605: Week 14

Question 1

When to do CEA?

Answer 1

It is not always necessary to do an analysis - sometimes you will have enough info w/o doing a full analysis/comparison (e.g. if you know the new strategy is more effective and costs less)

Question 2

Common problems in Cost-Benefit Analysis (CBA) and Cost-Effectiveness Analysis (CEA)

Answer 2

• Discounting
  
  • Adjusting for values of key variables over time (b/c over time, things take on different values)
    
    • inflation? (e.g. dollar today worth less than dollar will be with in a year); time preference? (e.g. don’t want to wait, might value something that gives us results “right now”; if we want a program that has value in the future, we have to “discount” future benefits to present-day dollar amounts)
• Sensitivity analysis
  
  • Results are sensitive to assumptions about key parameters
    
    • From literature? Guesses? (want to insert most reasonable values in analysis)
  • Perform sensitivity analysis
    
    • Vary values of key parameters; redo analysis; identify whether results vary signfificantly as values change (e.g. change 10% to 5% benefit, or increase cost and see if it is still worth it) - will help you see how sensitive results are to variation in key parameters (since we don’t know for sure what the actual values will be)
• Costs vs. Charges (list prices)
  
  • What data are available? Charges = costs? (There can be a big difference between what is chared vs. actual costs - especially in healthcare)
• Evaluation perspective
  
  • CBA-CEA results and implications may depend on what perspective is taken in the analysis
  • Possible percpectives for evaluation of proposed program to decrease morbidity and mortality?
    
    • policy maker, insurer/health plan, clinician/provider, employer, patient, society
    • societal perspective is best - most inclusive (less narrow view than the others); the societal perspective is usually used in these analyses for these reasons
  • Different perspectives may include or exclude different components of costs and benefits or health outcomes

Question 3

Terminology for CBA vs. CEA

Answer 3

Consider 2 alternative programs: A & B

• A is more cost beneficial than B
  
  • B/C ratio is higher for A than B
    
    • For the same $ cost, A yields more $ benefits
    • For the same $ benefits, A costs less
  • Greater net benefits from A than B
• A is more cost effective than B
  
  • For same cost, A yields more health effects than B
  • A costs less than B to achive same health effect

Question 4

Summary of CBA, CEA, and CUA

Answer 4

Question 5

Budget Terms

Answer 5

Revenues

• Billed or billable (billed, then pt or insurance sometimes pays at least part and/or part or all is due - “accounts receivable”
• Actual (received)
  
  • Patient (out-of-pocket) vs. insurance payments
• Accounts receivable A/R

Costs (or expenses)

• $ related to operation and/or delivering services
  
  • labor (personnel), supplies, equipment, space, etc.
• Fixed vs. variable
  
  • Fixed: constant; doesn’t change with service volume
    
    • e.g. equipment costs, building rent or lease, utilities, etc.
  • Variable: changes with volume of services
    
    • e.g. supplies, labor, etc.
• Direct vs. indirect

Variance

• Difference between $ budgeted and $ actual
  
  • Useful to view interim accuracy of budget prediction (mid-course changes)

Budget period

• Typically 1 year
  
  • Fiscal Year (FY) or Calendar Year (CY)

Question 6

Research Proposal Budget Terms

Answer 6

Direct Costs

• Personnel
  
  • Usually by title & responsibility
    
    • List highest to lowest
  • $ = (% FTE - full-time equivalent) x (# months) x (monthly salary)
    
    • % FTE reflects amount of time spent on project or committed to departmental functions
  • If multi-year, allow for reasonable salary increase
    
    • Merit & Cost of Living Adjustment (COLA)
    • Have to budget for these increases a head of time, because your funding source isn’t going to increase after a year
• Fringe Benefits
  
  • Includes: Social Security, Medicare, Workers’ Compensation, Medical/dental/life insurance, Allowance for vacation/sick leave, Retirement/pension (401k, etc.), Others
  • Expressed as % of salary
    
    • Typically: 20%-50%, depending on what’s included (Also type/cost of insurance selected; pension amount)
    • Different personnel may have different fringe rates
• Travel
  
  • Airfare; mileage allowance; hotel for meetings; per diem during travel
• Supplies
  
  • Consumable office supplies (pens, paper, etc.)
  • Equipment if < $5,000 (for grant proposal budgets)
• Equipment
  
  • > $5,000 (for grant proposal budgets)
  • Any equipment (for department budgets)
• Contracts
  
  • Subcontracts with other organizations
    
    • organizations providing services
• Consultants
  
  • Individuals/organizations hired to provide limited and specific expert advice or services
• Other possible direct costs
  
  • Telephone, Software, Duplicating/Copy/Printing, Rental space, Participant support/incentive costs, Equipment maintenance
  • “Other Operating Expenses”
    
    • Anything else not fitting into standard category
    • Important b/c you can never think of everything beforehand (allows for a little flexibility)

Indirect Costs

• Also called “Facilities and Administration (F&A)” costs (only for grant/research proposals since based under university or foundation that has admin costs)
  
  • Covers administrative “overhead”
    
    • Admin. costs incurred to run project (NOT personnel directly involved with project)
• Usually expressed as % (rate) of direct costs
  
  • Most common: MTDC = Modified Total Direct Costs
    
    • TDC less: equipment (> 5K), patient care costs, tuition/scholarships/stipends; subcontracts > 25K
• Often different F&A rates
  
  • Off campus vs. on campus

Question 7

Definition of Health Disparities

Answer 7

According to the National Institutes of Health:

• Health disparities are differences in the incidence, prevalence, mortality, and burden of diseases and other adverse health conditions that exist among specific population groups in the United States
  
  • examples: race, ethnicity, gender, insurance

May be due to social and political factors. Result:

• Unequal access
• Unequal treatment (procedures; services)
• Unequal health outcomes

Question 8

Health disparities and social determinants of health

• Most important predictor of health
• Factor underlying Health disparities

Answer 8

Most important predictor of health is: socioeconomic status (SES)

• Health gradient holds for all levesl of social scale
  
  • Decrease in SES leads to decrease in health
• Althought SES is most imoprtant, many other factors affect health (e.g. social circumstances, environmental exposures, behavioral patterns, health care, genetic predisposition)

Factors underlying health disparities:

• Social circumstances >>> education, income, housing, employment
• Environmental exposures >>> tobacco smoke, lead exposure, air quality
• Behavioral patterns >>> lifestyle, exercise
• Health care >>> access, insurance, hospitalizations, quality of care
• Genetic predisposition >>> familial diseases

Question 9

Examples of health disparities (San Diego data)

Answer 9

• African-American populations have higher cancer death rates than Whites; Hispanics and Asians have lower cancer death rates than Whites
• African-Americnas have higher rate of heart disease deaths than Whites; Hispanics and Asians have lower heart disease deaths than Whites
• African-Americans have highest diabetes deaths; Hispanics are second; Whites and Asians now similar in rate
• African-Americans have higher asthma deaths; Whites, Asians, and Hispanics now similar
• Infant mortality:
  
  • African American infant mortality is much higher than other races; rate is almost twice as high as next highest (Hipanics)
  • Hispanics have second highest infant mortality rates
  • Whites have third highest infant mortality rates
  • Asians have lowest infant mortality rates

Question 10

Special and vulnerable populations

• Definition/description (how they are often referred to in medical settings)
• Groups that often fall under this definition
• Difficulties
• Federal agency . . .

Answer 10

Some population groups in U.S. face greater challeges in accessing timely and needed health care services.

• At risk for worse health incomes
• Vulnerability depends on predisposing, enabling, need factors
• Often referred to as: [medically] underserved populations

Groups:

• Racial/ethnic minorities
• Women and children
• Rural residents
• Homeless
• Uninsured
• Disabled
• Prison population
• People with certain illnesses: HIV/AIDS, mental illness

Difficulties:

• Many vulnerable populations are difficult to work with and/or provide services
  
  • Social, economic, and health issues
  • Continuity of care may be problematic

Health Resources and Services Administration (HRSA)

• Federal agency focused on improving health of vulnerable populations
  
  • many grant programs to improve access to care

Question 11

Health equity

• Definition
• Pathway

Answer 11

Health equity: commitment to reduce (and ultimately eliminate) health disparities by addressing their determinants.

Pathway:

• Structural drivers >>>
  
  • Unhealthy community conditions
• Exposures and behaviors >>>
• Medical conditions >>>
• Health inequity

*Need to work on improving upstream factors instead of just focusing on disparities once medical issues have already developed.

Add picture!!

Question 12

Possible policies to reduce health disparities

Answer 12

• Improve income and reduce wealth inequalities
  
  • raise minimum wage
  • protect against layoffs
  • training for unemployed
  • social assistance benefits
• Improve social inclusion
  
  • reduce social inequality
  • resist discrimination
  • strengthen participation in community organizations
• Promote racial justice
  
  • Strengthen & enforce anti-discrimination laws
  • Build diverse neighborhoods
• Promote better working conditions
  
  • flexible work hours
  • job security
  • strengthen occupational safety laws
  • reduce job stress
• Improve conditions for children
  
  • Increase social support for families
    
    • child support payment, paid family leave, low-cost daycare
• Improve the physical environment
  
  • More low-cost housing
  • Reduce pollution
  • More parks and green spaces
  • Promote fresh produce in stores
  • Reliable & low-cost public transit
  • More pedestrian-oriented communities
• Improve schools
  
  • Smaller class sizes; increase teacher pay/training