Cost-Effectiveness In Healthcare
The revolution of the healthcare industry in the 21st Century, has improved the healthcare statistics tremendously. However, this progress comes with the rise in associated costs. With the medical advances, it has become easier to control and manage acute conditions and thereby improve quality of life. However, the rapid life-style changes have increased the prevalence of certain chronic conditions. Therefore, in my opinion if the healthcare services are more focused towards prevention of diseases rather than innovating a new cure for it a significant portion of this rising cost can be brought under control. As rightly mentioned “An ounce of prevention is worth a pound of cure”. This paper is an effort to curb the growing healthcare expenditure
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by promoting preventive medicine.
About 40 percent of all deaths in the United States of America are due to behavioral causes as stated in one of the articles by Center for Disease Prevention.1 A tremendous amount of progress related to the overall healthcare has been achieved in these few years in the country. There has been a 30 percent reduction in mortality rates, increase in percentage of children receiving immunizations, and improvement in other health statistics too but there is still a segment of diseases that needs attention in order to sustain this improvement. Preventable diseases like coronary heart disease, stroke, diabetes and other chronic conditions are still posing a greater threat to the overall increase in healthcare expenditures and are the leading cause of deaths in the country. According to a study, there are about 465,000 preventable deaths from smoking, 395,000 from high blood pressure, 216,000 from obesity, 191,000 from inactivity, 190,000 from high blood sugar levels, and 113,000 from high cholesterol. 2 Looking at this picture it is clear that there is some part of the healthcare delivery system that needs to be focused in order to achieve the desired healthcare goals.
When speaking of preventive medicine, it is crucial to understand that while a few initiatives towards prevention could save millions of dollars, a few of them could even end up adding to the already growing healthcare costs.
For example, frequent cancer screenings can be beneficial to only a few who are susceptible to it, while is a lot of investment on those who are not really endangered, similarly not prescribing drugs to patients with high cholesterol might increase their chances of a coronary heart disease leading to a more expensive treatment. There cannot be one perfect fit to everybody and thus weighing the importance of preventive measure specific to a population is very important. The two terms that usually comes to mind when this topic is discussed are “Cost-saving” and “Cost-effectiveness” and are often confused with each other. Any preventive measure that reduces cost is cost saving, for example childhood immunizations. On the other hand, if the benefits of a preventive measure greatly outweigh the costs, then it is cost cost-effective, even if it does not really save dollars in the short term. Cost-effectiveness is expressed as ratio of incremental costs to incremental benefits. A low ratio means the method is cost-effective while a high ratio means the method is expensive with little benefits. These benefits are described in terms of number of quality adjusted life years (QALYs) saved, which considers both the length of life and quality of life. Factors which …show more content…
affect the cost-savings and cost-effectiveness of an intervention are:
1.
Target population - The cost-effectiveness of an intervention increases when preventive services are targeted towards the population at a higher risk. For example, cost-effectiveness ration of screening for diabetes in 35-year-old would be $130,000/QALY while the same ratio in 75-year-old hypertension patients would be $32,000/QALY.3
2. Percentage of population – If a service is able to reach hundreds of people at a low cost and is proven to provide benefits, it can be considered a cost-saving method
3. Technology utilized and frequency – What technology is used as a preventive measure and how often it is used also determines the cost
effectiveness.
4. Type of method – Certain methods like counselling on life-style modifications can be grouped under both cost-saving and cost-effective methods.
by promoting preventive medicine.
About 40 percent of all deaths in the United States of America are due to behavioral causes as stated in one of the articles by Center for Disease Prevention.1 A tremendous amount of progress related to the overall healthcare has been achieved in these few years in the country. There has been a 30 percent reduction in mortality rates, increase in percentage of children receiving immunizations, and improvement in other health statistics too but there is still a segment of diseases that needs attention in order to sustain this improvement. Preventable diseases like coronary heart disease, stroke, diabetes and other chronic conditions are still posing a greater threat to the overall increase in healthcare expenditures and are the leading cause of deaths in the country. According to a study, there are about 465,000 preventable deaths from smoking, 395,000 from high blood pressure, 216,000 from obesity, 191,000 from inactivity, 190,000 from high blood sugar levels, and 113,000 from high cholesterol. 2 Looking at this picture it is clear that there is some part of the healthcare delivery system that needs to be focused in order to achieve the desired healthcare goals.
When speaking of preventive medicine, it is crucial to understand that while a few initiatives towards prevention could save millions of dollars, a few of them could even end up adding to the already growing healthcare costs.
For example, frequent cancer screenings can be beneficial to only a few who are susceptible to it, while is a lot of investment on those who are not really endangered, similarly not prescribing drugs to patients with high cholesterol might increase their chances of a coronary heart disease leading to a more expensive treatment. There cannot be one perfect fit to everybody and thus weighing the importance of preventive measure specific to a population is very important. The two terms that usually comes to mind when this topic is discussed are “Cost-saving” and “Cost-effectiveness” and are often confused with each other. Any preventive measure that reduces cost is cost saving, for example childhood immunizations. On the other hand, if the benefits of a preventive measure greatly outweigh the costs, then it is cost cost-effective, even if it does not really save dollars in the short term. Cost-effectiveness is expressed as ratio of incremental costs to incremental benefits. A low ratio means the method is cost-effective while a high ratio means the method is expensive with little benefits. These benefits are described in terms of number of quality adjusted life years (QALYs) saved, which considers both the length of life and quality of life. Factors which …show more content…
affect the cost-savings and cost-effectiveness of an intervention are:
1.
Target population - The cost-effectiveness of an intervention increases when preventive services are targeted towards the population at a higher risk. For example, cost-effectiveness ration of screening for diabetes in 35-year-old would be $130,000/QALY while the same ratio in 75-year-old hypertension patients would be $32,000/QALY.3
2. Percentage of population – If a service is able to reach hundreds of people at a low cost and is proven to provide benefits, it can be considered a cost-saving method
3. Technology utilized and frequency – What technology is used as a preventive measure and how often it is used also determines the cost
effectiveness.
4. Type of method – Certain methods like counselling on life-style modifications can be grouped under both cost-saving and cost-effective methods.