 |
| Dr. William Matzner, Simi Valley, California |
Cost Effectiveness
Analysis allows us to present highly credible (that’s credible to the actual
financial leaders in organizations) economic evaluation that does, as a number
of you have asked, take into account actual clinical costs along with more
qualitative factors as well. That’s what separates CEA from ROI, the ability
for a group of critical evaluators to agree on a range of measures, apply both
real and assumed “value” to those measures and then calculate the Cost
Effectiveness of programming.
My between the lines
read of may articles addressing ROI in wellness is that a fear exists among
practitioners that when measured critically, wellness programming will come up
short on a purely economic scale. I believe otherwise, that when measured
critically, those holding the corporate purse strings will see greater value in
wellness spending than they currently, and often grudgingly, allow. Further,
well developed Cost Effectiveness Analysis will allow wellness professionals to
better allocate spending among more qualitatively valuable and more
quantitatively valuable programming.
Cost
Effectiveness Analysis (CE Analysis) has been shown to be a useful tool in
medicine to look at the true effectiveness of certain new (or even older)
treatments. More recently I have written that it can prove to be a useful and
flexible tool for looking at the effectiveness of various programs used in
Corporate Health and Wellness programs. And as these corporate Health and Wellness
programs become more common, CFOs want data to justify corporate spending for
these programs.
At
first glance, it appears that CE models developed for these programs involved
simply looking at costs and decision tree analysis. However, the denominator of the CE analysis
takes into account the QUALITY of life, not just the prolongation of life
delivered by the treatment.
The
Quality Adjusted Life Year (QALY) is a
year of life that is lived in perfect health. It takes into account the length
of time and the health related quality of life (HRQL). The latter is given a
numeric value between 0 and 1. This HRQL can be estimated by a survey or can be
calculated from life tables and other published studies. The value of HRQL has its roots in expected
utility theory, a well developed economic theory.
A
specific example may help. Let us say that we are measuring a wellness program
that reduces stress. At first, someone could say that the cost difference in
such a program is small with respect to productivity, days lost etc. and that a
decision tree will not point you towards implementing such a program. BUT, this
doesn’t take into account the difference in effectiveness. Let us say that a stress free life has a QALY
of 1.0. However all the stress that one has at work may be severe enough to cause
high blood pressure and release of adrenaline such that life would be less
pleasurable and the QALY is reduced to 0.8. This would INCREASE the CE ratio by
20% (1/0.8). This leaves the non treatment side essentially costing 20% MORE,
just because the quality is of life during stress is that much less.
The
beauty and the flexibility of this approach is that we can turn subjective
feelings and data about health and life into a NUMERIC value, and then use this
to place in the denominator.
For
example, there has been much recent discussion about stress in the workplace
and how reducing stress may be an important mission for corporate health and
wellness programs. A stress value or measure can easily be built into the model
so that a stressful life has less QALY.
In this way the denominator becomes smaller and the CE ratio becomes
larger (like adding a cost because the quality of life as a result is less).
The
denominator in CE analysis, the QALY, can reflect pain and suffering as a
result of problems like COPD or heart disease, the pain and debility of having
surgery, or as we have alluded to, the mental and physical stress involved in a
job. All these factors lead to a QALY less than one, making any treatment less
effective once these subjective measures are taken into account.
There seem to be two camps
of those interested in corporate health and wellness—one that wishes to look at
the objective benefits of programs, and another that wishes to emphasis overall
well being and less stress. Using the CE approach, we can quantify the
subjective benefits and then produce a calculation to show (via the numbers)
real measurable benefits to making such programs better. This will give even
more validity to the usefulness of Corporate Health and Wellness programs and
hopefully to their acceptance by CFOs and their counterparts.
About William L.
Matzner, M.D., PhD, FACP
Dr.
William Matzner works in the area of healthcare economics consulting at
Healthcare Analytics, LLC, in California. He graduated Phi Beta Kappa from
Stanford University. He received his M.D. with Honors from Baylor College of
Medicine. In 1988, he was the Solomon Scholar for Resident Research at Cedar
Sinai Medical Center. Dr. Matzner subsequently was awarded a PhD in Neuro
Economics from Claremont Graduate University. He is board certified in Internal
Medicine and Palliative Medicine. He has researched and published extensively
on the issue of reproduction and immunology in medical literature. He has been
in private practice since 1989, specializing in Reproductive Immunology and
Internal medicine.
Website: https://drwilliammatzner.com
Consulting Website: https://healthcareanalytics.biz
News: https://hippocratesguild.com/dr-william-matzner News: https://medicogazette.com/dr-william-matzner
William Matzner, MD (Simi Valley, California), has been practicing medicine since 1989, Internal Medicine and Reproductive Immunology. M.D. with Honors from Baylor College of Medicine.
