You are to write a 2-3 page paper, in APA formatting, which addresses the case questions. Your answer must be supplemented with research from your book, CDC, NIH, and other quality sources to determine answers and solutions. Note: A minimum of three references should be used that support your responses in your paper. This is a paper, so your answer should not be numbered, but rather you should use titles and subtitles.
Access the case study in your textbook on page 609 “Capstone Case H: Cost-Effectiveness Analyses of Type II Diabetes”. Answer questions 1-48 only.
CASE STUDY:
Capstone Case H: Cost-Effectiveness Analysis of Type II Diabetes
Diabetes is a major health problem, particularly for the millions of Americans with undiagnosed diabetes, for whom treatment and glycemic control could substantially reduce the onset of complications of this disease. The CDC Diabetes Cost-Effectiveness Group has published a number of articles based on cost-effectiveness analyses (CEA) using a sophisticated Markov simulation model. This probability- based model predicts the onset of diabetes in a hypothetical cohort of patients and follows them as they transition into the various disease states associated with complications and ultimately death. The first analysis (1998) estimates the cost-effectiveness of one-time opportunistic screening (i.e., done during routine contact with a health system). Two cohorts were used in this study, (1) a hypothetical population without diabetes assigned to either opportunistic screening or current clinical practice, and (2) a hypothetical cohort of 10,000 newly diagnosed diabetics who are followed for the development of major complications under the two screening alternatives. The second analysis (2002) estimates the cost-effectiveness of three interventions for the hypothetical cohort of 10,000 newly diagnosed diabetics: (1) intensive glycemic control; (2) intensive hypertension control; and (3) reduction in serum cholesterol. Hoerger and colleagues (2004) use the CDC Markov model to estimate the cost-effectiveness of two screening strategies: (1) diabetes screening targeted at those individuals with hypertension and (2) universal diabetes screening.
Questions
1. What is the difference between cost–benefit, cost-effectiveness, and cost–utility analysis?
2. What is the relationship between cost and effectiveness? Does more effectiveness always cost more money?
3. When doing CEA it is important to identify the perspective from which the analysis is conducted. In other words, from whose perspective are the costs and benefits recognized? What are the different perspectives? With the diabetes CEA, a single-payer perspective is assumed. What does this mean, and what kinds of costs are ignored?
4. What kinds of costs are usually included in a CEA? The diabetes CEA included screening costs, treatment costs, diabetes intervention costs, and diabetes complication costs. Under what category of costs would screening and treatments fall?
Expert Solution Preview
Introduction:
Cost-effectiveness analysis (CEA) is a tool used in healthcare to evaluate the cost of interventions versus the benefits they provide. It helps decision-makers identify the most effective interventions at the lowest cost. In this paper, we will answer the questions related to the case study on cost-effectiveness analysis of Type II Diabetes.
1. What is the difference between cost–benefit, cost-effectiveness, and cost–utility analysis?
Cost-benefit analysis (CBA) evaluates the benefits of an intervention against its cost in monetary terms. Cost-effectiveness analysis (CEA) evaluates the benefits of an intervention against its cost in natural units such as life-years saved, cases cured, etc. Cost-utility analysis (CUA) evaluates the benefits of an intervention in terms of quality-adjusted life years (QALY). In simple words, CBA measures the economic benefit of an intervention, CEA measures the effectiveness of an intervention, and CUA measures the quality of life an intervention provides.
2. What is the relationship between cost and effectiveness? Does more effectiveness always cost more money?
The relationship between cost and effectiveness is complex. Sometimes, an intervention with a higher cost is more effective, while sometimes, an intervention with a lower cost is more effective. For instance, a new drug for diabetes that costs $100 but can save the life of a patient has a higher cost-effectiveness ratio than a cheaper drug that is only half as effective. However, it is not always the case that more effectiveness costs more money, as sometimes, a small change in an intervention can greatly improve its effectiveness, such as a lifestyle change.
3. When doing CEA it is important to identify the perspective from which the analysis is conducted. In other words, from whose perspective are the costs and benefits recognized? What are the different perspectives? With the diabetes CEA, a single-payer perspective is assumed. What does this mean, and what kinds of costs are ignored?
CEA should be conducted from the perspective of the decision-maker who pays for the intervention. Different perspectives include the patient, healthcare provider, insurer, and society. In a single-payer perspective, the payer bears all the costs, and no other costs or benefits are considered. With diabetes CEA, a single-payer perspective means that the government is the only payer, and it does not consider other costs such as those to the patient or society, such as lost productivity.
4. What kinds of costs are usually included in a CEA? The diabetes CEA included screening costs, treatment costs, diabetes intervention costs, and diabetes complication costs. Under what category of costs would screening and treatments fall?
Screening costs and treatment costs would fall under the category of direct medical costs in CEA, which includes all the costs related to the intervention, such as drugs, laboratory tests, and physician fees. These costs are usually measured in monetary terms.
