The role of perceived benefits and costs in patients’ medical decisions

Background Many decisions can be understood in terms of actors’ valuations of benefits and costs. The article investigates whether this is also true of patient medical decision making. It aims to investigate (i) the importance patients attach to various reasons for and against nine medical decisions; (ii) how well the importance attached to benefits and costs predicts action or inaction; and (iii) how such valuations are related to decision confidence. Methods In a national random digit dial telephone survey of U.S. adults, patients rated the importance of various reasons for and against medical decisions they had made or talked to a health‐care provider about during the past 2 years. Participants were 2575 English‐speaking adults age 40 and older. Data were analysed by means of logistic regressions predicting action/inaction and linear regressions predicting confidence. Results Aggregating individual reasons into those that may be regarded as benefits and those that may be regarded as costs, and weighting them by their importance to the patient, shows the expected relationship to action. Perceived benefits and costs are also significantly related to the confidence patients report about their decision. Conclusion The factors patients say are important in their medical decisions reflect a subjective weighing of benefits and costs and predict action/inaction although they do not necessarily indicate that patients are well informed. The greater the difference between the importance attached to benefits and costs, the greater patients’ confidence in their decision.     

A methodology for estimating the costs and benefits of health promotion

The publication of ‘The Health of the Nation’ [Departmentof Health (1992) The Health of the Nation. A Strategy for theHealth of England. CM 1986, HMSO.] has added increased emphasisto the long standing debate concerning the relative cost-effectivenessof health prevention versus health cure. The benefits arisingfrom curative interventions are highly visible, occur in identifiableindividuals and can be quantified using an increasing stockof clinical and quality of life measures. Unfortunately thebenefits of health promotion activities are much more difficultto quantify and measure given that their success depends uponill health not occurring. In order for health promotion to effectively compete for limitedhealth care resources it must ensure that the benefits of itswork are apparent to policy makers. This paper describes a methodologyby which such benefits can be quantified in readily measurableterms. This enables health promotion to make an effective casefor additional resources using ‘hard’ quantifieddata that emphasizes the value for money and health gain (orrather the prevention of health loss) that can be derived frominterventions of this nature. The methodology is based on readilyavailable data relating to the levels of morbidity and mortalityexperienced by any given population. Epidemiological data isthen utilized to quantify the link between ill health and theproblem being addressed by the health promotion activity. Themodel described in this paper was tested in relation to theanticipated impact of an anti-smoking programme upon the healthexperience of the population within the North West of England.     

Discounting and health benefits.

This paper argues that non-monetary health benefits should not be discounted at the same rate as variables expressed in monetary terms. It argues instead that the appropriate discount rate should be at or close to zero. It explores the various influences of rising income, age and pure time preference on the relative value of current and future health states. It examines various arguments advanced to justify the current practice of discounting health benefits at the same rate as monetary costs. These include uncertainty and delay. The article concludes with an analysis of the likely impact of adopting a zero discount rate on the ranking of health interventions.     

Discounting and health benefits: another perspective.

This paper reviews the argument advanced by Parsonage and Neuburger that the non-monetary benefits of health programmes should be discounted at a lower rate than that used for financial flows. The conceptual issues raised in that paper are discussed and others, such as the tradability of non-monetary benefits and the link between individual and social discount rates, are introduced. The collection and assessment of more evidence is needed before Parsonage and Neuburger's proposition can be supported.     

The association between health risk status and health care costs among the membership of an Australian health plan

Health promotion in Australia has developed into an accepted strategy for solving public health problems and promoting the health of its citizens. However, there are few evidence-based research studies in Australia that measure health risk status or track health changes over time with defined cost outcome measures. Those individuals with more high-risk lifestyle behaviors have been associated with higher costs compared with those with low-risk behaviors. Although intuitively it was believed that the health promotion programs had a positive impact on health behaviors and consequently on health care costs, the relationship between health risk status and health care costs had yet to be tested in the Australian population. Consequently, a verification study was initiated by the Australian Health Management Group (AHMG) to confirm that those relationships between health risks and medical costs that had been published would also hold in the Australian population using Australian private health care costs as the outcome measure. Eight health risks were defined using a Health Risk Appraisal (HRA) to determine the health risk status of participants. Consistent with previous studies, low-risk participants were associated with the lowest health care costs (377 Australian dollars) compared with medium- (484 Australian dollars) or high-risk (661 Australian dollars) participants and non-participants (438 Australian dollars). If the health care costs of those at low risk were considered as the baseline costs, excess health care costs associated with excess health risks in this population were calculated at 13.5% of total expenditures. Health risk reduction and low-risk maintenance can provide important strategies for improving/maintaining the health and well-being of the membership and for potential savings in health care costs.     

Aging and aggregate costs of medical care: conceptual and policy issues

The conventional wisdom says that because the cost of health care for the aged is more than that of the young at any time, there is a positive relationship between the aging or higher life expectancy of the population and aggregate health care spending. It is difficult, however, to find evidence to support this argument. We present a simple framework that shows how aging of the population may not necessarily increase the total cost of medical care over time or be observed across nations. This follows because numerous other factors that change with aging affect cost of care in ways that are not age-neutral. Such factors include age-specific shifts in morbidity and mortality, growth in income and insurance coverage, rising levels of education and changing technology. Consequently, the relative medical costs of the aged may indeed increase, at least for demographic reasons. Simultaneously, however, the costs of the young may decrease for the same reasons. The Israeli experience, used as a basis for a cursory empirical discussion of the issues, supports the line of reasoning presented in the paper.     

Switching benefits and costs in competitive health insurance markets: A conceptual framework and empirical evidence from the Netherlands

Competitive health insurance markets will only enhance cost-containment, efficiency, quality, and consumer responsiveness if all consumers feel free to easily switch insurer. Consumers will switch insurer if their perceived switching benefits outweigh their perceived switching costs. We developed a conceptual framework with potential switching benefits and costs in competitive health insurance markets. Moreover, we used a questionnaire among Dutch consumers (1091 respondents) to empirically examine the relevance of the different switching benefits and costs in consumers’ decision to (not) switch insurer. Price, insurers’ service quality, insurers’ contracted provider network, the benefits of supplementary insurance, and welcome gifts are potential switching benefits. Transaction costs, learning costs, ‘benefit loss’ costs, uncertainty costs, the costs of (not) switching provider, and sunk costs are potential switching costs. In 2013 most Dutch consumers switched insurer because of (1) price and (2) benefits of supplementary insurance. Nearly half of the non-switchers – and particularly unhealthy consumers – mentioned one of the switching costs as their main reason for not switching. Because unhealthy consumers feel not free to easily switch insurer, insurers have reduced incentives to invest in high-quality care for them. Therefore, policymakers should develop strategies to increase consumer choice.     

The health benefits of a targeted cash transfer: The UK Winter Fuel Payment

Each year, the UK records 25,000 or more excess winter deaths, primarily among the elderly. A key policy response is the “Winter Fuel Payment” (WFP), a labelled but unconditional cash transfer to households with a member above the female state pension age. The WFP has been shown to raise fuel spending among eligible households. We examine the causal effect of the WFP on health outcomes, including self‐reports of chest infection, measured hypertension, and biomarkers of infection and inflammation. We find a robust, 6 percentage point reduction in the incidence of high levels of serum fibrinogen. Reductions in other disease markers point to health benefits, but the estimated effects are less robust.     

Estimating the costs and health benefits of water and sanitation improvements at global level

The aim of this study was to estimate the costs and the health benefits of the following interventions: increasing access to improved water supply and sanitation facilities, increasing access to in house piped water and sewerage connection, and providing household water treatment, in ten WHO sub-regions. The cost-effectiveness of each intervention was assessed in terms of US dollars per disability adjusted life year (DALY) averted. This analysis found that almost all interventions were cost-effective, especially in developing countries with high mortality rates. The estimated cost-effectiveness ratio (CER) varied between US$20 per DALY averted for disinfection at point of use to US$13,000 per DALY averted for improved water and sanitation facilities. While increasing access to piped water supply and sewage connections on plot was the intervention that had the largest health impact across all sub-regions, household water treatment was found to be the most cost-effective intervention. A policy shift to include better household water quality management to complement the continuing expansion of coverage and upgrading of services would appear to be a cost-effective health intervention in many developing countries.     

The effect of expanded mental health benefits on treatment initiation and specialist utilization

OBJECTIVE: To measure the effects of a mental health benefit design change on treatment initiation for psychiatric disorders of employees of a large U.S.-based company. DATA SOURCES: Mental health treatment administrative claims data plus eligibility information provided by the company for the years 1995-1998. STUDY DESIGN: We measure the effect of a change in mental health benefits consisting of three major elements: a company-wide effort to destigmatize mental illness; reduced copayments for mental health treatment; and an effort to increase access to specialty mental health providers. DATA EXTRACTION METHODS: We identified the subsample of employees that were continuously enrolled in the company's health plan over the period 1995-1998, were between the ages of 18 and 65, and were actively employed. PRINCIPAL FINDINGS: Our results suggest that the combined effect of destigmatization and reduced copayments led to an 18 percent increase (p<.01) in the probability of initiating mental health treatment. The results suggest that the effort to increase access to specialty providers was effective, but only for nonphysician providers: initiation at nonphysician mental health providers increased nearly 90 percent (p<.01) relative to nonspecialty providers, while use of psychiatrists declined by nearly 40 percent (p<.01). CONCLUSIONS: Our results suggest that the benefit change increased initiation for mental health treatment overall and encouraged the use of nonphysician specialty mental health providers.     

Market Competition and the Health Composition of Manufactured Food

There has been surprisingly little research to date on the supply‐side role of food manufacturers on equilibrium health outcomes for consumers. In this letter we consider an oligopoly model in which food processors choose the health composition of manufactured food. We show that price competition between food processors leads to unhealthy food composition in the market equilibrium, even under circumstances in which consumers know food composition is unhealthy. Taxes on manufactured food decrease the healthiness of manufactured foods whenever improved consumer health increases the price elasticity of food demand. Copyright © 2016 John Wiley & Sons, Ltd.     

The attributable annual health costs of U.S. occupational lead poisoning

Background: U.S. occupational lead standards have not changed for decades, while knowledge about lead’s health effects has grown substantially.

Objective: The objective of this analysis was twofold: to estimate the attributable annual societal costs of health damages associated with occupationally lead-exposed U.S. workers and, more broadly, to develop methods for a fuller valuation of health damages.

Methods: I combined data voluntarily reported to NIOSH on the number of highly exposed workers with published literature on the health effects of lead in adults to estimate the potential health benefits of lowering the U.S. occupational limit. I developed simple algorithms for monetizing more fully both the direct medical and indirect (productivity) damages associated with those high lead exposures.

Results: I estimated direct medical costs of $141 million (2014US$) per year for 16 categories of health endpoints, and combined direct and indirect costs of over $392 million (2014US$) per year for the 10,000 or so U.S. workers with high occupational lead exposures.

Conclusions: Reducing allowable occupational lead limits produces annual societal benefits of almost $40,000 per highly exposed worker. Given underreporting of actual exposures and the omission of important health effects, this is likely a severe underestimate.     

The effects of early pregnancy loss on health outcomes and health care utilization and costs

ObjectiveTo evaluate the effects of early pregnancy loss on subsequent health care use and costs.Data SourcesLinked administrative health databases from Manitoba, Canada.Study DesignThis was a population‐based cohort study. The exposure of interest was first recorded ectopic pregnancy or miscarriage (EPM). Outcomes included visits to all ambulatory care providers, family physicians (FPs), specialists, and hospitals, as well as the costs associated with these visits. We also assessed the impact of EPM on a global measure of health service utilization and the incidence and costs of psychotropic medications.Data Collection/Extraction MethodsWe identified women who experienced their first recorded loss (EPM) from 2003–2012 and created a propensity score model to match these women to women who experienced a live birth, with outcome measures available through 31 December 2014. We used a difference in differences approach with multivariable negative binomial models and generalized estimating equations (GEE) to assess the impact of EPM on the aforementioned health care utilization indicators.Principal FindingsEPM was associated with a short‐term increase in visits to, and costs associated with, certain ambulatory care providers. These findings were driven in large part by increased visits/costs to FPs (rate difference [RD]: $19.92 [95% CI: $16.33, $23.51]) and obstetrician‐gynecologists (OB‐GYNs) (RD $9.41 [95% CI: $8.42, $10.40]) in the year immediately following the loss, excluding care associated with the loss itself. We also detected an increase in hospital stays and costs and a decrease in the use of psychotropic medications relative to matched controls.ConclusionPregnancy loss may lead to subsequent increases in certain types of health care utilization. While the absolute costs associated with post‐EPM care are relatively small, the observed patterns of service utilization are informative for providers and policy makers seeking to support women following a loss.     

Estimating health care delivery system value for each US state and testing key associations

ObjectiveTo estimate health care systems'' value in treating major illnesses for each US state and identify system characteristics associated with value.Data sourcesAnnual condition‐specific death and incidence estimates for each US state from the Global Burden Disease 2019 Study and annual health care spending per person for each state from the National Health Expenditure Accounts.Study designUsing non‐linear meta‐stochastic frontier analysis, mortality incidence ratios for 136 major treatable illnesses were regressed separately on per capita health care spending and key covariates such as age, obesity, smoking, and educational attainment. State‐ and year‐specific inefficiency estimates were extracted for each health condition and combined to create a single estimate of health care delivery system value for each US state for each year, 1991–2014. The association between changes in health care value and changes in 23 key health care system characteristics and state policies was measured.Data collection/extraction methodsNot applicable.Principal findingsUS state with relatively high spending per person or relatively poor health‐outcomes were shown to have low health care delivery system value. New Jersey, Maryland, Florida, Arizona, and New York attained the highest value scores in 2014 (81 [95% uncertainty interval 72‐88], 80 [72‐87], 80 [71‐86], 77 [69‐84], and 77 [66‐85], respectively), after controlling for health care spending, age, obesity, smoking, physical activity, race, and educational attainment. Greater market concentration of hospitals and of insurers were associated with worse health care value (p‐value ranging from <0.01 to 0.02). Higher hospital geographic density and use were also associated with worse health care value (p‐value ranging from 0.03 to 0.05). Enrollment in Medicare Advantage HMOs was associated with better value, as was more generous Medicaid income eligibility (p‐value 0.04 and 0.01).ConclusionsSubstantial variation in the value of health care exists across states. Key health system characteristics such as market concentration and provider density were associated with value.