By Lawrence Melniker, MD, MS, FACEP, Healthcare MBA, Candidate, George Washington University, School of Business
Healthcare economics is an applied field of study that allows for the systematic and rigorous examination of the problems faced in promoting healthcare for all. Complicating the situation is the fact that healthcare is different from other goods and services. The health care product [treatment of disease or injury] is not consistently well-defined and not generally desirable, the outcome of care is uncertain, the industry includes for-profit and nonprofit providers, and payments are made by third parties [leaving patients and providers with little knowledge of actual costs]. Many of these factors are present in other industries as well, but in no other industry are they all present; and it is the interaction of these factors that tends to make health care unique.
While there are considerable inefficiencies and waste in healthcare spending, published data suggest that between 1950 and 1990 the present value of per person medical spending in the United States increased by about $35,000 and life expectancy increased by seven years or $5000/additional life-year. An additional year of life is conventionally valued at $100,000; thus, the increased health spending may be worth the cost.
Healthcare economic research can include the evaluation of new technologies, but, unfortunately, the literature on cost-effectiveness analyses in medical imaging is limited. What we do know is that point-of-care ultrasound (PoCUS) technology costs are dropping and, simultaneously, becoming easier to use. PoCUS is becoming more widely prevalent in the marketplace, more accessible, and consequently, can be adopted more easily than 10-20 years ago. The pace of innovation is accelerating, while the price is falling. Advances in PoCUS technology have important implications for the workforce and for the types of training that health care providers will need in order to acquire proficiency in using PoCUS. In addition, integration with health information technology–derived information is critical to quality improvement strategies. In this rapidly changing environment, strategies for leveraging PoCUS to improve health outcomes will be extremely important, especially to reduce health disparities.
The most immediate impact of PoCUS can have on the healthcare economic environment is through the implementation of “Sono-First” protocols. Recent studies have shown not only statistically significant, but clinically relevant reductions in the use of CT scanning, when PoCUS is the first imaging modality in patients with suspected appendicitis and equivalency of care to CT assessment in suspected nephrolithiasis. While the marginal cost or operating expense of a CT scan is estimated to be $50-60, charges average $1500-2000 depending on the setting; compared to $10-20 operating cost for PoCUS and $100-200 in charges.
In conducting cost-effectiveness analyses, these “opportunity costs” must be considered; this is the value of the best alternative forgone, ie, CT. Assuming the best choice is made, opportunity costs are the loss of potential gain from other alternatives when one alternative is chosen, describe the basic relationship between scarcity and choice, and play a crucial part in ensuring that limited resources are used efficiently. These are not restricted to monetary or financial costs: the real cost of output forgone, lost time, or any other benefit that provides utility should also be considered opportunity costs. Based on this premise, each PoCUS exam that allows the clinician to forgo a CT, provides an average opportunity (savings) of $1300-1900 in charges. A complete cost-utility analysis would consider the relative sensitivity, specificity, accuracy, and the consequences of false-positive/false-negative findings between the choices made.
Where do we go next? We are well past the point where we need to prove how established PoCUS applications work. We must concentrate on how we can do a better job of harnessing PoCUS to improve care and to do that as effectively and efficiently as possible. However, this raises many questions, such as: