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When we are judging the cost-effectiveness of a treatment or intervention, we're really asking how much bang for the buck we're getting for our healthcare spending. That can be relatively easy when we're talking about life and death. But how do we measure improvements in quality? The most widely used method is through the use of utility values, and we'll show you how we calculate those in this week's Healthcare Triage.

For those of you who want to read more, go here: http://theincidentaleconomist.com/wordpress/?p=61426

John Green -- Executive Producer
Stan Muller -- Director, Producer
Aaron Carroll -- Writer
Mark Olsen -- Graphics

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AARON: If I had a pill that could extend your life by one day, but it cost a billion dollars it’s unlikely that many people would argue that health insurance should pay for it. We all understand that while the benefit might be real and quantifiable it’s not worth the expense. What if the pill cost a million dollars and what if it extended your life by ten years? Such discussions are about cost effectiveness and many people hate that topic but it’s important. So important that I think we need to discuss it here for two weeks on health care triage. 

[Jaunty intro tune plays]

AARON: At its heart, cost effectiveness get at how much bang-for-the buck we’re going to get from a treatment or therapy. How much it costs over how effective it is. Sometimes (rarely) these calculations are simple, but here is a made-up, straight-forward discussion. Let’s say you’re 42, and you believe you have about forty  years to live. Then, you find out you have a strange gene that will kill you tomorrow. It sucks, cause you’ll lose forty  years of life when you die. But then a pharmaceutical company develops a pill! If you take it today you’re cured. You’ll get an extra forty  years of life. If the pill costs a million dollars, then we could say that you’re spending about a  million dollars over forty life years, or twenty-five hundred dollars per life year gained. Now a million dollars for a pills sounds like a lot but I gotta tell you, twenty-five thousand per life year gained, that’s considered pretty cost effective. Very few therapies and medicines get to that level, but if we have a therapy and we know what it costs and we know how many years of life it gets you, then we can calculate cost effectiveness. What what about the many, many, many therapies that don’t necessarily extend life, they improve it? How do we measure those things? Costs are the same but we need a better measure of effectiveness. Measuring quality tho, isn’t necessarily easy. The best metric we have at the moment is what we call the utility value. It’s a number, somewhere between zero and one, where zero represents death and one represents perfect health, that provides a measure of how much people value life in a health state. There are two main ways to acquire utility values and they are some what time intensive but I’m going to model both of them for you today. The first is the standard gamble. In this demonstration Aaron with the green jacket is going to administer the test and and Aaron with the black jacket is going to take it. 

GREEN JACKET AARON: For this test, I want you to imagine that you have a moderate seizure disorder and about once a month you have a seizure and during the seizure, you become unconscious and have violent shaking of your arms and legs. Your back arches and eyes roll back. It lasts three to eight minutes each time. The seizures rarely disrupt work, but you can’t drive because of them, and you can’t participate in many activities.

BLACK JACKET AARON: Mmmm Okay.

GREEN JACKET AARON: This doesn’t effect your life expectancy at all. You get a full life but you have a moderate seizure disorder with everything I just described in it.

BLACK JACKET AARON: Got it.

GREEN JACKET AARON: Now, imagine there’s a new treatment available for moderate seizure disorder. The treatment is painless, and if it works, you’re instantly and completely restored to perfect health. But the treatment is risky. Some people who have the treatment can instantly die.  I want you to imagine you have to choose whether to undergo this treatment if the treatment had a fifty percent chance of making you perfectly healthy and a fifty percent chance of killing you, would you take the treatment?

BLACK JACKET AARON: Are you kidding me? A fifty percent chance of killing me? I still have a job, I’m still married, I still have kids, I’m still making Heath Care Triage—No way. Too risky. 

GREEN JACKET AARON: Okay, what if it had a seventy-five percent chance of making you perfectly healthy and a twenty-five percent chance of killing you, would you take the treatment?

BLACK JACKET AARON: No. Still too risky. I can’t take a twenty-five percent chance of it killing me.

GREEN JACKET AARON: What if it had an eighty-eight percent chance of making you perfectly healthy and a twelve percent chance of killing you. Would you take the treatment?

BLACK JACKET AARON: Okay, now you’re making me thing. I would like to drive. I’d like to do other stuff like ski… still, No.

GREEN JACKET AARON: What if it had a ninety-four percent chance of making you healthy and six percent chance of killing you? Would you take the treatment?

BLACK JACKET AARON: Ninety-four percent chance of success? I might do that. Yes I think I would.

GREEN JACKET AARON: What about a ninety-one percent chance of making you healthy and a nine percent chance of killing you? Would you take the treatment?

BLACK JACKET AARON: Mmmmmm, Yes, but that’s as low as I’d go. Ninety-one percent chance of success. 

GREEN JACKET AARON: And that’s how you do a standard gamble, and what ever number you end with is considered the utility value for the health state you are investigating. IN this case ninety-one percent or point nine one is the utility value for moderate seizure disorder. Now let’s go to the Time Trade Off. Let’s start over. You’re forty two, so let’s imagine that you have about forty years left to live. You still have a moderate seizure disorder and everything that comes with it. Okay?

BLACK JACKET AARON: Yup.

GREEN JACKET AARON: Now, imagine there’s a treatment avail be for this condition, The treatment is painless, and if it works, you will be restored to perfect health. But the treatment shortens your life. If the treatment shortens your life by twenty years would you choose the treatment or would you choose forty years with the moderate seizure disorder?

BLACK JACKET AARON: Loosing twenty years? No. I’d live with the moderate seizure disorder.

GREEN JACKET AARON: What if the treatment shortens your life by ten years? Would you take the treatment or the forty years with the moderate seizure disorder?

BLACK JACKET AARON: Thirty years of perfect health or forty years of moderate seizure disorder? Still the later.

GREEN JACKET AARON: What if the treatment shortens your life by five years? Would you take the treatment or forty years of the moderate seizure disorder.

BLACK JACKET AARON: I’d loose what? The years when I’m seventy-seven to eighty-two? And I still get to live to seventy-seven? And no more seizures ever? Yeah, I’d probably do it. 

GREEN JACKET AARON: What about…

BLACK JACKET AARON: No. No. That’s it. Five years is all I’m going to give up.

GREEN JACKET AARON: And that’s the time trade off. In this case we take the ratio of the two lifespans, thirty-five years of perfect health over forty years with disease, and we get a utility of point eight eight. Now you might be wondering with the values are for many other illnesses. There is much less research in this area that I’d like, but my IU colleague Steve Downes and I have conducted, what I think, is the largest Utility assessment of pediatric health states ever. We did more than four thousand of these Standard Gambles and Time Trade offs and established a dictionary of them for other researchers and clinicians to use. They are available in the journal of Pediatrics linked down below. How do we use them? That’s the topic of next weeks Health Care Triage.

[Outro music plays]