yemen

Yemen is a low‐middle‐income country where more than half of the population live in rural areas and lack access to the most basic health care. At US$40 per capita, Yemen's annual total health expenditure (THE) is among the lowest worldwide. This study analyses the preconditions and options for implementing basic social health protection in Yemen. It reveals a four‐tiered healthcare system characterised by high geographic and financial access barriers mainly for the poor. Out‐of‐pocket payments constitute 55% of THE, and cost‐sharing exemption schemes are not well organised. Resource‐allocation practices are inequitable because about 30% of THE gets spent on treatment abroad for a small number of patients, mainly from better‐off families. Against the background of a lack of social health protection, a series of small‐scale and often informal solidarity schemes have developed, and a number of public and private companies have set up health benefit schemes for their employees. Employment‐based schemes usually provide reasonable health care at an average annual cost of YR44 000 (US$200) per employee. In contrast, civil servants contribute to a mandatory health‐insurance scheme without receiving any additional health benefits in return. A number of options for initiating a pathway towards a universal health‐insurance system are discussed. Copyright © 2012 John Wiley & Sons, Ltd.     

Societal costs of home and hospital end‐of‐life care for palliative care patients in Ontario,Canada

In Canada, health system restructuring has led to a greater focus on home‐based palliative care as an alternative to institutionalised palliative care. However, little is known about the effect of this change on end‐of‐life care costs and the extent to which the financial burden of care has shifted from the acute care public sector to families. The purpose of this study was to assess the societal costs of end‐of‐life care associated with two places of death (hospital and home) using a prospective cohort design in a home‐based palliative care programme. Societal cost includes all costs incurred during the course of palliative care irrespective of payer (e.g. health system, out‐of‐pocket, informal care‐giving costs, etc.). Primary caregivers of terminal cancer patients were recruited from the Temmy Latner Centre for Palliative Care in Toronto, Canada. Demographic, service utilisation, care‐giving time, health and functional status, and death data were collected by telephone interviews with primary caregivers over the course of patients' palliative trajectory. Logistic regression was conducted to model an individual's propensity for home death. Total societal costs of end‐of‐life care and component costs were compared between home and hospital death using propensity score stratification. Costs were presented in 2012 Canadian dollars ($1.00CDN = $1.00USD). The estimated total societal cost of end‐of‐life care was $34,197.73 per patient over the entire palliative trajectory (4 months on average). Results showed no significant difference (P > 0.05) in total societal costs between home and hospital death patients. Higher hospitalisation costs for hospital death patients were replaced by higher unpaid caregiver time and outpatient service costs for home death patients. Thus, from a societal cost perspective, alternative sites of death, while not associated with a significant change in total societal cost of end‐of‐life care, resulted in changes in the distribution of costs borne by different stakeholders.