Tomas J. Philipson, PhD

 To determine the lifetime social value of using the guideline-recommended vaccines for children born in the United States in 2009. 

This study utilized an economic model with parameter values sourced from clinical and observational data, as well as the literature. 

The model quantified the health effects of routine vaccination for 14 diseases in terms of quality-adjusted life-years (QALYs) saved. The health effects were then valued by applying an economic value of a QALY. Producers’ profits were estimated using data on vaccine prices, profit margins, and the number of vaccines administrated in the 2009 US birth cohort. The costs of producing the vaccines were subtracted from the value of the health effects to yield the total social value of vaccination. The producers’ and consumers’ shares of this social value were calculated. Sensitivity analyses were conducted to determine how results depend on underlying parameter assumptions. 

Estimates indicated that vaccination of this cohort will save 1.2 million QALYs, relative to no vaccination. Of those health gains, 88% stemmed from reduced mortality and 12% from reduced morbidity. We estimated a social value of $184.1 billion from these gains, of which $3.4 billion accrues to manufacturers as profits, while $180.7 billion accrues to the rest of society. In sensitivity analysis, the total social value ranged from $40 billion to $675 billion, and the manufacturers’ share ranged from 0.3% to 11.5%. 

 Policy makers should account for this social value when considering policies affecting incentives to vaccinate and develop new vaccines.

		By preventing illness and premature deaths, vaccination of children born in the United States in 2009 will generate $184 billion in lifetime social value above the costs of the vaccines. 

		Because saving a child’s life yields many healthy life-years, the large majority (88%) of the health benefits of vaccines is due to avoided premature deaths rather than reduced morbidity (12%). 

		The high social value of vaccines has improved population health and provided economic benefit to multiple stakeholders, including patients, health plans, and vaccine manufacturers, whose profits in this cohort amount to approximately 2% ($3.2 billion) of the total social value.

The innovation of childhood vaccines has resulted in a decline in infectious disease, as well as gains in length and quality of life. Smallpox has been eradicated, poliomyelitis is nearly eliminated, and many other vaccine-preventable diseases have seen declines in incidence.

 Although adverse events (AEs) can occur with vaccines,

 and recent research has focused on their rising costs,

 the postvaccine era has seen life expectancy increase 15 to 25 years compared with the pre-vaccine era, and further gains are expected.

 Evidence suggests a large share of these survival gains is due to the control of infectious disease through vaccination.

When encouraged by public health policies, vaccination also provides a benefit to government and private payers by reducing overall costs and increasing population health. The CDC has cited evidence that common childhood vaccinations save over $5 in direct medical costs and effects on productivity for every $1 spent.

 Maciosek and colleagues found that preventative childhood immunization produced annual net medical savings of $267 per person.

 Vaccination also generates community (herd) immunity by reducing disease incidence and transmission, thus resulting in a healthier population.

Because vaccines have been successful at preventing disease, the public is no longer regularly confronted with many vaccine-preventable diseases, and the health and economic benefits of vaccination may be underappreciated.

 As childhood vaccines have reduced disease prevalence, real and perceived AEs of vaccination have become more salient to parents than the vaccine-targeted diseases.

 Consequently, vaccination rates in many US states have declined in recent years.

 As vaccination rates slip, the risk of new outbreaks increases.

Moreover, although consumers are insulated from the cost of many vaccines, vaccine cost is an important consideration for payers and providers and has been criticized.

 This focus on AEs and costs has obscured vaccines’ overall value to individuals and society. Previous research has yet to show how the total social value of vaccines is divided between innovators who develop these technologies and patients and the broader society who benefit from them. Therefore, in this study, we sought to measure the social value of childhood vaccines in the United States and the distribution of that value to manufacturers versus the rest of society.

The concept of social value of therapies and its distribution between manufacturers and patients has been described in other disease areas. For instance, Grabrowski et al found that statin usage resulted in a social value of $1.25 trillion, of which patients received 76%.

 Yin et al performed a similar analysis on tyrosine kinase inhibitors for the treatment of chronic myeloid leukemia and found a social value of $143 billion—90% of which was retained by patients.

 Recent gains in cancer survival have provided $1.9 trillion of additional social value, with 81% to 95% of that being retained by patients.

 Lastly, HIV/AIDS therapies have generated $1.38 trillion in social value, with 95% accruing to patients.

 Such analyses are net monetary benefit analyses, which is a common economic way of thinking about value which is distinct from cost-effectiveness analysis. The aim is to measure the total value a given health intervention generates for society, and how that value is distributed across patients and manufacturers.

This study applied similar methods to determine the social value of childhood vaccines for a birth cohort in the United States. Consistent with previous research, social value was defined from an economic perspective as the quantity of resources, in monetary terms, that society would be willing to give up in order to retain the health gains attributable to vaccines. Put another way, the overall social value of vaccines equals the aggregate value retained by consumers (above the actual payments for vaccines) plus the value retained by manufacturers (in the form of vaccine profits). We decomposed the social value into the shares accruing to manufacturers versus the rest of society. For infectious diseases, the social value includes not only those vaccinated, but also those not vaccinated who benefit from the reduction in disease incidence.

The study entailed constructing an economic model based on observational and clinical data. The model calculates the social value of the routine pediatric vaccination schedule used in the United States in 2009. We do so by quantifying the health effects of routine vaccination of children born in the United States in 2009. In particular, vaccines to prevent the following 14 diseases were considered: congenital rubella syndrome, diphtheria, haemophilus influenzae type b (Hib), hepatitis A, hepatitis B, measles, mumps, pertussis, pneumococcus-related diseases (including pneumococcal disease, otitis media, pneumonia, and meningitis), polio, rotavirus, rubella, tetanus, and varicella. The influenza vaccine was not included because its changing seasonal nature would have required different methods.

The social value was estimated by applying an economic value to the health effects of vaccines, measured in terms of quality-adjusted life-years (QALYs) saved through vaccination. QALYs take into account both duration and quality of life. A year in perfect health would be measured as 1 QALY, whereas death counts as 0. From the value of the QALYs gained, the costs to produce vaccines were subtracted. This yielded the social value—or in economic terms, the total surplus&mdash;of vaccines, and represents the economic value of the health gains from vaccines minus the resources society spent to produce them. The shares of the total surplus accruing to manufacturers (producer surplus) versus the rest of society (consumer surplus) were also calculated.

It should be noted that vaccine-preventable illnesses impose additional costs on society beyond the utility loss infected individuals experience, including caregiver utility loss and the use of special services for persistent disability. Therefore our estimate of the health value of vaccination should be considered a lower bound.

In addition, one should exercise caution in interpreting the results of this framework for rotavirus, since in industrialized countries like the United States, the costs of rotavirus are mainly hospitalization and caregiver utility loss, as rotavirus mortality and morbidity are lower in the industrialized setting. In contrast, many of the other studied vaccines target illnesses that imposed a high mortality and morbidity burden in the pre-vaccine era.

According to the CDC, 4,130,665 children were born in the United States in 2009.

 The health effects of vaccination in this cohort were estimated by combining data from the literature with life tables from the Human Mortality Database.

 From the literature, we obtained for each disease data on cases of illness prevented, premature deaths avoided, average age of onset, average age at death from the disease, average duration of disease, and utility loss. Specific parameter values and sources are available in the eAppendix (

). The survival benefits of vaccination were net of adverse reactions to vaccination. To obtain the economic value of a QALY, we considered values generated by revealed and stated preference studies.

 A mid-range value of $150,000 was used and varied in sensitivity analysis.

Estimating manufacturers’ profits required 3 types of data: 1) data on vaccine prices, 2) data on manufacturers’ profit margins, and 3) data on the number of vaccines administered in the 2009 US birth cohort. We obtained data on prices (available in the eAppendix) from the CDC Vaccines for Children Program website, which contains archived data on public and private vaccine prices from 2008 to 2015.

We obtained data on vaccine manufacturers’ profit margins from annual reports and financial statements. When measuring manufacturers’ profits, we used the gross profit margin, which represents the sales volume minus production costs. Obtaining a companywide average across the top 5 vaccine manufacturers produced an average gross profit of 75%.

 This is a conservative approach, as gross profits do not subtract out manufacturer research and development (R&D) and marketing expenses. By using the gross profit margin, we can view vaccines’ social value as society’s benefit from vaccination, and society’s investment in R&D as the cost of inventing and developing the vaccines. (Subtracting R&D from profits would negate this framing.) This framing is useful because investments should be undertaken when the benefits (ie, the return on investment) exceeds the cost; social value is an important part of this equation. Moreover, R&D costs include the costs of many failures that the innovator encountered on the way to the given successful product; there is not an established method for measuring R&D costs for vaccines.

To estimate the number of vaccines administered, we required data on vaccine coverage rates, dosage schedules, wastage, and the cohort size. Following previous work, we assumed that 53% of vaccine doses were publicly (vs privately) administered and the wastage rate—the rate at which additional vaccines must be purchased beyond those needed for each vaccinated child because some vaccines will be unused&mdash;was 5%.

 from the CDC. Doses administered between ages 0 and 18 were included, but the costs of any adult booster doses were excluded. Given that any adult booster doses occur many years into the child’s life, whereas the lives saved and illnesses avoided from vaccination are realized mainly in early childhood, the effect of the focus on childhood doses should be minimal.

The 3 analytic steps are described broadly below. Additional detail is provided in the eAppendix. Throughout the analysis, monetary values were inflation-adjusted to 2014 US dollars using the Consumer Price Index,

 and an annual discount rate of 3% was applied.

Step 1: Value Health Effects of Vaccination

The health effects of vaccines were calculated by summing the changes in morbidity and mortality among the 2009 US birth cohort due to vaccination. The mortality effects were calculated as the number of deaths averted from vaccination multiplied by the QALYs the typical child would lose from dying of the given disease (calculated as average life expectancy minus average age at death from the given disease times aged-adjusted utility). The morbidity effects were calculated as the number of cases of illness prevented through vaccination times the typical duration of illness times the disutility from the given illness. The health effects of vaccines in QALYs were then converted to economic terms by valuing each QALY at $150,000.

 This yielded the economic value of the health effects of vaccination.

Step 2: Estimate Manufacturers’ Profits

Vaccine manufacturers’ profits from a given vaccine were estimated by multiplying the vaccine’s price by the number of vaccines sold by the profit margin. Although vaccines typically consist of multiple doses, and vaccination rates vary by dose, in the profit calculations we assumed that all children who received the first dose of a vaccine would also receive all subsequent doses. This assumption overestimates profits because some children will not receive all doses, and manufacturers’ profits will be lower than they would be had these children received all of their doses.

Using the results of the previous 2 steps, we calculated consumer, producer, and total surplus (ie, social value). Consumer surplus was calculated as the value of the health effects of vaccines (from Step 1) minus the cost of the vaccines (from Step 2). Producer surplus equaled the manufacturer profits (from Step 2). Consumer and producer surplus together yielded the total surplus.

We performed analyses to test the sensitivity of the model to the parameters. Specifically, we varied all parameters by 

10%, except for the disease-specific vaccination rates, which were varied by 

 5% to avoid specifying rates over 100%. In addition, we also varied the value of a QALY from $50,000 through $250,000 to reflect the wide range of values in the literature, and varied the discount rate from 0% to 6%. Lastly, we conducted an analysis, which included the parents’ time cost to take the children to receive the vaccines, taking into account that multiple vaccines may be given in the same visit.

The health effects of vaccination are reported in 

. Compared with no vaccination, an estimated 1.2 million QALYs will be saved due to vaccination among children born in the United States in 2009, for a value of $185.2 billion. Because vaccines typically prevent deaths that would have occurred in childhood, these avoided deaths save a large number of QALYs, whereas QALY gains from avoided illness are more modest. Consequently, 88% of the health value of vaccines is due to avoided death compared with 12% due to avoided illness. Among vaccines, diphtheria, tetanus, and pertussis (DTaP/Tdap) will have the largest health value by an order of magnitude, at nearly 800,000 QALYs saved for a value of $119 billion. Other vaccines with large health values are pneumococcus-related diseases (154,000 QALYs, $23 billion); measles, mumps, and rubella (MMR) (135,000 QALYs, $19 billion); and hepatitis B (79,000 QALYs, $12 billion). The smallest health value will be for rotavirus, at 5264 QALYs and $790 million.

 reports estimates of manufacturers’ revenues, costs, gross and net profits by vaccines given to the 2009 US birth cohort. Estimated profits are the lowest for the hepatitis A vaccine ($109 million gross, $36 million net), and the highest for pneumococcus-related diseases ($1.0 billion gross, $350 million net). Across all 14 diseases, vaccines generate an estimated $4.5 billion in revenues, $1.1 billion in costs, $3.4 billion in gross profits, and $1.1 billion in net profits.

The total social value by vaccine and its distribution across manufacturers and consumers are reported in 

. Consumers’ share of value, or surplus, ranges from $10 million for rotavirus to $119 billion for DTaP/Tdap. Vaccines producing the greatest consumer surplus do not necessarily provide the largest profit, or producer surplus, to manufacturers. Total social value ranges from $595 million from rotavirus to $119 billion from DTaP/Tdap, with the full vaccination schedule generating $184 billion in social value (

), or $45,000 per child. Of that total social value, 1.8% accrues to manufacturers, whereas 98.2% accrues to the rest of society. The manufacturers’ share ranges from 0.3% for DTaP/Tdap to 98.3% for rotavirus, and is less than 15% for 7 out of the 9 vaccines.

In sensitivity analyses, we found that the model is most sensitive to the economic value of a QALY, the premature deaths prevented from vaccination, and the discount rate, which together contributed 98.1% of the variance in results (

). In simulations, the total social value ranged from $153 billion to $227 billion, and the manufacturers’ share ranged from 1.3% to 2.6%. In other words, varying parameters by 

10% maintained a social value of at least $37,172 per child, with at least 97% of the value retained as consumer surplus. In addition, varying the value of a QALY from $50,000 to $250,000 led to social value ranging from $61 billion to $308 billion, and varying the discount rate from 0% to 6% led to social value ranging from $447 billion to $107 billion. Subtracting parents’ time cost led to a social value of $182 billion and manufacture share of 1.8%.

Our estimates suggest that routine childhood vaccination produces a large social value. In particular, we found that vaccination will save 1.2 million QALYs among children born in the United States in 2009, relative to a counterfactual of no vaccination. Vaccines treating common diseases, such as DTaP/Tdap, pneumococcus, and MMR, generate a particularly large share of the health benefits.

Childhood illness is often transitory, but many childhood diseases have nontrivial fatality rates, and a death in childhood costs many years of healthy life. Therefore, it is not surprising that the bulk of these health gains (88%) stems from reduced mortality, with the remainder (12%) from reduced morbidity. Valuing each life-year at $150,000 and subtracting the production costs of vaccines, we found that vaccination of the 2009 birth cohort generated $184 billion in social value, or $45,000 per child. Of this, $3.4 billion (2%) accrues to manufacturers in the form of profits, while $180.7 billion (98%) is retained by the rest of society. Sensitivity analysis showed that the large social value and large share retained by society are robust to a wide range of plausible parameters.

The 2% manufacturers’ share of social value we found is smaller than that found in similar analyses of other health interventions. The manufacturers’ share of social value was between 5% to 24% in HIV/AIDS, chronic myeloid leukemia, and heart disease.

 The distribution of gains between manufacturers and the rest of society is determined by the cost of the intervention and the health gains it produces. Health gains will generally be larger in the context of diseases that are prevalent or take life early. Therefore, it is not surprising that childhood vaccines come out favorably in these comparisons, as they are among the most cost-effective health interventions

 and they preserve the health of children, who, in the absence of a devastating childhood illness, typically go on to lead a long, healthy life. To put the health results in context, in other industries, the producers’ share of total social value has ranged from 4% for minivans

The fact that 98% of the social value from existing childhood vaccines goes to children and their families is good news for access to current vaccines; however, it has longer-term implications for innovation. A 2% share of value suggests relatively weak incentives for the development of new and improved vaccines, relative to the incentives to develop cancer drugs, cholesterol-lowering drugs, or broadband Internet. However, there is debate in the literature about the exact manufacturer share of surplus required to optimally incentivize innovation, and therefore, although this study informs the debate, it does not determine optimal vaccine pricing.

Because the model relies on inputs from the literature, it is limited by their availability and quality. When exact parameters were not available, conservative assumptions were made. For example, costs and profits were overestimated by assuming children who receive 1 dose of a vaccine receive all subsequent doses, thus underestimating social value and overestimating manufacturers’ share. In cases in which illness is usually short and mild but can be severe and long-lasting (eg, polio), we assumed a short and mild case in our utility calculations. In calculating profit margins, we assumed the companywide profit margin applied to a given vaccine, although vaccines may comprise a less profitable division of pharmaceutical firms.

 We also used gross margin, which does not take R&D and marketing costs into account, rather than net margin, so that we could consider the social value as the return on society’s investment in developing the vaccine.

Additionally, while the 2009 birth cohort was selected for this analysis due to the availability of data on the health effects of vaccination,

 it has the drawback of including in the analysis a year of shortage of the Hib vaccine.

 However, given the scale of the findings of this study, this consideration likely had minimal impact.

Articles

Vaccination of children born in the United States in 2009 will save 1.2 million quality-adjusted life-years, generating $184 billion in social value net of vaccination costs.

The Social Value of Childhood Vaccination in the United States

Organs for transplantation are scarce, but new medical therapies can prevent organ failure and the need for transplants. We sought to describe the unique value created by treatments that spare organs from failure and thus conserve donated organs for transplant into others, using hepatitis C virus (HCV) as a case study. 

Using data on trends in chronic liver disease, liver disease progression, and liver transplant allocation models, as well as the effectiveness of new HCV treatments, we estimate the potential effects of systematic HCV screening and treatment on the demand for liver transplants in the United States. We estimate the spillover benefits to patients with all-cause liver disease in terms of increased availability of transplants and life-years gained.

We estimated that systematic HCV screening and treatment could spare 10,490 liver transplants to HCV-infected patients from 2015 to 2035. An estimated 7321 transplants would accrue to patients with end-stage liver disease without HCV and 3169 transplants to those with uncured HCV, providing approximately 52,700 and 22,800 additional life-years, respectively. 

Treatment advances for HCV have the potential to generate considerable spillover benefits to patients awaiting transplants for non—HCV-mediated liver failure. For other diseases in which organ transplants are in short supply, our study provides a novel pathway by which positive spillovers may accrue from treatments that prevent end-stage organ disease.

Am J Manag Care. 2016;22(5 Spec Issue No. 6):SP212-SP219

		Organs for transplantation are scarce, but innovative hepatitis C virus (HCV) therapies can prevent liver failure and the need for transplants.

		Systematic HCV screening and treatment would spare 10,490 livers for transplant over 20 years, with almost 70% of these livers benefitting patients with non—HCV-mediated liver failure.

		The increased availability of donor livers will lead to 52,700 additional life-years for patients without HCV infection and 22,800 life-years for patients with HCV, providing economic values of $7.9 billion and $3.5 billion, respectively.

		Such spillover benefits to untreated populations underscore the value of innovative therapies in preventing organ failure.

Medical treatments can offer value to society that extends beyond the patients who are directly treated. For example, vaccinations not only reduce the likelihood of infection in those who are vaccinated, they also reduce the spread of infection. Such positive spillovers generate considerable value.

 These spillovers may also result from the treatment of diseases that would otherwise lead to organ damage and transplantation. For example, improvements in nephropathy treatment within diabetes reduce the incidence of end-stage renal disease, thus sparing kidneys for use in patients with end-stage renal disease who do not have diabetes.

The availability of organs for transplantation is scarce. In the United States alone, more than 7000 individuals die awaiting organ transplantation each year.

 In this study, we explored this idea by applying it to recently introduced therapies for hepatitis C virus (HCV) infection. An estimated 3 million individuals in the United States are affected by chronic HCV, a condition associated with long-term injury to the liver and with complications including cirrhosis, hepatocellular carcinoma, and, ultimately, liver failure (see 

 The most common reason for liver transplantation in the United States is end-stage liver disease (ESLD), and currently, nearly 50% (14,000/29,000) of ESLD cases among transplant recipients are due to HCV.

Until recently, treatments for HCV were neither particularly effective nor well tolerated.

 However, newer HCV therapies suppress the virus in more than 90% of patients, making an effective cure of HCV highly likely for the majority of those affected.

 Curing patients of HCV obviates their need for future liver transplantation due to HCV, thus creating opportunities for transplantation into patients with other forms of ESLD.

Currently, only one-third of Americans who need liver transplants receive them,

 and shortages are expected to rise as the transplant waiting list continues to grow while the supply of organs remains flat.

 Obesity and the aging of the population are reducing the quality of deceased donor livers, while obesity-related liver disease is also increasing the demand for them.

We simulated the effect of a systematic HCV screening and treatment program in the United States on the number of livers spared from transplantation into patients with HCV-mediated ESLD. We estimated the number of these spared livers that could be transplanted into patients with other forms of ESLD, as well as the resulting benefits to both groups. Our analysis takes a broader perspective than do existing models of HCV burden

 because it recognizes that treatment of patients with HCV creates positive spillovers for non-HCV patients with ESLD.

Our study relied on 2 main data sources: first, the National Health and Nutrition Examination Survey (NHANES)

a biennial survey administered to a nationally representative sample of the US population. Along with a survey of health and healthcare utilization, participants also give blood samples and undergo other diagnostic tests. This data set was used to generate trends over time in liver disease and in key risk factors. Our second data source was the United Network for Organ Sharing (UNOS) database, which holds information on every patient on the waiting list for organ transplantation in the United States since 1987, including patient characteristics, primary disease, source of organ, and time spent on waiting list.

We developed an epidemiologic-economic model to estimate how a systematic HCV screening and treatment program would: a) reduce the number of livers transplanted into patients with HCV with ESLD and b) increase the number of spared livers that could be transplanted into patients with other forms of ESLD. We converted livers spared into life-years by using prior literature on life expectancy gained from transplants. Finally, we transformed these longevity benefits into economic values using conventional estimates of the value of a statistical life-year.

We compared the effects of 2 types of HCV screening and treatment interventions (“real-world” and “comprehensive”) with a baseline in which screening and treatment did not change from the status quo. First, we simulated the baseline annual demands for liver transplants from 2015 to 2035, for patients with ESLD, according to underlying disease (ie, HCV, alcohol-related, and nonalcoholic fatty liver disease [NAFLD]). Second, using historical data on national liver transplantation rates, we projected the supply of livers available for transplantation from 2015 to 2035. Third, we performed a simulation of how 2 different interventions in HCV screening and treatment would reduce the demand for liver transplantation among patients with HCV-mediated ESLD during 2015 to 2035. Together, these steps estimated, year-by-year, the impact of systematic HCV screening and treatment on the number of livers newly spared for transplantation.

Projected Annual Baseline Demand for HCV-Mediated Liver Transplants

We obtained HCV prevalence data from 2001 to 2012 from NHANES and annual HCV incidence data from 2001 to 2010 from the CDC.

 The incidence of HCV was estimated to be 17,000 cases in 2010 (see eAppendix).

 In our baseline scenario, we assumed constant incidence of 18,000 cases per year from 2011 onward.

To estimate the baseline demand for transplants among patients with HCV-mediated ESLD, we adapted previous HCV modeling studies

 to develop a Monte Carlo Markov simulation model that transitioned patients through each stage of liver disease, from chronic infection without liver fibrosis to decompensated cirrhosis or hepatocellular carcinoma. The latter 2 states comprise candidacy for liver transplantation (

 describes the Markov model). The conceptual flow diagram highlights the inputs to the model, steps taken to validate key model assumptions, and the model outputs: a) livers spared from transplantation into patients with HCV as a result of a systematic HCV screening and treatment intervention, and b) the allocation of these spared livers to patients without HCV and patients with uncured HCV on the transplant list.

Projected Annual Baseline Demand for Non—HCV-Mediated Liver Transplants

To project the baseline demand for liver transplants among individuals with non—HCV-mediated ESLD, we used data from UNOS. We counted the number of individuals on the liver transplant waiting list with a primary diagnosis of NAFLD or liver disease due to alcohol, iron deposition, or copper deposition. As illustrated in 

, the incidence of NAFLD on the transplant waitlist increased significantly in the last decade. From historical data, we linearly extrapolated the annual incidence of NAFLD from 2015 to 2035, and we assumed that rates of liver disease due to alcohol or iron/copper deposition increased linearly until 2025. Based on prior studies,

 we allowed for a “leveling off” between 2025 and 2035 by reducing the linearly extrapolated rates by 1.5% per year.

Projected Annual Number of Patients Receiving Transplant

Using our incidence forecasts, we projected the annual number of patients with HCV-mediated and non—HCV-mediated ESLD receiving liver transplants. Not all patients on the waiting list receive transplants; the likelihood of transplant varies by etiology of liver disease and clinical severity. UNOS data record whether and when a patient receives a liver transplant, as well as time spent on the waitlist. Using individual-level data from UNOS, we estimated the likelihood of liver transplantation as a function of time spent on the waitlist, adjusting for patient age, sex, and body mass index (BMI). Empirically, the probability of transplantation varied by sex and BMI among patients with HCV-mediated liver disease, but not among those without it. We applied sex- and BMI-specific transplant probabilities to HCV-mediated ESLD incidence estimates to project transplants for patients with HCV from 2015 to 2035. For non–HCV-mediated patients with ESLD, we used unadjusted Kaplan-Meier estimates of the probability of transplantation at a given year (45.7%, 52.3%, 54.8%, 56.4%, and 57.3%, after 1, 2, 3, 4, and 5 years, respectively).

Projected Supply of Livers Available for Transplantation

The supply of livers available for transplantation, at approximately 6700 per year (2.25 per 100,000 population), remained the same from 2005 to 2013. We conservatively assumed the liver supply would grow proportionately with the population from 2015 to 2035. We conducted several sensitivity analyses around this assumption, as described below.

Effect of HCV Screening and Treatment on Rates of HCV-Mediated ESLD and Liver Transplants

We simulated the annual impact of implementing two 5-year policies to screen for and treat HCV. We assumed that treatment with novel HCV therapies leads to sustained virologic response (SVR) rates of 90% among patients with liver disease fibrosis in stages F0 to F4 where severity of diseases increases with fibrosis stage.

 Subjects achieving SVR at stage F4 were assumed to either remain in SVR or to transition to either decompensated liver disease (at an annual probability of 0.008) or hepatocellular carcinoma (at an annual probability of 0.005).

In reality, some patients may not accept screening, others may not receive their results, and still others who are aware of their HCV infection may not initiate treatment. Our real-world screening and treatment intervention rate relies on prior studies to assume that the percent of patients accepting HCV screening is 91%

 and the percent of those screened positive who initiate treatment is 80% (regardless of liver fibrosis stage).

We calculated the difference in the transplant waitlist size between the real-world scenario and a baseline scenario in which HCV screening and treatment remained at current rates from 2015 to 2035. In the real-world scenario, screening would take place over 5 years during 2015 to 2019, with 100% of patients with HCV aware of their disease status by 2019. In the baseline scenario, we assumed that 25% of subjects between F0 and F3 would be aware of their HCV status, and 75% of subjects would be aware of it at F4.

 In both scenarios, we used Markov models to project the annual number of patients with and without HCV on the liver transplantation waitlist from 2015 to 2035. Finally, we calculated the number of livers spared and the number of additional patients receiving transplants in the real-world scenario. (Additional details are in the eAppendix.)

Measuring Spillovers in Terms of Number and Value of Life-Years Gained

To estimate the economic value of these gains, we applied a value of $150,000 per life-year.

 We computed life-years gained from newly available liver transplants using prior research, estimating that each new transplant adds 7.2 years of life.

 To calculate social value as life-years gained multiplied by $150,000, we utilized prior research estimating the value of a quality-adjusted life-year.

We conducted 3 additional sensitivity analyses. First, we simulated the impact of a comprehensive HCV screening and treatment scenario, with 100% take-up of screening and treatment and 90% effectiveness for those treated. This exercise assessed the potential maximum impact of a systematic screening and treatment program. Second, we assumed a rising, rather than constant, incidence of liver disease due to alcohol, iron deposition, or copper deposition. Third, we simulated the impact of an opt-out organ donation policy, which allows organs from deceased donors to be used unless the deceased has officially requested otherwise.

 Under current law, individuals must opt in and officially request to make their organs available for potential transplants in the event of death. Based on recent meta-analyses, we estimated that an opt-out policy in the United States would increase the supply of livers by 45%.

The impact of a systematic HCV screening and treatment program on the total number of livers spared from 2015 to 2035 is shown in 

. The projected numbers of patients with HCV with each stage of liver fibrosis were lower under a systematic HCV screening and treatment program (our real-world scenario) relative to baseline. For example, the projected number of patients with HCV and decompensated liver failure was 30% lower under a systematic HCV screening and treatment program, and deaths from liver disease fell by 22%. The projected total number of new patients with HCV to be added to the liver transplant list between 2015 and 2035 was 28% lower under a systematic HCV screening and treatment program.

Our model predicted that 45,541 livers would be transplanted into patients with HCV during the 2015-to-2035 period under the baseline scenario compared with 35,052 under the real-world HCV screening and treatment program. The 10,490 spared livers were projected to be primarily allocated to individuals on the waitlist with non—HCV-mediated ESLD (7321 liver transplants), with a lower proportion allocated to those with uncured HCV-mediated ESLD (3169 transplants). 

 shows these spared livers broken down by subsets of patient characteristics.

The total life-years gained from additional transplants in each group were projected to be 52,711 years (7321 

 7.2 years), respectively. This amounts to $7.9 billion in economic value accrued to patients with non—HCV-mediated liver disease over this time period, with an additional $3.5 billion accruing to patients with HCV. Of note, the total number of transplants and life-years gained from newly allocated transplants to patients with non–HCV-mediated ESLD were approximately twice as large as those gained by patients with uncured HCV ESLD requiring transplantation. This is due to the larger projected prevalence of patients who do not have HCV on the transplant waiting list after implementation of the HCV screening and treatment program.

 shows the projected year-by-year cumulative number of liver transplants to patients without HCV and those with uncured HCV on the liver transplant list. At each year, the cumulative number of spared livers transplanted into patients with non—HCV-mediated ESLD is roughly twice that among those with uncured HCV on the transplant list. From 2015 to 2035, our model projected 80,451 liver transplantations to patients without HCV, of which the 7321 newly allocated spared livers would account for approximately 9% of the total.

 shows how our projections were affected by not only various sensitivity analyses regarding future trends in NAFLD and other liver disease, but by a comprehensive HCV screening and treatment scenario, in which both screening uptake and treatment rates were 100%, and by an opt-out organ donation policy in the United States that was estimated to increase the supply of transplantable livers by 45%.

We found that increasing trends in NAFLD and liver disease due to alcohol or iron/copper deposition would increase the total number of spared livers allocated to these patients from 7321 to 7653 between 2015 and 2035. The use of an opt-out policy for organ donation would further increase the number of livers spared from 7653 to 10,953, and a comprehensive HCV screening and treatment intervention would further raise the number of spared livers from 10,953 to 16,557.

Advances in treatment for hepatitis C virus (HCV) have the potential to generate considerable spillover benefits to patients awaiting transplants, especially among those with non—HCV-mediated liver failure.

The Wider Public Health Value of HCV Treatment Accrued by Liver Transplant Recipients

To assess the effect of inpatient oral nutritional supplement (ONS) use on length of stay, episode cost, and 30-day readmission probability.

 Eleven-year retrospective study (2000 to 2010).

 Analyses were conducted using the Premier Perspectives Database, which contained information on 44.0 million adult inpatient episodes. Using a matched sample of ONS and non-ONS episodes for any inpatient diagnosis, instrumental variables regression analysis was performed to quantify the effect of ONS use on length of stay, episode cost, and probability of approximate 30-day readmission. For the readmission outcome, the matched sample was restricted to episodes where the patient was known to be at risk of readmission. The fraction of a hospital’s episodes in a given quarter involving ONS was used as an instrumental variable.

 Within the database, 1.6% of 44.0 million adult inpatient episodes involved ONS use. Based on a matched sample of 1.2 million episodes, ONS patients had a shorter length of stay by 2.3 days (95% confidence interval [CI] — 2.42 to –2.16), from 10.9 to 8.6 days (21.0% decline), and decreased episode cost of $4734 (95% CI – $4754 to – $4714), from $21,950 to $17,216 (21.6% decline). Restricting the matched sample to the 862,960 episodes where patients were readmitted at some point, ONS patients had a reduced probability of early readmission (within 30 days) of 2.3 percentage points (95% CI – 0.027 to – 0.019), from 34.3% to 32.0% (6.7% decline).

 Use of ONS decreases length of stay, episode cost, and 30-day readmission risk in the inpatient population.

Malnutrition is a serious but underappreciated problem among hospitalized patients. There is relatively little evidence evaluating the large-scale effectiveness of therapeutic interventions against malnutrition. We conducted an instrumental variables analysis to determine the effect of oral nutritional supplement use in the inpatient setting.

		Use of oral nutrition supplements decreased length of stay, episode cost, and probability of 30-day readmission.

		 By increasing oral nutrition supplement use, hospitals can improve hospitalization outcomes and decrease healthcare spending.

Malnutrition is a serious and underappreciated problem among hospitalized patients. Malnourished patients face heightened risks of poor outcomes, including increased length of stay (LOS),1-3 healthcare costs,

Estimates of malnutrition prevalence in the inpatient population range from 8% to 62%, depending on the location and the specific patient population considered.

Groups at highest risk include elderly as well as oncology and gastroenterology patients.

 Despite evidence documenting the deleterious effects of malnutrition in the inpatient setting, studies suggest it is a common problem that often goes unrecognized and undertreated.

A growing body of evidence suggests that oral nutrition supplements (ONS), which deliver both macronutrients and micronutrients for special medical purposes in addition to normal food, might improve outcomes among hospitalized patients. A variety of benefits have been found for ONS use, including reduced LOS,

However, previous studies suffer from limitations, including modest sample sizes, narrowly selected patient populations, and in observational studies, possible selection bias. Consequently, questions remain regarding the robustness and generalizability of existing findings and the size of gains and healthcare costs associated with ONS use in hospitalized patients.

This retrospective data analysis was conducted to assess the association and causal impacts of ONS on health outcomes for hospitalized patients, focusing on 3 key outcomes: LOS, episode cost, and probability of 30-day readmission.

This analysis was conducted using the Premier Perspectives Database. This database contains diagnostic and billing information on 44.0 million adult inpatient episodes at 460 sites during the years 2000 to 2010. Premier estimates that these data cover 20% of all US inpatient episodes. The sample was restricted to adults 18 years or older and excluded terminal episodes and all episodes involving tube feeding, leaving only oral feeding for examination. All monetary figures were reported in 2010 dollars and inflation-adjusted based on the Bureau of Labor Statistics medical Consumer Price Index (http://www.bls.gov/ cpi/#tables).

The study’s 3 key outcome variables were LOS, episode cost, and probability of 30-day readmission. Length of stay was defined as the number of days of direct patient care (minimum 1 day) from admission to discharge. Episode cost was defined as the actual costs to treat the patient during the hospitalization. Thirty-day readmission probability was defined as a return hospitalization for any diagnosis. For patient confidentiality purposes, the Premier database only contains the month and year of an inpatient episode. Therefore, the 30-day readmission window was calculated by identifying admissions later the same month or during the following month. Given that there are no

 International Classification of Diseases, Ninth Revision 

or Current Procedural Terminology codes that identify ONS use, ONS was defined as a “complete nutritional supplement, oral,” as indicated by the Premier data, and coded as a binary variable, indicating any ONS used during the inpatient episode.

Naïve ordinary least squares (OLS) regression analyses were performed on the full matched sample. Analyses controlled for a variety of patient, episode, and provider characteristics. Demographic covariates included age, age squared, insurance type, marital status, race, and sex. Comorbidity covariates included all components of the Charlson Comorbidity Index.

Health history covariates included whether the patient had been admitted to any Premier network hospital in the previous 6 months, and whether the patient was admitted from the emergency department, by physician referral, or by inter-facility transfer. Hospital- specific covariates included number of beds, urban location, whether the site was a teaching hospital, and region (Northeast, Midwest, West, or South as defined by US Census data). Time trends were controlled for using year and quarter dummies.

Treatment is assigned randomly in clinical trials to avoid confounding; however, there is potential for selection bias in observational research from unobserved factors that may influence study outcomes.

 Because it is likely to be administered to individuals who are less healthy, ONS use could be spuriously associated with increased LOS. Additionally, only certain patient health-related risk factors were directly observable with available data. Therefore, further methods were used to remove these sources of potential selection bias: propensity score matching and instrumental variables analysis.

To diminish the potential for confounding due to differences in observed personal characteristics and to identify nutritionally at-risk patients, propensity score matching

was used to match ONS episodes to similar non-ONS episodes. The probability of receiving ONS was estimated using a logistic regression of ONS based on the covariates noted above. After removing all episodes involving children (<18 years) and tube feeding, each ONS episode was matched to its nearest non-ONS episode neighbor.

Instrumental variable analysis was used to specifically address potential bias due to nonrandomized treatment selection, which could not be addressed with propensity matching alone. Instrumental variables can remove the effect of selection bias and identify the causal effect of a treatment on outcomes.

Using this method requires an instrument that correlates with the treatment of interest but does not affect the outcome, except through its influence on the likelihood of receiving treatment.

For this analysis, the selected instrument was the fraction of episodes involving any ONS use in a given hospital in a given quarter. By looking at changes in ONS use based on a hospital’s inclination to prescribe it, rather than underlying patient characteristics, the unbiased identification of the effect of ONS was made feasible. Since instrumental variable properties are best understood in linear settings,

this instrument was applied to linear models of the 3 outcomes. Several tests of the instrument’s validity were performed.

To control further for unobserved patient heterogeneity, the model included fixed effects for groups based on how long patient data remained observable prior to loss to follow-up. These fixed-effects “follow-up” groups were no patient follow- up data; 1 day through 1 year of follow-up; 1 to 2 years of follow-up; 2 to 3 years of follow-up; and more than 3 years of follow-up. Because life expectancy cannot generally be observed in the Premier database (except when individuals die in a Premier network hospital), follow-up duration served as a proxy for underlying health status. Observed follow-up using hospital-based data may be a preferable measure of overall patient frailty, because the diagnostic codes present in a single episode (vs multiple follow-up episodes) are unlikely to reflect the full range of patient comorbidities.

 For the readmission outcome, the matched sample was restricted to episodes where the patient was known to be at risk of readmission following discharge. If patients did not die following hospitalization, it could be assumed ONS had 2 potential benefits: it prevented readmissions by making people healthy, or it delayed readmissions among those eventually readmitted. Because the Premier data did not distinguish between patients not readmitted due to recovery and those not readmitted due to death, the current study could only measure the effect of delayed readmission (by calculating the change in 30-day readmission probability among patients eventually readmitted). This approach also provided a conservative estimate of the total impact of ONS on readmission.

Next, estimates for the effect of ONS on LOS, episode cost, and readmission probability were used to calculate a return on investment (ROI) for ONS use, using the following formula:

	ROI = savings generated through ONS use — amount spent on ONS

The above formula yields the “episode cost” ROI of ONS use through reduced episode cost. Savings generated from ONS use were defined as the average reduction in episode cost due to ONS use. The amount spent on ONS was the average episode cost of ONS use. For readmission ROI, the average episode cost among the readmitted population was multiplied by the reduction in the probability of readmission to calculate the savings generated through ONS use. The amount spent on ONS was defined as for the episode cost ROI.

Analyses were performed using Stata version 11 (StataCorp LP, College Station, Texas). A 2-sided P value of .05 or less was considered statistically significant. A detailed summary of additional testing and sensitivity analyses conducted to validate study results can be found in the 

From 46.1 million inpatient episodes and 810,589 episodes involving ONS use, we excluded 306,528 tube-feeding episodes, 1,798,907 involving patients under age 18 years, 112 with incomplete data, and 19,817 terminal episodes to obtain a sample of 44.0 million episodes and 724,027 ONS episodes. The overall rate of ONS use in adult inpatient episodes was 1.6%. Each adult ONS episode was matched to an adult non-ONS episode, to obtain a matched sample of 1,160,088 episodes.

Mean characteristics of ONS episodes, all non-ONS episodes, and matched non-ONS episodes are reported in 

. Compared with general non-ONS inpatient episodes, individuals receiving ONS were older (age 68.4 vs 56.7 years) and less healthy on various dimensions; and 42.2% of ONS episodes were preceded by an admission in the prior 6 months, compared with only 25.6% for non-ONS episodes. The average LOS for an ONS episode was 12.5 days compared with 4.8 days for non-ONS episodes.

Instrumental variables regression analysis indicated that inpatient oral nutritional supplement use decreased length of stay, episode cost, and 30-day readmission probability.

Impact of Oral Nutritional Supplementation on Hospital Outcomes

 To examine how cost sharing for prescription drugs affects compliance with antiplatelet therapy and subsequent health outcomes among patients with acute coronary syndrome (ACS).

 Retrospective outcomes study using administrative data from medical and pharmaceutical claims of patients enrolled at health plans offered by 26 large employers drawn from all regions of the country.

 A total of 14,325 patients were diagnosed as having ACS and underwent coronary stent implantation between 2002 and 2005. Each patient was followed up for a maximum of 2 years. Primary outcomes measures were adoption of outpatient antiplatelet therapy, adherence to outpatient therapy, hospital admissions, and healthcare expenditures.

 Patients with ACS who face higher coinsurance are less likely to adopt outpatient antiplatelet therapy within the first month after stent implantation and are more likely to discontinue treatment in the first year after stent implantation (P <.01). Higher coinsurance is also associated with an increased number of ACS rehospitalizations (P <.01). For patients in health plans with higher coinsurance rates, expected costs from ACS hospitalizations are  $2796 (38%) higher in the first year after stent implantation (P <.01).

 Higher copayments for prescription drugs are associated with lower utilization of antiplatelet therapy and with higher likelihood of rehospitalization among patients with ACS. As a consequence, total healthcare spending for patients with ACS increases by approximately $615 in the first year after stent implantation.

This article studies the association of pharmacy cost sharing with antiplatelet therapy utilization and health outcomes for patients with acute coronary syndrome.

Tomas J. Philipson, PhD

Articles

The Social Value of Childhood Vaccination in the United States

The Wider Public Health Value of HCV Treatment Accrued by Liver Transplant Recipients

Impact of Oral Nutritional Supplementation on Hospital Outcomes

Pharmacy Cost Sharing, Antiplatelet Therapy Utilization, and Health Outcomes for Patients With Acute Coronary Syndrome