Why are there high variation rates in procedures?

The Atlas of variations in health care describes what's going on in the real world. Once we know that there are large differences in hospitalization rates between geographic areas, we need to ask about the causes behind them. This is much more complicated.
Have a look at this article and you'll become convinced that it is possible to reduce potential inappropriate care, and hence reduce costs, without harming health. A key paragraph:

Si un área tuviese el comportamiento de las áreas con tasa en el percentil 25 como referencia, el exceso de coste anual oscilaría entre los 89 millones de euros en el caso de proctología hasta los 12 millones en el caso de revisión de artroplastia. En el caso de usar como umbral deseable la tasa del percentil 5, el exceso oscilaría entre los 22 millones atribuibles a revisiones de artroplastia y los 129 millones a procedimientos proctológicos.

This is a clear message for those at the helm of  budget cuts. It's the kind of message that a politician wants to avoid tackling. Anyway, handle with care, this is only a description. There is no clue about causes and consequences.

Why are we waiting?

Waiting Time Policies in the Health Sector What Works?

One could say quickly, waiting lists exist in NHS because prices are mostly absent and insurance plays a role. In consumer markets, waiting lists appear when there are creators of scarcity as Brandenburger-Nalebuff explained in his book as a specific strategy, or when there is a temporary mismatch between supply and demand. Since the solution in health care is not to introduce prices and forget insurance, we have to ask about the best practices on tackling such issue. The report by OECD says:

Supply-side waiting time policies, by themselves, are usually not successful. In the earlier OECD study on waiting time policies, the most common policy was to provide increased funding to health providers to decrease waiting times, and this type of policy continues to be a common approach. It has almost invariably been unsuccessful in bringing down waiting times over the long term. Generally, there is a short-term burst of funding that initially reduces waiting times, but then waiting times increase, and occasionally return to even higher levels when the temporary funding runs out. The other main supply-side policy is increasing hospital productivity, by introducing new payment methods such as activitybased financing (ABF) using diagnosis-related groups. This increases hospital productivity, but does not necessarily decrease waiting times.

The most promising tool is prioritisation within a waiting list. The cases of Norway and Australia are interesting examples to check. Nearer here we started with research, and finally a decree was prepared to be released. Unfortunately last April we received a phone call saying it was not possible to rule on waiting lists, that somebody would do it for us. At that moment I said that the intervention of health policy started. The answer today to the initial question - why are we waiting- is at least this one: we have made unnecessary political concessions and we should apply our legislation, we don't need the intervention from outside. That's it.

PS. Data on waiting lists at December 2012.

Dutch crossroads

EVALUATING REFORMS IN THE NETHERLANDS’ COMPETITIVE HEALTH INSURANCE SYSTEM

The quest for introducing systemic competition in health care is plagued with difficulties. This blog has explained its causes several times. There are at least two levels of competition: on the funding side and on the providers side. In my opinion the big issue is on the funding side. Under mandatory insurance, what is the outcome of managed competition (when insurers compete on quality rather than price)?. Although we don't have a case-control assessment, we can have a look at the Netherlands. Latest data confirm that costs are still rising although choice is greater than before. This article says:

Preliminary evidence shows that over the last six years health care costs have kept growing, quality information has become readily available, hospital efficiency has improved, and consumers have had greater choice

It is just a confirmation of my former post. I'm uncertain about the long term acceptance of dutch population for being the country that spends the most  on health in the EU. Can they afford the cost of choice? . Another wave of reform is approaching.

On corruption

These are days with one headline in the journal's front page: corruption. The anomalous funding of parties has created opportunities for "funding" opportunists in those parties. The case of Health Minister may be followed in this police report. The fight against corruption is not that easy. You may check recent proposals by World Bank in this book. I'm not so sure about the effectiveness of Income asset and disclosure as a tool, since we have had this for last 20 years and current news corroborate its failure.

PS. Acemoglu on innovation and growth. And the world of our grandchildren.

Overvaluing expensive drugs

A research from University of York has concluded that NICE is overvaluing expensive treatments because its cost threshold - the price at which a treatment is deemed good value for the NHS - is set too high. The threshold value per quality-adjusted life year (QALY) - a measure of the health benefits of a treatment - should be lowered from £30,000 to just £18,317, their analysis found. It suggests the NHS may be wasting money on treatments that are not as good value as first thought. Professor Sculped said:

It is crucial that the cost effectiveness threshold is seen as representing health forgone as the additional costs of new technologies are imposed on the fixed budgets of local commissioners. For decisions made by NICE and many policy options considered by the NHS and DH, this is the key to establishing the value for money of new services.

This is a strong criticism against QALYs, let's see if it has some impact in the near future. Fortunately, the British have the opportunity to debate on it. Nearer here, the press is saying now that 30% of drugs requested for approval were rejected (7 out of 24). No details available, no website, no transparent process. That's alleged democracy, southern style. NTA=Nothing to add.

PS. If you don't want to read the article, have a look at this presentation. I suggest you save it, it may be useful for the future.

PS. As you can see from my blog, in one week, two officials have said different numbers of rejected drugs for public funding (2 vs 7). Does this make any sense? Is there anybody asking for an explanation in Parliament?

PS. Follow the controversy on DSM-5 at BBC News.

PS. Check here how our drug prices have converged to the european average.

PS. Must read: Uwe Reinhardt blog.

PS. Interesting article on 20 years of economic evaluations of cancer.

Questions without answers

EESRI. Estadística dels centres hospitalaris de Catalunya, 2010

Statistics reflect facts, decision and behaviour of individuals and teams. Every year the hospital statistics might seem slightly similar to the previous one. The 2010 report, just released, splits results between publicly funded hospitals (public and private) and privately funded ones. Since the outlook is so different, I'm still asking some questions:

• Why private hospitals have a cesarean rate of 36% and public hospitals 22.7%? p.15
• Why discharges in private hospitals  are 10.5% of total if voluntary insurance is 24% of the population? p.18
•  Why "productivity" is double in private than in public hospitals? p.19 (31 vs 62 UMA/personal sanitari) p.19
• Why hospital discharge rate per 1.000 inhabitants in 2010 returns to 1995 data? (p.30)
• Does size matter for efficiency? Public hospitals average income 85m€ , private ones 19m €.

I have my own hypothesis, however the confirmation has to come from fresh research that I haven't found to date.

There is always a first time

It was not until yesterday that we knew that for the first time two drugs were not included in the publicly funded package because its low cost-effectiveness. This is a historical achievement. The news is so unique that deserves explanation. For decades, health economists have been asking for the economic evaluation of new benefits. Surprisingly, yesterday there was anounced in the press that two cancer drugs with limited effectiveness and high costs were not entering into public funding. My question is, how the regulator has come to such a decision if the committees set up by the law have not been nominated?. The answer is in the journal. Up to now, the institution that rules cost-effectiveness are the officials in the Ministry, that's all. NTA: Nothing to add.