Part of the Pediatric Value Curriculum from UCSF.

1. Value Over the
Lifecourse
Why Pediatrics is a
Good Investment

2. Defining Value in Care
Value =
Costs
Quality
Outcomes+
Safety+Service
Costs Over
Time
=

3. Cost Accounting
3
Direct Cost
Expense of a specific product or process
Indirect Cost - Overhead
Expenses not related to a product/process
Charges to Payer/Patient
Bill insurers/patients get & gross revenue
Societal Cost
Incl. productivity costs, opportunity costs

4. Pop Quiz
We Spend...
http://www.healthcostinstitute.org
Child Health Expenditure

5. Pop Quiz
Child Health Costs
http://www.healthcostinstitute.org

6. Pop Quiz
Peds Cost Drivers
• 15% of Patients 60% of Costs
• Incl. Significant Acute Dz (5%), Chronic Dz (10%),
Catastrophic Dz (0.4%), & Malignancy (<0.1%)
(Neff, 2004 HSR)
CostsPatient %
50%
0%
100%
Well
Kids
Complex

7. Pop Quiz
We Spend...
http://www.healthcostinstitute.org
• $2,100 per child, $285 Billion Total
• Up 4.5% in last year
• $6,000 per working adult
• $18,000 per person age 65+
Child
Adult
<65yr
Adult
>65yr
Cost
Age

8. Overview: Strategies for
Using Your Brain for Value
1. Question Dogma in Your
Practice
2. Time as a Diagnostic Test
3. Learning from Variation &
Comparison

9. More Strategies
4. Standardization & Value
5. Trust Your Team
6. Get Creative
7. Use Our Brains for Value at
UCSF

10. Value Over the
Lifecourse - Outline
Pediatric value investment
Peds care & cost savings
Cost-effectiveness & utility

11. Pediatric Value
Investment
HealthMeasureX
Age

12. Short Term Costs
HealthMeasureX
Age
18yo
Value Over the
Lifecourse

13. Short Term Costs
HealthMeasureX
Age
Potential Lifelong Benefit
Value Over the
Lifecourse

14. Short Term Costs
HealthMeasureX
Age
Potential Lifelong Benefit
Potential Lifelong Costs
Value Over the
Lifecourse

15. Value Over the Lifecourse
Investments in Childhood Health Accrue
Lifelong
Return on Child Health Investment is
Huge
Consider Examples of Lifelong Return on
Investments in Pediatric Health
What Comes to Mind?

16. Value Over the Lifecourse
Vaccine
s
Treatable
Infections
Hearing Screening

17. Value Over the Lifecourse
Vaccine
s
Treatable
Infections
Hearing Screening
Lead
Screen
Lactation
Services
NRP

18. Just How Much Do We Save?
Example: Vaccines
4.2 Million Kids Born Yearly
Most Get 27 vaccines by
age 6
Cost of Vaccines for these
Kids is About $7.5 Billion

19. Just How Much Do We Save?
Example: Vaccines
4.2 Million Kids Born Yearly
Most Get 27 vaccines by
age 6
Cost of Vaccine Series for
these Kids is About $7.5
BillionWhat’s the Return?

20. Pop Quiz!
What Vaccine-Preventable
Illness Was Most Common in the
Pre-Vaccine Era?
A. Diptheria B. Measles
C. Polio D. Varicella E.
Pertussis

21. Pop Quiz!
What Vaccine-Preventable
Illness Was Most Common in the
Pre-Vaccine Era?
A. Diptheria B. Measles
C. Polio D. Varicella E.
Pertussis
NNT to Prevent 1 Case of

22. Pop Quiz!
What Vaccine-Preventable
Illness Was Most Common &
Deadly/Costly in Pre-Vaccine
Era?
A. Diptheria B. Measles
C. Polio D. Varicella E.
Pertussis

23. Pop Quiz!
What Vaccine-Preventable
Illness Was Most Common &
Deadly/Costly in Pre-Vaccine
Era?
A. Diptheria!?! B. Measles
C. Polio D. Varicella E.
Pertussis

24. Just How Much Do We Save?
Example: Vaccines
Of the 4.2 M Kids Born
Yearly...Disease
Cases
Prevented
Deaths
Prevented
Societal
Savings

25. Just How Much Do We Save?
Example: Vaccines
Disease
Cases
Prevented
Deaths
Prevented
Societal
Savings
Diptheria 275,028 27,503 $39,296

26. Just How Much Do We Save?
Example: Vaccines
Disease
Cases
Prevented
Deaths
Prevented
Societal
Savings
Diptheria 275,028 27,503 $39 Billion
Measles 3, 835,825 3,106 $8 Billion

27. Just How Much Do We Save?
Example: Vaccines
Disease
Cases
Prevented
Deaths
Prevented
Societal
Savings
Diptheria 275,028 27,503 $39 Billion
Measles 3, 835,825 3,106 $8 Billion
Pertussis 2,950,836 1,062 $7Billion
Polio 67,463 800 $7 Billion

28. Just How Much Do We Save?
Example: Vaccines
Disease
Cases
Prevented
Deaths
Prevented
Societal
Savings
Diptheria 275,028 27,503 $39 Billion
Measles 3, 835,825 3,106 $8 Billion
Pertussis 2,950,836 1,062 $7Billion
Polio 67,463 800 $7 Billion
Hib 19,606 741 $3.7Billion
S.
2,323,952 5056 $2.7 Billion

29. Just How Much Do We Save?
Example: Vaccines
In Total:
Cases Prevented:
19,685,945/yr
Deaths Averted: 42,035/yr
Societal Savings: $76
Billion/yr
Peds Returns 1/4 of OurThat’s the Return
Zhou 2014, Pediatrics

30. Just How Much Do We Save?
Example: Vaccines
Flu
vaccine is
cost saving
Shouldn’t
states pay
more for
giving flu
VaccinationRate%
Nichol 2011, Vaccine
Yoo 2010, Pediatrics
CA
NY
MA
Medicaid Reimbursement $

31. Too Much or Too Little?
We Don’t Do Enough
Mangione 2007, NEJM

32. Just How Much Could We Save?
Ex: Breastfeeding
74% Breastfeed at Birth
43% Breastfeed at 6
months
Benefits: Less NEC, AOM,
gastro, respiratory infxns,
atopic derm, SIDS, asthma,
TIDM, Obesity, Leukemia.Batrick 2010, Pediatrics

33. Just How Much Could We Save?
Ex: Breastfeeding
Batrick 2010, Pediatrics
Disease
Total Cost per
Episode
OR BF
c/w
Formula
AOM $291 0.5/0.77

34. Just How Much Could We Save?
Ex: Breastfeeding
Batrick 2010, Pediatrics
Disease
Total Cost per
Episode
OR BF
c/w
Formula
AOM $291 0.5/0.77
Gastro
$339 OP & $2.7K
IP
0.36

35. Just How Much Could We Save?
Ex: Breastfeeding
Batrick 2010, Pediatrics
Disease
Total Cost per
Episode
OR BF
c/w
Formula
AOM $291 0.5/0.77
Gastro
$339 OP & $2.7K
IP
0.36
Obesity
$1.4K/y &
$36K/case
0.93

36. Just How Much Could We Save?
Ex: Breastfeeding
Batrick 2010, Pediatrics
Disease
Total Cost per
Episode
OR BF
c/w
Formula
AOM $291 0.5/0.77
Gastro
$339 OP & $2.7K
IP
0.36
Obesity
$1.4K/y &
$36K/case
0.93
$453/y &

37. Just How Much Could We Save?
Ex: Breastfeeding
Disease
Total Cost per
Episode
OR BF
c/w
Formula
AOM $291 0.5/0.77
Gastro
$339 OP & $2.7K
IP
0.36
Obesity
$1.4K/y &
$36K/case
0.93
$453/y &
Duke Study: MBM-fed ELBW infants had 1/2 LOS, 1/2
Seigel,
2014

38. Just How Much Could We Save?
Ex: Breastfeeding
What if 90% Breastfed to
6mos?
Batrick 2010, Pediatrics
Asthma,Obesity,TIDMRisk
Age
Breastfed

39. Just How Much Could We Save?
Ex: Breastfeeding
What if 90% Breastfed to
6mos?
Batrick 2010, Pediatrics
Early MBM
x6mos
Asthma,Obesity,TIDMRisk
Age
Breastfed

40. Just How Much Could We Save?
Ex: Breastfeeding
What if 90% Breastfed to
6mos?
Batrick 2010, Pediatrics
Early MBM
x6mos
Asthma,Obesity,TIDMRisk
Age
Decreased Risk & Cost
Breastfed
Non-Breastfed

41. Just How Much Could We Save?
Ex: Breastfeeding
Batrick 2010, Pediatrics
If 90% Breastfed to 6mos...
911 Deaths Averted
•$13 Billion in Cost
Savings

42. From Cost to
Cost-Effectiveness

43. Incremental Cost-Effectiveness
Ratio (ICER)
Change in Cost Per Change in
Benefit
Incremental Benefit for
Incremental Change in Resources
Used
Costintervention - Costbaseline
Effectivenessintervention -
Effectivenessbaseline

44. QualityofLife
0.8
1.0
0.6
0.2
0.4
0
Quality Adjusted Life Years (QALYs)
Full Health
No Health (Dead)

45. QualityofLife
Life Years
0.8
1.0
0.6
0.2
0.4
0
Baseline
Comparison
20 30
Quality Adjusted Life Years (QALYs)
Full Health
No Health (Dead)

46. QualityofLife
Life Years
0.8
1.0
0.6
0.2
0.4
0
Baseline
Comparison
Intervention
20 30
QALYs Gained = (30 x 0.8) – (20 x 0.4) = 24 – 8 = 16 QALYs
Quality Adjusted Life Years (QALYs)
Full Health
No Health (Dead)

47. Incremental Cost-Utility Ratio
“Cost per QALY”
Change in Cost Per Change in Quality
Adjusted Life Years (QALYs)
Costintervention - Costbaseline
QALYsintervention - QALYsbaseline

48. QualityofLife
Life Years
0.8
1.0
0.6
0.2
0.4
0
Baseline
Comparison
Intervention
20 30
QALYs Gained = (30 x 0.8) – (20 x 0.4) = 24 – 8 = 16 QALYs
Quality Adjusted Life Years (QALYs)
Full Health
No Health (Dead)
Cost of Baseline Care = $200,
000
Cost of Intervention = $1
Million

49. Incremental Cost-Utility Ratio
“Cost per QALY”
Change in Cost Per Change in Quality
Adjusted Life Years (QALYs)
Costintervention - Costbaseline
QALYsintervention - QALYsbaseline

50. Incremental Cost-Utility Ratio
“Cost per QALY”
Change in Cost Per Change in Quality
Adjusted Life Years (QALYs)
$1 Million - Costbaseline
QALYsintervention - QALYsbaseline

51. Incremental Cost-Utility Ratio
“Cost per QALY”
Change in Cost Per Change in Quality
Adjusted Life Years (QALYs)
$1 Million - $200K
QALYsintervention - QALYsbaseline

52. Incremental Cost-Utility Ratio
“Cost per QALY”
Change in Cost Per Change in Quality
Adjusted Life Years (QALYs)
$1 Million - $200K
24 QALYs - QALYsbaseline

53. Incremental Cost-Utility Ratio
“Cost per QALY”
Change in Cost Per Change in Quality
Adjusted Life Years (QALYs)
$1 Million - $200K
24 QALYs - 8 QALYs

54. Incremental Cost-Utility Ratio
“Cost per QALY”
Change in Cost Per Change in Quality
Adjusted Life Years (QALYs)
$1 Million - $200K =
$800K
24 QALYs - 8 QALYs = 16 QALYs

55. Incremental Cost-Utility Ratio
“Cost per QALY”
Change in Cost Per Change in Quality
Adjusted Life Years (QALYs)
$50K
1 QALY

56. Cost per QALY
What Has Most Cost-Utility?
Intervention
Cost per
QALY
Seat Belts $69
Varicella Vaccine $16,000
Home Health Wkr $20,000
Health Insurance $35,000

57. Value Over the
Lifecourse - Outline
Pediatric value investment
Peds care & cost savings
Cost-effectiveness & utility

58. Do No Financial Harm