Modelling the global economic costs of tobacco product waste

Tobacco smoking continues to cause considerable premature mortality and morbidity worldwide. Most of the approximately six trillion cigarettes sold globally each year are discarded improperly as toxic environmental waste. Tobacco product waste, including cigarette butts, is the most commonly collected waste item worldwide. Of particular concern is the cellulose acetate filter, a poorly degradable plastic additive attached to most commercially manufactured cigarettes. This filter was introduced by the tobacco industry to reduce smokers’ perception of harm and risk but it has no health benefit. To inform health policy and practice and improve public health outcomes, governments and society can benefit from cost estimates of preventing, properly disposing of and/or cleaning up tobacco product waste. Estimating the costs of tobacco product waste to communities and responsible authorities could encourage the development of health, environmental and fiscal policy interventions and shift accountability for the costs of tobacco product waste onto the global tobacco industry. To support health and environmental policy-making, we therefore propose an empirical approach to estimate the economic costs of tobacco product waste based on its negative environmental externalities. We first present general estimates for six representative countries and then identify data gaps that need to be addressed to develop global estimates. Interventions against tobacco product waste may be new channels to regulate tobacco products across sectors – for example, health, environment and finance – and consequently reduce overall tobacco use.     

Programme costs in the economic evaluation of health interventions

Estimating the costs of health interventions is important to policy-makers for a number of reasons including the fact that the results can be used as a component in the assessment and improvement of their health system performance. Costs can, for example, be used to assess if scarce resources are being used efficiently or whether there is scope to reallocate them in a way that would lead to improvements in population health. As part of its WHO-CHOICE project, WHO has been developing a database on the overall costs of health interventions in different parts of the world as an input to discussions about priority setting.Programme costs, defined as costs incurred at the administrative levels outside the point of delivery of health care to beneficiaries, may comprise an important component of total costs. Cost-effectiveness analysis has sometimes omitted them if the main focus has been on personal curative interventions or on the costs of making small changes within the existing administrative set-up. However, this is not appropriate for non-personal interventions where programme costs are likely to comprise a substantial proportion of total costs, or for sectoral analysis where questions of how best to reallocate all existing health resources, including administrative resources, are being considered.This paper presents a first effort to systematically estimate programme costs for many health interventions in different regions of the world. The approach includes the quantification of resource inputs, choice of resource prices, and accounts for different levels of population coverage. By using an ingredients approach, and making tools available on the World Wide Web, analysts can adapt the programme costs reported here to their local settings. We report results for a selected number of health interventions and show that programme costs vary considerably across interventions and across regions, and that they can contribute substantially to the overall costs of interventions.     

Estimating costs in the economic evaluation of medical technologies

The complexities and nuances of evaluating the costs associated with providing medical technologies are often underestimated by analysts engaged in economic evaluations. This article describes the theoretical underpinnings of cost estimation, emphasizing the importance of accounting for opportunity costs and marginal costs. The various types of costs that should be considered in an analysis are described; a listing of specific cost elements may provide a helpful guide to analysis. The process of identifying and estimating costs is detailed, and practical recommendations for handling the challenges of cost estimation are provided. The roles of sensitivity analysis and discounting are characterized, as are determinants of the types of costs to include in an analysis. Finally, common problems facing the analyst are enumerated with suggestions for managing these problems.     

Future costs in economic evaluation. A comment on Lee

In a recent article in this journal Lee argued that indirect medical costs should be ignored in economic evaluations. To reach this conclusion, Lee uses an unrealistic and uncommon budget constraint. This comment highlights a number of methodological problems in Lee's analysis. Moreover, it highlights that looking at current practice of economic evaluation, Lee's model implies the inclusion rather than the exclusion of indirect medical costs.     

Estimating production costs in the economic evaluation of health-care programs

We propose a method for calculating the production costs of an intervention in a manner that accounts for differences in productive 'effort.' This method could be used within a cost-effectiveness analysis framework in the evaluation of new medical technologies, pharmaceuticals, treatment programs, or public health interventions. We apply it to show evidence in favor of implementing a newborn screening program to detect congenital hearing impairment. Copyright (c) 2008 John Wiley & Sons, Ltd.     

An holistic economic evaluation of an Aboriginal community-controlled midwifery programme in Western Sydney

OBJECTIVES: To conduct an holistic economic evaluation of an Aboriginal community (Daruk)-controlled midwifery service in Western Sydney. METHODS: The study estimated direct programme costs and downstream savings to the health sector. Measures of antenatal attendance and perinatal outcome were compared between Aboriginal women with and without experiences of the antenatal programme through examination of antenatal clinic records and the New South Wales Midwives Data Collection for the period 1991-1996. Qualitative outcomes were analysed through interviews and focus groups. RESULTS: The net cost to the health sector was estimated to be $A1200 per client. Compared with Aboriginal women who received antenatal care in two conventional settings, there were no statistically significant differences in birthweight and perinatal survival. Gestational age at first visit was lower (17.2 vs 21.2 and 19.9 weeks), mean number of antenatal visits was higher (10.5 vs 5.5 and 9.5) and attendance for routine antenatal tests was better (94% vs 71% and 84%). Aboriginal clients were strongly positive about their experience of the Daruk service in terms of relationship and trust, accessibility, flexibility, provision of clear and appropriate information, continuity of care, empowerment and family-centred care. CONCLUSIONS: Net per client costs to the health service were modest. Quantitative evidence of improved antenatal outcomes was limited, but qualitative evaluation suggested the service was strongly valued. The outcomes examined in this study were broader than those used in conventional forms of economic evaluation and this enabled identification and analysis of more diverse sources of value from this programme.     

Opportunity costs and uncertainty in the economic evaluation of health care interventions.

Considerable methodological research has been conducted on handling uncertainty in cost-effectiveness analysis. The current literature suggests the concepts of net health benefits and cost-effectiveness acceptability curves to circumvent the technical shortcomings of cost-effectiveness ratio statistics. However, these approaches do not provide a solution for the inherent problem that the threshold cost-effectiveness ratio itself is unknown. The authors suggest analysing uncertainty in cost-effectiveness analysis by directly addressing the concept of opportunity costs using the decision rule described by Birch and Gafni (1992) and introduce a new graphical framework (the "decision making plane") for communicating with policy makers.     

Modelling in the economic evaluation of health care: selecting the appropriate approach

OBJECTIVES: To provide an overview of alternative approaches to modelling in economic evaluation, and to highlight situations where each of the alternative modelling techniques should be employed. METHODS: A review of the available approaches to modelling in the economic evaluation of health care interventions with a leading discussion of examples of published studies leading to guidance in the selection of an appropriate approach in different circumstances. RESULTS: The main approaches to modelling used in economic evaluations in health care are decision trees, Markov models and individual sampling models. These methods assume independence of individuals within the model. Where interaction between individuals is important, other methods such as discrete-event simulation or system dynamics are preferable. CONCLUSIONS: The paper highlights the crucial question to be answered when selecting the approach to modelling: can the individuals being simulated in the model be regarded as independent? This issue is very commonly not recognised by analysts but is fundamental to the appropriate application of modelling in economic evaluation.     

Modelling the hepatitis B vaccination programme in prisons

A vaccination programme offering hepatitis B (HBV) vaccine at reception into prison has been introduced into selected prisons in England and Wales. Over the coming years it is anticipated this vaccination programme will be extended. A model has been developed to assess the potential impact of the programme on the vaccination coverage of prisoners, ex-prisoners, and injecting drug users (IDUs). Under a range of coverage scenarios, the model predicts the change over time in the vaccination status of new entrants to prison, current prisoners and IDUs in the community. The model predicts that at baseline in 2012 57% of the IDU population will be vaccinated with up to 72% being vaccinated depending on the vaccination scenario implemented. These results are sensitive to the size of the IDU population in England and Wales and the average time served by an IDU during each prison visit. IDUs that do not receive HBV vaccine in the community are at increased risk from HBV infection. The HBV vaccination programme in prisons is an effective way of vaccinating this hard-to-reach population although vaccination coverage on prison reception must be increased to achieve this.     

The distribution of health care costs and their statistical analysis for economic evaluation

OBJECTIVE: Where patient level data are available on health care costs, it is natural to use statistical analysis to describe the differences in cost between alternative treatments. Health care costs are, however, commonly considered to be skewed, which could present problems for standard statistical tests. This review examines how authors report the distributional form of health care cost data and how they have analysed their results. METHOD: A review of cost-effectiveness studies that collected patient-level data on health care costs. To supplement the review, five datasets on health care costs are examined. Consideration is given to the use of parametric methods on the transformed scale and to non-parametric methods of analysing skewed cost data. RESULTS: Since economic analysis requires estimation in monetary units, the usefulness of transformation-based methods is limited by the inability to retransform cost differences to the original scale. Non-parametric rank sum methods were also found to be of limited use for economic analysis, partly due to the focus on hypothesis testing rather than estimation. Overall, the non-parametric approach of bootstrapping was found to offer a useful test of the appropriateness of parametric assumptions and an alternative method of estimation where those assumptions were found not to hold. CONCLUSIONS: Guidelines for the analysis of skewed health care cost data are offered.     

On future non-medical costs in economic evaluations

Economic evaluation in health care is still an evolving discipline. One of the current controversies in cost‐effectiveness analysis regards the inclusion or exclusion of future non‐medical costs (i.e. consumption net of production) due to increased survival. This paper examines the implications of a symmetry rule stating that there should be consistency between costs included in the numerator and utility aspects included in the denominator. While the observation that no quality‐adjusted life year (QALY) instruments explicitly include consumption and leisure seems to give support to the notion that future non‐medical costs should be excluded when QALYs are used as the outcome measure, a better understanding of what respondents actually consider when reporting QALY weights is required. However, the more fundamental question is whether QALYs can be interpreted as utilities. Or more precisely, what are the assumptions needed for a general utility model also including consumption and leisure to be consistent with QALYs? Once those assumptions are identified, they need to be experimentally tested to see whether they are at least approximately valid. Until we have answers to these areas for future research, it seems premature to include future non‐medical costs. Copyright © 2007 John Wiley & Sons, Ltd.     

Predicting hospital costs for patients receiving renal replacement therapy to inform an economic evaluation

Objective

To develop a model to predict annual hospital costs for patients with established renal failure, taking into account the effect of patient and treatment characteristics of potential relevance for conducting an economic evaluation, such as age, comorbidities and time on treatment. The analysis focuses on factors leading to variations in inpatient and outpatient costs and excludes fixed costs associated with dialysis, transplant surgery and high cost drugs.

Methods

Annual costs of inpatient and outpatient hospital episodes for patients starting renal replacement therapy in England were obtained from a large retrospective dataset. Multiple imputation was performed to estimate missing costs due to administrative censoring. Two-part models were developed using logistic regression to first predict the probability of incurring any hospital costs before fitting generalised linear models to estimate the level of cost in patients with positive costs. Separate models were developed to predict inpatient and outpatient costs for each treatment modality.

Results

Data on hospital costs were available for 15,869 incident dialysis patients and 4511 incident transplant patients. The two-part models showed a decreasing trend in costs with increasing number of years on treatment, with the exception of dialysis outpatient costs. Age did not have a consistent effect on hospital costs; however, comorbidities such as diabetes and peripheral vascular disease were strong predictors of higher hospital costs in all four models.

Conclusion

Analysis of patient-level data can result in a deeper understanding of factors associated with variations in hospital costs and can improve the accuracy with which costs are estimated in the context of economic evaluations.

     

Taking a local government perspective for economic evaluation of a population-level programme to promote exercise

BackgroundIn order to tackle the issue of physical inactivity, local governments have implemented population-level programmes to promote exercise. While evidence is accumulating on the cost-effectiveness of these interventions, studies have typically adopted a health sector perspective for economic evaluation. This approach has been challenged as it does not allow for key concerns by local governments, which are primary stakeholders, to be addressed.ObjectivesTo show how taking a local government perspective for economic evaluation can be implemented in practice and this may affect the economic conclusions.MethodsBased on data from a case study, the health equity impact of the intervention and its opportunity cost from a service provider viewpoint were assessed. The cost-effectiveness implications of a change in perspective were subsequently estimated by means of scenario analysis.FindingsThe intervention was found to provide adult residents living in the most deprived city areas with greater health benefits compared with the rest of the population. However, a negative net equity impact was found in the short-term. The opportunity cost of the intervention was estimated to be substantially lower than its financial cost (£2.77 per person/year), with significant implications for decision-making.ConclusionsTaking a local government perspective can affect the conclusions drawn from the economic evaluation of population-level programmes to promote exercise, and therefore influence decision making.     

Improving costing methods in multicentre economic evaluation: the use of multiple imputation for unit costs

Economic evaluations must use appropriate costing methods. However, in multicentre cost‐effectiveness analyses (CEA) a fundamental issue of how best to measure and analyse unit costs has been neglected. Multicentre CEA commonly take the mean unit cost from a national database, such as NHS reference costs. This approach does not recognise that unit costs vary across centres and are unavailable in some centres. This paper proposes the use of multiple imputation (MI) to predict those centre‐specific unit costs that are not available, while recognising the statistical uncertainty surrounding this imputation. We illustrate MI with a CEA of a multicentre randomised trial (1014 patients, 60 centres), implemented using multilevel modelling. We use MI to derive centre‐specific unit costs, based on centre characteristics including average casemix, and compare this to using mean NHS reference costs. In this case study, using MI unit costs rather than mean reference costs led to less heterogeneity across centres, more precise estimates of incremental cost, but similar estimates of incremental cost‐effectiveness. We conclude that using MI to predict unit costs can preserve correlations, maximise the use of available data, and, when combined with multilevel modelling is an appropriate method for recognising the statistical uncertainty in multicentre CEA. Copyright © 2009 John Wiley & Sons, Ltd.     

Modelling strategies for reducing pharmaceutical costs in hospital.

OBJECTIVE: To describe drug utilization and cost in a large hospital and to compare the impact of different strategies on cost associated with drug prescribing. DESIGN: Retrospective data on drug utilization and cost, linked to patient clinical data and prescriber data from November 1998 were analyzed and modelled. MAIN OUTCOME MEASURES: Impact of different strategies for cost control. SETTING: A large hospital in Sydney, Australia. RESULTS: The mean cost of drugs per episode of care was 28 Australian dollars. Of all drug costs, 79% was incurred by medical units and 14% by surgical units. Oncology accounted for 42% and inpatients for 91% of drug costs. Although section-100 (S-100) drugs incurred a high cost (640 dollars) per episode of care, there were only 41 episodes where S-100 drugs (expensive, restricted drugs) were used, and the total cost of S-100 drugs was only 3.7% of the total cost to the hospital. Antibiotics were the most commonly prescribed drug category, prescribed in 14% of all hospital episodes, and accounting for 14% of total drug costs. Anti-ulcer drugs were the next most costly group, accounting for 7% of total drug costs. A 20% reduction in use of antibiotics would save four times that (233,832 dollars pa) of a 20% reduction in use of S-100 drugs (61,392 dollars pa). DISCUSSION: Our study suggests that reducing inappropriate use of high volume drugs such as antibiotics could be more effective in optimising health facility drug budgets than attempts concentrating solely on reducing use of high cost drugs alone. Moreover our study suggests that systematic measurement of drug utilisation patterns is a key element of drug cost control strategies.