The Role of Economic Analysis in the Management of Maternal and Child Health Programs

1. The Role of Economic Analysis in the Management of Maternal and Child Health Programs Stephen E. Saunders, M.D., M.P.H. Associate Director for Family Health Illinois Department of Human Services December 12, 2003

2. Data Use “Triangle” Data TRANSLATION Program Politics Source: Peck and Sappenfield

3. Public Sector Decision Making Knowledge Base Political Will Social Strategy Source: Peck & Sappenfield

4. Who Doesn’t Want to Save Money? • Economic arguments are persuasive - money is often easier to understand than pathophysiology • Economic argumets can be especially persuasive in the current State Fiscal Climate

5. Illinois Example: Program PlanningTargeted Intensive Prenatal Case Management • Targets areas selected through analysis of Medicaid expenditure data • Advocacy based on reduction in NICU costs through prevention of low birth weight

6. Illinois Example: Program AdvocacyFamily Case Management • Statewide care coordination program to reduce infant mortality • Used cost benefit analysis to avoid budget cuts

7. But Money Isn’t Everything ... • Some services should be provided for reasons other than cost - such as professional consensus • Prenatal Care • Well Child Care

8. But Money Isn’t Everything ... • Prima Facie health benefits can be persuasive on their own, especially for low-incidence conditions • Newborn hearing screening • Impact on cognitive development • Availability of screening technology • The cost benefit is implied from avoided special education costs

9. … And Sometimes It’s Not Enough ... • Family planning saves $4.40 for each $1 spent - Forrest & Singh, 1990 • Family Planning expansions in Medicaid still require an 1115b waiver (evaluated in part on cost neutrality) despite more than 20 completed demonstrations. • Despite the cost-benefit, few states invest their own funds in family planning services

10. … Or Doesn’t Matter At All • Some services have strong political support despite the lack of evidence to support them or the presence of evidence that suggests ineffectiveness • Abstinence Only Education

11. Some Problems, Pitfalls and Other Precautions

12. It is Difficult to Stop Spending the Pound of Cure in Order to Fund the Ounce of Prevention • Adolescent mental health services • Most public funds used for treatment of SED adolescents; hard to shift funds to prevention • Nurse home visitation • Program costs recouped within four years through reduction in AFDC, Medicaid and Food Stamp expenditures -- Olds, et al., 1993

13. Solutions Attract Constituencies • It isn’t easy to redirect resources from good interventions to better ones • Paraprofessional (Healthy Families America) vs. Nurse Home Visitation (Olds)

14. Where’s the Beef? • Legislators hear the “prevention saves money” argument a lot. • If prevention is so effective, why doesn’t spending on treatment (health care, corrections, etc.) go down? • Difficult to prove that things didn’t get worse because of an intervention • The savings may take a long time to accrue and may appear in someone else’s budget • Family support vs. Incarceration

15. Know Your Audience

16. Something Gets Lost in Translation • “The U.S. total fertility rate (TFR) moved above ‘replacement’ (the rate at which a given generation can exactly replace itself) for the first time in almost 30 years in 2000.” -- CDC NCHS, 2/12/02 • “The U.S. birth rate rose in 2000 and, for the first time since 1971, the number of newborns exceeded deaths, the government said.” -- WSJ 2/13/02, pg. 1 • The number of births has, in fact, exceeded the number of deaths by roughly 2:1 each year from at least 1980 through 2000.

17. Political Decision-Making Prefers Simplicity(or, if you repeat something often enough, it becomes true…) • Every $1 spent on prenatal care saves $3.38 • IOM, Preventing Low Birth Weight, 1985 • Every $1 spent on WIC saves $3.13 • Devaney, et al., 1990 • Every $1 spent on immunization saves $13.40 -- White, et al., 1985

18. Watch Out! You’re Methodology is Showing! • Many of the studies used to establish the economic benefits of WIC are flawed by selection bias -- should we stop the WIC program?

19. The Role of Economic Analysis • Cost effectiveness is an important part of keeping the public trust • Cost (and other kinds of information) must be used along with good program designs and political will to effect policy change • Cost is not always the most important consideration in public health policy