sarina lacey - centre for international economics
TRANSCRIPT
Achieving better health, and a better use of
health resources: a companion piece to the
Know Pathology Know Healthcare campaign
The economic value of pathology
Presented by Sarina Lacey
National Pathology Forum 2016
www.TheCIE.com.au
December 2016
Understanding the purpose of the report
There is a ‘rule of thumb’ saying that 70 per cent of
clinical decisions are based on pathology and
precious little else on the value of pathology
No doubt true, but even the source is unknown
Pathology is so central that it can’t be ‘taken out’ of
healthcare to see how medical decisions would be
made without it
So how do we know what it’s worth?
This work focused on contribution of pathology --
patient outcomes -- efficient healthcare spending --
where pathology is more clearly identified as the
source of economic valuewww.TheCIE.com.au2
Understanding the purpose of the report
The work does not provide an estimate of bankable
savings from spending on pathology
The evidence base for such calculations does not
exist
It is likely that there is over/under priced tests, and
over/under used tests
Ultimately aims to great a dialogue around value
based pricing for pathology by understanding how it
adds value (rather than just cost)
www.TheCIE.com.au3
High level value drivers
Economic value for individuals:
■ Maintaining good health, more productive, more present,
greater workforce opportunities, higher income
■ Managing poor health, less absent, less avoidance of higher
performing roles
Economic value for the health system
■ Helping to minimise waste (ineffective treatments)
■ Helping to reduce reducing treatment costs (earlier more
targeted intervention)
■ Providing the information/database to see who is doing
what for what — a tool for performance management, best
practice clinical care
www.TheCIE.com.au4
www.TheCIE.com.au5
Impacts
Economic gains
■ Income and employment gains
■ Improvement in productivity
■ Hospital and health system efficiency
Social wellbeing
■ Health benefits and better health status
■ Reduced risk of disengagement
■ Improved social welfare
Pathology outputs
Test
results
Analysis
of results
Advisory networks with
medical specialists
Participation in
medical management
Outcomes
Physical and
mental patient
health
Patient safety Economic gains Social and
community gains Empowerment
■ Wellness and
wellbeing
■ Mortality and
morbidity
■ Pain and suffering
■ Emergency
response
■ ↓ medication errors
■ ↓ exposure to
toxicity
■ Correct diagnosis
■ Correct treatment
■ workforce
participation
■ ↓ absenteeism,
presenteeism
■ Public health
■ Community
engagement
■ Community
participation
■ Social cohesion
■ Independence
■ Choice
■ Lifetime
options
Pathology sector capital and labour inputs
Laboratories Collection
centres
Courier
networks
Pathologists,
scientists, support,
and management
personnel
ICT
systems
Diagnostics
suppliers R&D
Innovation: new/improved
tests and procedures
Inputs only: taxpayer investment is low relative to other health services and demand trends upwards
Testing rates rise as pathology becomes more
necessary with 7 tests per patient in 2014-15 up
from 5.8 10 years ago
Most services are for those aged 75+, which are
mainly the least expensive tests haematology and
chemical tests
The most common tests ordered by GPs relate to
diabetes
www.TheCIE.com.au7
Measuring outcomes: much harder task
Limited literature on the economic value of
pathology
■ cause/effect/ and attribution is fraught
■ how much prevention/better treatment is achieved because of
pathology information?
Pathology informs the doctor, who makes decisions
based on all available evidence
Patients may or may not adhere to doctors advice or
respond to treatment as expected
www.TheCIE.com.au8
A case study approach: a good first start
Pathology helps Australians with diabetes manage
their condition and minimise risks and
complications
www.TheCIE.com.au9
Economic results for diabetes
Reducing complications from diabetes reduces
costs per person by 2-to-3 fold
When prevention is achieved, people get better
quality of life and avoid co-mordities such as kidney
disease, amputation, eye disease, and myocardial
infarction, and all their avoided costs
Diabetes complications = 14% of potentially
preventable hospitalisations for chronic conditions
Diabetes prevention programs are multi-faceted,
but analysis by Department of Health indicates
they more than pay their way www.TheCIE.com.au10
Economic results for heart attack
A pathology test can inform
safe early ED discharge by
separating cases of chest
pain and heart attack
80% of patients with chest
pain in ED are not having a
heart attack. Troponin result
can discharge 40% early
Currently ~$167million is
being spent on those not
being discharged early but
could be. www.TheCIE.com.au11
Economic results for colorectal cancer
Pathology is vital to
tailored cancer
therapies, which are
achieving unprecedented
survival outcomes
5-year survival for CRC is
up from 47% to 67%
High cost cancer drugs
can be only provided
when they will work
www.TheCIE.com.au12
Improved survival for CRC patients
www.TheCIE.com.au13
2 000
2 500
3 000
3 500
4 000
4 500
5 000
10
15
20
25
30
35
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Ra
te p
er
10
0 0
00
pe
rso
ns
Age-standardised mortality rate (LHS)
No. of deaths (RHS)
1998 Introduction of hepatic resection.
2004-2006 Introduction of EGFR inhibitors and chemotherapeutics including oxaliplatin, bevacizumab, and
cetuximab.
2006 National bowel cancer screening program introduced.
2008 Scientific evidence published on the status of the KRAS gene and the efficiency of the EGFR inhibitors
2014 Clinical trials demonstrate better health outcomes if EGFR inhibitors are restricted to patients with RAS wild type genes.
MBS funds RAS testing for Stage IV CRC.
2011-2014 EFGR inhibitors are listed on the PBS.
2012 MBS funds KRAS testing for stage IV CRC.
2014 EFGR inhibitors are listed on the PBS.
Pathology identifies those at risk and detects those with cancer early
Pathologists confirm cancer ‘typing’ to support advances in genetics and
pharmacogenomics
Pathology supports success of colonoscopy in early detection and determination of disease type.
Strengthened pathology standards improve quality of specimen collection and analysis
Pathology proves EGFR inhibitors work
Pathology monitors dose – response success of therapies
Being well is valuable!
www.TheCIE.com.au14
A person’s life not shortened by avoidable death
is worth between $1.26 million and $1.4 million
People with 3+ chronic diseases are half as likely
to be in the paid workforce compared to people
that have no chronic diseases = loss to the labour
force, with productivity losses estimated at 10%,
compared to labour participation not being
reduced by chronic disease
‘Presenteeism’ costs the Australian economy
$34.1 billion p. a. = a productivity loss of 2.6%
and a GDP loss of 2.7%
What does it mean for pathology funding
Doesn’t mean funding for pathology is a panacea
But it does mean funding access to quality
pathology information is essential
Need funding level to be ‘right’ in terms of
funding the right amount and type of testing.
Need incentives to innovate and provide better
more accurate information (currently rewards are
largely derived from scale economies)
www.TheCIE.com.au15
What does it mean for pathology funding
Need a competitive and contestable pathology
market to ensure innovation and the sharing of
efficiency gains (i.e. not overly concentrated)
Focus on how to ensure pathology maximises
value, rather than minimises costs
Increased testing activity should typically be
value creating, providing the evidence for
informed prevention, treatment, and monitoring
plans
www.TheCIE.com.au16
Sarina Lacey
Director, Health Economics and Policy
(02) 9250 0800 or 0418 245 [email protected]
www.TheCIE.com.au