Cost benefit analysis of computer-based patient records with regard to their use in colon cancer screening

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1 Cost benefit analysis of computer-based patient records with regard to their use in colon cancer screening Bernstam EV 1, Strasberg HR 1, and Rubin DL 1 1 Stanford Medical Informatics, Department of Internal Medicine, Stanford University Medical Center, MSOB, Room X-215, 251 Campus Drive, Stanford, CA, USA Aims and objectives: Computer-based patient records (CPRs) offer many benefits, but have yet to gain widespread acceptance. In the United States, the expense of introducing a comprehensive CPR into an existing practice has been estimated at US$20,000 per provider for the first year and US$5,000 per provider for subsequent years. The substantial investment required is often cited as a major reason for deferring automation. Although it is generally agreed that CPRs have the potential to improve the quality of care, data regarding their financial benefits are generally lacking. To assess properly the value of a CPR, its costs must be weighed against the sum of its benefits. One of the benefits of a CPR is the ability to implement a computer-based reminder system (CRS), which, unlike a manual reminder system, can be adapted to multiple uses with minimal marginal cost for each new application. CRSs have been shown to increase compliance with preventive-care standards. In this analysis, we present a methodology for evaluating the cost-effectiveness of CPRs using the sum of the benefits offered by the CPR, with the example of colon-cancer screening (i.e., fecal occult blood testing, rectal examination and sigmoidoscopy). Methods: A recent meta-analysis reported that CRSs improved compliance with colon-cancer screening guidelines (odds-ratio 2.25 vs. no reminder). Using techniques from decision analysis, our work combines this effect of CRSs with published economic analyses of colon-cancer screening. Findings: From a risk-neutral societal perspective and under appropriate assumptions regarding the costeffectiveness of colon-cancer screening itself, the cost of the CPR can be partially justified by improved coloncancer screening. To support this argument, we performed sensitivity analyses on cost-effectiveness of coloncancer screening and on the odds-ratio of being screened given the availability of a CRS. Conclusions: Although CPRs are expensive, they can measurably improve care. We suggest that the cost of the CPR be weighed against the sum of benefits, many of which reduce overall costs while improving quality of care. Some of the benefits are administrative (e.g., reduced transcription costs, improved billing) but others are medical (e.g., improved screening for colon cancer). When this argument is extended to include other applications with low marginal cost of introduction to the CPR, the overall cost-justification for investment in a CPR becomes clear. 1. Aims and Objectives Computer-based patient records (CPRs) offer many benefits, both medical and financial. For example, they can reduce transcription costs, improve billing efficiency, and improve patient screening rates for diseases such as colon and breast cancers. However, although the benefits of CPRs are generally acknowledged, CPRs are not widely implemented in many areas of the world. In the United States, only 4.5% of primary care providers use a CPR[1]. One factor behind the poor acceptance rate of CPRs in the United States is their expense: the cost of introducing a comprehensive CPR into a practice is approximately US$20,000 per provider for the first year and US$5,000 per provider for subsequent years. Although vendors such as Medicalogic (Hillsboro, Oregon, USA) provide Internet-based CPRs on a subscription basis for approximately US$100 per month, expenses are still high, because of additional costs for training, lost productivity at introduction, hardware, etc.[2]. Another commonly cited reason for low penetrance is that individual physicians pay for CPRs, but patients derive the primary benefits from them. Demonstrating that the benefits of CPRs outweigh their costs may make them more attractive to physicians. To do so, CPR costs must be weighed against the sum of their benefits, a process that requires assessing the monetary value of improved

2 quality of medical care. Assessing this value is difficult, but has been made easier because considerable work has already been done in this area. For example, preventative care guidelines are amo ng the most thoroughly studied medical interventions. Although defining quality of care is difficult, groups charged with this responsibility often point to compliance with preventative care guidelines as indicators of quality[3]. Electronic reminder systems, available with many CPRs, may improve patient outcomes by increasing compliance with preventative care guidelines. Shea, et al., in a meta-analysis of this assertion, found statistically significant differences in compliance with various preventative measures when computerized reminders were available, compared to no reminders[4]. One of the preventative measures evaluated by Shea, et al. was colon cancer screening. The United States Public Health Service recommends routine colorectal cancer screening for persons aged 50 and over[6]. Although the optimal screening protocol is controversial, most groups recommend fecal occult blood testing (FOBT). Groups vary in their recommendations regarding digital rectal examination (DRE), sigmoidoscopy and colonoscopy. Shea, et al. determined the effect of computerized reminders on preventative-care practices by combining studies of colon cancer screening that included FOBT, DRE and/or sigmoidoscopy[4]. Our analysis used their data for our base case, but we performed a sensitivity analysis to explore the effect of uncertainty on conclusions regarding cost-effectiveness. We adopted the perspective of a risk-neutral society. The cost-effectiveness of colon cancer screening is controversial, with estimates ranging from cost saving to around US$100,000 per QALY. Although the upper limit for an acceptable cost-effectiveness ratio for a medical intervention is also controversial, values in excess of US$100,000 per year of life saved are generally considered excessive[5]. Comparing values for one intervention against established benchmarks can provide context. For example, screening blood donors for HIV infection costs US$10,900 per Quality Adjusted Life Year (QALY) gained, while therapy for hypertension costs US$33,750 per QALY gained. Surveillance of patients with Barrett s esophagus every four years costs US$276,700 per QALY gained. 2. Methods 2.1 Decision Model We used techniques from decision analysis to combine the effect of CRSs with published economic analyses of colon cancer screening. Our problem involved a single decision: whether or not to purchase and use an electronic reminder system. We used a decision tree with a single decision node to model the problem (figure 1). CPR with CRS No CPR with CRS Patient Screened.49 Patient Not Screened.51 Patient Screened.3 Patient Not Screened.7 Figure 1: Basic decision tree. The square represents the decision, and circles represent chance nodes. Chance nodes indicate probabilities concerning screening. The probabilities show that a CRS affects a patient s chances of undergoing screening. The derivation and justification of associated probabilities is discussed in section Odds Ratio of Screening with Reminders vs. Without Reminders There is always some uncertainty that a patient will undergo colon cancer screening. The likelihood that he will be screened varies with the availabilities and types of reminder systems. To calculate the probabilities for each scenario, we used data from Shea s meta-analysis of the impact of reminder systems on colon cancer screening rates[4]. The meta-analysis showed that the odds ratio of screening with reminders to screening without reminders was The odds ratio in this case is:

3 Odds(S R) Odds(S NR) = P(S R) 1-P(S R) P(S NR) 1-P(S NR) S = Screening, R = Reminders, NS = No Screening, NR = No Reminders, P(S R) = probability of screening given reminders Thus, calculating P(screening reminders) is possible given P(screening no reminders). According to data from the 1992 National Health Interview Survey, only 26% of the eligible population had undergone FOBT within the past three years, and only 33% reported ever having had sigmoidoscopy[7]. Because the market penetration of CPRs capable of generating reminders is quite low, we assumed that reminders did not significantly affect the data. For our base case, we used P(Screening No Reminders) = 0.3. Applying the odds ratio of 2.25, results in P(Screening Reminders) = 49%. 2.3 Cost Effectiveness Estimates for Base Case The literature contains widely variable cost-effectiveness estimates for colon cancer screening. Some of the variation may be due to the different protocols studied, to different assumptions regarding colon cancer rates, or to endoscopy costs. For our base case, we used relatively pessimistic numbers from a recent simulation model[8]. The model showed that, under a given set of assumptions, the net cost of screening is US$58.00 per person, and that the benefit is QALYs/person. These numbers assume screening of the eligible US population aged over 30 years ( ). 3. Findings 3.1 Base Case In the base case, the improved compliance with colon cancer screening provided by a CPR should be worth US$ to a risk-neutral society over the duration of screening per eligible patient (figure 2). Costs represent the expected costs of colon cancer related health care with or without screening. Colon cancer related health care costs include costs of screening as well as non screening-related costs such as costs incurred by primary treatment of colon cancer, continuous care and terminal treatment. The base case accounts for all screening effects by extending the simulation until all individuals have died [4]. 3.2 Sensitivity Analyses The base case clearly includes many assumptions, and we explored changes that would occur if the assumptions varied. To do so, we performed sensitivity analyses to explore the effect of the model parameters on the cost-effectiveness of CPRs. Specifically, we varied: 1) the odds ratio of screening with vs. without reminders (base case 2.25; figure 3), 2) the cost of screening (base case US$58.00 per patient; figure 4), 3) the benefit of screening per patient in QALYs (base case QALYs/patient; figure 5). In each figure, an arrow indicates the base case. 4. Discussion 4.1 Assumptions stemming from the choice of colon cancer screening as an example Our model incorporates multiple assumptions that are inherent in the economic analysis of colon cancer screening. For example, it includes built-in estimates of the costs of screening, the costs of treating colon cancer, and the natural history of the disease (e.g., how long a polyp is present until it undergoes malignant transformation). Note, however, that the purpose of this paper is not to present a cost-benefit analysis of colon cancer screening, but to use colon cancer screening as an example of an intervention that is affected by introducing a CPR. Multiple other interventions, such as vaccinations, can be substituted for colon cancer screening. Indeed, a study could consider a theoretical intervention rather than a specific example and perform a similar analysis.

4 Figure 2: Base case analysis of colon cancer screening. The figure makes the following assumptions: benefit of screening = QALYs/person, cost = US$195 for each screened individual vs. US$137 for un-screened individuals, odds ratio of being screened with a reminder system vs. no reminder system of 2.25, baseline probability of being screened = 0.3, cost effectiveness ratio (CER) of US$50, Manual reminders A reminder system does not absolutely require a CPR. Indeed, Shea, et al. found that manual reminders and CRSs generated similar compliance with screenings. However, a major drawback of manual reminders is that they do not scale well: the marginal cost of manually sending multiple reminders for multiple indications is similar in time and effort. Alternatively, implementing additional reminders is easy with a modern computerized reminder system. 4.3 Other benefits of CPRs Computer reminder systems are just one benefit of a CPR, and a valid approach to justifying a CPR requires that one look at the sum of multiple benefits. Other benefits include facilitation of clinical research, improved physician efficiency, elimination of redundant care with improved communication, decision support (e.g. guidelines, drug interactions), prevention of medical errors and integration with information retrieval systems. A cost-effectiveness analysis could be conducted for each of these benefits, and the sum of these benefits could be used to justify the cost of a CPR.

5 Figure 3: Effect of Odds Ratio With Computer Reminder System on Cost Effectiveness $ $ Cost of Reminder System per Patient $ $ $ $ $ $ Odds Ratio With Computer Reminder System Figure 4: Effect of Screening Cost on Cost Effectiveness $ Cost of Reminder System per Patient per Year $ $ $ $ $ $ $ $ ($300) ($200) ($100) $0 $100 $200 $300 $400 $500 $600 Screening Cost

6 Figure 5: Effect of Screening Benefit on Cost Effectiveness $ Cost of Reminder System per Patient per Year $ $ $ $ $ $ $ $(100.00) Screening Benefit (QALYs / Patient) 4.4 Why aren t physicians using CPRs? Assuming that CPRs are cost-effective or even cost saving, why are so few physicians using them? The most important reason may be that in current economic models, physicians must assume the costs of CPRs while not directly receiving their benefits. This arrangement makes CPRs unattractive to physicians, and society may not be providing sufficient incentive for physicians to invest US$20,000 in the first year alone in the technology. One incentive for physicians would be if health insurance companies, who stand to gain from the resulting cost savings, could bear this cost. Alternatively, the governments of countries with national health care systems could incur the costs of CPRs. Physicians may also be reluctant to use CPRs because their benefits are not clear. The type of analysis presented in this work may help by showing an approach to the evaluation of benefits. 5. Conclusions There is mounting evidence that CPRs can positively affect patient outcomes. Consequently, we suggest that CPRs be evaluated as clinical interventions, similarly to surgical procedures, hemodialysis, or medications. As such, costs should be balanced against benefits to the patient. Patients clearly prefer health plans that offer the latest clinical technologies to imp rove health. If CPRs improve outcomes, patients should prefer health plans that offer them. Just as the public demands high quality, cost-effective pharmaceuticals, imaging and surgery, so too should it demand the benefits of computer-based patient records. 6. References 1. Arvary, G. (1999) The view from 30,000 feet. JAMIA, 6, Middleton, B. (1999) Cost of CPR [unpublished personal communication]. 3. NCQA HEDIS WWW Page, NCQA, Shea, S, DuMouchel W, Bahamonde L. (1996) A meta-analysis of 16 randomized controlled trials to evaluate computer-based clinical reminder systems for preventative care in the ambulatory setting. JAMIA, 3, Mark, D, Hlatky M, Califf R, Naylor C, Lee K, Armstrong P, Barbash G, White H, Simoons M, Nelson C, Clapp- Channing N, Knight J, Harrell F, Simes J, Topol E. (1995) Cost effectiveness of thrombolytic therapy with tissue plasminogen activator as compared with streptokinase for acute myocardial infarction. N Engl J Med, 332, Screening for colorectal cancer. (1996) Report of the U.S. Preventative Services Task Force: Guide to clinical preventative services. pp Baltimore (MD), Lippincott, Williams & Wilkins. 7. Vernon, S. (1997) Participation in colorectal cancer screening: a review. J Natl Cancer Inst, 89, Loeve, F, Brown M, Boer R, van Ballegooijen M, van Oortmarseen G, Habbema J. (2000) Endoscopic colorectal cancer screening: a cost-saving analysis. J Natl Cancer Inst, 92,