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Diabetes 01

Diabetes 01

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Published by Brian Ahier
Using Clinical Information To Project Federal Healthcare Spending ~ Diabetes
Using Clinical Information To Project Federal Healthcare Spending ~ Diabetes

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Published by: Brian Ahier on Sep 30, 2009
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UsingClinicalInformationToProjectFederalHealthCareSpending
HowCongress could usea diabetes spending projection modelto helpinform budget decisions.
byElbert S. Huang, Anirban Basu, Michael J. O’Grady, and James C.Capretta
ABSTRACT:
Complications from chronic illnesses often do not emerge for many years.Cur-rent federal cost projection methods are constrained by ten-year cost estimates, which cap- ture increases in near-term intervention costs but not changes in long-term costs. Currentmethods also cannot easily capture the cost implications of changes in disease progres-sion. Type 2 diabetes is a prime example of a chronic illness with long-term health and costconsequences. We present results from an epidemiologically based model that projectsfederal costs for diabetes under alternative policies, and we discuss the potential changesin the federal budget process needed to capture the full impact of these interventions.[Health Aff (Millwood). 2009;28(5):w978–90 (published online 1 September 2009;10.1377/hlthaff.28.5.w978)]
T
he high costs associated with caring for 
people with chronicdiseasesisoneofthemostpressinghealthpolicyissuesintheUnitedStatestoday.
1
The baby-boom generation is entering its retirement years, and ad-vanced age is associated with the development of several costly chronic illnesses.As a result, Medicare and other payers will be under tremendous financial pres-sure as costs rise from predictable demographic and epidemiological forces.
Current Practice, The Ten-Year Budget Window, And Diabetes
Forecasting future health care costs for the federal government is done primar-ilybytheOfficeoftheActuary(OACT)attheCentersforMedicareandMedicaid Services (CMS) for the administration and by the Congressional Budget Office(CBO) for Congress. The CMS Office of the Actuary has lead responsibility for
w9 78 1 S e p t e m b e r 2 0 0 9
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DOI 10.1377/hlthaff.28.5.w978
©2009 Project HOPE–The People-to-People Health Foundation, Inc.
ElbertHuangisanassistantprofessorofmedicineintheSectionofGeneralInternalMedicine,Universityof Chicago(Illinois)SchoolofMedicine.AnirbanBasuisanassistantprofessorofmedicinethere.MichaelO’Grady(MOGrady@UChicago.edu)isaseniorfellowatNORCinBethesda,Maryland,andprincipalofO’GradyHealth PolicyLLCinChevyChase,Maryland.JamesCaprettaisaprincipalofCivicEnterprisesLLCinWashington,D.C.
 
forecasting future spending for Medicare as part of the annual look at the pro-gram’s finances by the Boards of Trustees. The CBO is charged by Congress withproviding nonpartisan research on the costs of proposed and enacted legislation.Both the House and the Senate have rules requiring bills to be analyzed for costimplications by the CBO. CBO staff has broad flexibility to use professional judg-ment to set assumptions and analytical approaches when producing cost esti-mates for health legislation.Both the CMS and the CBO regularly review the latest findings and data fromclinical medicine and health services research to inform their projection methodsand assumptions. For instance, the CBO released a detailed review of the litera-ture on pharmaceutical care before the Medicare prescription drug legislationwas passed. At that time, the CBO staff concluded that the evidence was insuffi-cient to incorporate health status changes into its projection methodology whenexamining drug coverage legislation.
2
A similar CBO study was issued in 2002 onthe effectiveness of disease management programs in Medicare.
3
The CBO has also developed the capacity to make long-term budgetary projec-tions, which are featured in a series of reports.
4
Findings from its long-term fore-casts have been cited extensively by agency officials in congressional testimonyand elsewhere, to better inform policymakers and the public about the dramaticgrowth in entitlement costs expected in the coming decades. To make these pro- jections, the CBO has developed separate, long-term models for Social Securityand health care costs.CBO cost estimates for legislation related to programs such as Medicare and Medicaid have traditionally covered a period of ten-years—the so-called budget-ary window.
5
Inthe past, concerns were raisedthatthis practice containeda bud-getary loophole. Legislation with minimal short-term costs could include built-incostincreasesbeyondtenyears.Toaddressthisproblem,Congressrecentlyaskethe CBO to monitor the cost effects of tax and entitlement legislation for the foursucceeding decades beyond the first ten years.
6
Still, the reverse problem has notyet been addressed. Legislative initiatives that produce near-term costs but lon-ger-term savings are only examined based on their ten-year cost impact.Forhealthpolicydirectedatchronicillnesses,anear-termfocusisproblematic,as the natural history of disease progression often goes well beyond ten years.Thus, the full impact of policies intended to head off unnecessary expenses willnot be in full view for policymakers with cost estimates stopping at year ten. Theproblem cuts both ways. A more complete accounting of the costs of a chronic-illness intervention would capture the potential offsetting costs of reductions incare for avoided or postponed complications, but it would also capture the in-creased spending associated with the chronically ill living longer lives.Further, projection methodologies should have the capacity to capture healthand cost effects of alternative policies for chronic illness. Although both the CBOand the CMS track closely the literature relevant to their projection assumptions,
C l i n i c a l I n f o r m a t i o n
H E A LT H A F FA I RS ~
We b E x c l u s i v e
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to our knowledge neither agency has yet built a forecasting approach for anychronic condition or disease that uses reliable epidemiological data to project ex-pected health and cost effects from alternative policy scenarios.Type 2 diabetes is the prototypical example of a chronic condition with long-term health implications. The typical progression is from excessive body weightto pre-diabetes (impaired fasting glucose, impaired glucose tolerance), to type 2diabetes, and ultimately to diabetes-related complications. Type 2 diabetes typi-cally develops in middle-aged or older people, although it is an emerging issue forchildrenandyoungadultsaswell.
7
Theactualdiagnosisoftype2diabetesoftenisdelayed by four to seven years from the time that glucose levels enter the diabeticrange.
8
The complications of diabetes such as blindness and renal failure also takemany years to appear. As a result, the positive effects of improved treatment oftentake decades to show clinically significant effects.
9
Cost estimators are understandably cautious about crediting long-term sav-ings,giventheuncertainfinancialexposurefortaxpayers.Althoughnoprojectioncanbefoolproof,whatisneedednowisaconcretedemonstrationofhowanepide-miological model could inform budget projections beyond ten years, with trans-parent methods and an acceptable level of reliability. We present such a model fortype 2 diabetes here.
Description Of A Model For Projecting Diabetes Prevalence,Incidence, And Costs
During the past decade, the modeling of the natural history of diabetes and itstreatments has advanced greatly with the availability of data from groundbreak-ing clinical trials such as the Diabetes Control and Complication Trial (DCCT)andtheUnitedKingdomProspectiveDiabetesStudy(UKPDS).
10,11
MajordiabetesmodelsincludetheDCCTResearchGroupType1diabetesmodel,
12
thetype2dia-betesmodelfromtheNationalInstituteofDiabetesandDigestiveandKidneyDis-eases (NIDDK),
13
the model of diabetes complications from the Centers for Dis-ease Control and Prevention (CDC) and Research Triangle International,
14
theUKPDStype2diabetesmodel,
15
theSheffieldmodel,
16
theCOREdiabetesmodel,
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the Eagle model,
16
and the Archimedes model.
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Each simulates the natural historyof major diabetes complications. The models’ conclusions regarding future com-plication rates and the benefits of comprehensive diabetes care have been consis-tentovertime,despitedifferencesinmodel assumptionsandinputs.
16
Thesemod-els have been used to forecast the long-term costs of a cohort of patients withdiabetes and its complications.We set out to explore whether an epidemiologically based model of a chroniccondition could provide insights to policymakers weighing the merits of policyscenarios. We developed the Diabetes Population Cost Model (DPCM), integrat-ing a diabetes progression model with data already in the public domain that canbe used to estimate population-level changes in diabetes risk factors over time.
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