Skip to main content
Log in

Requisite models for strategic commissioning: the example of type 1 diabetes

  • Published:
Health Care Management Science Aims and scope Submit manuscript

Abstract

A developing emphasis of health care reforms has been creating organisations with responsibilities for strategic commissioning of services for defined populations. Such organisations must set priorities in aiming to meet their populations’ needs subject to a budget constraint. This requires estimates of the health benefits and costs of different interventions for their populations. This paper outlines a framework that does this and shows how this requires modelling to produce estimates in a way that is transparent to commissioners, of requisite complexity to produce sound estimates for priority setting using routinely available data. The example illustrated in this paper is an intervention that would improve glucose control in the English population with type 1 diabetes. It takes many years for a change in glucose management to deliver maximum benefits; hence the intervention is not good value-for-money in the short run. We aim to give a more strategic view of the costs and benefits modelling costs and benefits in a steady-state model which suggests that the intervention is good value-for-money in the long run.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5

Similar content being viewed by others

References

  1. Ross J (1995) The use of economic evaluation in health care: Australian decision makers’ perceptions. Health Policy 31:103–110

    Article  Google Scholar 

  2. Drummond MF, Cooke J, Walley T (1997) Economic evaluation under managed competition: evidence from the U.K. Soc Sc Med 45(4):583–595

    Article  Google Scholar 

  3. Duthie T et al (1999) Research into the use of health economics in decision making in the United Kingdom—Phase II Is health economics ‘for good or evil’? Health Policy 46:143–157

    Article  Google Scholar 

  4. Drummond MF, Weatherly H (2000) Implementing the findings of health technology assessments. If the CAT got out of the bac, can the TAIL wag the dog? Int J Technol Assess Health Care 16(1):1–12

    Google Scholar 

  5. Bryan S, Williams I, McIver S (2007) Seeing the NICE side of cost-effectiveness analysis: a qualitative investigation of the use of CEA in NICE technology appraisals. Health Econ 16:179–193

    Google Scholar 

  6. Department of Health. PCT and SHA roles and functions (2006) http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_4134649. Cited January 8, 2008

  7. Local Health System Integration Act (2006), Ontario

  8. Weinstein M, Stason W (1977) Foundation of cost-effectiveness analysis for health and medical practices. N Engl J Med 296:716–721

    Google Scholar 

  9. Williams A (1985) Economics of coronary artery bypass grafting. Br Med J 291:326–329

    Google Scholar 

  10. Gold MR et al. (1996) Cost-effectiveness in health and medicine. Oxford University Press, New York

  11. Drummond MF, et al (2005) Methods for the economic evaluation of health care programmes, third edition. Oxford University Press, Oxford

  12. Anand S, Hanson K (1997) Disability-adjusted life years: a critical review. J Health Econ 16(6):685–702

    Google Scholar 

  13. Williams A (1999) Calculating the global burden of disease: time for a strategic reappraisal. Health Econ 8:1–8

    Article  Google Scholar 

  14. Mooney G, Wiseman V (2000) Burden of disease and priority setting. Health Econ 9:369–372

    Article  Google Scholar 

  15. Bevan G, Hollinghurst S (2003) Cost per quality adjusted life year and disability adjusted life years: the need for a new paradigm. Expert Rev Pharmacoecon Outcomes Res 3(4):469–477

    Article  Google Scholar 

  16. Murray CJL, Acharya AK (1997) Understanding DALYs. J Health Econ 16:703–730

    Article  Google Scholar 

  17. Murray CJL, Lopez AD (2000) Progress and directions in refining the Global Burden of Disease approach: a response to Williams. Health Econ 9:69–82

    Article  Google Scholar 

  18. Lopez AD et al (2002) Summary measures of population health: concepts, ethics, measurement and application. World Health Organization, Geneva

    Google Scholar 

  19. Hutubessy R, et al. (2003) Generalised cost-effectiveness analysis for national-level priority setting in the health sector. Cost Eff Resour Alloc 1:8

    Google Scholar 

  20. Andrews G et al (2004) Utilising survey data to inform public policy: comparison of the cost-effectiveness of treatment of ten mental disorders. Br J Psychiatry 184:526–533

    Article  Google Scholar 

  21. Evans D et al (2005) Methods to assess the costs and health effects of interventions for improving health in developing countries. Br Med J 331:1137–1140

    Article  Google Scholar 

  22. Dawson D, et al (2005) Developing new approaches to measuring NHS outputs and productivity. Report RP6, University of York Centre for Health Economics, York

  23. Department of Health (2005) Healthcare output and productivity: accounting for quality change. http://www.dh.gov.uk/PublicationsAndStatistics/Publications/PublicationsPolicyAndGuidance/PublicationsPolicyAndGuidanceArticle/fs/en?CONTENT_ID=4124266&chk=5QmbY7

  24. UK Centre for the Measurement of Government Activity (2006) Public service productivity: health. Econ Trends 628:26–57

    Google Scholar 

  25. Martin S, Smith PC (2006) Value for money in the NHS. A summary of the evidence. C.f.H. Economics, Editor, University of York, York

  26. Evans D et al (2005) Time to reassess strategies for improving health in developing countries. Br Med J 331:1133–1136

    Article  Google Scholar 

  27. Hollinghurst S, Bevan G, Bowie C (2000) Estimating the “avoidable” burden of disease by Disability Adjusted Life Years (DALYs). Health Care Manage Sci 3(1):9–21

    Article  Google Scholar 

  28. Hollinghurst S, Bevan G (2003) A scientific revolution to resolve the incomplete paradigms of cost per quality adjusted life year and disability-adjusted life-years? Expert Rev Pharmacoecon Outcomes Res 3(4):469–77

    Article  Google Scholar 

  29. Bevan G et al (1998) The South and West DALYs Project—developing a powerful tool for health care planning. Somerset Health Authority, Taunton

    Google Scholar 

  30. Rutstein D (1976) Measuring the quality of medical care. A clinical method. N Engl J Med 294(11):582–588

    Article  Google Scholar 

  31. Charlton J et al (1983) Geographical variation in mortality from conditions amenable to medical intervention in England and Wales. The Lancet 321(8326):691–696

    Article  Google Scholar 

  32. Holland, W (1991) European Community Atlas of ‘Avoidable Death’—Commission of the European Communities Health Services Research Series no. 6. Second edn, Vol. 1. In: W. Holland (ed). Oxford University Press, Oxford

  33. Andrews G et al (2004) Utilising survey data to inform public policy: comparison of the cost-effectiveness of treatment of ten mental disorders. Br J Psychiatry 184:526–533

    Article  Google Scholar 

  34. Tan-Torres Edejer T (2003) Making choices in health: WHO guide to cost-effectiveness analysis. W.H. Organization, Geneva

    Google Scholar 

  35. Dawson D, et al (2005) Developing new approaches to measuring NHS outputs and productivity. CHE Research Paper (6). Centre for Health Economics, York, UK

  36. Tomar R, et al (1998) Disease progression and cost of insulin dependent diabetes mellitus: development and application of a simulation model. J Soc Health Syst 5(4):24–37

    Google Scholar 

  37. Herman W et al (1997) The cost-effectiveness of intensive therapy for diabetes mellitus. Endocrinol Metab Clin N Am 26(3):679–695

    Article  Google Scholar 

  38. Palmer A et al (2000) The cost-effectiveness of different management strategies for Type I diabetes: a Swiss perspective. Diabetologia 43(1):13–26

    Article  Google Scholar 

  39. Diabetes Control and Complication Trial (1996) Lifetime benefits and costs of intensive therapy as practiced in the Diabetes Control and Complications Trial.. JAMA 276(17):1409–415

    Article  Google Scholar 

  40. Forouhi N et al (2006) Diabetes prevalence in England, 2001—estimates from an epidemiological model. Diabet Med 23(2):189–197

    Article  Google Scholar 

  41. National Clinical Audit Support Programme. National Diabetes Audit (2005) Key findings about the quality of care for people with diabetes in England. Report for the audit period 2003/04. http://www.icservices.nhs.uk/ncasp/pages/audit_topics/diabetes/default-new.asp

  42. Diabetes Control and Complication Trial (1990) Diabetes control and complication trial update. Diabetes Care 13(4):427–433

    Article  Google Scholar 

  43. Diabetes Control and Complication Trial (1993) The effect of intensive treatment of diabetes on the development and progression of long-term complications in insulin-dependent diabetes mellitus. N Engl J Med 329(14):977–986

    Article  Google Scholar 

  44. Eastman J et al (1997) Model of complications of NIDDM. II. Analysis of the health benefits and cost-effectiveness of treating NIDDM with the goal of normoglycemia. Diabetes Care 20(5):735–744

    Article  Google Scholar 

  45. Gray A et al (2000) Cost effectiveness of an intensive blood glucose control policy in patients with type 2 diabetes: economic analysis alongside randomised controlled trial (UKPDS 41). BMJ 320:1373–1378

    Article  Google Scholar 

  46. Stouthard M, et al (1997) Disability weights for diseases in The Netherlands. Rotterdam: Erasmus University, Department of Public Health

  47. National Institute for Health and Clinical Excellence (2007) The guidelines manual 2007. http://www.nice.org.uk/page.aspx?o=422950

  48. Wood I, Mallick N, Wing A (1987) Prediction of resources needed to achieve the national target for treatment of renal failure. BMJ 294:1467–1470

    Google Scholar 

  49. Bagust A et al (2002) The projected health care burden of Type 2 diabetes in the UK from 2000 to 2060. Diabet Med 19(Supplement 4):1–5

    Article  Google Scholar 

  50. Fanshel S, Bush J (1970) A health-status index and its application to health-services outcomes. Oper Res 18(6):1021–1066

    Article  Google Scholar 

  51. Eastman R (1997) Model of complications of NIDDM. I. Model construction and assumptions. Diabetes Care 20(5):725–734

    Article  Google Scholar 

  52. Palmer A et al (2004) The CORE Diabetes Model: projecting long-term clinical outcomes, costs and cost-effectiveness of interventions in diabetes mellitus (type 1 and 2) to support clinical and reimbursement decision-making. Curr Med Res Opin 20(Suppl. 1):S5–S26

    Article  Google Scholar 

  53. Mueller E, et al (2006) Development and validation of the economic assessment of glycemic control and long-term effects of diabetes (EAGLE) model. Diabetes Technol Ther 8(2):219–236

    Google Scholar 

  54. Eddy DM, Schlessinger L (2003) Archimedes: a trial-validated model of diabetes. Diabetes Care 26:3093–3101

    Article  Google Scholar 

  55. Pidd M (2003) Tools for thinking. Modelling in management science, second edn. Wiley, Chichester

    Google Scholar 

  56. Phillips L (1984) A theory of requisite decision models. Acta Psychol 56:29–48

    Article  Google Scholar 

  57. Morgan C et al (2000) The prevalence of multiple diabetes-related complications. Diabet Med 17:146–151

    Article  Google Scholar 

  58. Department of Health (2004) Population figures at SHA and PCO level for England and Wales. www.dh.gov.uk/assetRoot/04/11/36/62/04113662.xls

  59. Harvey J, Craney L, Kelly D (2002) Estimation of the prevalence of diagnosed diabetes from primary care and secondary care source data: comparison of record linkage with capture-recapture analysis. J Epidemiol Commun Health 56:18–23

    Article  Google Scholar 

  60. Laing S et al (1999) The British Diabetic Association Cohort Study, I: all-cause mortality in patients with insulin-treated diabetes mellitus. Diabet Med 16(6):459–465

    Article  Google Scholar 

  61. Laing S et al (1999) The British Diabetic Association Cohort Study, II: cause-specific mortality in patients with insulin-treated diabetes mellitus. Diabet Med 16(6):466–471

    Article  Google Scholar 

  62. Soedamah-Muthu S et al (2006) All-cause mortality rates in patients with Type 1 diabetes mellitus compared to a non-diabetic population from the General Practice Research Database (GPRD) 1992–1999. Diabetologia 49(4):660–666

    Article  Google Scholar 

  63. Soedamah-Muthu S et al (2006) High Risk of Cardiovascular Disease in Patients with Type 1 Diabetes in the U.K. A cohort study using the General Practice Research Database. Diabetes Care 29(4):798–804

    Article  Google Scholar 

  64. Rossing P et al (1996) Predictors of mortality in insulin dependend diabetes: 10-year observational follow-up study. Br Med J 313:779–784

    Google Scholar 

  65. Borch-Johnsen K, Andersen P, Deckert T (1985) The effect of proteinuria on relative mortality in type 1 (insulin-dependent) diabetes mellitus. Diabetologia 28:590–596

    Article  Google Scholar 

  66. Moss S, Klein R, Klein B (1992) The prevalence and incidence of lower extremity amputation in a diabetic population. Arch Intern Med 152:610–616

    Article  Google Scholar 

  67. Thompson D, Kozak S, Sheps S (1999) Insulin adjustment by a diabetes nurse educator improves glucose control in insulin-requiring diabetic patients: a randomized trial. Can Med Assoc J 161:959–962

    Google Scholar 

  68. Currie C et al (1997) NHS acute sector expenditure for diabetes: the present, future, and excess in-patient cost of care. Diabet Med 14(8):686–692

    Article  Google Scholar 

  69. Ansell D et al (2003) UK Renal Registry. The Sixth Annual Report. The Renal Association, Bristol

    Google Scholar 

  70. Williams R et al (2004) Epidemiology of diabetic retinopathy and macula oedema: a systematic review. Eye 18:963–983

    Article  Google Scholar 

  71. Davies R et al (2000) Using simulation modelling for evaluating screening services for diabetic retinopathy. J Oper Res Soc 51:476–484

    Article  Google Scholar 

  72. Mount Hood 4 Modeling Group (2007) Computer modeling of diabetes and its complications. Diabetes Care 30(6):1638–1646

    Article  Google Scholar 

  73. Ortegon MM, Redekop WK, Niessen LW (2004) Cost-effectiveness of prevention and treatment of the diabetic foot. A Markov analysis. Diabetes Care 27:901–907

    Article  Google Scholar 

  74. Currie C et al (2007) The financial costs of healthcare treatment for people with Type 1 or Type 2 diabetes in the UK with particular reference to differing severity of peripheral neuropathy. Diabet Med 24:187–194

    Article  Google Scholar 

  75. Gordois A et al (2004) The health care costs of diabetic nephropaty in the United States and the United Kingdom. J Diabetes Complicat 18:18–26

    Article  Google Scholar 

  76. Gordois A et al (2003) The health care costs of diabetic peripheral neuropathy in the United Kingdom. The Diabetic Foot 6:62–73

    Google Scholar 

  77. Klein R (1994) The Wisconsin Epidemiologic study of diabetic retinopathy. XIV. Ten-year incidence and progression of diabetic retinopathy. Arch Ophthalmol 112:1217–1228

    Google Scholar 

  78. Klein R (1998) The Wisconsin Epidemiologic Study of Diabetic Retinopathy XVII. The 14-year incidence and progression of diabetic retinopathy and associated risk factors in type1 diabetes. Ophthalmology 102:1799–1800

    Google Scholar 

  79. Klein R (1989) The Wisconsin Epidemiologic Study of Diabetic Retinopathy IX. Four-year incidence and progression of diabetic retinopathy when age at diagnosis is less than 30 years. Arch Ophthalmol 107:237–243

    Google Scholar 

  80. Klein R (1989) The Wisconsin Epidemiologic Study of Diabetic Retinopathy IX. Four-year incidence and progression of diabetic retinopathy when age at diagnosis is greater than 30 years. Arch Ophthalmol 107:244–249

    Google Scholar 

  81. Klein R et al (1989) Relation of ocular and systemic factors to survival in diabetes. Arch Intern Med 149:266–267

    Article  Google Scholar 

  82. Colquitt J, et al. (2004) Clinical and cost-effectiveness of continuous subcutaneous insulin infusion for diabetes. Health Technol Assess 8(43):1–186

    Google Scholar 

  83. MacLeod A, et al. (1998) Effectiveness and efficiency of methods of dialysis therapy for end-stage renal disease: systematic reviews. Health Technol Assess 2(5):1–166

    Google Scholar 

  84. Williams A (2004) What could be nicer than NICE? Office of Health Economics, London

    Google Scholar 

  85. Bevan, G., et al (2007) Estimating health and productivity gains in England from selected interventions. Research report, The Health Foundation

  86. Diabetes UK (2004) The national paediatric diabetes audit. Results from the audit year 2002. http://www.bsped.org.uk/professional/diabetesuk/NationalPaediatricAudit.pdf

  87. Diabetes UK (2004) Diabetes in the UK 2004. A report from Diabetes UK

  88. Health and Social Care Information Centre (2004) Quality and Outcomes Framework. http://www.ic.nhs.uk/services/qof

  89. Brailsford S et al (1998) Evaluating screening policies for the early detection of retinopathy in patients with non-insulin dependent diabetes. Health Care Manage Sci 1:115–124

    Article  Google Scholar 

  90. Brailsford S et al (2001) Screening for diabetic retinopathy. The evaluation of screening policies for diabetic retinopathy using computer simulation. http://www.management.soton.ac.uk/retinopathy/ last updated 25 October 2001. Date of last access 13 November 2007

  91. Davies R et al (2000) Using simulation modelling for evaluating screening services for diabetic retinopathy. J Oper Res Soc 51: 476–484

    Article  Google Scholar 

  92. Niessen L (2002) Roads to health. Multi-state modelling of population health and resource use. Dutch University Press

  93. Office of National Statistics (2003) Mortality statistics. Cause. Series DH2, no. 30

  94. Mowatt G et al (2003) Systematic review of the effectiveness and cost-effectiveness, and economic evaluation, of home versus hospital or satellite unit haemodialysis for people with end-stage renal failure. Health Technol Assess 7(2)

  95. Clarke P et al (2003) The impact of diabetes-related complications on healthcare costs: results from the United Kingdom Prospective Diabetes Study (UKPDS study No. 65). Diabetic Medicine 20:442–450

    Article  Google Scholar 

  96. Harvey, J et al (2001) Population-based survey and analysis of trends in the prevalence of diabetic nephropathy in Type 1 diabetes. Diabet Med 18:998–1002

    Article  Google Scholar 

  97. DARTS (2001) DARTS annual report, Tayside: Tayside University Hospital

  98. Finne P et al (2005) Incidence of end-stage renal disease in patients with type 1 diabetes. JAMA 294(14):1782–1787

    Article  Google Scholar 

  99. Klein R et al (1984) The Wisconsin Epidemiologic study of diabetic retinopathy. Arch Ophthalmol 102:520–526

    Google Scholar 

  100. HM Treasury (2003) The Green Book: appraisal and evaluation in central Government. London: TSO

Download references

Acknowledgments

The authors wish to thank Christina Georgiou for testing the model with several PCTs, four anonymous referees, and acknowledge the financial support of the Health Foundation.

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Mara Airoldi.

Appendix

Appendix

1.1 Model parameters

Table 12 Parameters shared by the renal and eye disease model: mortality rate of the non-diabetic population and incidence rate of diabetes
Table 13 Incidence rates of sores/ulcers and amputation
Table 14 Transition probabilities in the renal disease complication model
Table 15 Transition probabilities in the eye disease complication model
Table 16 Disability weights

Rights and permissions

Reprints and permissions

About this article

Cite this article

Airoldi, M., Bevan, G., Morton, A. et al. Requisite models for strategic commissioning: the example of type 1 diabetes. Health Care Manage Sci 11, 89–110 (2008). https://doi.org/10.1007/s10729-008-9056-9

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10729-008-9056-9

Keywords

Navigation