#100wordreview – The Cost Disease (William J Baumol) [Book]

The rising cost of healthcare is a global phenomenon. Why? Because the relative productivity of labour intensive industries inevitably – and inexorably – declines. Computers get cheaper; healthcare doesn’t. It’s a simple idea, now proven by historic data and in need of appreciation. The cost disease allows – encourages, even – affordable increases in spending on health. Though incisive, Baumol’s book inevitably labours this central argument. But to understand trade-offs in public spending you need a firm grasp of the cost disease. This book provides a means to that end, and delivers important context for any discussion about healthcare, education, economics and politics.

Amazon / Wikipedia / Yale University Press

The Cost Disease: Why Computers Get Cheaper and Health Care Doesn’t

Paperback, 288 pages, ISBN 9780300198157, published 18 October 2013

New working paper – ‘The relationship between individual risk and cost-effectiveness in screening interventions’

I’ve just released a new working paper, along with my co-authors Profs Marilyn James and David Whynes. You can access it through RePEc here. The paper discusses the (somewhat obvious) relationship between a person’s risk of developing a disease and the cost-effectiveness of screening them. This is important because publicly-funded screening interventions will, in the future, I suspect, have to discriminate based on risk.

Here’s the abstract:

Advancements in our understanding of the causes and correlates of disease mean that we are now able to estimate an individual’s level of risk. This, and the ever-increasing need for healthcare interventions to be cost-effective, has led to calls for the introduction of risk-based screening. Risk-based screening would involve the use of information about an individual’s risk factors to decide whether or not they should be eligible for screening, or the frequency with which they should be invited to attend screening. Evidence is emerging that targeted screening, towards those at higher risk, can increase the cost-effectiveness of a screening programme. The relationship between individual risk and the cost-effectiveness of screening an individual is implicitly recognised in current population screening programmes in the UK. However, the nature of this relationship, and its implications for cost-effectiveness analysis, has not been presented in the academic literature. In this study we propose that an individual’s risk of developing a disease has a consistent and quantifiable relationship with the cost-effectiveness of screening them. We suggest a simple modification to standard methods of cost-effectiveness analysis that enables the incorporation of individual risk. Using numerical examples we demonstrate the nature of the relationship between risk and cost-effectiveness and suggest means of optimising a screening intervention. This can be done either by defining a minimum level of risk for eligibility or by defining the optimal recall period for screening. We suggest that methods of decision modelling could enable such an analysis to be carried out, and that information on individual risk could be used to optimise the cost-effectiveness of population screening programmes.

I’d really appreciate any comments you might have on this paper. Feel free to post below or alternatively please send me an email.

#100wordreview – The Humble Economist (Tony Culyer) [Book]

A collection of 21 abridged essays summarising Tony Culyer’s most important contributions. Fellow health economists may have already read the book’s constituent parts, but much can be gained from digesting them in this form. The book presents Culyer’s work as a cohesive set of ideas, woven together in his unmistakable style and approach; best characterised by the book’s title. For non-economists interested in health research, the book disarms economics of its alienating features that lead to confusion and misunderstanding about what economists actually do and why they do it. For economists, herein lies an exemplar approach to your discipline.

New article – Generic Preference Based Measures: how economists measure health benefit

I was invited to write a short review article for Advances in Clinical Neuroscience and Rehabilitation, and it’s just been published in their latest issue. You can view the article online here.

The article gives a very brief introduction to the use of generic preference-based measures and highlights their use in relevant clinical fields such as stroke, multiple sclerosis and Parkinson’s disease.

ACNR is a professional journal distributed free to neurologists, rehabilitation specialists and allied professionals in the UK.

New working paper – ‘Happy and healthy: a joint model of health and life satisfaction’

Mónica Hernández-Alava, Allan Wailoo and I have just released a new working paper. You can access it through RePEc here. The paper builds on previous work (mainly by Paul Dolan) looking at subjective well-being as a potential means of valuing health benefits. Our study, however, identifies a number of limitations of these existing studies and offers a solution to some of their problems. Furthermore, our findings contradict some of those reported in previous studies.

Here’s the abstract:

Subjective well-being has been proposed as an alternative to preference based values of health benefit for use in economic evaluation. We develop a latent factor model of health and well-being in order to compare reported satisfaction with life, satisfaction with health and SF-6D responses. This approach provides a coherent, integrated statistical framework for assessing differences between these outcomes on the same scale. Using panel data from the British Household Panel Survey we find that SF-6D and satisfaction with health are influenced to a similar degree by changes in latent health and satisfaction with life is less responsive. For the average individual, there are no substantial differences in the relative impacts of physical versus mental health conditions between the three measures. These findings suggest that the differences between experienced and hypothetical values of health and life satisfaction may not lead to substantial differences in the assessment of value from health technologies.

This paper has been a long-time coming, and is barely recognisable from its earlier incarnations. It started out as my MSc dissertation, which was completed in 2010. Since then a slightly improved version appeared at HESG in Exeter earlier this year, after which the study got something of an econometric makeover. Please do have a read of the paper if you’re interested in this area of research and we’d welcome any comments you might have.

Comment on: ‘A framework for understanding quality of life in individuals without capacity’

I’ve just read a new paper in Quality of Life Research by Round, Sampson (not me) and Jones. You can access the paper here, if you have a subscription.

The paper discusses the problems associated with current methods of quality of life measurement when applied to individuals without capacity, such as those with severe dementia. The purpose of the paper is to justify the need for a new (QALY-compatible) measure for use in dementia, and to offer a framework for its development.

Here are my thoughts on the article.

I agree with the authors’ proposals, but I am not convinced by their arguments. The paper argues that current measures – those based on functioning, capabilities or subjective well-being – lack content, face and construct validity. This may be true, but I don’t think it’s quite that simple. The authors argue that because functioning and capabilities measures might invariably be at the lower bound for individuals with severe dementia, and because there may be no possibility of improvement, the measures are not valid. This is not the case; such people may be in the worst possible state of functioning and capability and the measures may be capturing this perfectly well. Furthermore, the authors argue that capabilities are not relevant to such a population because it is necessary that they receive almost constant care and assistance. On the contrary, the loss of capabilities is surely a key factor in the undesirability of dementia.

The paper drops in words like ‘unethical’, ‘immoral’ and ‘need’ without much justification. Given the purpose of the paper, justification is necessary. For example, if ‘need’ were dependent on capacity to benefit, and an improvement in a patient’s health is impossible, how can we say they are in need? Furthermore, if they cannot benefit, why is it immoral to withhold care? These issues need addressing. Of course, it may be that they have been addressed elsewhere and I just don’t know about it…

For me, the authors are more on the money when they consider subjective well-being. They state that:

SWB has at its core the notion that the individual is the best judge of their wellbeing, yet it is clear that the method is inappropriate for people without the cognitive capacity to evaluate their life.

I agree. But the same surely applies to utility measures. Of any sort. Preference-based measures require, to be valid, that patients can actually have preferences. Yet the authors still argue that a preference-based utility measure is the way forward. An apparent contradiction. I agree with the authors that processes become more important than outcomes, but whether this is process ‘utility’ I’m not so sure.

I would be comfortable with the care of individuals with severe dementia being valued based on people’s expected preferences (largely related to processes) regarding a possible future with dementia. The preferences of the individual with dementia need not be considered as they do not have preferences. In practice this is actually similar to the way we currently use QALYs anyway, but the dismissal of experienced utility is only implicit. It isn’t that we use preferences because we don’t care what people experience in a given health state, it’s that preferences are a useful (and practical) way of estimating the value that people attach to this experience. In the case of severe dementia, I’m not sure it’s possible (logically) for preferences to be indicative of experiences. Therefore, I think there is a subtle (but important) difference; between the process of eliciting people’s preferences for a hypothetical health state (defined by generic functioning or capabilities measures) and the process of eliciting people’s preferences for a possible future health state (defined by a ‘capacity-adapted’ measure) in which they would not be capable of valuing their own experiences. This distinction needs more investigation.

Despite my reservations, I would still conclude that there is a need for a new measure, which would be valued by the public; the same conclusion as the authors! The authors’ proposed framework could be extremely valuable in developing better measures. In terms of the implementation of such a measure, should the authors get around to creating it, there will be a few difficulties. It will be necessary to identify which individuals ‘lack capacity’ because of their disease. This would require a ‘cut-off’ point in some cases. This cut-off would presumably be defined by some existing measure, which raises obvious challenges to the validity of the approach. Given the necessity of proxy questionnaires, the valuation process could be set-up to account for this (e.g. “your carer judges you to be…”).

So, I agree with the need for a new measure, and that it should probably look something like that proposed by the authors, but others may disagree. A better justification for the approach will be necessary for it to be seen as credible.

doi: 10.6084/m9.figshare.1145926