Clever budget cuts

Disinvestment in the age of cost-cutting sound and fury. Tools for the Spanish National Health System

The government has anounced that it is difficult to apply  new budget cuts again because it would harm citizen's health. However, a close look at this interesting article can provide light to take decisions that would reduce inappropriate care. The authors say:
Articulating the proposed approach to “value for money”, would require 3 basic elements:
(A) The mandate to do it: Regulatory framework
(B) The capacity to identify “low value” interventions and produce guidance on best practice
(C) The capacity to monitor compliance to and effects of “enforced” guidance.
My impression is that light is not enough. Government needs courage for clever reforms, and this means to surpass the existing hurdles. The article explains how. However, I'm uncertain about how many politicians will read this article, and still more uncertain about how many will take the suggested approach.


PS. I should read "Behavioral foundations of public policy".

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.

Plausible stories about the future

Sustainable Health Systems - Visions, Strategies, Critical Uncertainties and Scenarios

Last week the "health output" of the Davos World Economic Forum was a report on Sustainable Health Systems - Visions, Strategies, Critical Uncertainties and Scenarios. A quick look at the document will show you that the future could lie only in three scenarios. This is an easy way to limit what may happen. A reduccionist perspective I would say. Anyway, you may agree or disagree after reading it. The three options would be:

• In Health Incorporated, the boundaries of the health industry are redefined. Corporations provide new products and services as markets liberalize, governments cut back on public services and a new sense of conditional solidarity emerges.
• In New Social Contract, governments are responsible for driving health system efficiency and for regulating organizations and individuals to pursue healthy living.
• In Super-empowered Individuals, citizens use an array of products and services to manage their own health. Meanwhile, corporations compete for this lucrative market and governments try to address the consequences.

Fortunately the future will be more complex, an organized chaos at best, evolving from what we already see right now.

PS. Horrendous stories about the past.

Pharma confidential

We have just entered a new world. A confidential pricing market has been created!.  A complete new pharmaceutical market that Adam Smith couldn't realise. It's not a joke, it is what an official answered yesterday to the press. The Ministry can't explain the prices of prescription medicines not funded by NHS because they are confidential. The journalist was asking about the price of 400 medicines that were delisted from public coverage last September and why pharmaceutical firms have increased its price thrice. Does this make any sense? Do we need such regulator? Maybe a vacation is the best option . Last April a new regulation introduced the notified price, this is a free price that has to be notified for prescription medicines not funded by NHS. However, notified price it is not confidential price. That's the reason why we have to ask for compliance with the law, just that. The Comision Interministerial de Precios has not published any administered price since last June, and notified prices are considered confidential by the Ministry oficials.

On predictive modeling

A better understanding of population morbidity allows to predict how such population will evolve. Currently there is an increasing interest on chronic care and a specific program has been set up. The potential tools available to define chronic populations have been presented and you can check them in this document.Although we do need more details, it is a first step in the right direction. However, I'm not so sure about the split of chronic care from integrated care. Why now?

Health disparities

We all know that there are differences in health and health services throughout geography. If you want to check the extent of such differences, I suggest you have a look at Interactive atlas of health inequalities that WHO has published. You can select the country and you´ll find the comparison.
The number of variables is limited, but is a first step in the right direction since OECD only publishes data at a state level.

On food and public health policies

Is the food industry in the driver's seat?

The role of stakeholders in health policy requires transparency. Otherwise any potential relationship may end in conflict with general interest. The appointment of high level officials in any regulatory body has to be clean, without doubts over conflicts of interest.
Have a look at this article at EJPH. Some months ago I highlighted my concerns about this here.

Years behind the leader

U.S. Health in International Perspective: Shorter Lives, Poorer Health

This latest report of IOM-NAS highlights the outcomes of a health system and poor health behaviours. The concern about the US population health is growing. I was astonished by this statement:

Demographers refer to this measure as 35q15, or the probability of dying in the 35 years following one’s 15th birthday. For females in the 16 peer countries, 35q15 was around 2 percent in 2007 but was approximately twice as high—4 percent—in the United States. This means that the probability of a 15-year-old U.S. female dying within 35 years was double the average for 16 peer high-income countries.
In all high-income countries, including the United States, 35q15 has been declining for more than half a century. But the relative position of the United States has deteriorated since the late 1950s, when it was near the average of its peers. These countries, on average, had reduced their 35q15 for females to the U.S. 2007 level of 4 percent almost 40 years earlier. In this sense, one can say that, in 2007, the United States was 40 years behind the average of its peers (and 50 years behind the leading peer country).

Forty years behind the leader! that's a lot. A great effort is needed to balance such situation. An important sailors alert: those that want fierce and unregulated competition without mandatory insurance should have these results in their mind. Is this really what they want?

PS. The cheapest ad for a company is the one you may watch on TV3,  i.e. yesterday on TN about prenatal genetic screening. Why do all the citizens have to pay for this advertisement through our taxes?