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Cost of change - or why bother?

Business
Healthcare
Healthy thinking
Comment

Business


Here is something to think about for the new year. You are the managing director of a firm, with regular customers who usually place orders worth hundreds or thousands of pounds, but who sometimes make small purchases as well. Your finance director tells you that the cost of raising an invoice is £25. Do you:

a) Grab every penny?
b) Tell sales to send out orders less than £25 gratis to regular customers?

Being a sensible person you know that option b not only saves you money, but raises the esteem of your company with customers. It's a no-brainer.

Healthcare


Now try the same thing for changing behaviour of health professionals. You are chief executive of a health authority (or whatever they are called nowadays) with particular concern about GP prescribing habits. Let's assume that you have the evidence and good health economic analysis to show that A is not only the same as B, but costs less. Do you:

a) Arrange for hordes of thrusting young pharmacists to tell your GPs that they are wrong?
b) Ask about how savings relate to the cost of making those savings?

The no-brainer answer is b, but the one most often chosen is a. When, to save a few pennies, GPs are pressured to prescribe codeine to patients and tell patients to buy their own paracetamol, rather than prescribing paracetamol and codeine together, we need a bit of common sense. That comes from a group of British health economists [1].

Healthy thinking


In this paper [1] the health economists make the point that the cost of a health intervention is the sum of the cost or saving of the intervention itself, plus the cost of implementing the new policy. Both costs have to be taken into account in calculating cost effectiveness.

Their examples are increasing use of ACE inhibitors in patients with heart failure, and the use of older antidepressants instead of SSRIs. The methods are straightforward, and based on costs and benefits seen in a randomised trial of pharmacy advice outreach applied to a health authority.

The results (Table 1) show that for ACE inhibitors, the cost per quality adjusted life year gained is increased, but is still very reasonable. Changing GPs from using SSRIs to older antidepressants actually costs more than it saves.

Table 1: Cost and effectiveness

ACE inhibitor
Treatment cost effectivemess (£/QALY) 1437
Implementation cost effectiveness (£/QALY) 297
Total 1734
SSRI
Cost saving per episode in change to older treatment (£) 50
Cost per patient of change (£) 55
Loss per conversion (£) 5

Comment


This is welcome stuff. There's an old rule that 80% of your savings will come from 20% of accounts. What this paper does is to remind us that there is a cost to changing behaviour. If the effort is not effective, or if it concentrates on trivial targets, then it is a waste of space. Intelligent targeting would be the equivalent of not bothering to raise an invoice for anything costing less than £25. Prescribing advice (often seen as prescribing command) would benefit from this kind of thinking.

References:

  1. J Mason et al. When is it cost-effective to change the behaviour of health professionals? JAMA 2001 286: 2988-2992.
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