By Alan Maynard

Email: alan.maynard@york.ac.uk

Introductory issues

Is it time to restrict health care investment?

Health care policy: now what? Investing in prevention: a nice challenge

Conclusions

How do you produce population health i.e. improvements in the length and quality of citizens’ lives?

Many inputs: which produces health most cost effectively?

Income

Wealth

Nutrition

Sanitation

Education

Housing

Work

Leisure

Genetic

endowment

Health care

Health

capital

stock

Healthy

days / years

of life

Is it more efficient to invest “down-stream” i.e. when citizens are damaged and have to be rescued from the river of illness?

Or

Is it more efficient to invest up-stream and prevent them from falling into the river of illness?

Efficiency: least cost production of the greatest gain in health

Equity: concern for the distribution of health care and health

Expenditure control: often eroded by incentives e.g. hospital and physician payment systems

The problem of trade offs: e.g. social values may lead to investment in saving low birth weight babies, which may be inefficient but “equitable”

Purchasers, be they insurers or government agencies, are weak i.e. they are price and quality takers

Providers, be they physicians, hospitals or the pharmaceutical industry, are strong i.e. they are price and quality makers

Can an expenditure cap be defended by the observed inefficiency of all health care systems, public and private?

For instance clinical practice variations have be described for over 70 years, and they continue to be unresolved. Why?

“ I once asked a worker at a crematorium, who had a curiously contented look on his face, what he found so satisfying about his work. He replied that what fascinated him was the way in which so much went in and so little came out. I thought of advising him to get a job in the NHS, it might increase his job satisfaction, but decided against it. He probably gets his kicks from the visual demonstration of the gap between input and output. A more statistical demonstration might not have worked so well”

Archie Cochrane, “Effectiveness and Efficiency” (1972)

Randomised clinical trials (RCTs) (www.equator-

network.org )

Systematic reviews and meta analysis: the hierarchy of evidence from RCTs to cohort analysis to observational studies-opinion. Identifying grain from the ocean of chaff! (www.cochrane.org )

Quasi-experimental methods (difference in difference methods) (see MRC guidelines) (www.campbellcollaboration.org )

Innovative English study: Glover (1938) on

tonsillectomy rates The work of Jack Wennberg (e.g. Tracking

Medicine, 2010) Potential savings e.g. US Medicare 1. Wennberg and Fisher: save 30-40% of

expenditure with safe, conservative practice 2. Economists : save 12-15% (Cutler and

Sheiner (1999), Rettenmaier and Wang (2012)

Priorities in Health and Social Care (DHSS, 1976) highlighted potential savings from reducing variations

McKinsey report (DH, 2010)|: save £20billion over 4 years (out of an English NHS budget of £105bn annually) by reducing variations

NHS budget static for 4 years, variation reduction essential to fund increased demand from population ageing and technological change

“Changing diagnostic criteria for many conditions are causing virtually the entire adult population to be classified as having at least one chronic condition” Moynihan et al, BMJ June 2, 2012

Examples 1. Lowering of diagnostic thresholds in US e.g.

diabetes fasting sugar criterion from140-126 increased prevalence by 1.6m/14%;lower hypertension guideline from 160/100 to 140/90 increased prevalence by 13m.35%; lowering cholesterol guideline from 240-200 added 42m/86% (Welch, Swartz and Woloshin, 2011, page 23)

2. Norwegian study of breast cancer screening:18-25% non-malignant and intervention unnecessary

3. Flat of the curve medicine: no benefit and high cost.

Are the savings from reducing variations real or mythical?

For decades their potential has been highlighted, but there has been a failure to resolve them and produce efficiency gains

Expenditure driven by perverse incentives

Current fashion is to change incentives, in particular offer bonuses for improved performance

But where is the evidence of cost effectiveness? Large investments worldwide but evidence base is poor.

Problems with P4P………

1. What is the measure of achievement:

process or outcome measures?

2. Are financial incentives a more efficient way of altering behaviour than reputational incentives?

3. Do bonuses work better than penalties? Adam Smith argued pain better than pleasure! (Theory of Moral Sentiments,1759)

1. Studies lack control groups. Non-intervention comparators

2. Studies lack data on cost effectiveness

3. Studies fail to separate the effects of financial and non-financial/reputational incentives

Reform policies are continually altered but are usually poorly evaluated and equivalent to “jumping on the spot”

Policy principles (Evans et al, 1994) 1. Don’t use the market 2. “Competition” and “markets” are means not

ends 3. Avoid commercial insurance. Use public

insurance or tightly regulated non-commercial insurance.

4. Prevention may be better than cure

Maybe!

But what is the problem? 1. Maximising health production? 2. Reducing health inequalities?

What’s the problem with prevention?

An absence of high quality evidence about

the cost effectiveness of prevention policies

1. What works best in education? e.g. target pre-school children or teenagers

2. What works best in social work? 3. What works best in the judiciary?. What is the

most cost effective way of preventing re-offending?

4. What works best in policing? E.g. what is the most cost effective way of controlling a riot?

5. What is the best way of controlling childhood obesity? E.g. educate kids or parents?

6. What is the best way of controlling the use of “sinful” products e.g. tobacco, alcohol and drugs?

Prices affect consumption i.e. tax sugary drinks (New York and France) and fatty food (Hungary and Denmark)

But:

1. Parents may mediate effects of price rises on children’s consumption

2. Consumers may switch to equally harmful products

3. Obesity : should you pay for success or require participants to put their money forward and be re-paid. Penalised for achievements?

UK spends £3bn on seeking to control illicit drug use

Most of the policies have no evidence base

The price of knowledge is high but the costs of ignorance are higher!

The health care industry appears to be very inefficient, particularly if we believe the clinical practice variations literature

If the evidence of inefficiency is valid, the case for investing in health care is poor

Prevention may be better than cure but the evidence base is very weak

How to proceed? Proceed with extreme caution and base investment on evidence of cost effectiveness

Scepticaemia was defined by two physicians

as

“ an uncommon generalised condition of low infectivity. Medical school education is likely to confer life long immunity” (Skrabanek and McCormick (1989, 1992))

But progress will be difficult as Moses knew so well!!.....................................................