Research Supports Improving 'Scoring' of Costs and Benefits of Preventive Health Care to Better Inform Federal Budgetary Decisio
September 01 2009 - 9:58AM
PR Newswire (US)
Current federal models estimating the cost of preventive care may
underestimate true benefit of upfront investment in chronic
illnesses PRINCETON, N.J., Sept. 1 /PRNewswire/ -- For economists
and policy-makers to understand the true value of the costs and
savings of preventive health programs for chronic disease, the
Congressional Budget Office (CBO) should incorporate long-term
clinical outcomes data and look beyond the 10-year window when
making cost estimates, says a team of University of Chicago
researchers in today's issue of Health Affairs. The team developed
a simulation model that incorporates critical findings from
landmark clinical trials, illustrating that an investment in early,
aggressive prevention and treatment of diabetes yields payoffs that
increase over time, with a significant amount of the benefits
accruing after the current 10-year CBO window. "Diabetes is a prime
example of a chronic illness with long-term health and cost
consequences,' writes health policy economist Michael O'Grady,
Senior Fellow at the National Opinion Research Center at the
University of Chicago. He and co-authors Elbert Huang, Anirban
Basu, and James Capretta conducted their work with a grant from the
National Changing Diabetes Program (NCDP), a diabetes leadership
initiative established by Novo Nordisk to drive health systems
change at the national and local levels. The CBO provides Congress
with economic forecasts based on impartial analyses of the costs of
federal programs, such as Medicare or Medicaid. These forecasts
traditionally cover a 10-year period, as required by current rules,
which remain appropriate in certain cases. But for health policy
directed at chronic illnesses such as diabetes, the authors write,
"a near-term focus is problematic, as the natural history of
disease progression often goes well beyond ten years.' "We
commissioned this research following a review of long-term outcomes
studies that indeed demonstrate preventive health care for people
at high risk of developing diabetes and complications is effective.
Other key studies indicate good diabetes care can have decade-long
benefits," said Dana Haza, senior director, NCDP. "It is our hope
CBO and lawmakers will strongly consider these data as they debate
the value of investments in prevention of diabetes and other
chronic disease." To demonstrate this, the authors created the
"Diabetes Population Cost Model,' a computer simulation that
integrates a diabetes progression model with publicly available
data from a number of sources, including the National Health and
Nutrition Surveys and the United Kingdom Prospective Diabetes
Study. The model shows annual expenses of a diabetes program at a
cost of $1,024 per patient are offset by 58% over 10 years, and
when carried out to 25 years, are offset by 89%. Science as a
driver of policy If such data from clinical medicine are to be
used, it is important to recognize that, in some circumstances,
using a 10-year cost projection is not long enough to fully capture
the effects of many medical interventions. "This is particularly
true for diabetes,' the authors write. By limiting estimates to a
10-year window, "the full impact of policies intended to head off
unnecessary expenses will not be in full view,' they note. It's
time to update the CBO system of "scoring' costs for health
interventions, devised in the mid-1970s, to capture the impact of
prevention, says James S. Marks, M.D., M.P.H., senior vice
president of the Robert Wood Johnson Foundation Health Group.
"Research has shown that programs aimed at prenatal care, childhood
vaccines, smoking cessation and diabetes prevention and treatment
have a tremendous return on investment,' he says. "As a medical
doctor, I've never seen a patient who would choose treatment over
not getting sick in the first place,' says Marks. "Yet the CBO
scoring system is skewed away from preventative health.' Science in
the last decade has pointed toward new approaches and treatments
that can improve the lives of people with diabetes. Large clinical
trials have shown that early, intensive treatment to reduce blood
glucose levels, control blood lipids such as cholesterol and lower
blood pressure can delay or prevent debilitating and costly
complications of diabetes, such as heart disease, stroke,
blindness, kidney disease and amputation. As medical breakthroughs
are published, the findings can be tracked by federal budgetary
forecasters -- the Office of the Actuary at the Centers for
Medicare and Medicaid Services, which provides estimates of
proposed policy costs for the Administration, and the CBO, which
does that for Congress -- but currently neither agency uses
epidemiological modeling to forecast costs and benefits of
alternative health policies. "In the current approach, budget
forecasters consider how many people will be affected by
legislation, how much it will cost to enroll them, and what tax
revenue will be used to cover additional costs," says Dr. Huang,
Assistant Professor of Medicine and a Research Associate of the
Center on Demography and Economics of Aging at the University of
Chicago. They do not account for the natural history of a chronic
disease or the impact of treatment, "so under the current budget
scoring process, the baseline estimate of health care costs may be
inaccurate and the potential cost offsets of improved health care
delivery are not counted,' he says. By understanding how a disease
progresses and the effect of treatment, forecasters can get a more
accurate estimate of the budgetary impact of new legislation, he
says. "Having these new chronic disease models allows you to do
this.' Skyrocketing costs The escalating cost of caring for people
with chronic diseases today and in the future is of national
concern. The Baby Boom generation is entering the years when costly
chronic illnesses become more common; at the same time, the rate of
obesity, which is associated with type 2 diabetes and other
illnesses, has increased dramatically in the last 20 years. Type 2
diabetes is "the prototypical example of a chronic condition with
long-term health implications,' the authors write. Though usually
diagnosed in mid-life, it is being found more often in young
people. Symptoms develop slowly, and many people go undiagnosed for
years, even as the damage to their bodies has accumulated silently.
Debilitating and costly complications of diabetes, such as kidney
failure, vision loss or nerve damage that leads to amputation
develop over many years, so the positive effects of better
treatments that begin at the time of diagnosis may not be apparent
for decades. Over the next 25 years, the authors project that
annual total spending on diabetes and its complications for people
over age 24 will increase to about $336 billion -- growing at an
annual percentage rate faster than both gross domestic product and
Medicare spending. Conclusions -- This new simulation model
provides a clear, population-wide perspective on the natural
progression of type 2 diabetes over time and associated cost
consequences for Medicare and other payers. Using well-established,
epidemiological data, the model connects indicators of health
status of people with diabetes, and probable health-care service
use, to quantifiable measures of disease control over time. -- In
certain instances, the primary cost-estimating agencies, CBO and
CMS, should consider incorporating clinical data in modeling
efforts and thus improve the rigor of certain cost projections. --
Because certain chronic illnesses progress slowly over many years,
sometimes even decades, a 10-year cost projection window can be
insufficient for capturing the full cost consequences of
alternative policy scenarios. For instance, an upfront investment
in an intervention designed to improve diabetes control and avoid
costly complications would yield cost savings benefits beyond 10
years. For policymakers to develop strategies to rein in the costs
of federal health-care programs they need the most reliable and
relevant information available, the authors argue. While
epidemiological modeling of federal health costs is new, needs more
testing and does not answer all questions, it does present a
realistic and rational way for policymakers to understand the
complex interactions of disease progression and the health and cost
benefits of alternative medical interventions. About chronic
diseases Chronic diseases are the leading cause of death and
disability in the United States, and treatment of these diseases
accounts for 75% of national health care spending. Diabetes alone
already affects nearly 24 million Americans, and is expected to
rise to 50 million by 2025. The Lewin Group estimated diabetes cost
$218 billion in 2007, in medical care and lost productivity. A
Mathematica report, also commissioned by NCDP, found the federal
government spends nearly $80 billion annually to treat people with
diabetes and its complications, while only about $4 billion is
spent on disease prevention and health promotion activities that
could affect diabetes. About the National Changing Diabetes Program
The National Changing Diabetes Program (NCDP) is a multi-faceted
initiative that brings together leaders in diabetes and policy to
improve the lives of people with diabetes. NCDP strives to create
change in the U.S. health care system to provide dramatic
improvement in the prevention and care of diabetes. Launched in
2005, NCDP is a program of Novo Nordisk. For more information,
please visit http://www.ncdp.com/ or http://twitter.com/ncdpnews.
About Novo Nordisk Novo Nordisk is a healthcare company with an
86-year history of innovation and achievement in diabetes care. The
company has the broadest diabetes product portfolio in the
industry, including the most advanced products within the area of
insulin delivery systems. In addition to diabetes care, Novo
Nordisk has a leading position within areas such as hemostasis
management, growth hormone therapy, and hormone therapy for women.
Novo Nordisk's business is driven by the Triple Bottom Line: a
commitment to social responsibility to employees and customers,
environmental soundness and economic success. With headquarters in
Denmark, Novo Nordisk employs more than 27,550 employees in 81
countries, and markets its products in 179 countries. Novo
Nordisk's B shares are listed on the stock exchanges in Copenhagen
and London. Its ADRs are listed on the New York Stock Exchange
under the symbol 'NVO'. For global information, visit
novonordisk.com; for United States information, visit
novonordisk-us.com. DATASOURCE: The National Changing Diabetes
Program CONTACT: Sean Clements of Novo Nordisk, +1-609-514-8400, ;
or Susan Bro, +1-615-440-2799, , or Tony Plohoros, +1-908-940-0135,
, both of Media Mind for Novo Nordisk Web Site:
http://www.ncdp.com/
Copyright