Who pays and who benefits?

Lifetime Distributional Effects of Publicly Financed Health Care in Canada

A lifetime perspective on equity is needed. Short term analysis introduce confounding factors. Fortunately, today we have good news. The Canadian Institute of Health Information has released an interesting research using this approach, and these are the key results:

• Health care costs are higher for low-income groups, but differences are not as pronounced when estimated over the life course instead of in a single year (2011 in this analysis).
- Average lifetime health care costs are $237,500 per person in the lowest income group and $206,000 in the highest income group—a difference of 15%. The difference is much larger (60%) when considering the effect on a single year (2011).
• Tax payments to finance health care are higher among higher-income groups but, like health costs, the differences between income groups are less pronounced when taking a life course perspective.
- Over a lifetime, average annual tax payments to finance health care costs are approximately 8.5 times as high in the highest income group as in the lowest income group. A more pronounced difference of 10 times between groups is estimated when looking at 2011 only.
• Patterns of health care costs and tax payments for different income groups have an effect on the distribution of income.
- Average annual health care costs represent 24% of the income of the lowest income group ($4,220 of $17,500) but 3% of the highest income group’s average income ($3,350 of $114,900).
Although the corresponding tax payment amounts are much higher in high-income groups, in an average year over a lifetime, the lowest income group pays 6% of its income toward publicly funded health care services; the highest income group pays just less than 8%.
Lifetime average after-tax income in the highest income group is 5.1 times the income of the lowest group; after adding the dollar value of health care costs, the gap was reduced to 4.3 times.

Hopefully one day we'll have something similar for our country.

PS. Fyi - from BBC News.
The European Commission is launching legal action against Spain over the refusal of some hospitals to recognise the European Health Insurance Card.
The EHIC entitles EU citizens to free healthcare in public hospitals.
But some Spanish hospitals rejected the card and told tourists to reclaim the cost of treatment via their travel insurance, the Commission says.
A BBC correspondent says the Commission is not accusing cash-strapped Spanish hospitals of trying to make money. The Commission, which checks compliance with EU law, has requested information on the issue from the Spanish government - the first stage of an infringement procedure which could eventually result in a fine.

PS. The course on Health for all through primary care at Coursera-Johns Hopkins has started. Free for all.

Navigating through data

The Health Data Navigator

Undertanding health system performance starts with the availability of data. Many sources are available, but beyond data you need a framework for the analysis. Since this week a new and healthful source is the Health Data Navigator, the outcome of the Euroreach research. The toolkit summarizes in one document the approach. It is a helpful resource. The institutional basis for performance is often a key neglected element in the analysis. They follow the WHO Building Blocks perspective, although there are other options.
Beyond OECD data, we have right now a new database to check. Unfortunately our country has not joined this initiative by now.

PS. The six building blocks:
• Good health services are those which deliver effective, safe, quality personal and non-personal health interventions to those that need them, when and where needed, with minimum waste of resources.
• A well-performing health workforce is one that works in ways that are responsive, fair and efficient to achieve the best health outcomes possible, given available resources and circumstances (i.e. there are sufficient staff, fairly distributed; they are competent, responsive and productive).
• A well-functioning health information system is one that ensures the production, analysis, dissemination and use of reliable and timely information on health determinants, health system performance and health status.
• A well-functioning health system ensures equitable access to essential medical products, vaccines and technologies of assured quality, safety, efficacy and cost-effectiveness, and their scientifically sound and cost-effective use.
• A good health financing system raises adequate funds for health, in ways that ensure people can use needed services, and are protected from financial catastrophe or
impoverishment associated with having to pay for them. It provides incentives for providers and users to be efficient.
• Leadership and governance involves ensuring strategic policy frameworks exist and are combined with effective oversight,coalition-building,regulation,attention to
system-design and accountability

Assesment and review

Disability weights in the Global Burden of Disease 2010: Unclear meaning and overstatement of international agreement

The Global Burden of Disease study is a huge effort to understand  worldwide population health. A former post explains some details and links. However, some calculations and estimates require and assessment and review. This is what Erik Nord explains in his article:

After a long history of changing concepts and methods in measuring ‘burden of disease’ the GBD 2010 has landed on ‘health’ as a unidimensional construct to be used forweighting multi-dimensional non-fatal health problems against each other and against death. At first glance this may look plausible. But the unidimensional health construct does not have a clear meaning. It likely also leads to biases in assessments of conditions that in everyday language are associated with ‘being ill’ as opposed to con-ditions which are not associated with ‘being ill’, namelystates of disability and the state dead. Furthermore, the transformation of ordinal data from paired comparisons into disability weights with purported ratio scale properties is not validated nor explained in a way that allows judgements of face validity.

And I would like to highlight this final consideration:

A value oriented burden of disease construct can either have a personal welfare content or a content that incorporates societal values in priority setting and resource allocation. Which of these would make the GBD enterprise most useful to decision makers is an important issue for further debate

I fully agree with this article. Aggregation without accurate metrics gives quick results, but uncertain for the implications we can derive, sometimes.

Death, taxes and fiscal deficit

Benjamin Franklin said: "The only things certain in life are death and taxes.". If he had lived here, he would have added "fiscal deficit" in its quote. And this is a constant since 1986, 8,1% of our GDP disappears and doesn't returns in services or infrastructures. And somebody is still interested in this money to use it for their preferences, and not for the tax-payers.
Yesterday we knew again that fiscal deficit was 16,543 million euros, a 8,5% of GDP of 2011. After 25 years, the accumulated amount of fiscal deficit is 306.267 million euros!!!. Can you imagine what represents this figure for a country of 7,5 million inhabitants?
Every year the fiscal deficit is equal to the sum of health, education and welfare expenditures. As far as a country can't survive with such bleeding, I'm convinced that we'll not discuss it again. Let's put it simply, time to say goodbye has arrived because it is socially unacceptable such discrimination and unfair relationship. Only one fourth of the fiscal deficit in one year would stop recent public budget cuts. The answer is only one: Goodbye.

Healthcare value chain, again

Redefining global health-care delivery

A remake of what you may already know has been published as article in The Lancet. It could be good as a reminder but something else is needed. The authors recognise:

Many individual elements we have described will be familiar to global health scholars and practitioners. Many lessons have been learned in discrete areas. What we lack is a true field. We need a clearing-house for information about programme design, best practices, lessons learned, synergies, policy constraints, environmental determinants, and other elements of global health-care delivery. In an age of information, the collection of data can run seamlessly from bedside to seminar room and back to the field.

 I'm uncertain about the outcome of such proposal. The details are so important and difficult to capture that the challenge is huge. On the other hand, I suggest to have a look at this Mckinsey Quarterly article that focus on the opposite: against benchmarking. After reading it, you'll notice that competition pressure in IT may not fit exactly with health care industry, and the message may not apply as straightforwarding.
Anyway, we need an evaluation effort to understand those strategies that are able to deliver more value. Now it's time.

PS. I wrote an earlier post about Porter et al.

Aprés tout (4)

An updated release of public health expenditure data has just been published. In 2011, the expenditure on health was 1,330 € per capita, you can check p.9 of the report. Total decentralised public expenditure: 10,120 m €, percentage of GDP: 5.1%. Why are these figures so different from my previous post with official data?
Now it seems that the deficit in 2011 was 932 m€ - a 10.1% budget deviation-, while formerly a lower figure was announced:586 m€. If it is a mistake, somebody has to fix it, otherwise it will remain in the statistics for the future. If it is true, then we have to ask why it was published incorrectly. Was it misinterpretation, negligence or making -up?

PS. Beware, this data comes from outside. Anyway, somebody has to confirm or dismiss it.

PS. Is it sustainable a public health expenditure variation from 4.4% of GDP to 9.9% of GDP between geographic areas with the same tax regime?

Wired Health

Eric Topol information into action, Wired Health conference


Eric Topol: Information into Action at Wired Health from WIRED on FORA.tv

Economics of genomics

The Economics of Genomic Medicine - Workshop Summary

Just imagine for a while that you are concerned about economic implications of genomics and you invite a distinguished professor of genetic medicine - James Evans- to the introduction of a workshop at IOM. Instead of more is better, he sends a cautious message to the audience. And beyond the potential and valuable applications for those that are already ill,  he openly critizises the current trend towards the use of genetic tests for the healthy:

Assessing the risk of common diseases through whole genome analysis of a healthy person has received the most attention, but this attention “is somewhat misplaced,” Evans said. Currently, assessment of genetic risk alleles has “rather feeble predictive power” because the increased risks tend to be small. “From a clinical standpoint I don’t know what to do with patients who are at a 1.3 relative risk for colon cancer,” said Evans. “Am I going to hurt them by doing more intensive screening, or am I going to help them?”

"I know what almost everybody in this room is going to die of,” said Evans. “We are going to die of heart disease or cancer. . . . We are all at high risk for these maladies regardless of our [genomically determined] risk. And many at decreased risk for heart disease will still die of heart disease. So we are all going to benefit from interventions that lower heart disease. We don’t really need to target people. It doesn’t do anyone much good to tweak our estimation of an individual’s relative risk for common diseases which we are all at high absolute risk of developing anyway."

 “The old adage that an elephant for a nickel is only a bargain if you have a nickel and you need an elephant applies here. I am not sure most of us need that elephant. Even if free, perceived low cost is an illusion, because the misapplication of medical tests—and make no mistake, whole genome sequencing is a medical test—is very expensive,”

A clear message for geneto-enthusiasts and marketeers. Cost-effectiveness of genetic testing starts with assessing if they are effective. If not, any economic analysis is useless . This is obvious, but we do need to repeat it, just in case.

PS. Must read, Reinhardt's blog.

PS. A report to understand the financial markets' mess and why recovery is far by now.

The right rate

International Variations in a Selected Number of Surgical Procedures

If you want to be astonished by the huge variation on the rate of surgical procedures in OECD countries, have a look at this report. It is difficult to find arguments for such a huge differences in health care. The key statement:

The data presented here provide contemporary assessments of the size of the clinical margins of uncertainty for the procedures studied. These may also in part be a consequence of varying legal constraints, methods of payment, availability of cover and patient preferences. They therefore provide basic evidence for research priorities in an increasingly evidence-based medicine paradigm. The only way to make proper judgements on the optimal level for a particular procedure is to have national longitudinal data linking individuals’ treatment (and deliberate withholding of treatment) to outcomes. Such data do not exist in most countries. This is a critical deficiency in health service delivery, which means current policy on which procedures to fund, for whom, is formulated in circumstances based more upon local custom and scientific tradition than empirical effectiveness data.

Meanwhile you can add this report to the folders with the Atlas VPM that you may already know.

Tackling obesity

Integrating Educational, Environmental, and Behavioral Economic Strategies May Improve the  Effectiveness of Obesity Interventions

On top of the priorities for the improvement of public health, obesity deserves a place. However, the tools and decisions to slice its impact on health are still dubious. A recent article may help to put together different approaches:

Obesity is a multifactorial problem impacted by access to foods (supply) and food choices (demand). Neighborhood environments constrain the food choices available to individuals, while complex dietary decisions are driven by taste, cost, nutrition, convenience, and weight concerns. The complex nature of dietary choices therefore requires informed educational approaches that are strategically combined with guided nudges, and environmental interventions that improve access to promote healthier eating. Moreover, multi-institutional  collaborations will likely be necessary to address the obesity epidemic.

Since a multi-institutional approach is needed, somebody has to lead this effort. Is the government able to do it?. If so, don't delay it.

PS. Let me suggest also this Lancet article, my key reference up to now with the OECD one and its update.

The stratified approach

How Health Systems Could Avert 'Triple Fail' Events That Are Harmful, Are Costly,And Result In Poor Patient Satisfaction 

While reading the latest HA, I've picked this article that intends to focus on implementation issues: how to improve health. A short statement:

 The stratified approach to the Triple Aim described in this article includes three phases. A planning phase would involve conducting an opportunity analysis, developing predictive models and impactibility (also known as intervenability) models.

More details in the article. Formerly in this blog, I've explained more or less the same. For instance, have a look at a post of last year on risk prediction in a population . We do need to focus on the basics using the most appropriate tools. This is what the article does, and what we have to do.

Aprés tout (3)

Publicly funded health expenditure reached 9,162m € in 2012, although the initial budget was 8,756m €. Therefore, the size of the budget deviation was  406m €(10% of total public deficit, health care is 38% of total public budget), and we have to remember that in 2011 the deviation was 582m€ .
Let's say it differently, in 2012 we have roughly accomplished the budget of 2011 (!) , or being more precise we have reduced the 2011 budget in 26 million .
The most interesting figure is always the per capita expenditure, in 2012 the final number is 1,205 € per inhabitant. A reduction of 2 € if we compare to 2011 budget (p. 45), or 77€ per capita of cutbacks in current terms.
The level of expenditure is right now close to what we were spending 5 years ago. Surprisingly, the size of population also went back to the figure of 5 years ago.(!)
Meanwhile, citizens wonder if there is a limit in the shrinking trend. The rumor these days is that the 2013 budget may be reduced by 9%. I can't imagine that this is possible to accomplish in 6 months, given that we have reduced 12% in two years(!!!).
And finally, don't forget that we are in a country that only 43% of our taxes come back, the remaining amount we'll retrieve it the day that we all agree in the creation of a new state. Then we'll not discuss again about cutbacks in the health budget, because we'll decide how much to devote to health services with our taxes.

PS. Video: Our politicians in the Parliament, a review of health policy in 2012.

PS. Today at 19:30 h. free broadcast of GET2013:  Genomics in the Practice of Medicine

PS. Otherwise at 22:00 h you may be interested in:  Genetics in Hollywood: Inspiring Writers and Producers to Create Storylines that Improve Health Worldwide 

PS. Recovery room from cutbacks: Must listen to Ben l'Oncle

Against patents

The case against patents

Some months ago, a WP blog hightlighted a paper by Boldrin and Levine with a straightforward title. Now you can read it at the Journal of Economic Perspectives. The summary is in the first paragraph:

The case against patents can be summarized briefly: there is no empirical evidence that they serve to increase innovation and productivity, unless productivity is identified with the number of patents awarded—which, as evidence shows, has no correlation with measured productivity. This disconnect is at the root of what is called the “patent puzzle”: in spite of the enormous increase in the number of patents and in the strength of their legal protection, the US economy has seen neither a dramatic acceleration in the rate of technological progress nor a major increase in the levels of research and development expenditure.

A risky statement unless there is a clear support from research. However, once you continue reading you'll have arguments to be convinced about it. The impact on pharmaceutical industry is analysed in detail:

There are four things that should be born in mind in thinking about the role of patents in the pharmaceutical industry. First, patents are just one piece of a set of complicated regulations that include requirements for clinical testing and disclosure, along with grants of market exclusivity that function alongside patents. Second, it is widely believed that in the absence of legal protections, generics would hit the market side by side with the originals. This  assumption is presumably based on the observation that when patents expire, generics enter immediately. However, this overlooks the fact that the generic manufacturers have had more  than a decade to reverse-engineer the product, study the market, and set up production lines. Lanjouw’s (1998) study of India prior to the recent introduction of pharmaceutical patents there indicates that it takes closer to four years to bring a product to market after the original is introduced—in other words, the fifi rst-mover advantage in  pharmaceuticals is larger than is ordinarily imagined. Third, much development of pharmaceutical products is done outside the private sector; in Boldrin and Levine (2008b), we provide some details. Finally, the current system is not working well: as Grootendorst, Hollis, Levine, Pogge, and Edwards (2011) point out, the most notable current feature of pharmaceutical innovation is the huge “drought” in the development of new products.

And the proposal is a controversial one:

we could either treat Stage II and III clinical trials as public goods (where the task would be financed by National Institutes of Health, who would accept bids from firms to carry out this work) or by allowing the commercialization of new drugs—at regulated prices equal to the economic costs of drugs—if they satisfy the Food and Drug Administration requirements for safety even if they do not yet satisfy the current (overly demanding) requisites for proving efficacy.

The last sentence sounds far from what should be a "fair" regulatory process in pharmaceuticals. Anyway, it seems that we have entered in a new perspective on patents and more scholars will be supporting it in the future.  I'm close to this perspective, but the details are important, as usual.

Full overhaul needed

A full-fledged overhaul is needed for a risk and value-based regulation of medical devices in Europe


This is exacty what medical devices regulation in EU needs: a full overhaul. The weaknesess of current process have been on the press for the case of breast implants. But this is only an extreme case that has shown the failures and conflicts of interest.
Carlos Campillo article in Health Policy shows clearly the details and examples of the current mess.

In Europe, the first step should be to understand thefull extent of the problem and bring it to public attention.Comprehensive, reliable and constantly updated registriescould play an important role in this endeavor. Secondly,all the improvement measures described in connectionwith both sides of the problem (assessment, appraisal andapproval, on the one hand, and postmarketing on the other)should be urgently implemented. The fact that we already know what these measures are would delegitimize any delay in implementation.

A clear alert for any politician with eyes to read.

PS. On non-profit boards