Use of Budget Impact Model to Understand the Source of Variations in the Growth of Medical Costs

• Activity Number: 283
• Type: Topic Contributed
• Date/Time: Tuesday, July 31, 2012 : 8:30 AM to 10:20 AM
• Sponsor: Health Policy Statistics Section
• Author(s): Tina Shih*+
• Companies: The University of Chicago
• Keywords: medical cost ; budget impact model ; cancer

Abstract

The unique statistical properties of medical cost data have motivated the development of a number of statistical and econometric methods in recent years. Although these innovative methods provide more accurate estimation and projection of medical care costs over time, an under-explored area is the identification of "cost drivers" from these analyses. Budget impact model is a technique commonly used in economic evaluation to examine the financial impact of new medical technologies to payors. The integration of budget impact model into recently developed methods for medical cost analysis provides a mechanism to understand reasons behind the observed increase in medical costs. Using new therapies in cancer as examples, we applied the budget impact model to study the medical cost of breast, colorectal, and prostate cancers and explore whether the observed difference in cost over time was driven by variations in price, uptake of new technologies, and/or disease prevalence.