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Illustrating Potential Efficiency Gains from Using Cost-Effectiveness Evidence to Reallocate Medicare Expenditures
Abstract Objectives The Centers for Medicare & Medicaid Services does not explicitly use cost-effectiveness information in national coverage determinations. The objective of this study was to illustrate potential efficiency gains from reallocating Medicare expenditures by using cost-effectivenes...
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Published in: | Value in health 2013-06, Vol.16 (4), p.629-638 |
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description | Abstract Objectives The Centers for Medicare & Medicaid Services does not explicitly use cost-effectiveness information in national coverage determinations. The objective of this study was to illustrate potential efficiency gains from reallocating Medicare expenditures by using cost-effectiveness information, and the consequences for health gains among Medicare beneficiaries. Methods We included national coverage determinations from 1999 through 2007. Estimates of cost-effectiveness were identified through a literature review. For coverage decisions with an associated cost-effectiveness estimate, we estimated utilization and size of the “unserved” eligible population by using a Medicare claims database (2007) and diagnostic and reimbursement codes. Technology costs originated from the cost-effectiveness literature or were estimated by using reimbursement codes. We illustrated potential aggregate health gains from increasing utilization of dominant interventions (i.e., cost saving and health increasing) and from reallocating expenditures by decreasing investment in cost-ineffective interventions and increasing investment in relatively cost-effective interventions. Results Complete information was available for 36 interventions. Increasing investment in dominant interventions alone led to an increase of 270,000 quality-adjusted life-years (QALYs) and savings of $12.9 billion. Reallocation of a broader array of interventions yielded an additional 1.8 million QALYs, approximately 0.17 QALYs per affected Medicare beneficiary. Compared with the distribution of resources prior to reallocation, following reallocation a greater proportion was directed to oncology, diagnostic imaging/tests, and the most prevalent diseases. A smaller proportion of resources went to cardiology, treatments (including drugs, surgeries, and medical devices, as opposed to nontreatments such as preventive services), and the least prevalent diseases. Conclusions Using cost-effectiveness information has the potential to increase the aggregate health of Medicare beneficiaries while maintaining existing spending levels. |
doi_str_mv | 10.1016/j.jval.2013.02.011 |
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The objective of this study was to illustrate potential efficiency gains from reallocating Medicare expenditures by using cost-effectiveness information, and the consequences for health gains among Medicare beneficiaries. Methods We included national coverage determinations from 1999 through 2007. Estimates of cost-effectiveness were identified through a literature review. For coverage decisions with an associated cost-effectiveness estimate, we estimated utilization and size of the “unserved” eligible population by using a Medicare claims database (2007) and diagnostic and reimbursement codes. Technology costs originated from the cost-effectiveness literature or were estimated by using reimbursement codes. We illustrated potential aggregate health gains from increasing utilization of dominant interventions (i.e., cost saving and health increasing) and from reallocating expenditures by decreasing investment in cost-ineffective interventions and increasing investment in relatively cost-effective interventions. Results Complete information was available for 36 interventions. Increasing investment in dominant interventions alone led to an increase of 270,000 quality-adjusted life-years (QALYs) and savings of $12.9 billion. Reallocation of a broader array of interventions yielded an additional 1.8 million QALYs, approximately 0.17 QALYs per affected Medicare beneficiary. Compared with the distribution of resources prior to reallocation, following reallocation a greater proportion was directed to oncology, diagnostic imaging/tests, and the most prevalent diseases. A smaller proportion of resources went to cardiology, treatments (including drugs, surgeries, and medical devices, as opposed to nontreatments such as preventive services), and the least prevalent diseases. Conclusions Using cost-effectiveness information has the potential to increase the aggregate health of Medicare beneficiaries while maintaining existing spending levels.</description><identifier>ISSN: 1098-3015</identifier><identifier>EISSN: 1524-4733</identifier><identifier>DOI: 10.1016/j.jval.2013.02.011</identifier><identifier>PMID: 23796298</identifier><language>eng</language><publisher>New York, NY: Elsevier Inc</publisher><subject>Beneficiaries ; Biological and medical sciences ; Cost effectiveness ; Cost-Benefit Analysis ; Coverage ; disinvestment ; Efficiency ; General aspects ; Health Care Rationing - economics ; Health costs ; Health Policy ; Humans ; Insurance Coverage ; Internal Medicine ; Interventions ; Medical sciences ; Medicare ; Miscellaneous ; Planification. Prevention (methods). Intervention. Evaluation ; Public health. Hygiene ; Public health. Hygiene-occupational medicine ; Quality-Adjusted Life Years ; resource allocation ; United States</subject><ispartof>Value in health, 2013-06, Vol.16 (4), p.629-638</ispartof><rights>International Society for Pharmacoeconomics and Outcomes Research (ISPOR)</rights><rights>2013 International Society for Pharmacoeconomics and Outcomes Research (ISPOR)</rights><rights>2014 INIST-CNRS</rights><rights>Copyright © 2013 International Society for Pharmacoeconomics and Outcomes Research (ISPOR). Published by Elsevier Inc. All rights reserved.</rights><lds50>peer_reviewed</lds50><oa>free_for_read</oa><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c518t-f464f81506f0f5e0f04b6bf1b72d3e0bb3c97aa30b52d9c39fd4bd625bde91b33</citedby><cites>FETCH-LOGICAL-c518t-f464f81506f0f5e0f04b6bf1b72d3e0bb3c97aa30b52d9c39fd4bd625bde91b33</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><link.rule.ids>314,780,784,27924,27925,31000</link.rule.ids><backlink>$$Uhttp://pascal-francis.inist.fr/vibad/index.php?action=getRecordDetail&idt=27500394$$DView record in Pascal Francis$$Hfree_for_read</backlink><backlink>$$Uhttps://www.ncbi.nlm.nih.gov/pubmed/23796298$$D View this record in MEDLINE/PubMed$$Hfree_for_read</backlink></links><search><creatorcontrib>Chambers, James D., MPharm, MSc, PhD</creatorcontrib><creatorcontrib>Lord, Joanne, MSc, PhD</creatorcontrib><creatorcontrib>Cohen, Joshua T., PhD</creatorcontrib><creatorcontrib>Neumann, Peter J., ScD</creatorcontrib><creatorcontrib>Buxton, Martin J., BA</creatorcontrib><title>Illustrating Potential Efficiency Gains from Using Cost-Effectiveness Evidence to Reallocate Medicare Expenditures</title><title>Value in health</title><addtitle>Value Health</addtitle><description>Abstract Objectives The Centers for Medicare & Medicaid Services does not explicitly use cost-effectiveness information in national coverage determinations. The objective of this study was to illustrate potential efficiency gains from reallocating Medicare expenditures by using cost-effectiveness information, and the consequences for health gains among Medicare beneficiaries. Methods We included national coverage determinations from 1999 through 2007. Estimates of cost-effectiveness were identified through a literature review. For coverage decisions with an associated cost-effectiveness estimate, we estimated utilization and size of the “unserved” eligible population by using a Medicare claims database (2007) and diagnostic and reimbursement codes. Technology costs originated from the cost-effectiveness literature or were estimated by using reimbursement codes. We illustrated potential aggregate health gains from increasing utilization of dominant interventions (i.e., cost saving and health increasing) and from reallocating expenditures by decreasing investment in cost-ineffective interventions and increasing investment in relatively cost-effective interventions. Results Complete information was available for 36 interventions. Increasing investment in dominant interventions alone led to an increase of 270,000 quality-adjusted life-years (QALYs) and savings of $12.9 billion. Reallocation of a broader array of interventions yielded an additional 1.8 million QALYs, approximately 0.17 QALYs per affected Medicare beneficiary. Compared with the distribution of resources prior to reallocation, following reallocation a greater proportion was directed to oncology, diagnostic imaging/tests, and the most prevalent diseases. A smaller proportion of resources went to cardiology, treatments (including drugs, surgeries, and medical devices, as opposed to nontreatments such as preventive services), and the least prevalent diseases. Conclusions Using cost-effectiveness information has the potential to increase the aggregate health of Medicare beneficiaries while maintaining existing spending levels.</description><subject>Beneficiaries</subject><subject>Biological and medical sciences</subject><subject>Cost effectiveness</subject><subject>Cost-Benefit Analysis</subject><subject>Coverage</subject><subject>disinvestment</subject><subject>Efficiency</subject><subject>General aspects</subject><subject>Health Care Rationing - economics</subject><subject>Health costs</subject><subject>Health Policy</subject><subject>Humans</subject><subject>Insurance Coverage</subject><subject>Internal Medicine</subject><subject>Interventions</subject><subject>Medical sciences</subject><subject>Medicare</subject><subject>Miscellaneous</subject><subject>Planification. Prevention (methods). Intervention. Evaluation</subject><subject>Public health. Hygiene</subject><subject>Public health. Hygiene-occupational medicine</subject><subject>Quality-Adjusted Life Years</subject><subject>resource allocation</subject><subject>United States</subject><issn>1098-3015</issn><issn>1524-4733</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2013</creationdate><recordtype>article</recordtype><sourceid>7QJ</sourceid><recordid>eNqFkl2L1DAUhoso7of-AS-kN4I3rSdJ005BhGUY14UVRd3rkCYnkppJxyQdnH9vujMqeKFXORfPewjneYviGYGaAGlfjfW4l66mQFgNtAZCHhTnhNOmajrGHuYZ-lXFgPCz4iLGEQBaRvnj4oyyrm9pvzovwo1zc0xBJuu_lh-nhD5Z6cqNMVZZ9OpQXkvrY2nCtC3v4kKtp5iqDKBKdo8eYyw3e6szjGWayk8onZuUTFi-R22VDFhufuzQa5vmgPFJ8chIF_Hp6b0s7t5uvqzfVbcfrm_WV7eV4mSVKtO0jVkRDq0BwxEMNEM7GDJ0VDOEYWCq76RkMHCqe8V6o5tBt5QPGnsyMHZZvDzu3YXp-4wxia2NCp2THqc5CsIb0q8IsO7_KOsodH3TkYzSI6rCFGNAI3bBbmU4CAJi0SJGsWgRixYBVGQtOfT8tH8etqh_R355yMCLEyCjks4E6ZWNf7iOA7C-ydzrI4f5cHuLQcR7S_nOIesQerL__sebv-LKWZ8VuW94wDhOc_BZiSAi5oD4vBRo6Q9hS3dawn4CrU3BbQ</recordid><startdate>20130601</startdate><enddate>20130601</enddate><creator>Chambers, James D., MPharm, MSc, PhD</creator><creator>Lord, Joanne, MSc, PhD</creator><creator>Cohen, Joshua T., PhD</creator><creator>Neumann, Peter J., ScD</creator><creator>Buxton, Martin J., BA</creator><general>Elsevier Inc</general><general>Elsevier</general><scope>6I.</scope><scope>AAFTH</scope><scope>IQODW</scope><scope>CGR</scope><scope>CUY</scope><scope>CVF</scope><scope>ECM</scope><scope>EIF</scope><scope>NPM</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>7X8</scope><scope>7QJ</scope></search><sort><creationdate>20130601</creationdate><title>Illustrating Potential Efficiency Gains from Using Cost-Effectiveness Evidence to Reallocate Medicare Expenditures</title><author>Chambers, James D., MPharm, MSc, PhD ; Lord, Joanne, MSc, PhD ; Cohen, Joshua T., PhD ; Neumann, Peter J., ScD ; Buxton, Martin J., BA</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c518t-f464f81506f0f5e0f04b6bf1b72d3e0bb3c97aa30b52d9c39fd4bd625bde91b33</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2013</creationdate><topic>Beneficiaries</topic><topic>Biological and medical sciences</topic><topic>Cost effectiveness</topic><topic>Cost-Benefit Analysis</topic><topic>Coverage</topic><topic>disinvestment</topic><topic>Efficiency</topic><topic>General aspects</topic><topic>Health Care Rationing - economics</topic><topic>Health costs</topic><topic>Health Policy</topic><topic>Humans</topic><topic>Insurance Coverage</topic><topic>Internal Medicine</topic><topic>Interventions</topic><topic>Medical sciences</topic><topic>Medicare</topic><topic>Miscellaneous</topic><topic>Planification. Prevention (methods). Intervention. Evaluation</topic><topic>Public health. Hygiene</topic><topic>Public health. Hygiene-occupational medicine</topic><topic>Quality-Adjusted Life Years</topic><topic>resource allocation</topic><topic>United States</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Chambers, James D., MPharm, MSc, PhD</creatorcontrib><creatorcontrib>Lord, Joanne, MSc, PhD</creatorcontrib><creatorcontrib>Cohen, Joshua T., PhD</creatorcontrib><creatorcontrib>Neumann, Peter J., ScD</creatorcontrib><creatorcontrib>Buxton, Martin J., BA</creatorcontrib><collection>ScienceDirect Open Access Titles</collection><collection>Elsevier:ScienceDirect:Open Access</collection><collection>Pascal-Francis</collection><collection>Medline</collection><collection>MEDLINE</collection><collection>MEDLINE (Ovid)</collection><collection>MEDLINE</collection><collection>MEDLINE</collection><collection>PubMed</collection><collection>CrossRef</collection><collection>MEDLINE - Academic</collection><collection>Applied Social Sciences Index & Abstracts (ASSIA)</collection><jtitle>Value in health</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Chambers, James D., MPharm, MSc, PhD</au><au>Lord, Joanne, MSc, PhD</au><au>Cohen, Joshua T., PhD</au><au>Neumann, Peter J., ScD</au><au>Buxton, Martin J., BA</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Illustrating Potential Efficiency Gains from Using Cost-Effectiveness Evidence to Reallocate Medicare Expenditures</atitle><jtitle>Value in health</jtitle><addtitle>Value Health</addtitle><date>2013-06-01</date><risdate>2013</risdate><volume>16</volume><issue>4</issue><spage>629</spage><epage>638</epage><pages>629-638</pages><issn>1098-3015</issn><eissn>1524-4733</eissn><abstract>Abstract Objectives The Centers for Medicare & Medicaid Services does not explicitly use cost-effectiveness information in national coverage determinations. The objective of this study was to illustrate potential efficiency gains from reallocating Medicare expenditures by using cost-effectiveness information, and the consequences for health gains among Medicare beneficiaries. Methods We included national coverage determinations from 1999 through 2007. Estimates of cost-effectiveness were identified through a literature review. For coverage decisions with an associated cost-effectiveness estimate, we estimated utilization and size of the “unserved” eligible population by using a Medicare claims database (2007) and diagnostic and reimbursement codes. Technology costs originated from the cost-effectiveness literature or were estimated by using reimbursement codes. We illustrated potential aggregate health gains from increasing utilization of dominant interventions (i.e., cost saving and health increasing) and from reallocating expenditures by decreasing investment in cost-ineffective interventions and increasing investment in relatively cost-effective interventions. Results Complete information was available for 36 interventions. Increasing investment in dominant interventions alone led to an increase of 270,000 quality-adjusted life-years (QALYs) and savings of $12.9 billion. Reallocation of a broader array of interventions yielded an additional 1.8 million QALYs, approximately 0.17 QALYs per affected Medicare beneficiary. Compared with the distribution of resources prior to reallocation, following reallocation a greater proportion was directed to oncology, diagnostic imaging/tests, and the most prevalent diseases. A smaller proportion of resources went to cardiology, treatments (including drugs, surgeries, and medical devices, as opposed to nontreatments such as preventive services), and the least prevalent diseases. Conclusions Using cost-effectiveness information has the potential to increase the aggregate health of Medicare beneficiaries while maintaining existing spending levels.</abstract><cop>New York, NY</cop><pub>Elsevier Inc</pub><pmid>23796298</pmid><doi>10.1016/j.jval.2013.02.011</doi><tpages>10</tpages><oa>free_for_read</oa></addata></record> |
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subjects | Beneficiaries Biological and medical sciences Cost effectiveness Cost-Benefit Analysis Coverage disinvestment Efficiency General aspects Health Care Rationing - economics Health costs Health Policy Humans Insurance Coverage Internal Medicine Interventions Medical sciences Medicare Miscellaneous Planification. Prevention (methods). Intervention. Evaluation Public health. Hygiene Public health. Hygiene-occupational medicine Quality-Adjusted Life Years resource allocation United States |
title | Illustrating Potential Efficiency Gains from Using Cost-Effectiveness Evidence to Reallocate Medicare Expenditures |
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