Using Risk
Analysis for
Opportunity
Analyses to
Estimate Likely
Health Mgt
Outcomes
Gordon Norman, MD, MBA
Chief Innovation Officer
Inverness Medical / Alere
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What is Health Management?
• Industry formerly known as “disease management”; now
called “health management” or “population health
management”
• $2.4B market with 15-25% CAGR over the past 15 years
• Provide individualized health support for people with health
risks & various health conditions
• Sell services to health plans, employers, public sector entities
who expect us to improve health outcomes and reduce cost,
with typical ROI of 2:1 in 1-2 years
• Use nurses, devices, Internet, mail, onsite interactions in
programs that improve health across the continuum of care,
from prevention to terminal care
• Alere is 2nd largest U.S. company (~$500M annual revenues)
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2
Who is Alere?
Inverness Medical Innovations
empowers individuals with the
freedom to gain greater control
over their own health
Alere leverages technology and
services to improve healthcare –
one person, one touch at a time
Oct 2009
May 2008
Alere Medical
1996
ParadigmHealth
1991
Matria Healthcare
Jan 2010
1970
July 2009
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3
Health Mgt Programs We Offer
Wellness
Chronic Care
Asthma
Portal/HPA
Diabetes
Coaching
Heart Failure
Online
CAD
Screening
Tobacco
Mind & Body
Chronic Pain
Care Gaps
Diagnostic
Screening
Case Management
Oncology
COPD
Care Gaps
Diagnostic
Screening
Personal
Wellness
Health
Support
Complex Care
Diagnostic
Screening
Women & Children’s
Care Gaps
Preconception
OB Risk Assmt/Ed
Care Gaps
Diagnostic
Screening
Catastrophic
OB Case Mgt/Home
Perinatal screening
Intensive Care
NICU
End of Life
PCMH
Collaborative Care
Solutions™
NCQA PPC-PCMH Recognition
Collaborative Care Platform
Gaps in Care Closure
P4P / PQRI Support
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4
A New Business Opportunity for Alere
ANTICOAGULATION MGT
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5
Risky Treatment, But Manageable
•
50 year old drug; brand & generic similarly priced
($0.13/tablet or $48/yr.)
•
Monthly monitoring in anticoagulation clinic ($400-600/yr)
•
Home monitoring program ($1800-$3000/yr.)
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6
Challenges in Warfarin Mgt.
•
Warfarin has a complex dose-response
relationship making safe and effective use a
challenge
•
Classic example of “narrow therapeutic index”
•
9-12% of outpatients suffer major adverse event
Genetic variants metabolize drug differently
Optimal dose and toxic doses are not far apart
Despite active research for replacement Rx,
none yet FDA approved in U.S.
Some now in stage 3 FDA trials which do not require
monitoring with blood tests
All are very expensive ($4000-7000/yr), so warfarin
not likely to disappear soon
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7
An Underused Therapy
•
Despite growing emphasis from supportive studies,
warfarin continues to be underused in practice
•
Data show that of those patients with atrial
fibrillation and no contraindication to warfarin
therapy, only 15% to 44% are prescribed warfarin
•
Ambulatory patient surveys show that fewer than
half of patients with high stroke risk are taking
anticoagulants
•
Both patients and physicians appear to misjudge
risk-benefit ratio of anticoagulation often
•
Inconvenience of regular monitoring is mentioned
by many patients who refuse warfarin when offered
by their physician
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8
Warfarin Adherence Challenges
•
Even among patients who routinely use
anticoagulation clinics, more than 40% miss more
than 20% of doses
•
Missed doses leads to increased odds of under- and
over-coagulation
•
Home PT/INR provides a convenient weekly
reminder of need to adhere to dosage, as well as
need for dosage adjustment
•
With increased adherence comes
more stable anticoagulation control
more time in therapeutic range
fewer complications
reduced utilization
savings
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9
Moving Warfarin Monitoring Upstream
Standard Today (lab)
Point of Care testing (anticoagulation clinic)
Patient Self-Test (home)
• Reduce morbidity
• Enhance patient QOL
• Reduce cost
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Home INR Testing
•
Blood test for following warfarin levels is called PT/INR
•
Several studies have demonstrated feasibility of home
PT/INR testing for many patients
•
Weekly PT/INR values allow for better titration of
dosage and tighter management to target values
•
Patient compliance has been high, as is satisfaction with
convenience and control using home testing
•
Reduced adverse events documented with associated
cost savings
•
CMS supportive of home testing and expanding
coverage of warfarin indications
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11
Convenience of Home INR
Hemosense
ITC/Thoratec
Roche
Monitor Display & Demonstration
•
Convenient, accurate home INR meters have grown
in use for several years
•
Most patients have little trouble learning to self-test,
and greatly appreciate the convenience of avoiding a
special trip to a clinic, lab, or hospital for same test
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12
Home Testing Better For Patients
“When monitored monthly, around 50% of
patients remain within range, compared to
85% when monitored weekly”
Lancet, 2/2006
Aggregate results from 14 clinical trials:
Meta-analysis Outcomes
Stroke Reduction:
55%
Bleeding Reduction: 33%
Survival Benefit:
33%
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13
PT/INR Control Opportunity
Lafata JE - J Thromb Thrombolysis - 01-JUN-2000; 9 Suppl 1: S13-9
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14
Using @Risk to Quantify Uncertainties
OPPORTUNITY ANALYSIS
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Client X Opportunity Analysis
Sensitivity Analysis – Cost per Adverse Event
Annualized Cost Savings Pro Forma for Reduced Bleeding and Stroke Events with Home INR Monitoring Program
Prepared by Alere for Client X, April 2009
Per 100 Pts. on Warfarin w/ CMS Indication
Est. # AF Pts. Monthly Testing Weekly Testing
On Warfarin (Standard Care) (Home PST)
Incremental
Savings
Adverse Event Costs & Gross Savings
Stroke
Non-Stroke Thromboembolism (NSTE)
Hemorrhage
Combined
1.8 $
10.6 $
6.0 $
$
INR Monitoring Fees
$
Total Costs & Net Savings per 100 pts.on program
$
91,220
211,489
184,355
487,063
$
$
$
$
50,000 $
537,063
$
41,961
97,285
121,674
260,920
$
$
$
$
168,000 $
428,920
$
Est. available Client X pt. pool on warfarin with CMS indication for home monitoring
Est. enrollment % for INR program
Est. Client X Net Savings for INR program, total population
Est. Client X ROI for INR program
49,259
114,204
62,681
226,143
(118,000)
108,143
22,257
23%
$
5,616,205
1.92
INR Opportunity Analysis for Client X Population
Study Period = 10/1/04 to 9/30/05
Study Population = Commercial Population
Claims Data for the Analysis = 10/1/03 to 9/30/05 with 3 months run-out
Cost figures from 2007 trended 10%
No stop-loss or DM hierarchy applied
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16
Client X Opportunity Analysis
Sensitivity Analysis – Cost per Adverse Event
Model Specifications
Model
Assumption
Assumption or
Data Source
Uncertainty
Range
$
$
50,678
1.8%
54%
500
1,680
per client claims
per client claims
per literature
per vendor
Alere INR fee
+/- 15%
+/- 25%
+/- 25%
+/- 20%
Non-Stroke Thromboembolism Assumptions:
Client X NSTE related costs/NSTE pt.
$
Risk of NSTE on warfarin
Reduced risk of NSTE from weekly INR
Monthly testing cost
$
Weekly testing cost
$
19,952
10.6%
54%
500
1,680
per client claims
per client claims
per literature
per vendor
Alere INR fee
+/- 15%
+/- 25%
+/- 25%
+/- 20%
Hemorrhage Assumptions:
Client X hemorrhage-related cost/hemorrhage pt.
Risk of hemorrhage on warfarin
Reduced hemorrhage risk from weekly INR
Monthly INR testing cost
Weekly INR testing cost
30,726
6.0%
34%
500
1,680
per client claims
per client claims
per literature
per vendor
Alere INR fee
+/- 15%
+/- 25%
+/- 25%
+/- 20%
22,257 per client claims
+/- 25%
Stroke Assumptions:
Client X stroke-related costs/stroke pt.
Risk of stroke on warfarin
Reduced stroke risk from weekly INR
Monthly testing cost
Weekly testing cost
Est. Client X pts. on warfarin
Est. enrollment of eligible patients
$
$
$
$
23% per QAS
Client Reported Client Reported
Per Diem
BedDays PMPM
$3,325
1.27
$3,325
0.50
$3,325
0.77
- 50%, +100%
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17
Client X Opportunity Analysis
Defined Input Variables
Name
Cell
Graph
Category: Client X hemorrhage-related cost/hemorrhage pt.
Client X hemorrhage-related
cost/hemorrhage pt. / Assumption
Function
Min
Mean
Max
RiskTriang(G41*F41*12*0.85,G41*F41*12,
G41*F41*12*1.15)
$
26,117
$
30,726
$
35,335
RiskTriang(G34*F34*12*0.85,G34*F34*12,
G34*F34*12*1.15)
$
16,959
$
19,952
$
22,945
C26
RiskTriang(G27*F27*12*0.85,G27*F27*12,
G27*F27*12*1.15)
$
43,076
$
50,678
$
58,279
C46
RiskTriang(22257*0.75,22257,22257*1.25)
C40
Category: Client X NSTE related costs/NSTE pt.
Client X NSTE related costs/NSTE pt.
/ Assumption
C33
Category: Client X stroke-related costs/stroke pt.
Client X stroke-related costs/stroke
pt. / Assumption
Category: Est. Client X pts. on warfarin
Est. Client X pts. on warfarin /
Assumption
16,693
22,257
27,821
Category: Est. enrollment of eligible patients
Est. enrollment of eligible patients /
Assumption
C48
RiskTriang(0.2*0.5,0.2,0.2*2)
C29
RiskTriang(500*0.8,500,500*1.2)
10%
23%
40%
Category: Monthly testing cost
Monthly testing cost / Assumption
$
400
$
500
$
600
Category: Reduced hemorrhage risk from weekly INR
Reduced hemorrhage risk from
weekly INR / Assumption
RiskTriang(0.34*0.75,0.34,0.34*1.25,Risk
Corrmat(NewMatrix1,2))
26%
34%
43%
RiskTriang(54%*0.75,54%,54%*1.25,Risk
Corrmat(NewMatrix1,1))
41%
54%
68%
C41
RiskTriang(6%*0.75,6%,6%*1.25)
4.5%
6.0%
7.5%
C34
RiskTriang(10.6%*0.75,10.6%,10.6%*1.2
8.0%
5,RiskCorrmat(NewMatrix3,2))
10.6%
13.3%
C27
RiskTriang(1.8%*0.75,1.8%,1.8%*1.25,Ri
1.4%
skCorrmat(NewMatrix3,1))
1.8%
2.3%
C42
Category: Reduced stroke risk from weekly INR
Reduced stroke risk from weekly INR
C28
/ Assumption
Category: Risk of hemorrhage on warfarin
Risk of hemorrhage on warfarin /
Assumption
Category: Risk of NSTE on warfarin
Risk of NSTE on warfarin /
Assumption
Category: Risk of stroke on warfarin
Risk of stroke on warfarin /
Assumption
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Client X Opportunity Analysis
Sampled Input Variables
Name
Cell
Graph
Category: Client X hemorrhage-related cost/hemorrhage pt.
Client X hemorrhage-related
cost/hemorrhage pt. /
Assumption
C40
Min
Mean
Max
5%
95% Errors
$
26,132
$
30,726
$
35,310
$
27,574
$
33,876
0
$
16,961
$
19,952
$
22,927
$
17,905
$
21,997
0
$
43,152
$
50,678
$
58,220
$
45,479
$
55,875
0
26,062
0
Category: Client X NSTE related costs/NSTE pt.
Client X NSTE related costs/NSTE
pt. / Assumption
C33
Category: Client X stroke-related costs/stroke pt.
Client X stroke-related
costs/stroke pt. / Assumption
C26
Category: Est. Client X pts. on warfarin
Est. Client X pts. on warfarin /
Assumption
C46
16,736
22,257
27,799
18,452
Category: Est. enrollment of eligible patients
Est. enrollment of eligible patients
C48
/ Assumption
10%
23%
40%
14%
35%
0
Category: Monthly testing cost
Monthly testing cost / Assumption C29
$
401
$
500
$
599
$
432
$
568
0
Category: Reduced hemorrhage risk from weekly INR
Reduced hemorrhage risk from
weekly INR / Assumption
C42
26%
34%
42%
28%
40%
0
41%
54%
67%
45%
63%
0
C41
4.5%
6.0%
7.5%
5.0%
7.0%
0
C34
8.0%
10.6%
13.2%
8.8%
12.4%
0
C27
1.4%
1.8%
2.2%
1.5%
2.1%
0
Category: Reduced stroke risk from weekly INR
Reduced stroke risk from weekly
INR / Assumption
C28
Category: Risk of hemorrhage on warfarin
Risk of hemorrhage on warfarin /
Assumption
Category: Risk of NSTE on warfarin
Risk of NSTE on warfarin /
Assumption
Category: Risk of stroke on warfarin
Risk of stroke on warfarin /
Assumption
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19
Client X Opportunity Analysis
Probability Density – Net Savings
Simulation Summary Information
Workbook Name
Client X INR model 121409.xls
Number of Simulations
1
Number of Iterations
10000
Number of Inputs
11
Number of Outputs
2
Sampling Type
Latin Hypercube
Simulation Start Time
12/14/09 14:36:36
Simulation Duration
00:00:15
Random # Generator
Mersenne Twister
Random Seed
1163123560
Summary Statistics for Est. Client X net savings for INR program
Statistics
Minimum
Percentile
5% $
$
740,297
2,540,209
Maximum
$
18,042,243
10% $
2,994,317
Mean
$
5,622,425
15% $
3,339,040
2,308,468
Std Dev
$
20% $
3,629,302
Variance
5.32902E+12
25% $
3,924,474
Skewness
0.855764459
30% $
4,179,892
Kurtosis
3.8379995
Median
$
5,265,455
35% $
4,435,925
40% $
4,713,036
Mode
$
4,573,528
45% $
4,975,573
Left X
$
2,540,209
50% $
5,265,455
Left P
5%
55% $
5,538,233
60% $
5,852,997
Right X
$
Right P
95%
Diff X
$
Diff P
#Errors
9,988,520
65% $
6,202,384
70% $
6,555,165
90%
75% $
6,975,949
0
80% $
7,439,473
Filter Min
Off
85% $
7,992,388
Filter Max
Off
90% $
8,726,911
#Filtered
0
95% $
9,988,520
7,448,311
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Monte Carlo risk
analysis allows
simultaneous
testing of all
uncertain input
variables over their
plausible ranges of
uncertainty via
repeated iterations
to show the
resulting range and
distribution of
possible savings
outcomes.
Here, Monte Carlo
risk analysis shows
90% probability for
net savings in range
of $2.54 -$9.99
million for the total
population on
warfarin for CMS
indications for home
monitoring.
20
Client X Opportunity Analysis
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Client X Opportunity Analysis
Y% chance of saving more than $X
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22
Client X Opportunity Analysis
Probability Density – ROI
Simulation Summary Information
Workbook Name
Client X INR model 121409.xls
Number of Simulations
1
Number of Iterations
10000
Number of Inputs
11
Number of Outputs
2
Sampling Type
Latin Hypercube
Simulation Start Time
12/14/09 14:36:36
Simulation Duration
00:00:15
Random # Generator
Mersenne Twister
Random Seed
1163123560
Summary Statistics for Est. Client X ROI for INR program
Statistics
Minimum
1.16
Percentile
5%
1.51
Maximum
2.88
10%
1.59
Mean
1.92
15%
1.65
Std Dev
0.26
20%
1.69
25%
1.74
Variance
0.066880176
Skewness
0.254167547
30%
1.77
Kurtosis
2.876272093
35%
1.81
40%
1.84
1.90
Median
Mode
1.82
45%
1.87
Left X
1.51
50%
1.90
55%
1.94
2.37
60%
1.97
65%
2.01
0.86
70%
2.05
Left P
5%
Right X
Right P
95%
Diff X
Diff P
90%
75%
2.09
#Errors
0
80%
2.14
Filter Min
Off
85%
2.19
Filter Max
Off
90%
2.26
#Filtered
0
95%
2.37
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Here, Monte Carlo risk
analysis shows ROI
distribution mean of
1.92, median of 1.90,
and mode of 1.82.
There is a 90%
probability for ROI in
range of 1.51 – 2.37
for the total population
on warfarin for CMS
indications for home
monitoring.
Since Client X’s target
ROI for this kind of
program is typically
2.0, and minimum
threshold for
consideration is often
1.5, this analysis is
very helpful for
determining likelihood
of achieving these
levels of performance.
23
Client X Opportunity Analysis
Probability Density – ROI
Minimum
Target
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Client X Opportunity Analysis
Cumulative Probability Curve – ROI
Y% chance of ROI less than $X
Minimum
Target
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Rank-Ordered Risk Factors
Estimated Net Savings
Regression, Rank for
Est. UHC net
savings
for INR program
Estimated
Net
Savings
Rank
1
Name
Est. enrollment of eligible patients
Regr
0.669
Corr
0.682
2
Reduced stroke risk from weekly INR
0.383
0.505
3
Risk of NSTE on warfarin
0.269
0.376
4
Est. UHC pts. on warfarin
0.255
0.259
5
Risk of hemorrhage on warfarin
0.150
0.128
6
Reduced hemorrhage risk from weekly INR
0.147
0.459
7
Risk of stroke on warfarin
0.112
0.339
8
Monthly testing cost
0.097
0.088
Achieving these modeled savings appears most dependent upon:
1.
2.
3.
4.
5.
enrollment rate – conservative estimate may be exceeded
adverse event risks – Client X rates consistent with literature
event reduction likelihood – documented in literature
anticoagulation prevalence – based on Client X historical claims
difference in PST cost from usual care cost – monthly PT/INR test
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Rank-Ordered Risk Factors: Net Savings
Regression and Rank Information for Est.
Client X net savings for INR program
Rank
1
2
3
4
5
6
7
8
Name
Regr
Est. enrollment of eligible
0.677
patients
Reduced stroke risk from
0.388
weekly INR
Risk of NSTE on warfarin
0.277
Est. Client X pts. on warfarin
0.255
Reduced hemorrhage risk from 0.153
weekly INR
Risk of hemorrhage on warfarin0.149
Risk of stroke on warfarin
0.111
Monthly testing cost
0.094
Corr
0.678
0.491
0.370
0.245
0.450
0.143
0.101
0.101
Achieving modeled net savings appears most dependent upon:
1.
2.
3.
4.
5.
enrollment rate – conservative estimate may be exceeded
event reduction likelihood – documented in literature
adverse event risks – Client X rates consistent with literature
anticoagulation prevalence – based on Client X historical claims
difference in PST cost from usual care cost – monthly PT/INR test
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Rank-Ordered Risk Factors: ROI
Regression and Rank Information for Est.
Client X ROI for INR program
Rank
1
2
3
4
5
6
7
8
Name
Regr
Reduced stroke risk from
0.576
weekly INR
Risk of NSTE on warfarin
0.397
Monthly testing cost
0.269
Reduced hemorrhage risk from 0.219
weekly INR
Risk of hemorrhage on warfarin0.218
Risk of stroke on warfarin
0.175
Est. Client X pts. on warfarin
0.000
Est. enrollment of eligible
0.000
patients
Corr
0.738
0.525
0.258
0.670
0.204
0.476
0.000
0.000
Achieving modeled ROI appears most dependent upon:
1.
2.
3.
event reduction likelihood – documented in literature
adverse event risks – Client X rates consistent with literature
difference in PST cost from usual care cost – monthly PT/INR test
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Utility of @Risk for Opportunity Analyses
• Forces identification and estimation of uncertain variables
• Allows rapid modeling of key outcomes under every possible
combination of uncertain variable values
• Offers more insight than best case, worst case, most likely
sensitivity analysis
• Identifies key vulnerabilities for delivering modeled outcomes
for close monitoring
• Allows planning for contingencies around vulnerable factors
• Enhances plausibility of opportunity analysis for clients
• Permits progressive refinement of assumptions iteratively
• Demonstrates quantitative rigor which may signal to client
one’s thoroughness in other areas of execution
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Van Halen & Brown M&Ms
Consider Van Halen. In its 1980s heyday, the band became notorious for a clause in its
touring contract that demanded a bowl of M&Ms backstage, but with all the brown ones
removed. The story is true - confirmed by former lead singer David Lee Roth himself and it became the perfect, appalling symbol of rock-star-diva behavior.
Get ready to reverse your perception. Van Halen did dozens of shows every year, and at
each venue, the band would show up with nine 18-wheelers full of gear. Because of the
technical complexity, the band's standard contract with venues was thick and
convoluted - Roth, in his inimitable way, said in his autobiography that it read "like a
version of the Chinese Yellow Pages." A typical "article" in the contract might say,
"There will be 15 amperage voltage sockets at 20-foot spaces, evenly, providing 19
amperes."
Van Halen buried a special clause in the middle of the contract. It was called Article 126.
It read, "There will be no brown M&Ms in the backstage area, upon pain of forfeiture of
the show, with full compensation." So when Roth would arrive at a new venue, he'd
walk backstage and glance at the M&M bowl. If he saw a brown M&M, he'd demand a
line check of the entire production. "Guaranteed you're going to arrive at a technical
error," he wrote. "They didn't read the contract.... Sometimes it would threaten to just
destroy the whole show."
In other words, Roth was no diva. He was an operations expert. He couldn't
spend hours every night checking the amperage of each socket. He needed a
way to assess quickly whether the stagehands at each venue were paying
attention - whether they had read every word of the contract and taken it
seriously. In Roth's world, a brown M&M was the canary in the coal mine.
http://www.fastcompany.com/magazine/143/made-to-stick-the-telltale-brown-mampm.html
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