Brush up on economic evaluation skills

By Patrice Spath, RHIT
Brown-Spath & Associates
Forest Grove, OR

Case managers frequently are involved in projects intended to identify optimal uses for health care resources. There are clear limits to what types of health care services can be provided, and this means that clinicians have to make choices about diagnostic tests and treatments. Economic evaluations may be a component of a clinical path or guideline implementation project. Often, outcomes management initiatives involve an evaluation of the costs and outcomes (benefits) of the status quo. For this reason, case managers should have a good understanding of how to complete an economic evaluation.

Economic evaluations can take many forms, depending on the perspective of the project and the outcomes under consideration. The most simplistic economic evaluation is one that seeks to determine which treatment is least expensive when two or more treatments are known to produce the same outcomes. The goal of such a project is to minimize costs without affecting patient outcomes.

This type of project should be undertaken only when there is reason to believe that the outcomes of each intervention are the same. For instance, if in comparing two forms of asthma treatment there are no differences in clinical outcomes for the defined groups of patients, then it’s fine to concentrate on identifying the least costly option. However, if there is no clear indication that the outcomes are the same or similar, by simply concentrating on costs, you could report misleading (and potentially harmful) results.

When a project is undertaken to determine which intervention produces the best outcome for the least cost, it is considered to be a cost-effectiveness study. This type of analysis is an appropriate technique to use when the outcomes of different interventions are expected to vary, but these outcomes nevertheless can be expressed in the same terms. For example, a range of treatments are available for the control of hypertension. While the treatment activities can vary, the effects are measured in terms of reductions in diastolic blood pressure (mm Hg).

For a hospital that is concentrating on certain treatment options (e.g., pediatric asthma education), different quantities of the same outcome (e.g., reductions in the number of readmissions for acute asthma attacks) may result. When a common outcome measure is used, the effect of different interventions can be measured in terms of cost per unit of outcome.

A study question such as, "Should a clinical pharmacist be involved in educating patients about their medications?" looks at the cost-benefit of a particular intervention. Answering this cost-benefit question requires an understanding of the net benefit of medication education and the costs associated with the educational effort. The steps that should be followed when completing any type of economic evaluation are briefly detailed here.

Posing a well-defined question in an answerable form is the first and most important step in undertaking an economic evaluation. A well-specified question identifies the perspective of the evaluation and the alternatives being compared. These elements have implications for what is to be measured and included in the study. For instance, will the economic evaluation be considered from the patient’s viewpoint or the institution’s? If the viewpoint of the patient is the focus, then the scope of the study may need to be widened to include costs and benefits that are not of primary interest to the institution, e.g., out-of-pocket expenses or quality of life. An example of a question that focuses on the patient’s perspective: "Is a hospital-sponsored self-help support group for the treatment of obesity more cost-effective than the status quo from the patient’s point of view?"

In addition to defining the study perspective, the alternatives to be evaluated must be identified. Economic evaluations involve a comparison with at least one alternative intervention to allow for an understanding of how the alternative might have changed the situation. Wherever possible, interventions should be compared with the next best option or options. For example, clinical pharmacists can compare their medication education practices with similar educational interventions by other professionals. Alternatively, patient care practices may be assessed against other (yet similar) interventions taking place in another department or division in the organization.

After specifying the study question, the next step is to create a clear description of the activities associated with the project and its comparator(s). For instance, in the example of pediatric asthma education, the two activities to be compared might be "active" group education sessions for patients/parents and "passive" interventions involving distribution of asthma information booklets to patients/parents. Next, the direct and indirect costs of each intervention are calculated. Direct costs for each of the interventions fall into four main categories: staffing, consumables, overheads, and capital. Staff costs are the costs for any labor involved in the intervention, e.g., direct salary and benefits. Consumable costs are those associated with the items consumed by the intervention, e.g., drugs, diagnostic items, or educational materials. Consumable costs might include any printing, postage, or telephone calls associated with the intervention in question. Overhead costs sometimes are referred to as indirect costs, e.g., heating, lighting, laundry, security, and cleaning services. Capital costs may include land, buildings, and major items of equipment.

Costs for other related services also should be considered. For instance, if community services (such as meals-on-wheels) are used for home-care, the cost of these services also should be included. If volunteers are being used (e.g., to mail out education booklets), their involvement also may be costed, even if services are provided for free. There also may be direct treatment/ prevention costs for patients and their families. For example, parents may have out-of pocket expenses for attending group education sessions or buying associated products. There may be child day-care costs or costs associated with caring for sick relatives. (For examples of the costs that may be associated with the two different pediatric asthma education interventions, see box below.)

Once all the relevant costs have been identified, it’s time to measure them. This usually involves calculating resource use in terms of physical quantities, such as the amount of time spent by educators in group sessions, the number of education booklets produced, or the amount of postage used. Wherever possible, these quantities should be derived from the actual amounts that are used rather than subjective estimates.

Outcomes in their simplest form can be thought of as the end result of the intervention as represented by changes individuals experience in physical health and social and emotional functioning. However, these outcomes can take different forms. There are outcomes that cause changes in how resources are used in the future. Effective pediatric asthma education can lead to fewer health resources needed for future asthma treatment, potentially a direct benefit of improved education.

Similarly, the therapeutic effects of a health intervention also can affect patients and their families’ use of resources. For instance, parents may take fewer days off work when their child’s asthma is better controlled. The therapeutic effects also can give rise to another outcome — that of changed quality of life for patients and their families. For this hypothetical asthma education project, the relevant outcome is the number of children effectively treated (e.g., the number of acute asthma attacks prevented).

Another factor to be considered is the time frame for the study. The evaluation period should be sufficient to allow the full costs and effects to be accounted for. However, it may be difficult to determine at the onset of the project how far into the future the analysis will continue. This is particularly problematic for preventive projects, such asthma education. In this case, group education may have a short-term impact on a child’s asthma treatment, but future conditions may arise that negate the education’s effect.

Evaluating various treatment options using an economic framework requires a thorough understanding of what costs and outcomes will be considered. By systematically applying some basic principles, the study can provide useful information about how to maximize the use of available resources. This information provides a basis from which more informed decisions can be made about the treatment of future patients. However, successful evaluations take time. Careful planning from the outset will help to ensure that all relevant data are collected accurately to allow meaningful analysis.