VALUING HEALTH EFFECTS: THE CASE OF OZONE AND FINE PARTICLES IN SOUTHERN CALIFORNIA

This study presents a conservative estimate of the health benefits that would result from attainment of the federal ozone and fine particle (PM_2.5) standards in the South Coast Air Basin of southern California. A three‐stage approach is used that links pollution exposures to adverse health outcomes to economic values. The annual value of the aggregate health benefits approaches $500 million (with a range of $295–$646 million) for ozone and exceeds $21 billion (with a range of $12.85–$34.22 billion) for fine particles. Such results are useful to regulatory agencies and other policy makers when evaluating the merits of various air pollution reduction strategies. (JEL Q51, Q53)     

THE MORTALITY COST OF EXPENDITURES

This paper updates the mortality cost of expenditures, which has relevance to a broad range of policies, including regulations, wars, and COVID‐19 restrictions. Because changes in income lead to changes in mortality risk, health investments costing more per life saved than a threshold cost‐per‐life‐saved cutoff level are expected to increase mortality risk. This article discusses the mechanisms driving this relationship and provides recent empirical support. The 2019 cost‐per‐life‐saved cutoff level at which expenditures increase mortality risk has a lower bound of $83.1 million and an upper bound of $133.8 million, with a midpoint of $108.5 million. (JEL D61, I18, J17, K32)     

REPEAL OF PROHIBITION: A BENEFIT‐COST ANALYSIS

In spite of an estimated increase in annual alcohol‐related motor vehicle costs of $2.767 billion (1947 dollars), the net social benefit of repeal of alcohol Prohibition amounts to $432 million per annum in 1934–1937, about 0.33% of gross domestic product. Total benefits of $3.25 billion consist primarily of increased consumer and producer surplus, tax revenues, and reduced criminal violence costs. A Monte Carlo simulation shows the probability of negative net benefits is 16%. The estimated price elasticity of demand for spirits, beer, and wine are –.60, ?.56, and –.51 respectively, which is consistent with the modern literature. (JEL D61, I18, K420, I120)     

DO SCHOOL LUNCH SUBSIDIES CHANGE THE DIETARY PATTERNS OF CHILDREN FROM LOW‐INCOME HOUSEHOLDS?

This article examines the effects of school lunch subsidies provided through the means‐tested component of the National School Lunch Program on the dietary patterns of children aged 10–13 years in the United States. Analyzing data on 5,140 public school children in fifth grade during spring 2004, we find significant increases in the number of servings of fruit, green salad, carrots, other vegetables, and 100% fruit juice consumed in 1 week for subsidized children relative to unsubsidized children. The effects on fruit and other vegetable consumption are stronger among the children receiving a full subsidy, as opposed to only a partial subsidy, and indicate the size of the subsidy is an important policy lever underlying the program's effectiveness. Overall, the findings provide the strongest empirical evidence to date that the means‐tested school lunch subsidies increase children's consumption over a time period longer than one school day. (JEL H51, I12, I38)     

HAVE VEHICLE REGISTRATION RESTRICTIONS IMPROVED URBAN AIR QUALITY IN JAPAN?

About 2.6 million noncompliant vehicles were removed from designated metropolitan areas in Japan after the introduction of vehicle registration restrictions under the 1992 Automobile NOx Control Law. Based on a difference‐in‐differences framework and using a monitor‐level panel dataset for the period January 1981–December 2015, we find that the intervention led to a 3%–6% reduction in the monthly mean ambient concentration of nitrogen dioxide (NO₂) in the treated areas. Back‐of‐the‐envelope calculations identify benefits equal to about US$104 million as a result of reduced mortality from asthma. (JEL Q53, Q58)     

Relationship of hospital-associated bleeding with length of stay and total hospitalization costs in patients hospitalized for atrial fibrillation

Background:

While literature has focused on the impact of bleeding beginning outside the hospital setting among patients with atrial fibrillation (AF), there is little information regarding bleeding that first occurs within a hospital setting. This study was performed to determine the association between hospital-associated bleeding in patients admitted for AF on outcomes of length of stay (LOS) and total hospitalization cost.

Methods and results:

The Premier research database was queried to identify adult inpatients discharged between 2008–2011 having a primary diagnosis code for AF where a bleeding diagnosis code was not present on admission. Regression was used to adjust for baseline differences in patients to estimate outcomes comparing patients with and without a hospital-associated bleed. There were 143,287 patients that met the study criteria. There were 2991 (2.1%) patients identified with a hospital associated bleed. After adjustment for covariates, the mean estimated LOS was significantly greater in the bleed group, at 6.0 days (95% CI?=?5.8–6.1) vs the no bleed group at 3.3 days (95% CI?=?3.3–3.3) (p?<?0.0001). Similarly, the adjusted mean estimated total hospitalization cost was also significantly greater in the bleed group, $12,069 (95% CI?=?$11,779–$12,366) vs $6561 (95% CI?=?$6538–$6583) in the no bleed group (p?<?0.0001).

Conclusions:

After adjustments for baseline differences the data show that the 2.1% (n?=?2991) of patients with hospital associated bleeding accounted for an estimated additional 8106 hospitalization days and $16.4 million dollars in cost over the study period compared to non-bleeders.     

ESTIMATES OF THE PRICE ELASTICITY OF SWITCHING BETWEEN BRANDED AND GENERIC DRUGS

We estimate price elasticities of switching from branded to generic drugs for two widely used drugs: Prozac and Zocor. We find the price elasticity of switching varies by drug and is between 0.01 and 0.10. While elasticity estimates for Zocor are robust to the inclusion of controls for supply‐side factors, those for Prozac are not. Our results indicate consumers in managed care plans are most responsive to differences in out‐of‐pocket (OOP) cost, and we estimate that a 10% increase in the OOP cost difference between Zocor and generic Simvastatin increases an individual's probability of switching to the generic by approximately 0.3%. This would result in a modest total savings of $36,700 among our sample of 114,218 privately insured Zocor users. Our finding that individuals are relatively unresponsive to the lower prices caused by generic introduction implies that policies targeting supply‐side behavior are likely to have a larger effect on generic uptake than price‐based inducements. If generic‐uptake did occur immediately within the first 18 months after generic introduction, the total savings among individuals and insurance companies within our sample would be approximately $7 million for Zocor and $255,000 for Prozac. (JEL I11, I18)     

Economic Benefits of Management Reform in the Gulf of Mexico Grouper Fishery: A Semi-parametric Analysis

This paper uses a semi-parametric empirical model to estimate the economic benefits of adopting a property rights-based management program in the Gulf of Mexico grouper fishery. The analysis predicts that a rights-based fleet will be comprised of fewer, more cost efficient boats than under the current controlled access management program. Results indicate that in the year of our data, 1993, the smaller, more productive fleet could harvest the allowable reef fish catch at a cost saving of $2.92–$7.07  million, 12–30% less than under controlled access management. Recent tightening of controlled access regulations suggest that the benefits from management reform could be even larger in the current day fishery.      

Productivity cost model of the treatment of rheumatoid arthritis with abatacept

Background: The cost of the biological drug abatacept may be partly offset by reductions in the cost of productivity losses due to employee absences and reduced effectiveness at work because of rheumatoid arthritis (RA).

Methods: This was a 1-year productivity cost model based on epidemiologic and economic data. The setting was private industry in the US and the primary outcome measure was the difference in the costs of lost productivity and drug treatment with and without abatacept (‘cost difference’).

Results: The lost productivity cost of RA for a firm of 10,000 was $1.69 million, largely due to the cost of RA-related absenteeism ($1.55 million) rather than to worker displacement ($0.12 million) or care-giving for spouses with RA ($0.02 million). In the base case analysis (excluding presenteeism), 37% of the acquisition cost of abatacept was offset by reductions in the cost of RA-related productivity losses. In some industry groups (Utilities and Finance), and in models that included presenteeism, reductions in lost productivity costs exceeded the abatacept cost.

Conclusions: Much of the acquisition cost of abatacept may be offset by reductions in the cost of productivity losses due to RA. Abatacept treatment could be cost saving in some industry groups.     

Obesity-related costs and the economic impact of laparoscopic adjustable gastric banding procedures: benefits in the Texas Employees Retirement System

Objective: To assess the return on investment (ROI) and economic impact of providing insurance coverage for the laparoscopic adjustable gastric banding (LAGB) procedure in classes II and III obese members of the Texas Employees Retirement System (ERS) and their dependents from payer, employer, and societal perspectives.

Methods: Classes II and III obese employee members and their adult dependents were identified in a Texas ERS database using self-reported health risk assessment (HRA) data. Direct health costs and related absenteeism and mortality losses were estimated using data from previous research. A dynamic input–output model was then used to calculate overall economic effects by incorporating direct, indirect, and induced impacts. Direct health costs were inflation-adjusted to 2008 US dollars using the Consumer Price Index for Medical Care and other spending categories were similarly adjusted using relevant consumer and industrial indices. The future cost savings and other monetary benefits were discounted to present value using a real rate of 4.00%.

Results: From the payer perspective (ERS), the payback period for direct health costs associated with the LAGB procedure was 23–24 months and the annual return (over 5 years) was 28.8%. From the employer perspective (State of Texas), the costs associated with the LAGB procedure were recouped within 17–19 months (in terms of direct, indirect, and induced gains as they translated into State revenue) and the annual return (over 5 years) was 45.5%. From a societal perspective, the impact on total business activity for Texas (over 5 years) included gains of $195.3 million in total expenditures, $93.8 million in gross product, and 1354 person-years of employment.

Limitations: The analysis was limited by the following: reliance on other studies for methodology and use of a control sample; restriction of cost savings to 2.5 years which required out-of-sample forecasting; conservative assumptions related to the cost of the procedure; exclusion of presenteeism; and no sensitivity analyses performed.

Conclusion: This analysis indicates that providing benefits for the LAGB procedure to eligible members of the Texas ERS and their dependents is worthy of support from payer, employer, and societal perspectives.     

WAREHOUSES,TRUCKS, AND PM2.5: HUMAN HEALTH AND LOGISTICS INDUSTRY GROWTH IN THE EASTERN INLAND EMPIRE

The eastern Inland Empire of Southern California has experienced dramatic growth of the logistics industry since 2000. This paper analyzes the air pollution implications of that expansion. It is found that truck traffic will generate significant air pollution, especially PM_2.5. The estimated excess mortality associated is 32–64 cases per year, with a combined excess mortality and morbidity value of $247–$455 million per year. This represents 44%–81% of the estimated wages generated by industry growth and $5 million–$9 million per distribution facility. These estimates suggest that policies should be developed to internalize those costs.     

DOUBLING U.S. EXPORTS UNDER THE PRESIDENT'S NATIONAL EXPORT INITIATIVE: IMPLICATIONS OF SUCCESSFUL IMPLEMENTATION

President Obama's National Export Initiative (NEI) is targeted at doubling U.S. exports between 2010 and 2015. We apply USAGE to quantify what the NEI would need to do to foreign import‐demand curves and domestic export‐supply curves to achieve this target. USAGE is a dynamic economy‐wide model of the U.S. incorporating recession‐relevant factor market specifications including excess capacity and wage/labor‐demand elasticities that vary with the level of employment. In our central simulation, export‐promotion policies compatible with the President's target reduce the cost of the current recession from about 70 million 1‐year jobs for the period 2008–2020 to 45 million jobs. (JEL E17, C68, E62, E65, F16)     

THE ECONOMIC VALUE OF PROTECTING INVENTORIED ROADLESS AREAS: A SPATIAL HEDONIC PRICE STUDY IN NEW MEXICO

The objective of this paper is to examine the off‐site benefits, as capitalized into housing values, of protecting 1.6 million acres of Inventoried Roadless Areas (IRAs) in the state of New Mexico, United States. In light of petitions filed by various U.S. states to maintain the status of IRAs as roadless lands, spatial hedonic price models are estimated and used to calculate the implicit value of IRAs in New Mexico. Findings show that a two‐stage least squares (2‐SLS), robust spatial‐lag model is the most appropriate econometric representation of the hedonic price function, and that IRA lands are a significant and positive determinant of house value. After controlling for the presence of Wilderness Areas (WAs) and other characteristics, results indicate that, on average, there is a 5.6% gain in the property value of a house from being located in, or adjacent to, a Census tract with IRAs. In the aggregate, this gain represents 3.5% of the value of all owner‐occupied units in New Mexico ($1.9 billion in capitalized value, or an annualized value in perpetuity of $95 million, assuming a 5% interest rate). (JEL R22, H40, Q51, C21)     

Adoption of digital repositories for CO2 emissions reduction: the case of Korea

This study aims to estimate the potential economic benefits, energy and CO₂ emissions reductions when using trusted third-party digital repository (TTPR) services in one individual bank, and within the banking industry in Korea. First, the cost, benefit and net benefit of using TTPR services in the banking industry are estimated. Second, the net induced output effect is estimated. Third, based on an environmentally extended input–output analysis, CO₂ emissions reduction was estimated as 1924.32 tons in 2009 and the energy consumption reduction as 640.70 TOE. Fourth, the total economic benefit, which is the sum of the net induced output effect and economic value of CO₂ emissions reductions, is approximately $11.04 million. The findings demonstrate that energy consumption and CO₂ emissions reductions are meaningful enough to result in significant economic benefits. Therefore, the Korean government should promote the use of TTPR services in the entire industry.     

STRESS AND SMOKING: ASSOCIATIONS WITH TERRORISM AND CAUSAL IMPACT

This study analyzes the effects of the Oklahoma City bombing and 9/11 terrorist attacks on stress, smoking, and smoking quit attempts using 1,657,985 observations from the Behavioral Risk Factor Surveillance System. Regression discontinuity results suggest that, in the fourth quarter of 2001, stress increased by nearly an extra half day per 30 days (11.9%) among ever smoking adults. In the 2 years after 9/11, smoking prevalence increased by 1.1 percentage points (2.3%) among ever smoking adults, resulting in between 950,000 and 1,300,000 adult former smokers becoming smokers again because of terrorism. The net cost to the government was between $530 million and $830 million through the end of 2003. Adults reported disproportionate stress increases based on community military participation and education. Simultaneity between smoking and stress is addressed by an instrumental variables model, providing validity to the hypothesized causal pathway between terrorism, stress, and smoking. This model suggests that an extra day of stress per 30 days causes a 3.4 percentage point increase in smoking among ever smoking adults. Results help to quantify a hidden cost of terrorism and provide a better understanding of utility maximization during periods of high stress. (JEL I12, I18)     

The cost implications of the use of telmisartan or ramipril in patients at high risk for vascular events: the ONTARGET study

Abstract

Background:

The recently published ONTARGET trial found that telmisartan was non-inferior to ramipril in reducing CV death, MI, stroke, or heart failure in patients with vascular disease or high-risk diabetes. The cost implications of ramipril and telmisartan monotherapy use based on the ONTARGET study are reported here.

Methods and Results:

Only healthcare system costs were considered. Healthcare resource utilization was collected for each patient during the trial. The authors obtained country-specific unit costs to the different healthcare care resources consumed (i.e., hospitalizations events, procedures, non-study, and study drugs) for all enrolled patients. Purchasing power parities were used to convert country-specific costs into US dollars (US$ 2008). The total undiscounted costs of the study for the telmisartan group was $12,762 per patient and is higher than the ramipril group at $12,007 per patient, an un-discounted difference of $755 (95% confidence interval [CI], $218–$1292); The discounted costs for the telmisartan group was $11,722 compared with $11,019 for the ramipril group; a difference of $703 (95% CI, $209–$1197). The difference in costs is exclusively related to the acquisition cost of telmisartan over generic ramipril.

Limitations:

This analysis only considered direct healthcare system costs. Costs accrued outside the hospital were not collected. Combination therapy was excluded since it would likely be more expensive than ramipril alone, with no additional benefit and a risk of some harm.

Conclusions:

Based on these results, it is suggested that for the ONTARGET patients, the use of telmisartan instead of ramipril increases costs by 6.3%. These findings suggest that the choice to put patients on telmisartan should be justified based on the patient’s susceptibility to specific adverse events to minimize the cost implications.     

Healthcare costs in patients with advanced non-small cell lung cancer and disease progression during targeted therapy: a real-world observational study

Aims: To assess healthcare costs during treatment with epidermal growth factor receptor (EGFR) tyrosine kinase inhibitors (TKIs) and following disease progression in patients with advanced non-small cell lung cancer (NSCLC).

Methods: A retrospective analysis of medical records of US community oncology practices was conducted. Eligible patients had advanced NSCLC (stage IIIB/IV) diagnosed between January 1, 2008 and January 1, 2015, initiated treatment with erlotinib or afatinib (first-line or second-line), and had disease progression. Monthly Medicare-paid costs were evaluated during the TKI therapy period and following progression.

Results: The study included 364 patients. The total mean monthly cost during TKI therapy was $20,106 (95% confidence interval [CI]?=?$16,836–$23,376), of which 47.0% and 42.4% represented hospitalization costs and anti-cancer therapy costs, respectively. Following progression on TKI therapy (data available for 316 patients), total mean monthly cost was $19,274 (95% CI?=?$15,329–$23,218), and was higher in the 76.3% of patients who received anti-cancer therapy following progression than in the 23.7% of those who did not ($20,490 vs $15,364; p?<?.001). Among patients who received it, anti-cancer therapy ($11,198; 95% CI?=?$7,102–$15,295) represented 54.7% of total mean monthly cost. Among patients who did not receive anti-cancer therapy, hospitalization ($13,829; 95% CI?=?$4,922–$22,736) represented 90.0% of total mean monthly cost. Impaired performance status and brain metastases were significant predictors of increased cost during TKI therapy.

Limitations: The study design may limit the generalizability of findings.

Conclusions: Healthcare costs during TKI treatment and following progression appeared to be similar and were largely attributed to hospitalization and anti-cancer therapy. Notably, almost one-quarter of patients did not receive anti-cancer therapy following progression, potentially indicating an unmet need; hospitalization was the largest cost contributor for these patients. Additional effective targeted therapies are needed that could prolong progression-free survival, leading to fewer hospitalizations for EGFR mutation-positive patients.     

Economic burden of hepatitis C-associated diseases: Europe,Asia Pacific,and the Americas

Abstract

Background:

Globally, hepatitis C virus (HCV) infects ～3% of the population. The objective of this study was to review published work and determine the direct medical costs for diseases associated with HCV infection globally, with the exception of the US.

Methods:

A systematic literature search was conducted to identify studies reporting the costs of hepatitis C sequelae between January 1990 and January 2011. Over 400 references were identified, of which 45 were pertinent. The costs were compiled, converted to US dollars, and adjusted to 2010 costs using the medical component of the consumer price index.

Results:

The median cost of liver transplants was estimated at $139,070 ($15,430–$443,700), refractory ascites at $16,740 ($8990–$35,940), hepatocellular carcinoma (HCC) at $15,310 ($3370–$84,710), decompensated cirrhosis at $14,660 ($3810–$48,360), variceal hemorrhage at $12,190 ($3550–$46,120), hepatic encephalopathy at $9180 ($5370–$50,120), diuretic sensitive ascites at $3400 ($1320–$7470), compensated cirrhosis at $820 ($50–$2890), and chronic hepatitis C at $280 ($90–$1860). The variation among studies was mainly due to the methodology used to assess cost, local cost and government reimbursement, and country-specific treatment protocols.

Limitations:

All costs were adjusted to 2010 US dollars using the US medical component of the consumer price index (CPI) which may not reflect the change in medical costs in other countries. In addition, the costs, in the local currency were converted to US dollars in the year of the study. However, medical expenses may not vary with exchange rate, leading to artificial variations. Finally, there was no assessment of the quality of individual studies, which resulted in the same weighting to all studies.

Conclusions:

Hepatitis C imposes a high economic burden globally. Knowing the burden of HCV sequelae is useful for policy decisions as well as serving as a basis for determining the value of HCV screening and treatment.     

Managing acute acetaminophen poisoning with oral versus intravenous N-acetylcysteine: a provider-perspective cost analysis

Abstract

Background: Acetaminophen (APAP) overdose, which can lead to hepatotoxicity, is the most commonly reported poisoning in the United States and has the highest rate of mortality, with more than 100,000 exposures and 300 deaths reported annually. The treatment of choice, N-acetylcysteine (NAC), is effective in both oral (PO) and intravenous (IV) formulations. The main difference in therapies, other than administration route, is time to complete delivery – 72 hours for PO NAC versus 21 hours for IV NAC, according to full prescribing information. This distinction is the primary basis for variation in management costs for hospitalized patients receiving these products.

Objectives: To quantify and compare full treatment costs from the provider perspective to manage acute APAP poisoning with either PO or IV NAC in a standard treatment regimen.

Methods: A cost model was developed and populated with published data comprising probabilities of potential clinical outcomes and the costs of resources consumed during patient care.

Results: For patients who present <10 hours post-ingestion, the estimated total cost of care with PO NAC in the treatment regimen is $5,817 (ICU patients) or $3,850, (ward patients) compared with $3,765 and $2,768 for similar care with IV NAC. Potential cost savings equal – $2,052 (–35%) or –$1,083 (–28%), respectively, in favor of IV NAC. Similar potential savings were estimated for patients presenting 10–24 hours post-ingestion.

Conclusion: IV NAC is the less costly therapeutic option for APAP poisonings, based on simulation modeling and retrospective data. The current economic evaluation is restricted by the absence of comparative data from head-to-head, matched-cohort studies and the limitations common to retrospective APAP toxicology datasets. Additional research could refine these results.