Cost Effectiveness in Radiology, an Introductory Primer

1. Radiology and Cost-
Effectiveness
…and my experience at the Harvard School
of Public Health

2. HSPH

3. HSPH – MPH Programs
• Clinical Effectiveness
• Epidemiology
• Global Health
• Health and Social Behavior
• Health Management
• Health Policy
• Occupational and Environmental Health
• Quantitative Methods

4. Quantitative Methods
• 42.5 credits (45 now)
• Tuition $55,125 currently
– I got approximately 40-50% in
grants/scholarships
• Completed over two semesters
• Practicum requirement
• Busy! But very rewarding

5. Coursework
• Epidemiology
• Biostatistics
• Rates and Proportions (Regression)
• Economics
• Decision Science
• Meta-Analysis
• Health Care Quality and Safety
• Environmental Health
• Ethics

6. Clinical Effectiveness Summer
Program
• 15 credits
– Core requirements: epidemiology, biostatistics
– Tuition $18,375 currently
• Intense 7 weeks
• Many go on to get full MPH

7. Radiology and Cost-Effectiveness
OIG analysis of Part B data, 2007

8. Radiology and Cost-Effectiveness
http://www.ifhp.com/

9. Radiology and Cost-Effectiveness

10. Radiology and Cost-Effectiveness

11. NLST
• Methods
– Three strategies: screening with CT,
screening with XR, no screening
– QALY, ICER, cost per person estimates

12. NLST
• Results (CT compared to no screening)
• Per person:
– Additional $1631
– Additional 0.0316 life-years
– Additional 0.0201 QALYs
– ICERs
• $52,000 per life-year gained
• $81,000 per QALY gained
– Wide variability

13. Lung Cancer Screening
• McMahon 2011
– Up to $169,000/QALY
• Pyenson 2012
– Less than $19,000 per life-year saved

14. Case
• A new diagnostic technique may better
characterize certain findings and prevent
additional imaging workup
• However, assume the false negative rate for
this technology is 5%
– 5% of masses called benign but turn out to be
cancer
– Cost-effective?
– What if false negative rate is 1%

15. Decision Analysis
• Identify and bound decision problem
• Create decision tree
• Fill in the tree
– Data collection, expert opinions
• Calculate expected value
• Sensitivity analysis
– Evaluate uncertainty and test conclusions

16. Cost

17. Cost Analysis
• Direct Costs
– Decision leads to resource utilization directly
– CT, staff costs, physician payments, additional workup for
positive results, lung cancer treatment
• Medicare Physician Fee Schedule, Inpatient Prospective
Payment System, other payors etc.
• Indirect Costs
– Changes in resource use leading to increased or
decreased productivity
– Opportunity costs (time, etc.)
• BLS data
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PFSLookup/index.html?redirect=/pfslookup/02_PFSsearch.asp
http://www.bls.gov/news.release/archives/ecec_03102010.pdf

18. Cost Analysis
• Perspectives
– Patient
– Payor
– Societal

19. Cost Analysis

20. Effectiveness

21. QALYs

22. Expected Value
• Weighted average of possible values of a
random variable
• Bet on a horse
– Probability of winning: 10%
– Potential net winnings: $1000
– Costs $200 to play
• E(b) = $1000*0.1 - $200*0.9 = - $80

23. Expected Value
• Expected value for two different treatment
regimens
• Surgery + Medical Treatment
• Medical treatment alone
• E(x) = 0.6*40 + 0.3*25 + 0.1*0 = 31.5 QALYs gained
• E(y) = 0.7*40 + 0.15*20 + 0.15*0 = 31 QALYs gained

24. Standard Gamble
http://www.ispor.org/news/articles/aug05/tbl1.gif

25. Time Trade Off

26. Measuring and Valuing Outcomes
• Perspectives
– Patient
– Society
• Health state classification systems
– e.g. EQ-5D

27. ICER
• Net increase in cost / Net gain in
effectiveness
• Additional cost per unit increase in effect
• Measure of value of resources
• Willingness to pay threshold
https://upload.wikimedia.org/wikipedia/commons/a/ae/ICER_Equation.png

28. NLST
• Results (CT compared to no screening)
• Per person:
– Additional $1631
– Additional 0.0316 life-years
– Additional 0.0201 QALYs
– ICERs
• $52,000 per life-year gained
• $81,000 per QALY gained
– Wide variability

29. Willingness to Pay Threshold
• $25K per QALY gained?
• $50K?
• $100K?
• $150K?

30. Two Kinds of Decisions
• Ultrasound
• XR
• CT
• MRI
• PET/CT
• PET/MRI
• AMIGO
• Super AMIGO
• 81 mg aspirin
• 325 mg aspirin
• 20 mg statin
• 81 mg aspirin +
statin
• 325 mg aspirin +
statin

31. Shopping Spree

32. Competing Choice

33. Decision Analysis
• Identify and bound decision problem
• Create decision tree
• Fill in the tree
• Calculate expected value
• Sensitivity analysis

34. Decision Analysis
• Identify and bound decision problem
• Create decision tree
• Fill in the tree
• Calculate expected value
• Sensitivity analysis

35. Modeling

36. Decision Tree

37. Markov Model

38. Markov Model
• Mutually exclusive, collectively exhaustive
health states
• Transition probabilities
– Govern movement among states
• Fixed cycle length
• Health states with utility value and/or costs
• Matrix algebra

39. Decision Analysis
• Identify and bound decision problem
• Create decision tree
• Fill in the tree
• Calculate expected value
• Sensitivity analysis

40. Case
• Data Search
– Probabilities
• Percentage of CTs that find renal masses/cysts
• True RCC rate
• True benign finding (hyperdense cyst)
• False negative rate
• False positive rate
• Etc…
– Data Quality/Missing Data
– Expert Opinion

41. Decision Analysis
• Identify and bound decision problem
• Create decision tree
• Fill in the tree
• Calculate expected value
• Sensitivity analysis

42. Sensitivity Analysis
• How high a false negative rate can you
tolerate for this test to be cost-effective?
• How many screening CTs can you perform
for this test to be cost-effective?
• What complication rates can you tolerate
for ablation to be more cost-effective than
nephrectomy?

43. Sensitivity Analysis

44. Sensitivity Analysis

45. Health Care Rationing?

46. Health Care Rationing?
• (c)(1) The Secretary shall not use evidence or findings from
comparative clinical effectiveness research conducted under section
1181 in determining coverage, reimbursement, or incentive
programs under title XVIII in a manner that treats extending the life
of an elderly, disabled, or terminally ill individual as of lower value
than extending the life of an individual who is younger, nondisabled,
or not terminally ill.
• (e) The Patient-Centered Outcomes Research Institute established
under section 1181(b)(1) shall not develop or employ a dollars-per-
quality adjusted life year (or similar measure that discounts the value
of a life because of an individual’s disability) as a threshold to
establish what type of health care is cost effective or recommended.
The Secretary shall not utilize such an adjusted life year (or such a
similar measure) as a threshold to determine coverage,
reimbursement, or incentive programs under title XVIII.
http://www.ssa.gov/OP_Home/ssact/title11/1182.htm

47. Challenges
• Variation and uncertainty
• Data lacking
• Cost estimates challenging
• Lack of methodological uniformity
• Politically controversial