OUTCOME EVALUATION AND COST-EFFECTIVENESS IN HEALTHCARE INDUSTRY

Jung-Der Wang, M.D., Sc. D.

National Taiwan University College of Public Health

National Taiwan University Hospital

OUTLINES• Introducing the needs and concepts of

survival, quality of life (QOL), and quality-adjusted survival as final outcome indicators with QALY (quality-adjusted life year) as a common unit for risk/outcome evaluation and cost-effectiveness

• Extended to psychometric measurement for QOL and clinical decision making

• Integration with medical cost to the NHI

• Increased value for the spending of NHI

(Cost-effectiveness)

No. articles in PubMed database with two specific key words

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Evidence based medicine: • There is no room for spending money

on ineffective diagnosis and treatment for any medical condition.

• Quality assurance, safety, and efficacy for all medical managements.

• Find the real causes and effects for all studies and practices

• Minimize the cost and share with all colleagues

Redefining health care (2006): by Michael Porter and Elizabeth Teisberg

• Value is the health outcomes per dollar spent in providing services. Outcomes are multidimensional, and include not only survival but extent of recovery or disability, errors, complications, recovery time, recurrences, and other aspects of the patient’s health experience. (Cost-effectiveness)

Healthcare reformed:Outcome-based pricing system• McCain: Reform of Medicare to make bundled p

ayments for episodes of care and to pay on the basis of outcomes

• Obama: Payment of providers on the basis of p

erformance and outcomes(Oberlander J. The Partisan Divide — The McCain and Ob

ama Plans for U.S. Health Care Reform. New

Engl J Med 2008:359: 781-4)

What are the outcomes in health care industry?

• Exposure• Internal dose => target organ dose• Early biological indicators, e.g., blood pre

ssure, HbA1c, creatinine, ALT, AST, cholesterol, A/G, chromosome aberration, sister chromatid exchange, etc.

• Impairment of organ-systems (hemiplegia, acute myocardial infarction, etc.)

• Functional disability (ADL, iADL, etc.)• Change of quality of life or patient reporte

d outcomes • Survival vs. mortality

Why do we need to assess QOL and survival ?

• All the intermediate indicators (exposure, dose, early biological indicators, diagnosis of illness or impairment, functional disability, etc.) must be demonstrated to have direct link with these final outcome indicators:

• Change of quality of life or patient reported outcomes

• Survival vs. mortality

Significance of final outcome indicators

• Intermediate outcome indicators are useful for early proactive and/or reactive prevention of poor final outcomes

• All kinds of intermediate outcome indicators must validate or establish their relationships with the final outcomes, or, survival and quality of life and the combination of them

• Final outcome indicators provide evidence of evaluation for every healthcare products along the same metric

Preventive Measures (NEJM2008;358:661-3)

• Haemophilus influenzae type b vaccination of toddlers Cost-saving

• One-time colonoscopy screening for colorectal cancer in men 60-64yr of age Cost-saving

• Newborn screening for medium-chain acyl-coenzyme A dehydrogenase deficiency $160/QALY

• High-intensity smoking-relapse prevention program, as compared with a low-intensity program $190/QALY

• Intensive tobacco use prevention program for 7th and 8th graders $23,000/QALY

Treatments for Existing Conditions• Cognitive-behavioral family intervention for patient

s with Alzheimer’s disease Cost-saving

• Cochlear implants in profoundly deaf children Cost-saving

• Combination antiretroviral therapy for HIV-infected patients $29,000/QALY

• Liver transplantation in patients with primary sclerosing cholangitis $41,000/QALY

• Implantation of cardioverter defibrillators in appropriate populations, compared with medical management alone $52,000/QALY

Environmental and Occupational Health Risk Assessment

• For sustainable development, we always want to reduce health risk or replace toxic substances by a less toxic compound. But how do you compare nephrotoxicity with hepatotoxicity?

• Procedures of risk assessment involve:Hazard identificationExposure assessment Dose-response function Risk characterization Can we compare different types of risks?

Cost-effectiveness is necessary to make the National Health Insurance more sustainable under limited resources

– Priority is given from a high to a low cost per unit of benefit or health

– How can we measure health ?

– Is there any common unit in measuring health ?

A common question raised:• Is there a common unit to measure bo

th the survival and utility or psychometry of quality of life?

• Live vs. Dead ---- counting the no. of lives saved

• More delicate measures:

--Length of survival S(t) or S(ti|xi) --Quality of life Qol(ti|xi)

• Can we measure S(ti|xi) or Qol(ti|xi)?

• Can we develop a method to combine both?

• (Can we quantify the cost paid by the NHI? )

Summary Measures of Population Health WHO 2002

Concepts, Ethics, Measurementand Applications

Edited by Christopher J.L. Murray, Joshua A. Salomon, Colin D. Mathers and Alan D. Lopez

http://www.who.int/publications/smph/en/

Comparative Quantification of Health Risks- WHO2004

Global and Regional Burden of Disease Attributable to Selected Major Risk Factors

Edited by Majid Ezzati, Alan D. Lopez, Anthony Rodgers and Christopher J.L. Murray

http://www.who.int/publications/cra/en/

Estimated survival function, mean QOL and quality adjusted survival curve; The area under the QAS curve is the expected quality adjusted survival time (Hwang JS, et al Statistics in Medicine 1996;15:93-102)

Notation of a typical life table with added columns of QOL (quality of life) and QAST (quality adjusted survival time)

. . . . . . . . .

. . . . . . . . .

. . . . . . . .

. . . . . . . . .

1 0

ConditionalProportionSurviving

CumulativeProportionSurvivingInterval

NumberLost toFollow-up

NumberWithdrawn Alive

NumberDying

NumberEnteringInterval

NumberExposedTo Risk

ConditionalProportion Dying

QOL ti( ) QAST

21 tt l1 w1 d1 n'1 n1 1q̂ 1p̂ 00.1)(ˆ 1 ts qol t( )1 QS1

32 tt l 2 w2 d 2 n'2 n2 2q̂ 2p̂ )(ˆ 2ts qol t( )2 QS 2

1 ii tt li wi di n i' ni iq̂ ip̂ )(ˆ its qol ti( ) QSi

ss tt 1 ls 1 ws 1 ds 1 n s' 1 ns 1 1ˆ sq 1ˆ sp )(ˆ 1sts qol ts( ) 1 QSs 1

st ls ws ds n s' ns )(ˆ sts qol ts( ) QSs

A more general model:

• xi:determinant(s) of S(survival) and U(utility) functions e.g. head injury, stroke,….., etc.

• Quality adjusted survival Qol(t| xi): quality of life function

(Wang JD. Basic principles and practical applications in epidemiological research. 2002)

)dt|()]|([ ii xtSxtUE

)dt|()]|([ ii xtSxtQolE

Cost of illness approach:

• Human capital left over for determinant xi

WA(t| xi): work ability function

• Direct medical cost of determinant xi

Cost(t| xi): medical cost function

)dt|()]|([ ii xtSxtWE A

)dt|()]|([ ii xtSxtCostE

ILLUSTRATIVE EXAMPLES:

• How much utility of health (in QALY) does it cost for a case of end stage renal disease or liver cancer?

• --- Survival curve• --- Quality of life estimation--- General population of Taiwan in

1995 as the reference population assuming QOL=1

Observed survival rates for the patients with HCC stratified by treatment groups

Group No. Age of diagnosisMean (SD)

Median survival in mo

(95% CI)

Survival rate

6 mo

1 yr

3 yr

Entire cohort

2599 57.8 (13.9)11

(10 – 13)

48 (42 – 54)

16 (15 – 19)3

(3 – 4)

60.7%

48.2%

~28%

Tx

Surgical 846 57.3 (13.3) 90.1%

78.4%

~58%

Medical* 630 61.3 (11.9)72.8%

58.5%

~24%

Support-ive

1123 56.2 (14.9)32.5%

20.4%

~8%

Utility (SG) for Utility measures of HCC

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Utility measured by standard gamble (SG)

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S

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Reference populationHCC cohort

Shaded area =233.6 QALM loss due to liver cancer

Pit dug for washing underground soil and water

Table Concentration ranges of the tested volatile organic compounds (VOCs) in groundwater samples collected from 52 civilian wells around a closed electronics-manufacturing factory.Lee LJH, et al. (J Toxicol Environ Health 2002;65:

219-35)

*MCLG: Maximum Contaminant Level Goal†MCL: Maximum Contaminant Level

EPA’s Drinking water standard

(µg/L) VOCs

Solubility in water

mg/L at 25℃

MCLG* MCL†

Concentration range µg/L

1,1-Dichloroethane 6000 NA NA ND-227.9

1,1-Dichloroethene 2500 7 7 ND-1240.4

cis 1,2-Dichloroethene

3500 70 70 ND-1376.0

Tetrachloroethene 150 0 5 ND-5228.3

1,1,1-Trichloroethane

1495 200 200 ND-1504.4

Trichloroethene 1100 0 5 ND-5479.7

RISK:LIKELIHOOD OF EVENT

(Incidence rate or probability)

X

CONSEQUENCE OF EVENT

(loss of utility due to the event)

(need to establish a cohort to estimate)

Cancer risks based on RME (reasonable maximal

exposure) and cancer slopes

Vinyl chloride QALM

8.4 x 10-6 (X 233.6 .002

Tetrachloroethylene QALM) =

1.9 x 10-4 .044

Trichloroethylene

1.4 x 10-4 .032

IF there are 1000 people at risk, then the above numbers must be multiplied with 1,000

Extrapolation of survival under high censored rate: Semi-parametric modeling (Hwang & Wang 1999, Fang et al. 2007)

H (t | patient) = H (t | reference) + constant excess hazard C1

)population reference|()populationpatient |()( tStStW

logit W(t) = ln [exp (C0 – C1 × t)/(1 – exp (C0 – C1 × t))]

= C0 – C1 × t – ln [1 – exp (C0 – C1 × t)]Because C1 > 0, the residual item ln [1 – exp (C0 – C1 × t)] will converge to 0 when t . As a result, when t , logit W(t) will approximate to C0 – C1 × t , which is a straight line with a slope of – C1.

Total Hazard Background Hazard

age- and gender-matched

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AIDS group

Non-AIDS group

3-year survival extrapolated to 6 years

3-year survival extrapolated to 6 years

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HD PatientsReferents

Comparison of survival functions between chronic hemodialysis patients

and age, gender matched general population(Potential Life Loss=12.57 years)

Patients under hemodialysis adjusted for quality of life measured by standard gamble

Monthly cost (NT$) for hemodialysis

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Survival Rate

mean_costmedian_costSurvival Rate

Lifetime cost (NT$) for hemodialysisAnnual cost

Discount rate

Lifetime cost

mean median mean median

Out patient clinic

476,553 606,800 0% 3,870,084 4,927,820

2% 3,303,139 4,205,923

4% 2,890,398 3,680,375

Hospitalization 43,133 24,600 0% 350,279 199,776

2% 298,965 170,510

4% 261,608 149,204Total 422,863 578,100 0% 3,434,073 4,694,748

2% 2,931,001 4,006,994

4% 2,564,760 3,506,303

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referenceLiver group

Liver groupLife expectancy : 3.45 yearsLoss of life expectancy : 15.61 yearsHealth gap : 81.9%

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referenceBreast group

Breast groupLife expectancy : 20.01 yearsLoss of life expectancy : 9.35 yearsHealth gap : 31.8%

癌症種類 人數 估計損失壽命估計健保資源損失 *（千元 / 人）

口腔癌 6869 15.4 821.0

鼻咽癌 5547 17.2 665.6

食道癌 2936 12.4 582.2

胃癌 11938 7.9 977.5

大腸癌 16993 5.4 1,060.6

肝癌 16926 14.7 488.7

膽囊癌 1449 9.9 737.3

胰臟癌 2112 12.5 495.3

表 2 國人罹患一項癌症後將可能造成之預期壽命損失與健保系統治療將給付之估計金額

肺癌 16953 11.4 631.0

白血病 4197 17.5 3,707.1

皮膚癌 4130 0.9 519.2

乳房癌 10150 11.0 1,678.8

子宮頸癌 14964 5.8 1,232.9

卵巢癌 1910 11.5 1,846.3

前列腺癌 2948 1.6 644.7

膀胱癌 4490 2.8 687.5

腎臟癌 3172 6.2 710.2

* 預估在 4 ％醫療服務膨脹率下，以 2 ％折現率之折現值。

WHOQOL (World Health Organization Quality of Life Questionnaire):• Concepts:

Individual perception of their position in life in the context of culture and value systems in which they live and in relation to their goals, expectations, standards and concerns

WHOQOL (continued):

• WHOQOL-BREF (24 facets, 4 domains, 26 questions)

physical psychological cross-culturally social consistent

environmental

Domains and facets of Taiwan version of WHOQOL questionnaire (Facet 25 and 26 are new ones developed from Taiwan version)

• Overall quality of life and health • Physical Domain

F 1. pain and discomfortF 2. energy and fatigueF 3. sleep and restF 9. mobilityF10. activity of daily livingF11. dependance on medicine treatmentF12. working capacity

Domains and facets of Taiwan version of WHOQOL questionnaire (continued)

• Psychological DomainF 4. positive feelingF 5. thinking, learning, memory and

concentrationF 6. self-esteemF 7. bodily image and appearanceF 8. negative feelingsF24. spirituality/religion/personal beliefs

Domains and facets of Taiwan version of WHOQOL questionnaire (continued):

• Social RelationshipsF13. personal relationshipsF14. social supportF15. sexual activityF25. be respected/be accepted

Domains and facets of Taiwan version of WHOQOL questionnaire (continued):

• Environmental DomainF16. physical safety and securityF17. home environmentF18. financial resourcesF19. health and social care: availability and qualityF20. opportunities for acquiring new information and skills

Domains and facets of Taiwan version of WHOQOL

questionnaire (continued):

• Environmental Domain (continued)F21. participation in and

opportunities for recreation /leisureF22. physical environment: (pollution/noise/traffic/climate)F23. transportF26. dietary

Domain Facets Epilepsy(yes/no)

Frequency of seizure

Marriage Co-morbid

Environ-ment

Health and social care

0.32** (0.06)

Financial resources

0.22* (0.08)

−0.017** (0.006)

Participation in recreation

−0.014* (0.006)

−0.30* (0.12)

Opportunities for new skills

−0.017** (0.005)

Physical safety and security

−0.013* (0.006)

−0.28* (0.11)

Social Personal relationships

−0.30** (0.07)

−0.014* (0.005)

0.21** (0.06)

−0.23* (0.10)

Being respected −0.27** (0.06)

−0.010* (0.005)

0.23** (0.06)

Sexual activity −0.24** (0.07)

0.47** (0.08)

* p < 0.05** p < 0.005

Quality of life of epilepsy patients (Liu HH, et al. Epilepsy Res 2005)

Domain Facets BMI(25–32)

BMI(32–35)

BMI(35–40)

BMI(>40)

Employ-ment

Physical Pain and discomfort

−0.33*(0.14)

Energy and fatigue

−0.37*(0.19)

−0.57**(0.18)

−0.56**(0.11)

Sleep and rest −0.51*(0.22)

−0.51**(0.20)

−0.64**(0.12)

Psychol-ogical

Thinking & concentration

−0.60**(0.21)

−0.69**(0.20)

−0.53**(0.12)

0.43**(0.11)

Self-esteem −0.59**(0.20)

−0.54**(0.18)

−0.84**(0.11)

0.32**(0.10)

Body image & appearance

−1.13**(0.21)

−1.32**(0.20)

−1.35**(0.12)

Sexual activity −0.47*(0.18)

−0.43**(0.17)

−0.54**(0.10)

0.24**(0.09)

Being respected

−0.52**(0.18)

−0.41**(0.11)

0.36**(0.10)

* p < 0.05** p < 0.005

Quality of life in obese patients (Chang CY et al. Obesity Surg 2008)

EXTENSION TO HEALTH PROFILE (PSYCHOMETRIC

SCORE)• Consequence of the event

can be replaced by QOL measured by psychometrics

• Hwang JS, Wang JD. Quality of Life Research 2004; 13:1-10

Psychometric mean score

• The sum of scores of those who are still alive plus those who die

• The following simple equation establishes the relationship between population mean QoL score function and survival function,

where Qs(t) is the average QOL of surviving subjects at time t

)](1[)()()( tStQtStQ s

Estimations

• The estimate of expected psychometric score-adjusted survival (PAS) for an index population,

is obtained by firstly estimatingand at chosen time points ’s

maxmax

00d))(1(d)()(][

TT

s ttSttQtSPASE

)(tS)(tQs

kt

Survival-weighted Health Profile in Long-term Survivors of Acute Myelogenous Leukemia (AML)

Chiun Hsu1, Jung-Der Wang1, Jing-Shiang Hwang2, and Jih-Luh Tang 1

National Taiwan University Hospital1

Academia Sinica2

Taipei, Taiwan

(Quality of Life Research 2003 ;12:503-517)

Comparison of life time psychometric Scores for BMT and chemotherapy (WHOQOL generic instrument)

Comparison of life time psychometric scores for BMT and chemotherapy(WHOQOL generic measurement)

Comparison of life time psychometric scores for BMT and chemotherapy (EORTC cancer specific instrument)

Comparison of life time psychometric scores for BMT and chemotherapy (EORTC cancer specific instrument)

Comparison of life time psychometric scores for BMT and chemotherapy (EORTC cancer specific instrument)

HOW MUCH DOES IT COST FOR A UNIT OF SCORE-TIME?

• Through questioning 157 patients with disability caused by occupational injury under contingent valuation method or stated preference, we found that people are willing to pay US$ 65.1-69.6 for a pain-killer pill that can remove pain for 24 hours.

Ho JJ, et al. et al. (monetary value of score time) Accident Analysis & Prevention 2005;37:537-48

• The WTP money for removing a longer duration of pain is even bigger

Conclusion: for outcome/risk assessment in health and medicine

• The QALY or life year gained or loss plus the psychometric score time can be estimated for comparative assessment of health risks/outcomes in national health resources allocation and clinical decision makings (and for cost-effectiveness analysis).

• Measurements of QOL had better be improved to an interval scale.

• Life-time utility (Economist)

經濟學家：終生預期效用

survival function 人命 (存活函數 ) utility function --HRQL( 健康相關生活品質 ) --working ability, wages, medical costs 工作能力、薪資、醫療費用

• Quality-adjusted life expectancy or healthy life expectancy ( 生活品質調整後預期壽命 )

)dt|()]|([ xitSxitUE

)dt|()]|([ xitSxitQolE

Clinical decision making

Maximize individual patient’s utility under resource constraint

based on: psychometric theory

WHOQOL health profile (multi-dimensions)

+

survival function

National resource allocation

Maximize utility of all people (No. of QALY) under the constraint of National Insurance

System (NIS)

based on: expected utility theory

EQ-5D (or other utility measurement)

+

survival function

survival weighted psychometric scores for each facets

maxmax

00d))(1(d)()(][

TT

s ttSttQtSPASE QAS (QALY)= )|())|(( ii xtSxtQolE

Each patient participates in clinical decision to maximize no. of QALY/per given cost

How much is the patient willing to pay?

Cost / QALY(or DALY)

How much will NIS pay per QALY under the constraint of distributive justice?

Summarize to only one dimension

Hwang JS, Tsauo JY, Wang JD. (theory of QAS) Stat Med 1996;15:93-102

Hwang JS, Wang JD. (QAS extrapolation to lifetime) Stat Med 1999;18:1627-40

Tsauo JY, et al. (Utility of enforcement of helmet law) Accident Anal Prev 1999;31:253-63

Yao KP, et al. (WHOQOL-BREF Taiwan version) J Formos Med Assoc 2002;101:342-51

Lee LJH, et al. (Risk assessment for water pollution) J Toxicol Environ Health 2002;65:219-35

Hwang JS, Wang JD (extended to psychometry) Quality Life Res 2004; 13:1-10

Hsu J, et al. (bone marrow transplantation for leukemia) Qual Life Res 2003 ;12:503-517

Chuang HY, et al. (occupational health policy for lead) J Toxicol Environ Health 2005; 68:1485-96.

Ho JJ, et al. (monetary value of score time) Accident Anal Prev 2005;37:537-48.

Ho JJ, et al. (survival of occupational disability) Scand J Work Environ Health 2006; 32(2):91-98.

Ho WL, et al. (survival and cost of thalassemia) Bone Marrow Transplant 2006; 37(6):569-574.

Ho JJ, et al. Estimation of reduced life expectancy. Accident Anal Prev 2006; 38:961-968.

Fang CT et al. (Life expectancy of patients with HIV/AIDS). Quarterly J Med 2007; 100:97-105.

Fang CT et al. (Cost-effectiveness for HAART policy) J Formos Med Assoc 2007; 106(8):631–640

Chu PC et al. (Lifetime financial burden to the National Health Insurance for 17 different cancer in Taiwan) J Formos Med Assoc 2008; 107:54-63

Chu PC et al. (Life expectancy and loss of life expectancy for major cancer in Taiwan) Value in Health 2008; in press

Chang CY et al (Quality of life in obese patients) Obesity Surg 2008; in press

THANK YOU FOR YOUR ATTENTION

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referenceLung group

Lung groupLife expectancy : 3.09 yearsLoss of life expectancy : 11.79 yearsHealth gap : 79.2%

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referenceAIDS group

AIDS groupLife expectancy : 10.61 yearsLoss of life expectancy : 23.12 yearsHealth gap : 68.5%

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referenceHIV group

HIV groupLife expectancy : 21.53 yearsLoss of life expectancy : 17.31 yearsHealth gap : 44.6%

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referenceOral cavity group

Oral cavity groupLife expectancy : 9.58 yearsLoss of life expectancy : 14.00 yearsHealth gap : 59.4%

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referenceNasopharynx group

Nasopharynx groupLife expectancy : 12.59 yearsLoss of life expectancy : 14.89 yearsHealth gap : 54.2%

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referenceEsophagus grouop

Esophagus groupLife expectancy : 3.54 yearsLoss of life expectancy : 13.25 yearsHealth gap : 78.9%

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referenceStomach group

Stomach groupLife expectancy : 7.51 yearsLoss of life expectancy : 8.80 yearsHealth gap : 54.0%

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referencepatients

Gallbladder & Extrahepatic bile duct group

Life expectancy : 4.98 yearsLoss of life expectancy : 10.36 yearsHealth gap : 67.5%

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referencePancreas group

Pancreas groupLife expectancy : 2.81 yearsLoss of life expectancy : 12.87 yearsHealth gap : 82.1%

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referenceLeukemia group

Leukemia groupLife expectancy : 11.61 yearsLoss of life expectancy : 19.34 yearsHealth gap : 62.5%

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referenceCervix uteri group

Cervix uteri groupLife expectancy : 19.77 yearsLoss of life expectancy : 6.18 yearsHealth gap : 23.8%

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referenceOvary group

Ovary groupLife expectancy : 17.71 yearsLoss of life expectancy : 11.91 yearsHealth gap : 40.2%

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referenceProstate group

Prostate groupLife expectancy : 8.17 yearsLoss of life expectancy : 1.72 yearsHealth gap : 17.4%

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referenceUrinary Bladder group

Urinary Bladder groupLife expectancy : 10.99 yearsLoss of life expectancy : 3.83 yearsHealth gap : 25.8%

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referenceKidney group

Kidney groupLife expectancy : 10.97 yearsLoss of life expectancy : 6.74 yearsHealth gap : 38.1%

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referenceSkin group

Skin groupLife expectancy : 16.16 yearsLoss of life expectancy : 1.59 yearsHealth gap : 9.0%

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referenceColon & Rectum group

Colon & Rectum groupLife expectancy : 10.86 yearsLoss of life expectancy : 6.36 yearsHealth gap : 36.9%