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THE IMPACTS OF EXPERT SYSTEMS ON HEALTH CARE:ECONOMIC CONSIDERATIONS: 

THE IMPACTS OF EXPERT SYSTEMS ON HEALTH CARE: ECONOMIC CONSIDERATIONS MERUERT RAKHIMOVA HEALTH ECONOMICS

“It is necessary to use electronic extensions of the human memory and analytic capacity at the time of action, just as we need X-rays to extend human eye”  (Larry Weed): 

“It is necessary to use electronic extensions of the human memory and analytic capacity at the time of action, just as we need X-rays to extend human eye” (Larry Weed)

Telemedicine: 

Telemedicine Medicine practiced at a distance or healthcare delivered via telecommunication channels Includes both diagnoses and treatment

Telemedicine: 

Telemedicine Aids to decision-making (remote expert systems) Remote sensing (eg. transmittal of patient info from remote site to a collaborator in a distant site, teleconferences) Collaborative arrangements (real-time management of patients)

Premise to the ongoing exponential rise in low-cost computing power: 

Premise to the ongoing exponential rise in low-cost computing power Development of telecommunications  not only data can be exchanged rapidly, but complex systems can be run remotely Development of large knowledge bases

Do clinicians always have the info they need to perform their tasks effectively, efficiently and accurately?: 

Do clinicians always have the info they need to perform their tasks effectively, efficiently and accurately?

Answer?: 

Answer? - Physicians recalled only 50% of patient info 5 min after the appointment; 60% of physicians surveyed did not know the names of their patients’ drugs; 20% did not recall the purpose of the patients’ medication (M.J. Ball, J. Lillis, 2000) B. 180,000 patients die each year as a result of medical error (M.J. Ball, J. Lillis, 2000) C. 1.3 mln. Injuries may occur in the U.S. annually during hospitalization; of them 20-70% may be preventable (D.W. Bates et al., 1998)

Aids to decision-making: 

Aids to decision-making ****************************************** Softwares designed to assist physicians with medical knowledge pertinent to patient care ****************************************** Expert Systems Clinical Decision Support Systems (CDSS) Computer-based Patient Record (CPR) Computerized Physician Order Entry systems (POE)

Aids to decision-making: 

Aids to decision-making EXAMPLES of types of assistance: diagnostic suggestions testing prompts therapeutic protocols practice guidelines alerts of potential drug-drug and drug-food reactions treatment suggestions

Effects of expert systems: 

Effects of expert systems Impact on quality of health care Economic impact Impact on medical education Other impacts

Impact on quality of health care: 

Impact on quality of health care CDSS can enhance clinical performance for drug prescribing, drug dosing, preventive care (D.L. Hunt, 1998) Using CDSS helped medication errors to decrease by 55%, from 10.7 events per 1,000 patient-days to 4.86 events per 1,000 p-d. Dose errors decreased 23%, known allergies fell 56%, drug-drug interaction errors fell 40% (D.W. Bates, 1998)

Economic impact:CDSS are cost-effective!!!: 

Economic impact: CDSS are cost-effective!!! Issue – rising costs for health care. Prescription drug costs account for 11-14% of total medical expenses and are increasing at > than 16% annually Solution – to manage costs while increasing quality, service, operating performance  CDSS = ideal tool for managing + structuring data

Economic impact (cont’d)How much does it cost to put CDSS into operation?: 

Economic impact (cont’d) How much does it cost to put CDSS into operation? Scale of initiative Size of institution *********************************** Eg. $700,000/yr. to implement+maintain CDSS. ROI? Cost savings from the intervention ~$250,000 in the 1st yr. Overall savings -$5-10 mln./yr

Impact on medical education: help or hinder?: 

Impact on medical education: help or hinder? CDSS cannot be considered an educational tool !!! *** Critiquing systems are more effective than reminding High physicians compliance during CDSS trials (82.8% - 94.9%). But: Removal of CDSS  physicians revert to previous practicing behavior

Other impacts: Pharmacist – part of clinical team: 

Other impacts: Pharmacist – part of clinical team Pharmacists are more often present on the unit and available for questions Better communication Nursing Staff + Pharmacists

Actual effects of expert system on health care: 

Actual effects of expert system on health care 1.Utilization of medical services 2.Need in labor force 3.Patient welfare 4.Price for services and hospital expenditures 5.Insurance premiums 6.Impact on welfare loss

1. Decrease in utilization of med. Services (Q ): 

1. Decrease in utilization of med. Services (Q ) Decrease in average length of stay Tierney et al (1993) found that implementation of a POE system on a medical service resulted in a reduction in the average length-of-stay days by 0.89 days and a 12.7% reduction in charges. Avoidance of use of superfluous diagnostic tools due to utilization of targeted diagnostic techniques and more rational differential diagnosis

2. Decrease in need in labor force: 

2. Decrease in need in labor force Less record keeping  less human force is required Increased availability of physician’s time  more time to spend with a patient/ serve more patients  increased patient satisfaction

3. Patients’ welfare: 

3. Patients’ welfare Increased patients’ satisfaction  Increased utilization of medical services  Better general health status of population  Increased physician utility

4. Prices for services + hospital expenditures : 

4. Prices for services + hospital expenditures Decrease in utilization of medical services, and Decrease in need in labor force Decrease in price for health services – P

Decreased price for medical services: 

Decreased price for medical services Price S   D D1 Services Figure 1. Decrease in demand of services Wage S   D D1 Labor Figure 2. Decrease in demand in labor

Decrease in gross hospital expenditures: 

Decrease in gross hospital expenditures because: 1. Expenditure = Price x Quantity = P x Q 2. Medical malpractice  cost for it’s insurance

5. Insurance premiums: 

5. Insurance premiums Premium = Expected Payout (Q*P) + Adm. Fee *Adm. Fee = const.

6. Impact on welfare loss: 

6. Impact on welfare loss WL is a quantitative measure of economic inefficiency. Stems from resources being used in markets or production where they are not most highly valued. Is a violation of known equation: Marginal Cost=Marginal Value Sources of WL in Health Care: - Lack of information/asymmetrical information; - Medical insurance; - Medical practice variations

Medical practice variations: 

Medical practice variations WL= ½ P*X*N*cov2/n Where: P – price X – quantity N – number of practicing physicians Cov2 – coefficient of variance squared, equal to variance X / (X*)2 n – elasticity or: WL= ½*total spending* cov2/n

Medical practice variations (cont’d): 

Medical practice variations (cont’d) Price D1 D2 D3 Dn p=mc Quantity Figure 3. High Degree of medical practice variation before introduction of CDSS’s Price D1 Dn p=mc Quantity Figure 4. Lower degree of medical practice variation after introduction of CDSS’s

Decrease in WL: 

Decrease in WL Decrease in medical practice variation, more standardized approach in practicing medicine (valid both for short-term and long-term effects ) Decrease in expenditures due to: Decrease in Quantity of services only in the short-run or: Decrease in both Price and Quantity in the long-term

Welfare Loss: 

Welfare Loss Short-run WL=½ P *X *N*cov2/n Long-run WL=½ P * X *N*cov2/n

Further implications: 

Further implications Barriers of entry – urban health centers vs. rural large health centers vs. small Liability - shared or not – Software manufacturer? Hospital?