Helping Policy-Makers Control Health Care Costs

    • July 14, 2009

The Problem: Cost-effectiveness analysis, which examines the costs and health outcomes of alternative health interventions, is important in deciding how to allocate health care spending. However, health economists did not agree about how to account for future costs in cost-effectiveness analysis.

Grantee Perspective: David O. Meltzer, MD, PhD, an assistant professor of medicine and economics at the Pritzker School of Medicine at the University of Chicago, had been conducting research on estimating future costs when he began the Robert Wood Johnson Foundation (RWJF) Generalist Physician Faculty Scholars Program.

As a faculty scholar from 1998 to 2002, Meltzer studied the impact of future costs in economic analyses for patients with kidney failure and young adults with Type 1 diabetes. The program’s flexible support also enabled him to expand his cost-effectiveness work to include the elements of patient preference and decision-making.

“The program helped me develop my overall work in medical cost-effectiveness analysis, and increased my recognition within the University of Chicago,” said Meltzer, who is now chief of the Section of Hospital Medicine and an associate professor there.

Meltzer also gained national visibility by serving on the Institute of Medicine organ and transplantation panel. The panel prompted policy changes that eliminated state geographic restrictions and allowed organs to go to the sickest patients (Science, 2000.) Kenneth I. Shine, MD, Meltzer’s national advisory committee mentor, recommended him for the panel.

Results: To show the impact of including future costs in economic analyses, Meltzer and his colleagues compared two types of dialysis for patients with kidney failure, including and excluding various related and unrelated medical and nonmedical expenses that might be incurred. In Health Economics (2003), they reported:

  • Even relatively inexpensive interventions that extend patient survival may not be cost-effective since, by extending survival, the extra outpatient dialysis costs are large.

In the study of Type 1 diabetes patients, Meltzer et al. examined the impact of including all future costs in determining cost-effectiveness of intensive therapy (frequent doses of insulin and close monitoring of blood sugar levels). In Medical Care (2000), they concluded:

  • The inclusion of future costs can significantly improve the cost-effectiveness analysis of interventions that decrease death among young adults. The common practice of excluding future costs may bias cost-effectiveness analyses against such interventions.

In 2002, Meltzer received Research America’s Eugene Garfield Outstanding Paper Award for his article about uncertainty in medical cost-effectiveness analysis (Journal of Health Economics, 2001). This paper is now finding increasing relevance as an approach to inform priorities for comparative effectiveness research.

After the program, Meltzer continued his cost-effectiveness analysis research, including through grants from:

  • The National Cancer Institute to study the cost-effectiveness of prostate cancer screening and treatment (2001–03, $1.1 million)
  • The Centers for Disease Control and Prevention (CDC) to study how patients’ preferences should influence policy recommendations for diabetes treatment (2003–06, $600,000).

Meltzer is director of the University of Chicago’s Center for Health and Social Sciences, which supports and encourages interdisciplinary health and social science research, and the Hospital Medicine and Economics Center for Education and Research in Therapeutics, which is funded with a $3-million grant from the CDC to enhance health promotion policies.

In 2007, Meltzer received an Investigator Award in Health Policy Research from RWJF to quantify the history of hospitalists (physicians who specialize in the medical care of hospitalized patients).

“The [Generalist Physician Faculty Scholars] program provided a great set of people for me to interact with. I learned from them in a variety of ways, from their areas of expertise to how they managed their careers and lives,” said Meltzer.

RWJF Perspective: The Robert Wood Johnson Foundation established the Generalist Physician Faculty Scholars Program to create a cadre of respected generalist leaders in medical schools who would be in a position to influence curriculum, admissions and scholarship. Junior faculty in family medicine, internal medicine and pediatrics conducted research and built their careers under the guidance of mentors.

“Given the shortage of primary care physicians, we need innovative approaches to encourage medical students to choose careers in generalist fields. The Generalist Physician Faculty Scholars Program was designed to emphasize a scholarly foundation for generalism and improve the quality of the education provided to students who choose this important career path,” said Pamela S. Dickson, MBA, assistant vice president of RWJF’s Health Care Group.

When the program ended in 2008, RWJF created the Robert Wood Johnson Physician Faculty Scholars Program to strengthen the leadership and academic productivity of junior medical school faculty who are dedicated to improving health and health care. It is open not only to generalists, but all physicians.