Cost Effectiveness and Resource Allocation

Little is known about cost implications of anemia and its association with mortality in chronic obstructive pulmonary disease (COPD). This claims analysis addresses these questions.

Using the the US Medicare claims database (1997–2001), this study identified Medicare enrollees with an ICD-9 diagnosis of COPD. Concomitant anemia was identified based on ICD-9 codes or receipt of transfusions. Persons with anemia secondary to another disease state, a nutritional deficiency or a hereditary disease were excluded. Medicare claims and payments, resource utilization and mortality were compared between COPD patients with and without anemia.

Of the 132,424 enrollees with a COPD diagnosis, 21% (n = 27,932) had concomitant anemia. At baseline, anemic patients were older, had more co-morbidities and higher rates of health care resource use than non-anemic individuals with COPD. In a univariate analysis annual Medicare payments for persons with anemia were more than double for those without anemia ($1,466 vs. $649, p < 0.001), the direction maintained in all categories of payments. Adjusting for demographics, co-morbidities, and other markers of disease severity revealed that anemia was independently associated with $3,582 incremental increase per patient (95% CI: $3,299 to $3,865) in Medicare annual reimbursements. The mortality rate among COPD patients with anemia was 262 vs. 133 deaths per 1,000 person-years among those without anemia (p < 0.001).

Anemia was present in 21% of COPD patients. Although more prevalent in more severely ill COPD patients, anemia significantly and independently contributes to the costs of care for COPD and is associated with increased mortality.

This paper estimates the cost-effectiveness of five interventions that could counter injuries in lower and middle income countries(LMICs): better traffic enforcement, erecting speed bumps, promoting helmets for bicycles, promoting helmets for motorcycles, and storing kerosene in child proof containers.

We adopt an ingredients based approach to form models of what each intervention would cost in 6 world regions over a 10 year period discounted at both 3% and 6% from both the governmental and societal perspectives. Costs are expressed in local currency converted into US $2001. Each of these interventions has been assessed for effectiveness in a LMIC in limited region, these effectiveness estimates have been used to form models of disability adjusted life years (DALYs) averted for various regions, taking account of regional differences in the baseline burden of injury.

The interventions modeled in this paper have cost effectiveness ratios ranging from US $5 to $ 556 per DALY averted depending on region. Depending on local acceptability thresholds many of them could be judged cost-effective relative to interventions that are already adopted. Enhanced enforcement of traffic regulations is the most cost-effective interventions with an average cost per DALY of $64

Injury counter measures appear to be cost-effective based on models. More evaluations of real interventions will help to strengthen the evidence basis.

Forty-nine million people or 83 per cent of the entire population of 59 million rely on the public healthcare system in South Africa. Coupled with a shortage of medical professionals, high migration, inequality and unemployment; healthcare provision is under extreme pressure. Due to negligence by the health professionals, provincial health departments had medical-legal claims estimated at R80 billion in 2017/18. In the same period, provincial health spending accounted for 33 per cent of total provincial expenditure of R570.3 billion or 6 per cent of South Africa’s Gross Domestic Product. Despite this, healthcare outcomes are poor and provinces are inefficient in the use of the allocated funds. This warrants a scientific investigation into the technical efficiency of the public health system.

The study uses data envelopment analysis (DEA) to assess the technical efficiency of the nine South African provinces in the provision of healthcare. This is achieved by determining, assessing and comparing ways that individual provinces can benchmark their performance against peers to improve efficiency scores. DEA compares firms operating in homogenous conditions in the usage of multiple inputs to produce multiple outputs. Therefore, DEA is ideal for measuring the technical efficiency of provinces in the provision of public healthcare. In DEA methodology, the firms with scores of 100 per cent are technically efficient and those with scores lower than 100 per cent are technically inefficient. This study considers six DEA models using the 2017/18 total health spending and health staff as inputs and the infant mortality rate as an output. The first three models assume the constant returns to scale (CRS) while the last three use the variable return to scale (VRS) both with an input-minimisation objective.

The study found the mean technical efficiency scores ranging from 35.7 to 87.2 per cent between the health models 1 and 6. Therefore, inefficient provinces could improve the use of inputs within a range of 64.3 and 20.8 per cent. The Gauteng province defines the technical efficiency frontiers in all the six models. The second-best performing province is the North West province. Other provinces like KwaZulu-Natal, Limpopo and the Eastern Cape only perform well under the VRS. The other three provinces are inefficient.

Based on the VRS models 4 to 6, the study presents three policy options. Policy option 1 (model 4): the efficiency gains from addressing health expenditure wastage in four inefficient provinces amounts to R17 billion. Policy option 2 (model 5): the potential savings from the same provinces could be obtained from reducing 17,000 health personnel, advisably, in non-core areas. In terms of Policy option 3 (model 6), three inefficient provinces should reduce 6940 health workers while the same provinces, inclusive of KwaZulu-Natal could realise health expenditure savings of R61 million. The potential resource savings from improving the efficiency of the inefficient provinces could be used to refurbish and build more hospitals to alleviate pressure on the public health system. This could also reduce the per capita numbers per public hospital and perhaps their performance as overcrowding is reportedly negatively affecting their performance and health outcomes. The potential savings could also be used to appoint and train medical practitioners, specialists and researchers to reduce the alarming numbers of medical legal claims. Given the existing challenges, South Africa is not ready to implement the National Health Insurance (NHI) Scheme, as it requires additional financial and human resources. Instead, huge improvements in public healthcare provision could be achieved by re-allocating the resources ‘saved’ through efficiency measures by increasing the quality of public healthcare and extending healthcare to more recipients.