Learning and Spillover in Treatment for Ischaemic Heart Disease Using Surveys of Medical Care in Japan *)

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1 Learning and Spillover in Treatment for Ischaemic Heart Disease Using Surveys of Medical Care in Japan *) Rei Watanabe Graduate School of Economics, Kyoto University and Yasushi Ohkusa Institute of Social and Economic Research, Osaka University Summary We analyzed learning effects concerning relatively new medical procedures for coronary heart disease using the surveys of medical care in Japan taken from claim records from all over Japan. Although we can not follow specific medical providers and we only can investigate learning effect of national level, we have got the following results. In stent, a emerging technology, there is a strong learning effect of reducing costs as the number of the patients increases. On the contrary, there is no learning effect for POBA and CABG, procedures in which diffusion reached stable. Especially, in POBA, negative learning effect increasing cost as the number of patients grows. 1.Introduction Heart disease is the second cause of death in Japan, and more than half of these are caused by ischemic heart disease. Their risk factors are such as age, hyperlipidemia, smoking, hypertension and the importance of ischemic heart disease is naturally getting higher in Japan. By 1970s, the main treatment of ischemic heath disease was conservational ones such as rest and medication. In 1970s, it changed drastically owing to the development of coronary artery bypass grafting and coronary intervention using coronary catheralization. These new treatment 153

2 drastically owing to the development of coronary artery bypass grafting and coronary intervention using coronary catheralization. These new treatment have decreased mortality of ischemic heart disease, but they are invasive to body and expensive. It goes without saying that indications of these treatments have to be considered carefully. McClellan et al (1994) pointed out that effects of treatments with high fixed and marginal cost such as operation and coronary interventions can be overestimated. Treatments of ischemic heart disease include low technical innovations with low fixed and marginal costs, such as aspirin or blocker, as well as high technical innovations as above. Different from low technical innovation, medical professions needs to have much experience before they get used to specific procedures to realize good outcomes expected. Additionally, there are pieces of research showing unit costs of these procedures decreases as they experience much more.(luft et al (1979)) Concerning cardiovascular procedures, Ho(2002) finds learning effect on the total cost in PTCA using hospital level panel data in the USA. Though we don't have the comparable dataset in Japan, we estimate it using the sampling data. By definition, sampling data seldom contains the same hospital in different year and moreover we cannot identify it. However, if doctors operate eagerly in one hospital, we can observe several record of the operation from this hospital. Therefore, we obtain some information from the number of record of the operations on the dataset. Using this, we can guess their experience and define learning effect. Moreover, since the dataset is national survey, it has the information about national level experience. Even though it did not operate within a hospital, the knowledge and experience may diffuse to other hospital through meeting, research paper or other communication device. We can define the cumulative number of operation in the should of Japan, and thus we examine the spillover effect form the accumulation of experience in the whole of nation. Both effect are expected to rise the quality in operation and reduce the total cost. 2.Data The data are from Surveys of Medical Care (SMC), which are conducted 154

3 every year in June by the Ministry of Health and Welfare. The surveys are stratified samples of approximately 200,000 claims data from the government-managed health insurance and national health insurance scheme, written by medical providers all over Japan. Although it is the most comprehensive survey of medical care in Japan, there are several problems with the SMC for research. First, the survey is only conducted in June and does not cover all patients. Because there are not enough samples, the data are pooled for several years. The second problem is the coding used for each disease and drug. With the disease classification, ischaemic heart disease consists of one group, but this corresponds to I20-I25 in ICD-10. This includes I20, Angina pectoris; I21, Acute myocardial infarction; I22, Subsequent myocardial infarction; I24, Other acute ischaemic heart diseases; and I25, Chronic ischaemic heart disease. From the SMC, acute myocardial infarction cannot be distinguished from chronic ischaemic heart diseases such as stable angina. With the coding of drugs, the SMC shows only a four-digit classification combining drug code and drug price determined by the government. However, many generic drugs have the same prices, and thus it is impossible to isolate them. The third problem is related to the first one. The SMC uses a sample from claim data during one month, and there is no information about previous months and the following months, even if the sampled patients were in hospital during the other months. From the Patient Survey of the Ministry of Health and Welfare, the duration of hospitalization of the ischaemic heart disease patient is 31.3 days on average. However, many patients have hospitalization across months. The fourth problem is that the SMC is based on claim data, not on patients' clinical cards. In the clinical setting, physicians and other medical providers record everything on the patient's clinical card. Using clinical cards, clerical workers make claim data for charging fees to insurers once a month. In claim data, clinical procedures are recorded comprehensively, not chronologically. In other words, there is no information about the date of the specified procedures, even though the information about drugs, tests and treatments performed are almost perfect. Furthermore, the SMC does not indicate death, discharge or continuation of therapy. 155

4 Owing to these problems, the SMC is not suited for analysis of the long-term prognosis and medical expenditure of hospitalization periods longer than one month. Therefore, it is very difficult to specify relevant variables that represent outcomes even in short-term outcomes and our analysis focus on the relation ships between costs and the experience of specific procedures. The medical cost used here are realized by GDP deflator as Ho(2002). 3.Estimation Method First of all, the samples are taken from the Surveys of Medical Care in Japan from 1996 to 2000 as the cases in which diagnosis is ischemic heart disease. Ischemic heart disease is caused by stenosis or occlusion of coronary artery supporting the heart muscle. Next, we have taken samples undergone the following medical procedures. These are coronary-arterial bypass graft (CABG), plain old balloon angioplasty (POBA), cutting balloon angioplasty (CBA), rotor blader procedures(rotor), coronary stenting(stent) and percutaneous tranluminal coronary recanalization (PTCR). Among these, CBA and Rotor are reimbursed under social insurance from 1998 in Japan. The dependent variable in the estimation equation is medical cost of POBA, CAB G or Stent. The explanatory variables is at first, the dummy variable whether the patients use other treatment than the corresponding technology. In the case that two or three treatment were performed, it should rise medical cost extensively. Hence we add the dummy variables for CABG or Stent in the equation for the medical cost of POBA, and in the equation for the medic al cost of CABG, the dummy variables for POBA or Stent are added. Of course, it is the same in the case of medical cost of Stent. The second groups of the explanatory variables are length of stays(los). It seems to be natural medical cost increases with LOS. We suppose the quadratic form of LOS as explanatory variable because of fixed cost due to the operations. The third groups of explanatory variables are demographic characteristics, i.e. age and gender. Age is supposed to be represented by dummy variables for 60s, 70s and more than 80. The fourth group of explanatory variables are learning by doing in the hospital level and national level. The former is the dummy variable which 156

5 is one if this hospital experienced another operation other than the corresponding patient and otherwise zero. The latter is cumulative number of operation as shown in Table 1. Unfortunately, we do not know the number of operation in whole of nation before 1996, and so we set these are zero. Note that this assumption is not important even if zero experience is not true because its effect is absorbed in the constant term. Final group of explanatory variables are ownership status. We expect teaching hospital more eagerly adopt new technology, and for-profit hospital may have more incentives than non-profit hospital or government hospital if this treatment make profit and vice versa. 4.Estimation Result Table 1 shows the number of patients and average medical cost. Table 2 shows the estimation result. The first column is for POBA, the second is for CABG, and the third is for Stent. At first glance, estimation for CABG is very poor because the null of all coefficients are zeros cannot be rejected. Hence, the result in CABG should be discarded. The number of this procedure is flactuating intensly. This may comes from that this data are sample survey and this number is formulated using sampling rate. The number of operation within a hospital in the same month reduces the medical cost in Stent significantly. It decreases by 17% when the number of operation is twice. Conversely, in the case of POBA, it rises the medical cost by 9% when the number of operation is twice. In CABG, it is not significant. At least, we can find strong learning effect to reduce cost in Stent. Since Stent is relatively emerging technology comparison with POBA or CABG, its learning effect seems to be high. On the other hand, POBA and CABG is not so new technology, and POBA is popular operation as shown in Table 1, positive learning effect seem to be disappear. M oreover, negative learning effect is observed in POBA. On the other hand, national level cumulative number of operation reduce cost significantly only in Stent. Ten percent increasing in operation would reduce the cost by 1.3%. This also reflect Stent is relative new technology and thus there is high spillover from other hospital. Concerning with the ownership status, non-profit hospital charge more cost comparison with the public hospital by 13% in Stent. The medical cost 157

6 in teaching hospital is not different from non- teaching hospital. 5.Concluding Remarks We analyzed learning effects concerning relatively new medical procedures for coronary heart disease using the surveys of medical care in Japan taken from claim records from all over Japan. Although we can not follow specific medical providers and we only can investigate learning effect of national level, we have got the following results. In stent, a emerging technology, there is a strong learning effect of reducing costs as the number of the patients increaes. On the contrary, there is no learning effect for POBA and CABG, procedures in which diffusion reached stable. Especially, in POBA, negative learning effect increasing cost as the number of patients grows. 158

7 Reference Ikegami N, Miyazaki S, Noguchi H, Hashimoto H, Ikeda S and Kaneko Y(2000),"The patient characteristics and treatment choice for coronary intervention in the National Cardiovascular Center in Japan" in The Research Report for the Grant of the Promotion for Health and Welfare(Polic y Resaerch and Evaluation Projects) International Studies on Social Security Reforms from Comparative Perspectices.. Ho.V.(2002),"Learning and the Evolution of Medical Technologies: the Diffusion of Coronary Angioplasty,"{\ it Journal of Health Economic} 2 1,pp McClellan M, McNeil BJ, Newhouse JP; Does more intensive treatment of acute myocardial infarction in the elderly reduce mortality? Analysis using instrumental variables. JAMA 1994; 272: Luft, H. S., J. Bunker, et al. (1979). "Should operations be regionalized? An empirical study of the relation between surgical volume and mortality." New England Journal of Medicine 301:

8 Table 1: The Number of Patients and Medical Cost in Ischaemic Heart Disease No. of CABG POBA Stent CBA Roter PTCR Total Medical Cost CABG POBA Stent CBA Roter PTCR Total Note:The number of patients are in one month, May. Medical cost is annual base and its unit is trillion yen in Total number of patients and medical cost include the patients whose disease are Ischaemic Heart Disease, but they did not have operation in this month. 160

9 Table 2:Estimation Result POBA CABG Stent POBA CABG *** *** Stent ** Days * ** * Days * > age> * > age> age> ** female No Ope *** *** Cum Ope * Nonpro * Forpro TH constant *** *** *** No. of Sample p - value for F test R Note:The sample is limited to be LOS is less than one month. "Days" indicates the number of inpatient days in this month, and thus it is smaller than or equal to LOS by definition. "No Ope" indicates the number of operation in one hospital on the dataset, and means learning effect. "Cum Ope" indicates the cumulative operation in national wide since It indicates accumulation of knowledge in national wide and thus it means positive externality from the past or other hospital experience. "TH" indicates it is a teaching hospital. 161

10 Table 3: Unit Cost Age Inpatients per annual Outpatients per day Note: Unit cost is estimated from Social Medical Service in