Economics of EvidenceBased Treatment for Childrens E

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Economics of Evidence-Based Treatment for
Childrens EB Problems Thinking about Costs
and Quality

• E. Michael Foster
• School of Public Health
• University of North Carolina, Chapel Hill

Apologies in advance I went wild with googling
images. E-mail me for the actual slides(!)
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If you came for a talk on

• estimating the costs of an EB intervention
• gauging the cost-effectiveness of an intervention
• measuring potential cost savings in juvenile
  justice, child welfare and other child-serving
  systems
• That talk is later today!

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Questions

• Why dont markets drive providers to deliver
  high-quality, evidence-based care?
• Why dont consumers demand it?
• Why dont payors, such as the Medicaid program,
  demand it?
• What can we learn from other areas of health
  policy? (work in progress)

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How are mental health services similar to and
different from ..?
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Outline

• Background
• What is quality?
• How do we measure it?
• What do we know about quality in the US?
• What do we know about quality and costs?
• 4. How should the market function?
• What level of quality is best?
• On what does it depend?
• Implications of the economic model
• What do we get?

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Outline (cont)

• Consumers are uniformedso what?
• Is Quality more costly?
• Solutions
• What can researchers contribute?

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1. Background

• If youre feeling angry that the mental health
  system doesnt work very well, or
• If youre feeling defensive about that
  perception, then
• Relax. Its not just the mental health system
  that delivers low-quality care.

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The U.S. health care delivery system does not
provide consistent, high quality medical care to
all people. Americans should be able to count on
receiving care that meets their needs and is
based on the best scientific knowledge--yet there
is strong evidence that this frequently is not
the case. Indeed, between the health care that
we now have and the health care that we could
have lies not just a gap, but a chasm.
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Faced with such rapid changes, the nations
health care delivery system has fallen far short
in its ability to translate knowledge into
practice and to apply new technology safely and
appropriately.
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• And its not just the US.
• UK not so great
• Canada not so great
• The problems cannot be attributed to the
  idiosyncratic aspects of the US health care
  system.

Canada and the UK are moving toward a US system
a two-tier, public-private hybrid
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The forces are fundamental

• Market competition
• Incentives to produce quality
• Incentives to buy quality
• Knowledge
• Asymmetric information
• Principal agent problem
• Technology (including EBT)

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• Some of these issues are shared by other goods
  and services (e.g., wine, used cars, knee
  surgery).
• Some characteristics of mental health services
  are distinctive.

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2. What is quality?

• Qualitative aspects of treatment desired by
  consumers
• IOM "Quality of care is the degree to which
  health services for individuals and populations
  increase the likelihood of desired health
  outcomes and are consistent with current
  professional knowledge."
• Consumers
• Effective
• pleasant
• available
• convenient

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Quality Market fundamentals

• Not captured by price per se Wine
• More expensive to produce ???
• Competition based on price (which a provider can
  signal very clearly) rather than quality (which
  is somewhat harder to signal)

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How Do We Measure Quality

• Donabedian framework
• Structure (e.g., credentials)
• Process (e.g., medication management)
• Outcome
• gtgt In health care more generally, we often lack
  data on the third of these and rely on the other
  two.
• gtgt Presumes a link that may be lacking.

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Structure
Outcomes
Process
Multiply Determined
Provider Controlled
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3. What is the level of quality in the US health
care system?

• Poor, especially in light of very high
  expenditures
• Direct evidence
• Indirect evidence (e.g., breast cancer)

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4. How should the market function?

• Under what circumstances do providers provide the
  mix of services that consumers want and can
  afford?

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In a perfectly competitive market

• Consumers know what they want
• Producers compete on the basis of price and
  quality
• We end up with an optimal quantity of price and
  quality given
• technology
• consumer tastes and
• income
• The equilibrium level of quality depends
• On technology
• On consumer taste

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Note debate as to whether quality is more costly
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Q
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Q depends

• Marginal costs of quality
• Is quality more expensive to produce?
• Technology
• Nature of the disorder
• Marginal benefits of quality
• Nature of the disorder
• Consumer preferences

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Implications

• Optimal quality is not perfect or maximum
  quality (e.g., group v. individual therapy)
• Consumers are always going to be somewhat
  dissatisfied

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Why dont we end up with higher or at least
optimal quality?

• Lower reimbursement rates
• Providers arent competitive
• Providers dont know what theyre doing
• Consumers/purchasers are uninformed (lemons
  problem)
• Incentives work against becoming informed

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5. Consumers are uninformed

• Lemons problem and information asymmetries
• Aside used cars
• Bad providers are more profitable
• Good providers are driven out of the market
• Interaction with the low reimbursement rates
• The problem gets worse over time.

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Incentives work against becoming informed

• Mental health is not like a used car.
• Stigma knee replacement
• Treatment individualized hair cut
• Treatment not repeated brain surgery
• Misperception of quality

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Can consumers be educated?

• 2004 issue of Consumer Reports
• Talk therapy rivaled drug therapy in
  effectiveness.
• Therapy delivered by psychologists and clinical
  social workers was perceived as effective as that
  given by psychiatrists.

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Can consumers be educated?

• Drug therapy relieved symptoms faster than talk
  therapy, and the majority of people who described
  their therapy as "mostly medication" also had
  good outcomes.
• But it can take much trial and error to find the
  right medication.

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Can Consumers (cont)?

• Consumers who did their own research and
  monitored their own care reported better
  results.
• Information can be disseminated, but it is only
  as good as the underlying research.

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Where does the shopping metaphor break down?
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6. Is Quality More Costly?
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In CMH, we know about expensive, model treatments
provided as part of efficacy studies.
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7. Solutions (???)

• Normalization of treatment
• Higher reimbursement combined with
• Certification
• Treatment guidelines
• Performance measurement

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Pay for Quality

• Depends on
• Size of incentive
• Leverage of payor (share of business)
• Targeted point structure, process or outcome
• Quality level or improvement
• Relative or absolute threshold

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Good Examples

• NYS Medicaid program
• The Quality Incentive program pays Medicaid plans
  up to a 3 bonus on capitated premiums
• Criteria quality metrics (HEDIS and CAHPS
  metrics)
• Several focus on children and adolescents and
  women. 

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Other issues

• Compliance, compliance, compliance
• What are the costs to families? Are those costs
  higher for high quality care?

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8. What information can researchers provide?

• Good measures of quality (i.e., outcomes)
• Relationship between structure and process and
  outcome
• Relationship between costs and quality Is
  quality really more costly?

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8. What information can researchers provide?
(cont)

• Relationship between quality and competition
• See, for example, work by Scanlon and colleagues.
• Costs of model treatments delivered in real-world
  settings
• Identify incentives to encourage adoption of EBT
• How do organizations ready themselves for
  adoption of EBT?
• See, for example, work by Glisson, Wells and
  others.

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Thanks!