This issue of CHP/PCOR's quarterly newsletter, which covers news from the fall 2005 quarter, includes articles about:

• a study concluding that the implantable cardioverter defibrillator -- one of the most expensive medical devices on the market -- is worth its high cost, in appropriate patients, because it prevents sudden cardiac deaths;
• the evolution and broad application of the Quality Indicators, a set of practical tools developed by CHP/PCOR researchers that are used by hundreds of U.S. hospitals, medical groups, health insurers, state health agencies and business coalitions to screen for quality problems;
• a study finding that the Internet can be a valuable tool to help patients with stigmatized illnesses (such as mental illness) find information about and seek treatment for their illness;
• CHP/PCOR-hosted seminars on global health themes, given by Jack Chow of the World Health Organization -- who discussed combating malaria, TB and HIV/AIDS -- and Dean Jamison of the NIH's Fogarty International Center, who discussed evaluating countries' performance on health; and
• a prestigious national award won by two CHP/PCOR trainees at the annual meeting of the Society for Medical Decision Making.

In 1999, the Blue Cross and Blue Shield Federal Employee Program (FEP) implemented a pilot disease management program to manage congestive heart failure (CHF) among members. The purpose of this project was to estimate the financial return on investment in the pilot CHF program, prior to a full program rollout. A cohort of 457 participants from the state of Maryland was matched to a cohort of 803 nonparticipants from a neighboring state where the CHF program was not offered. Each cohort was followed for 12 months before the program began and 12 months afterward. The outcome measures of primary interest were the differences over time in medical care expenditures paid by FEP and by all payers. Independent variables included indicators of program participation, type of heart disease, comorbidity measures, and demographics. From the perspective of the funding organization (FEP), the estimated return on investment for the pilot CHF disease management program was a savings of $1.08 in medical expenditure for every dollar spent on the program. Adding savings to other payers as well, the return on investment was a savings of $1.15 in medical expenditures per dollar spent on the program. The amount of savings depended upon CHF risk levels. The value of a pilot initiative and evaluation is that lessons for larger-scale efforts can be learned prior to full-scale rollout.

To allocate HIV prevention resources effectively, it is important to have information about the effectiveness of alternative prevention programs as a function of expenditure. We refer to this relationship as the ldquoproduction functionrdquo for a prevention program. Few studies of HIV prevention programs have reported this relationship. This paper demonstrates the value of such information. We present a simple model for allocating HIV prevention resources, and apply the model to an illustrative HIV prevention resource allocation problem. We show that, without sufficient information about prevention program production functions, suboptimal decisions may be made. We show that epidemiologic data, such as estimates of HIV prevalence or incidence, may not provide enough information to support optimal allocation of HIV prevention resources. Our results suggest that good allocations can be obtained based on fairly basic information about prevention program production functions: an estimate of fixed cost plus a single estimate of cost and resulting risk reduction. We find that knowledge of production functions is most important when fixed cost is high and/or when the budget is a significantly constraining factor. We suggest that, at the minimum, future data collection on prevention program effectiveness should include fixed and variable cost estimates for the intervention when implemented at a ldquotypicalrdquo level, along with a detailed description of the intervention and detailed description of costs by category.

The pharmaceutical industry is facing substantial criticism from many directions, including financial barriers to access to drugs in both developed and developing countries, high profits, spending on advertising and marketing, and other issues. Underlying these criticisms are fundamental questions about the value of the current patent-based drug development system. Six major problems with the patent system are (1) recovery of research costs by patent monopoly reduces access to drugs; (2) market demand rather than health needs determines research priorities; (3) resources between research and marketing are misallocated; (4) the market for drugs has inherent market failures; (5) overall investment in drug research and development is too low, compared with profits; and (6) the existing system discriminates against US patients.

Potential solutions fall into 3 categories: change in drug pricing through either price controls or tiered pricing; change in drug industry structure through a "buy-out" pricing system or with the public sector acting as exclusive research funder; and change in development incentives through a disease burden incentive system, orphan drug approaches, or requiring new drugs to demonstrate improvement over existing products prior to US Food and Drug Administration approval. We recommend 4 complementary reforms: (1) having no requirement to test new drug products against existing products prior to approval but requiring rigorous comparative postapproval testing; (2) international tiered pricing and systematic safeguards to prevent flow-back; (3) increased government-funded research and buy-out for select conditions; and (4) targeted experiments using other approaches for health conditions in which there has been little progress and innovation over the last few decades.

This issue of CHP/PCOR's quarterly newsletter, which covers news from the summer 2005 quarter, includes articles about:

• our new core faculty member Grant Miller, a Harvard-trained health economist with an interest in improving health in developing countries;
• a discussion with center director Alan Garber on key issues and challenges facing the Medicare program;
• the fourth meeting of the Patient Safety Consortium, a group of more than 100 U.S. hospitals taking part in CHP/PCOR research on patient safety culture;
• core faculty member Jay Bhattacharya's research on HIV patients' perceptions of their lifespan as examined through viatical settlement transactions; and
• a research project on technology coverage decisions in the U.S. vs. the U.K., undertaken by Stirling Bryan, a U.K.-based Harkness Fellow in Health Care Policy who is spending the next academic year at CHP/PCOR.

Investors systematically deviate from rationality when making financial decisions, yet the mechanisms responsible for these deviations have not been identified. Using event-related fMRI, we examined whether anticipatory neural activity would predict optimal and suboptimal choices in a financial decision-making task. We characterized two types of deviations from the optimal investment strategy of a rational risk-neutral agent as risk-seeking mistakes and risk-aversion mistakes. Nucleus accumbens activation preceded risky choices as well as risk-seeking mistakes, while anterior insula activation preceded riskless choices as well as risk-aversion mistakes. These findings suggest that distinct neural circuits linked to anticipatory affect promote different types of financial choices and indicate that excessive activation of these circuits may lead to investing mistakes. Thus, consideration of anticipatory neural mechanisms may add predictive power to the rational actor model of economic decision making.

This issue of CHP/PCOR's quarterly newsletter covers developments from the spring 2005 quarter. It includes articles about:

• research on HIV/AIDS in Russia -- presented in May at an international conference -- which shows that in order to contain the country's rapidly expanding HIV/AIDS epidemic, Russia must aggressively treat HIV-positive injection drug users;
• a CHP/PCOR-hosted discussion session with Edward Sondik, director of the National Center for Health Statistics;
• an ongoing CHP/PCOR study that examines older adults' preferences about health states in which they would need help with basic tasks like bathing or eating;
• a panel discussion on "International Responses to Infectious Diseases," led by CHP/PCOR at the Stanford Institute for International Studies' first annual conference, featuring the World Health Organization's chief of infectious diseases;
• a widely publicized study by CHP/PCOR researchers which found that obese workers are paid less than non-obese workers in similar jobs, but only when they have employer-sponsored health insurance -- a finding suggesting that the wage gap is due to obese workers' higher medical costs, rather than outright prejudice; and
• an update on the Center on Advancing Decision Making for Aging, including two new seed projects and a lecture given by economics and psychology professor George Loewenstein.

Purpose:

To examine U.S. adolescents' (age 13-18) utilization of ambulatory care and the likelihood of receiving preventive counseling from 1993 through 2000.

Methods:

The National Ambulatory Medical Care Survey and National Hospital Ambulatory Medical Care Survey provided visit-based data on counseling services that occurred in private physician offices and hospital outpatient departments. Main outcome measures included adolescents' use of outpatient care and their likelihood of being counseled on 3 health promotion topics (i.e., diet, exercise, and growth/development) and 5 risk reduction topics (i.e., tobacco use/exposure, skin cancer prevention, injury prevention, family planning/contraception, and HIV/STD transmission).

Results:

Adolescents had the lowest rates of outpatient visits among all age groups, with particularly low rates among boys and ethnic minorities. Most frequently, adolescent visits were for upper respiratory tract conditions, acne, routine medical or physical examinations, and, for girls, prenatal care. In 1997-2000, counseling services were documented for 39% (99% CI: 32-46%) of all adolescent general medical/physical examination (GME) visits. Diet [26% of GME visits (20-32%)] and exercise [22% (17-28%)] were the most frequent counseling topics. The counseling rates of the other six topics ranged from as low as 3 to 20%, with skin cancer prevention, HIV/STD transmission, and family planning/contraception ranking the lowest. These rates represented minimal improvements from 1993-1996 both in absolute term and in relation to the gaps between practices and recommendations.

Conclusions:

Adolescents underutilize primary care, and even those who do receive care are underserved for their health counseling needs. The noted lack of change over time suggests that satisfactory improvement is unlikely unless substantial interventions are undertaken.