Sunday, March 28, 2010

With The Passage of Health Reform, How Many Dollars Are Being Used To Save A Life?

In the tumult leading up to the passage of health reform, one of the more compelling arguments used by supporters was that the lack of insurance was leading to the death of 'hundreds of thousands' of Americans. In the dust-up followed over just how studies like this, this and this should be interpreted, the rhetoric dipped into research methodology while the Disease Management Care Blog's liberal colleagues scored points with some 'you-have-blood-on-your-hands' political jabs.

After all, it was hard to argue with the research. The studies showed a very strong association between the lack of health insurance and mortality that could not be explained by any other sources of known bias. Proponents of the Democrats' plan correctly argued that prospective clinical trials on health insurance would be unethical and take too long. Instead, anecdotes, experience, common sense and a judgment about the reasonableness of the association was good enough to argue that lives were at stake.

The DMCB supports the use of that type of reasoning. It should be similarly applied to assessing the strong association between population-based disease/care management and insurance cost savings.

But that's not the purpose of this post. Now that health reform is the law of the land and we have a credible cost analysis, your intrepid DMCB is willing to tread where few will go. It asks if the price tag of $940,000,000,000 is worth spending to save 'hundreds of thousands' of persons' lives. A quick calcuation says that's $94 billion a year to save 22,000 persons a year who, but for lack of insurance, die every year. That works out to $4,272,727 per person. If the DMCB highballs the lives saved without including other costs alledgly not included in the health reform bill, it's $2,088,888.

The DMCB will be the first to point out that that figure doesn't tell the whole story. In addition to lives saved per single year, there are the additional years of life expectancy minus the additional cost of caring for survivors plus tax revenues from their gainful employement. There are also many lives improved, including fewer complications from treatable disease and increased quality of life, minus lives lost with better (albeit questionable) access to health care. In addition, expansions in health care seem to lead to additional demand, which indirectly but significantly increases cost. Finally, there is the time value of money. Reconciling all of that would require some high octane health services research using dollars per quality adjusted life year. That's currently out of the DMCB's reach.

But it does raise an important point about health reform. While it has considerable benefit, it also comes at a significant cost. That has little meaning to individuals and their families who are confronting life threatening disease, but Americans and their elected representatives (i.e., the ones who, effective March 23, 2010, are now apparently responsible for running the health care system) will need to continually ask if we are getting our money's worth. Prior to the advent of health reform, $100,000 per year life saved was considered reasonable. The DMCB thinks that with the hundreds of billions of dollars going into health reform, we just decided, as a society, that $100,000 is not enough. We're willing to spend more - a lot more.

Last thought: there is no right or wrong answer to the number of dollars that should be spent to save one year of life, to save failing schools, increase employment, reverse failed nation-states, shore up our financial system, keep the sea lanes open, enable home ownership, preserve our infrastructure and resurrect our manufacturing base. The DMCB has personally presided over the consumption of hundreds of thousands of dollars in the care of its patients. Unfortunately, however, no matter how well intentioned we are about the many needs out there, other considerations that are outside of our direct control are looming.

That may force us to reconsider things in the not too distant future.


Benjamin Littenberg, MD said...

Your points are well taken (and well written, too!), but I do want to quibble with one item. The standard in cost-effectiveness research is $100K per quality-adjusted-life-year. The cost of the new law that you estimated is $4M per life saved. Those are not directly comparable, for the many reasons you listed.

The value of a life saved is generally a lot higher than a QALY. Would it be $4M? I'm not sure, but it very well might be that much or a lot more!

Thanks for your good work.

Jaan Sidorov said...

Thanks Dr. Littenberg -

You're right. In my travels on the topic of $/QALY, there were a host of references that pointed to $100,000.

It'd be interesting to see just how much money is being used in health reform to save how many years/lives. I have no doubt that lives are being saved, but sooner or later we're going to need to assess if the Feds are giving us our money's worth. This would be one way - not the ONLY way - to do it.