Capital investment strategies in health care systems

Capital investment decisions are among the most important decisions made by firms. They determine the firm's capacity for providing services and commit the firm's cash for an extended period of time. Interviews with chief financial officers of leading health care systems reveal capital investment strategies that generally follow the recommendations of modern finance theory. Still, there is substantial variation in capital budgeting techniques, methods of risk adjustment, and the importance of qualitative considerations in investment decision making. There is also variation in delegation of investment decision making to operating units and methods of performance evaluation. Health care systems face the same challenges as other organizations in developing and implementing capital investment strategies that use consistent methods for evaluation of projects that have inconsistent aims and outcomes.     

The potential use of decision analysis to support shared decision making in the face of uncertainty: the example of atrial fibrillation and warfarin anticoagulation

The quality of patient care is dependent upon the quality of the multitude of decisions that are made daily in clinical practice. Increasingly, modern health care is seeking to pursue better decisions (including an emphasis on evidence-based practice) and to engage patients more in decisions on their care. However, many treatment decisions are made in the face of clinical uncertainty and may be critically dependent upon patient preferences. This has led to attempts to develop decision support tools that enable patients and clinicians to make better decisions. One approach that may be of value is decision analysis, which seeks to create a rational framework for evaluating complex medical decisions and to provide a systematic way of integrating potential outcomes with probabilistic information such as that generated by randomised controlled trials of interventions. This paper describes decision analysis and discusses the potential of this approach with reference to the clinical decision as to whether to treat patients in atrial fibrillation with warfarin to reduce their risk of stroke.     

Using Monte Carlo simulation to make better capital investment decisions

The financial analysis of a proposed capital investment typically involves estimating the project's expected cash flows and profitability and then perhaps looking at one or two alternative scenarios. However, this procedure provides incomplete information about a project's potential risk/return characteristics because it focuses on only a few possibilities; whereas, real-world investments can have an almost unlimited number of financial outcomes. Monte Carlo simulation can solve the incomplete information problem. In a Monte Carlo simulation, relatively certain input variables are specified by single values, while relatively uncertain variables are specified by probability distributions. The end result is a probability distribution that describes the project's full range of potential profitability. With a complete set of information concerning a project's risk/return characteristics, decision makers can better judge the financial impact of the investment and hence make better capital investment decisions.     

Rationality in medical treatment decisions: is there a sunk-cost effect?

OBJECTIVE: To assess residents' propensity to display the sunk-cost effect, an irrational decision-making bias, in medical treatment decisions; and to compare residents' and undergraduates' susceptibility to the bias in non-medical, everyday behaviors. DESIGN: Cross-sectional, in-person survey. SETTING: Louisiana State University, two locations: Medical Center-Baton Rouge and Main Campus-Psychology Department. PARTICIPANTS: Internal medicine and family practice residents (N = 36, Mdn age = 27) and college undergraduates (N = 40, Mdn age = 20). MEASUREMENTS AND MAIN RESULTS: Residents evaluated medical and non-medical situations that varied the amount of previous investment and whether the present decision maker was the same or different from the person who had made the initial investment. They rated reasons both for continuing the initial decision (e.g., stay with the medication already in use) and for switching to a new alternative (e.g., a different medication). There were two main findings: First, the residents' ratings of whether to continue or switch medical treatments were not influenced by the amount of the initial investment (p's>0.05). Second, residents' reasoning was more normative in medical than in non-medical situations, in which it paralleled that of undergraduates (p's<0.05). CONCLUSIONS: Medical residents' evaluation of treatment decisions reflected good reasoning, in that they were not influenced by the amount of time and/or money that had already been invested in treating a patient. However, the residents did demonstrate a sunk-cost effect in evaluating non-medical situations. Thus, any advantage in decision making that is conferred by medical training appears to be domain specific.     

Using an integrated point of care system: a nursing perspective

Nurses at LDS Hospital, Salt Lake City, Utah, have had the ability to document patient data and nursing care on a bedside computer for over nine years. This ability has had numerous ramifications for the medical record, nursing practice, and clinical decision making. This article is an effort to describe how and why certain decisions were made, the implications of these decisions, mistakes that were made and their solutions, and the tremendous impact on clinical decision making and improved patient outcomes that is only beginning to be realized by computerization of the medical record.     

The value of implementation and the value of information: combined and uneven development

AIM: In a budget-constrained health care system, the decision to invest in strategies to improve the implementation of cost-effective technologies must be made alongside decisions regarding investment in the technologies themselves and investment in further research. This article presents a single, unified framework that simultaneously addresses the problem of allocating funds between these separate but linked activities. METHODS: The framework presents a simple 4-state world where both information and implementation can be either at the current level or "perfect.' Through this framework, it is possible to determine the maximum return to further research and an upper bound on the value of adopting implementation strategies. The framework is illustrated through case studies of health care technologies selected from those previously considered by the UK National Institute for Health and Clinical Excellence (NICE). RESULTS: Through the case studies, several key factors that influence the expected values of perfect information and perfect implementation are identified. These factors include the maximum acceptable cost-effectiveness ratio, the level of uncertainty surrounding the adoption decision, the expected net benefits associated with the technologies, the current level of implementation, and the size of the eligible population. CONCLUSIONS: Previous methods for valuing implementation strategies have not distinguished the value of efficacy research and the value of strategies to change the level of implementation. This framework demonstrates that the value of information and the value of implementation can be examined separately but simultaneously in a single framework. This can usefully inform policy decisions about investment in health care services, further research, and adopting implementation strategies that are likely to differ between technologies.     

Reconciling the theory and reality of shared decision‐making: A “matching” approach to practitioner leadership

Shared decision making (SDM) evolved to resolve tension between patients’ entitlement to make health‐care decisions and practitioners’ responsibility to protect patients’ interests. Implicitly assuming that patients are willing and able to make “good” decisions, SDM proponents suggest that patients and practitioners negotiate decisions. In practice, patients often do not wish to participate in decisions, or cannot make good decisions. Consequently, practitioners sometimes lead decision making, but doing so risks the paternalism that SDM is intended to avoid. We argue that practitioners should take leadership when patients cannot make good decisions, but practitioners will need to know: (a) when good decisions are not being made; and (b) how to intervene appropriately and proportionately when patients cannot make good decisions. Regarding (a), patients rarely make decisions using formal decision logic, but rely on informal propositions about risks and benefits. As propositions are idiographic and their meanings context‐dependent, normative standards of decision quality cannot be imposed. Practitioners must assess decision quality by making subjective and contextualized judgements as to the “reasonableness” of the underlying propositions. Regarding (b), matched to judgements of reasonableness, we describe levels of leadership distinguished according to how directively practitioners act; ranging from prompting patients to question unreasonable propositions or consider new propositions, to directive leadership whereby practitioners recommend options or deny requested procedures. In the context of ideas of relational autonomy, the objective of practitioner leadership is to protect patients’ autonomy by supporting good decision making, taking leadership in patients’ interests only when patients are unwilling or unable to make good decisions.     

A new model of medical decisions: exploring the limits of shared decision making.

This article proposes a model of medical decisions based on 2 fundamental characteristics of each decision--importance and certainty. Importance reflects a combination of objective and subjective factors; certainty is present if 1 intervention is superior and absent if 2 or more interventions are approximately equal. The proposed model uses these characteristics to predict who will have decisional priority for any given decision and shows how one class of decisions lends itself particularly well to shared decision making. Three other types of decisions are less well suited to a collaborative decision: 1) For major choices that have low certainty, patients should be encouraged to be the primary decision makers, with physician assistance as needed. 2) Most minor decisions that have high certainty are expected to be made by physicians. 3) Major decisions that have high certainty are likely to cause serious conflict when patients and physicians disagree.     

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.     

The anatomy of a decision

There is a decision-making pattern that applies in all situations large or small, though in small decisions the steps are not especially evident. The steps are: gathering information, analyzing information and creating alternatives, selecting and implementing an alternative, and follow up on implementation. The amount of effort applied in any decision situation should be consistent with the potential consequences of the decision. Essentially all decisions are subject to certain limitations described as constraints, forces, or circumstances that limit one's range of choices. Follow-up on implementation is the phase of decision making most often neglected, yet it is frequently the phase that determines success or failure. Risk and uncertainty are always present in a decision situation, and the application of human judgment is always necessary.     

Do objective estimates of chances for survival influence decisions to withhold or withdraw treatment? The French Multicentric Group of ICU Research

The authors studied the impact on clinical decision making of providing feedback of objective prognostic information describing the probability of survival for ICU patients with multiple organ system failure (OSF). The prognostic estimates, derived from a control period (1), were to be provided on a daily basis to physicians providing treatment in 25 French ICUs during a subsequent experimental period (2). The types of, frequencies of, and reasons for decisions to limit or stop treatment in the two periods were compared. In the experimental period 2, 17 ICUs participated in the feedback study. Within these 17 units, there was a small but significant (p less than 0.05) increase in decisions to stop active treatment and provide comfort care that was limited to patients with three or more OSFs. There was no change in decision making in the eight units that did not participate in the feedback study. Although these results suggest a direct causal relationship between the provision of objective prognostic data and changes in physician decision making, the small increase in comfort care decisions (n = 14) between period 1 and period 2 and the fact that only 17 of the 25 original units participated in the feedback study make it difficult to eliminate other influences. There was no indication in this study, however, that explicit provision of prognostic data led to a sense of therapeutic futility.     

Evaluation designs for adequacy, plausibility and probability of public health programme performance and impact

The question of why to evaluate a programme is seldom discussed in the literature. The present paper argues that the answer to this question is essential for choosing an appropriate evaluation design. The discussion is centered on summative evaluations of large-scale programme effectiveness, drawing upon examples from the fields of health and nutrition but the findings may be applicable to other subject areas. The main objective of an evaluation is to influence decisions. How complex and precise the evaluation must be depends on who the decision maker is and on what types of decisions will be taken as a consequence of the findings. Different decision makers demand not only different types of information but also vary in their requirements of how informative and precise the findings must be. Both complex and simple evaluations, however, should be equally rigorous in relating the design to the decisions. Based on the types of decisions that may be taken, a framework is proposed for deciding upon appropriate evaluation designs. Its first axis concerns the indicators of interest, whether these refer to provision or utilization of services, coverage or impact measures. The second axis refers to the type of inference to be made, whether this is a statement of adequacy, plausibility or probability. In addition to the above framework, other factors affect the choice of an evaluation design, including the efficacy of the intervention, the field of knowledge, timing and costs. Regarding the latter, decision makers should be made aware that evaluation costs increase rapidly with complexity so that often a compromise must be reached. Examples are given of how to use the two classification axes, as well as these additional factors, for helping decision makers and evaluators translate the need for evaluation--the why--into the appropriate design--the how.     

Marcos GRADE de la evidencia a la decisión (EtD): un enfoque sistemático y transparente para tomar decisiones sanitarias bien informadas. 1: Introducción

Clinicians, guideline developers, and policymakers sometimes neglect important criteria, give undue weight to criteria, and do not use the best available evidence to inform their judgments. Explicit and transparent systems for decision making can help to ensure that all important criteria are considered and that decisions are informed by the best available research evidence. The GRADE Working Group has developed Evidence to Decision (EtD) frameworks for the different type of recommendations or decisions. The purpose of EtD frameworks is to help people use evidence in a structured and transparent way to inform decisions in the context of clinical recommendations, coverage decisions, and health system or public health recommendations and decisions. EtD frameworks have a common structure that includes formulation of the question, an assessment of the evidence, and drawing conclusions, though there are some differences between frameworks for each type of decision. EtD frameworks inform users about the judgments that were made and the evidence supporting those judgments by making the basis for decisions transparent to target audiences. EtD frameworks also facilitate dissemination of recommendations and enable decision makers in other jurisdictions to adopt recommendations or decisions, or adapt them to their context. This article is a translation of the original article published in British Medical Journal. The EtD frameworks are currently used in the Clinical Practice Guideline Programme of the Spanish National Health System, co-ordinated by GuíaSalud.     

Decision making in a multidisciplinary cancer team: does team discussion result in better quality decisions?

To establish whether treatment recommendations made by clinicians concur with the best outcomes predicted from their prognostic estimates and whether team discussion improves the quality or outcome of their decision making, the authors studied real-time decision making by a lung cancer team. Clinicians completed pre- and postdiscussion questionnaires for 50 newly diagnosed patients. For each patient/doctor pairing, a decision model determined the expected patient outcomes from the clinician's prognostic estimates. The difference between the expected utility of the recommended treatment and the maximum utility derived from the clinician's predictions of the outcomes (the net utility loss) following all potential treatment modalities was calculated as an indicator of quality of the decision. The proportion of treatment decisions changed by the multidisciplinary team discussion was also calculated. Insofar as the change in net utility loss brought about by multidisciplinary team discussion was not significantly different from zero, team discussion did not improve the quality of decision making overall. However, given the modest power of the study, these findings must be interpreted with caution. In only 23 of 87 instances (26%) in which an individual specialist's initial treatment preference differed from the final group judgment did the specialist finally concur with the group treatment choice after discussion. This study does not support the theory that team discussion improves decision making by closing a knowledge gap.     

Clinical decision making--what every non-clinician manager should know but was never taught.

The management of a health care system requires making decisions and establishing policies that can affect the process of patient care. Clinicians often complain that these decisions and policies are made by people without clinical training. Clinical knowledge is not a prerequisite for a career in health policy or management. Even graduates of accredited health administration programs are not required to understand the process of clinical decision making or the nature of medical practice. Much of the health services literature advocates a shared decision-making model for clinicians and managers. However, most of the literature focuses on how to involve physicians in management decision making; almost none discusses management involvement in clinical decisions. This paper briefly examines how non-clinician managers can support the clinical decision-making process and then specifies the knowledge and skills required for them to play this role.     

For the good of many: an infection control perspective on ethics

The decisions made by infection control personnel affect both individuals and those in the broader patient population in a health care facility. In making the decisions required to provide an environment free of infectious risks, while maintaining the rights of individuals to attain optimal health outcomes, infection control practitioners are often confronted with ethical dilemmas.This article describes an ethical dilemma commonly faced in infection control practice, where the needs of one patient must be weighed against the needs of the patient population. A case study describing the decision to isolate an infectious patient is presented, highlighting the role that ethics plays in decisions made to control infection. A decision making framework is applied to ensure that the needs of both individuals and groups are considered. Resource considerations and the need to conform to basic microbiological and epidemiological principles are also considered. The various issues in conflict are described, analysed, resolved and rationalised. The use of a decision making framework can help to ensure that competing interests are carefully considered to produce an ethical, and optimal, decision.     

The Role of The Cochrane Collaboration in Support of the WHO Nutrition Guidelines

This article describes the background and contribution of The Cochrane Collaboration to the WHO Nutrition Guidelines program. Systematic reviews, augmented by the Grading of Recommendations, Assessment, Development, and Evaluation (GRADE) methodology for assessing the quality of a body of evidence, form the evidence basis for WHO guidelines. Our shared experience of working together has highlighted a number of issues that are challenging, such as decisions made about selecting appropriate questions for evidence synthesis and the nature of study types that are included, in particular the decision on whether or not to extend a search beyond randomized studies. Although the skills and experience required for evidence synthesis are different from those needed to determine recommendations for policy and practice, our experience suggests that some engagement between the two groups is mutually beneficial. Finally, our experience highlights the recognition that evidence of effectiveness is essential but by no means sufficient to guide decisions on recommendations. Programmatic and implementation considerations are important to guide decision making and the evidence basis for this may be limited; therefore, it is essential that groups involved in delivering interventions to populations are also engaged in the guidelines process.     

The potential value of priority-setting methods in public health investment decisions: qualitative findings from three English local authorities

This paper reports on an action-oriented research study providing decision support to three local authorities in England on the prioritisation of public health investment and disinvestment decisions. We adopted a political science perspective, using the multiple streams framework to investigate the use of prioritisation tools in public health spending decisions at a time of severe financial constraints. The challenges and implications of their potential use in everyday practice were explored. Twenty-nine interviews were conducted before the targeted decision support occurred and 19 interviews after the decision support had been delivered. Interviews were held with locally elected politicians, officers and public health professionals based within local government, NHS commissioners and the local independent consumer watchdog for health and social care. Targeted workshops with local stakeholders were facilitated in each site by health economist members of the project team. Structured observational notes were recorded during these workshops and integrated with the interview data. Many respondents expressed an interest in prioritisation tools although some scepticism was expressed about their value and impact on decision-making. This paper analyses the enablers and barriers to adopting priority-setting tools in a local government environment that by definition is political. The findings suggest that the adoption of priority-setting tools in decision-making processes in public health poses some significant challenges within local government and that certain enabling factors have to be present.     

Informing disinvestment through cost-effectiveness modelling

The mandatory nature of recommendations made by the National Institute for Health and Clinical Excellence (NICE) in the UK has highlighted inherent difficulties in the process of disinvestment in existing technologies to fund NICE-approved technologies. A lack of evidence on candidate technologies means that the process of disinvestment is subject to greater uncertainty than the investment process, and inefficiencies may occur as a result of the inverse evidence law. This article describes a potential disinvestment scenario and the options for the decision maker, including the conduct of value of information analyses. To illustrate the scenario, an economic evaluation of a disinvestment candidate (screening for amblyopia and strabismus) is presented. Only very limited data were available. The reference case analysis found that screening is not cost effective at currently accepted values of a QALY. However, a small utility decrement due to unilateral vision loss reduced the incremental cost per QALY gained, with screening expected to be extremely cost effective. The discussion highlights the specific options to be considered by decision makers in light of the model-based evaluation. It is shown that the evaluation provides useful information to guide the disinvestment decision, providing a range of focused options with respect to the decision and the decision-making process. A combination of explicit model-based evaluation, and pragmatic and generalizable approaches to interpreting uncertainty in the decision-making process is proposed, which should enable informed decisions around the disinvestment of technologies with weak evidence bases.     

‘It ain't what you do it's the way that you do it’: lessons for health care from decommissioning of older people's services

Public sector organisations are facing one of the most difficult financial periods in history and local decision‐makers are tasked with making tough rationing decisions. Withdrawing or limiting services is an emotive and complex task and something the National Health Service has always found difficult. Over time, local authorities have gained significant experience in the closure of care homes – an equally complex and controversial issue. Drawing on local knowledge and best practice examples, this article highlights lessons and themes identified by those decommissioning care home services. We believe that such lessons are relevant to those making disinvestment decisions across public sector services, including health‐care. The study employed semi‐structured interviews with 12 Directors of Adult Social Services who had been highlighted nationally as having extensive experience of home closures. Interviews were conducted over a 2‐week period in March 2011. Results from the study found that having local policy guidance that is perceived as fair and reasonable was advocated by those involved in home closures. Many local policies had evolved over time and had often been developed following experiences of home closures (both good and bad). Decisions to close care home services require a combination of strong leadership, clear strategic goals, a fair decision‐making process, strong evidence of the need for change and good communication, alongside wider stakeholder engagement and support. The current financial challenge means that public sector organisations need to make tough choices on investment and disinvestment decisions. Any such decisions need to be influenced by what we know constitutes best practice. Sharing lessons and experiences within and between sectors could well inform and develop decision‐making practices.