Health doesn’t exist in a vacuum. All of the innovative treatments in the world are useless if the health system itself is not functioning optimally and if new innovations cannot be effectively implemented.
That’s where health economics come into play. Investigating how factors like efficiency, effectiveness, value and behaviour can impact healthcare gives researchers and policymakers insights into how to implement innovations into existing healthcare systems effectively so that patients receive the highest possible standard of care.
Several IHI and IMI2 projects are investigating the relationships between health and economics: two main results are highlighted below.
Loss of productivity due to respiratory infections
When people get sick, they cannot work, and the economy suffers a loss. Value-Dx reported on productivity losses caused by common respiratory infections, and compared them from one country to another.
Common respiratory infections come with a high social cost – every year, many people need to go to doctor’s clinics for assessment, treatment and advice because of them. While people are sick, even for short periods, they cannot work, and if many people are sick at the same time, that impact compounds.
Value-Dx’s PRUDENCE trial primarily focused on whether prescriptions of antibiotics could be reduced if doctors tested patients for infections on the spot. But the trial also recorded the hours of paid work missed due to respiratory infections.
What they uncovered was that strong differences exist from country to country.
For instance, in Ireland people suffered from symptoms of respiratory illnesses – which could impact work performance – for roughly 14 days, whereas in Spain people experienced symptoms for an average of 7 days.
In Germany, respiratory infections resulted in about 30 hours of work missed per patient, counted from the moment of consultation, whereas in France only seven hours were lost.
The cost in Euros of productivity loss due to the respiratory infections was the highest in Germany, at €1260 per patient, whereas in Greece it was only €129. These differences in productivity losses are affected by the labour market – in Germany an hour of labour lost is on average more expensive than an hour in Greece.
“In addition to differences in income levels, varying productivity losses across countries can also be attributed to differences in illness behaviour, illness duration, work culture and social security systems,” says Clazinus Veijer, the first author of the study.
For instance, in some countries, access to the general practitioner is higher than in other countries. This may be due to the number of general practitioners (GPs) that have offices in a particular region, for instance. Someone ill with limited health insurance may decide to wait and see how the disease develops, while another person who has a health insurance that covers all costs may visit the GP directly after noticing symptoms.
What’s clear from the results of this study is the fact that a one-size-fits-all approach to estimate the value for money of diagnostic testing in people with respiratory infections would overlook important country differences. Rather, a targeted and country-specific approach would work better.
“Country-specific information is required to evaluate interventions for the prevention or treatment of respiratory infections. Future analyses of productivity loss due to respiratory infections could yield even higher estimates if work hours missed before and on the day of the GP consultation are also taken into account. Reduced productivity while at work may also contribute to this,” says Veijer.
And productivity is only part of the story. A bad winter season, with lots of respiratory viruses circulating, places a burden on the healthcare sector and redirects the attention of doctors, nurses and healthcare staff from other patients. This is also why reducing the spread of respiratory viruses through public awareness campaigns, for instance about hand washing and covering mouths when coughing, is so important.
Alternative ways of funding healthcare
Health impact bonds are an innovative form of funding preventative health programmes, where the initial capital for healthcare interventions is provided by private investors, with a pay-out from governments once the pre-agreed health outcomes are achieved.
The AD-RIDDLE and PROMINENT projects teamed up recently to publish a scoping review on how effective health impact bonds have been worldwide, and what challenges and roadblocks have stood in their way. The review covered 23 health impact bond programmes across 13 countries, running from a minimum of 2 to a maximum of 7.5 years.
“At the moment, healthcare systems typically under-invest in prevention in general,” says Linus Jönnsen, principal investigator of the PROMINENT project, chief economist for AD-RIDDLE and professor of Health Economics at Karolinska Institutet. “That’s normal, because you have to prioritise people who are sick before you help those that are not sick yet. But in the end that leaves almost no money for prevention even if it’s very cost-effective and efficacious.
“With health impact bonds, you measure the risk of a patient population getting a particular disease or illness. An investor then will pay for interventions that prevent that risk. We measure the outcome and if it turns out that it’s effective, then the healthcare system will pay for the fact that it’s produced and will pay the investor back.”
AD-RIDDLE and PROMINENT both focus on dementia, and although health impact bonds have not yet been applied to dementia prevention, they could potentially be adapted for this purpose. For instance, financing could be linked to measurable changes in dementia risk factors or early indicators of cognitive health, rather than waiting decades for dementia diagnoses.
In the study, returns for investors ranged widely – from a modest 5% return for a Japanese programme called Kobe’s Diabetic Nephropathy Prevention to a 27.4% return for the Dutch Strong Standing SIB. Most bonds also offered fixed annual returns, regardless of the outcomes, or tiered returns, where the inclusion of high-risk participants in a health programme resulted in a higher return on investment.
Most health impact bond programmes reviewed by the study had achieved their predefined performance targets, which demonstrates that this model has high potential to mobilise private investment in preventive healthcare.
However, some differences in the structure of schemes according to geography were noted – although both US and European programmes involved many investors, American programmes were typically driven jointly by public and private-sector partners, whereas European programs tended to be government-led.
Impact bonds as part of the puzzle, but not the full picture
Although the review presents health impact bonds as an innovative and strategic health funding solution, one key concern was noted by the researchers. With schemes that are investor-led, there’s the risk that health financing may shift its priorities towards more easily measurable, short-term outcomes, which could come at the expense of broader health system improvements. More feasible and financially attractive investments could become overrepresented compared to more complex – but no less important – ones.
The overall conclusion of the review was that, while health impact bonds can be an important piece of the puzzle, they should complement existing health system funding rather than replacing it.
Public-private partnerships, such as IHI, could also play an important role in conducting research to discover the best ways to set up effective health impact bonds. Of the 23 health impact bond programmes covered, about 11 reported a successful result, indicating that there is still room for improvement. Another strength of public-private partnerships is that they bring public and private actors together in a collaborative neutral space, where solutions could be broached more easily.
Using science-backed evidence to inform stronger and better policies
Studies like the two highlighted here provide an evidence-based backbone which can be used to drive forwards progressive and effective public health policies and initiatives, to lower costs and steer better care for patients.
Improving efficiencies in the healthcare sector has many positive knock-on effects, freeing up money to buy needed drugs or improve hospitals for instance, and easing the workload on doctors, nurses and healthcare staff so that they can continue to provide high-quality care.
“The individual productivity losses caused by respiratory infections may seem manageable. However, the impact on the population as a whole should not be underestimated,” says Veijer. “Particularly in self-limiting conditions that require few healthcare resources but are highly prevalent, productivity loss can place a substantial burden on society. Insights from health economics can inform spending decisions that affect the well-being of patients, their families, and society as a whole.”