Kathryn A Phillips

CSU Mentor, Long Beach, California, United States

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Publications (103)648.97 Total impact

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    ABSTRACT: New genomic sequencing technologies enable the high-speed analysis of multiple genes simultaneously, including all of those in a person's genome. Sequencing is a prominent example of a "big data" technology because of the massive amount of information it produces and its complexity, diversity, and timeliness. Our objective in this article is to provide a policy primer on sequencing and illustrate how it can affect health care system and policy issues. Toward this end, we developed an easily applied classification of sequencing based on inputs, methods, and outputs. We used it to examine the implications of sequencing for three health care system and policy issues: making care more patient-centered, developing coverage and reimbursement policies, and assessing economic value. We conclude that sequencing has great promise but that policy challenges include how to optimize patient engagement as well as privacy, develop coverage policies that distinguish research from clinical uses and account for bioinformatics costs, and determine the economic value of sequencing through complex economic models that take into account multiple findings and downstream costs.
    Health affairs (Project Hope). 07/2014; 33(7):1246-53.
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    ABSTRACT: Background-The coronary artery calcium (CAC) score predicts future coronary heart disease (CHD) events and could be used to guide primary prevention interventions, but CAC measurement has costs and exposes patients to low-dose radiation.Methods and Results-We estimated the cost-effectiveness of measuring CAC and prescribing statin therapy based on the resulting score under a range of assumptions using an established model enhanced with CAC distribution and risk estimates from the Multi-Ethnic Study of Atherosclerosis. Ten years of statin treatment for 10 000 55-year-old women with high cholesterol (10-year CHD risk, 7.5%) was projected to prevent 32 myocardial infarctions, cause 70 cases of statin-induced myopathy, and add 1108 years to total life expectancy. Measuring CAC and targeting statin treatment to the 2500 women with CAC>0 would provide 45% of the benefit (+501 life-years), but CAC measurement would cost $2.25 million and cause 9 radiation-induced cancers. Treat all was preferable to CAC screening in this scenario and across a broad range of other scenarios (CHD risk, 2.5%-15%) when statin assumptions were favorable ($0.13 per pill and no quality of life penalty). When statin assumptions were less favorable ($1.00 per pill and disutility=0.00384), CAC screening with statin treatment for persons with CAC>0 was cost-effective (<$50 000 per quality-adjusted life-year) in this scenario, in 55-year-old men with CHD risk 7.5%, and in other intermediate risk scenarios (CHD risk, 5%-10%). Our results were critically sensitive to statin cost and disutility and relatively robust to other assumptions. Alternate CAC treatment thresholds (>100 or >300) were generally not cost-effective.Conclusions-CAC testing in intermediate risk patients can be cost-effective but only if statins are costly or significantly affect quality of life.
    Circulation Cardiovascular Quality and Outcomes 03/2014; · 5.66 Impact Factor
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    ABSTRACT: Purpose:There is uncertainty about when personalized medicine tests provide economic value. We assessed evidence on the economic value of personalized medicine tests and gaps in the evidence base.Methods:We created a unique evidence base by linking data on published cost-utility analyses from the Tufts Cost-Effectiveness Analysis Registry with data measuring test characteristics and reflecting where value analyses may be most needed: (i) tests currently available or in advanced development, (ii) tests for drugs with Food and Drug Administration labels with genetic information, (iii) tests with demonstrated or likely clinical utility, (iv) tests for conditions with high mortality, and (v) tests for conditions with high expenditures.Results:We identified 59 cost-utility analyses studies that examined personalized medicine tests (1998-2011). A majority (72%) of the cost/quality-adjusted life year ratios indicate that testing provides better health although at higher cost, with almost half of the ratios falling below $50,000 per quality-adjusted life year gained. One-fifth of the results indicate that tests may save money.Conclusion:Many personalized medicine tests have been found to be relatively cost-effective, although fewer have been found to be cost saving, and many available or emerging medicine tests have not been evaluated. More evidence on value will be needed to inform decision making and assessment of genomic priorities.Genet Med advance online publication 14 November 2013Genetics in Medicine (2013); doi:10.1038/gim.2013.122.
    Genetics in medicine: official journal of the American College of Medical Genetics 11/2013; · 3.92 Impact Factor
  • Su-Ying Liang, Daniel Grossman, Kathryn A Phillips
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    ABSTRACT: BACKGROUND: Little is known about the proportion of oral contraceptive pill (OCP) users that use progestin-only pills (POPs), factors associated with POP use, and whether out-of-pocket expenditures and dispensing patterns are similar to combined oral contraceptives (COCs). STUDY DESIGN: Observational cohort using 1996-2008 Medical Expenditure Panel Surveys. RESULTS: Among all OCP users, 4% used POPs and changed little between 1996 and 2008. Women were more likely to use POPs if they received postpartum care (p<.001), had a diagnosis of hypertension (p<.001) or resided in the West (p<.01). POP users, compared to COC users, were more likely to pay $15 and more (p<.01) and less likely to obtain more than one pack per purchase (p<.001), controlling for age, race/ethnicity and insurance coverage. CONCLUSION: POP use is very low in the United States. POP users obtained fewer packs per purchase compared with COC users, suggesting that POP may be used as transitional OCPs, particularly during the postpartum period.
    Contraception 07/2012; · 3.09 Impact Factor
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    ABSTRACT: Patients and relatives have varying preferences for genetic testing and interventions related to hereditary cancer syndromes. We examined how the impact of these services on quality of life (QoL) affects the cost-effectiveness of screening for Lynch syndrome among probands newly diagnosed with colorectal cancer and their relatives. We constructed a state-transition model comparing screening strategies (clinical criteria, prediction algorithms, tumor testing, and upfront germline testing) with no screening to identify Lynch syndrome. The model incorporated individuals' health state utilities after screening, germline testing, and risk-reducing surgeries, with utilities persisting for 12 months in the base case. Outcomes consisted of quality-adjusted life-years (QALYs), costs, and cost per QALY gained. Sensitivity analyses assessed how the duration and magnitude of changes in QoL influenced results. Multiple screening strategies yielded gains in QALYs at acceptable costs compared with no screening. The preferred strategy-immunohistochemistry of tumors followed by BRAF mutation testing (IHC/BRAF)-cost $59,700 per QALY gained in the base case. The duration and magnitude of decreases in QoL after decisions related to germline testing and surgeries were key determinants of the cost-effectiveness of screening. IHC/BRAF cost > $100,000 per QALY gained when decrements to QoL persisted for 21 months. Screening for Lynch syndrome in the population is likely to yield long-term gains in life expectancy that outweigh any short-term decreases in QoL, at acceptable costs. Counseling for individuals should aim to mitigate potential negative impact of genetic testing and risk-reducing interventions on QoL.
    Journal of Oncology Practice 05/2012; 8(3 Suppl):e24s-30s.
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    Grace Wang, Mary S Beattie, Ninez A Ponce, Kathryn A Phillips
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    ABSTRACT: : Coverage policies for genetic services for hereditary cancers are of interest because the services influence cancer risk reduction for both persons with cancer and their family members. We compared coverage policies for BRCA genetic testing and genetic counseling among selected payers in the United States to illuminate eligibility criteria variation that may explain differential access by insurance type. We compared these policies with policies for breast cancer screening with magnetic resonance imaging to consider whether payers apply a unique policy approach to genetic services. : We conducted a case study of large private and public payers selected on number of covered lives. We examined coverage policies for BRCA genetic testing, genetic counseling, and screening with magnetic resonance imaging and the eligibility criteria for each. We compared eligibility criteria against National Comprehensive Cancer Network guidelines. : Eligibility criteria for BRCA testing were related to personal history and family history of cancer. Although private payers covered BRCA testing for persons with and without cancer, the local Medicare carrier in our study only covered testing for persons with cancer. In contrast, Arizona's Medicaid program did not cover BRCA testing. Few payers had detailed eligibility criteria for genetic counseling. Private payers have more detailed coverage policies for both genetic services and screening with magnetic resonance imaging in comparison with public payers. : Despite clinical guidelines establishing standards for BRCA testing, we found differences in coverage policies particularly between private and public payers. Future research and policy discussions can consider how differences in private and public payer policies influence access to genetic technologies and health outcomes.
    Genetics in medicine: official journal of the American College of Medical Genetics 08/2011; 13(12):1045-50. · 3.92 Impact Factor
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    ABSTRACT: Testing has been advocated for all persons with newly diagnosed colorectal cancer to identify families with the Lynch syndrome, an autosomal dominant cancer-predisposition syndrome that is a paradigm for personalized medicine. To estimate the effectiveness and cost-effectiveness of strategies to identify the Lynch syndrome, with attention to sex, age at screening, and differential effects for probands and relatives. Markov model that incorporated risk for colorectal, endometrial, and ovarian cancers. Published literature. All persons with newly diagnosed colorectal cancer and their relatives. Lifetime. Third-party payer. Strategies based on clinical criteria, prediction algorithms, tumor testing, or up-front germline mutation testing, followed by tailored screening and risk-reducing surgery. Life-years, cancer cases and deaths, costs, and incremental cost-effectiveness ratios. The benefit of all strategies accrued primarily to relatives with a mutation associated with the Lynch syndrome, particularly women, whose life expectancy could increase by approximately 4 years with hysterectomy and salpingo-oophorectomy and adherence to colorectal cancer screening recommendations. At current rates of germline testing, screening, and prophylactic surgery, the strategies reduced deaths from colorectal cancer by 7% to 42% and deaths from endometrial and ovarian cancer by 1% to 6%. Among tumor-testing strategies, immunohistochemistry followed by BRAF mutation testing was preferred, with an incremental cost-effectiveness ratio of $36,200 per life-year gained. The number of relatives tested per proband was a critical determinant of both effectiveness and cost-effectiveness, with testing of 3 to 4 relatives required for most strategies to meet a threshold of $50,000 per life-year gained. Immunohistochemistry followed by BRAF mutation testing was preferred in 59% of iterations in probabilistic sensitivity analysis at a threshold of $100,000 per life-year gained. Screening for the Lynch syndrome with immunohistochemistry followed by BRAF mutation testing only up to age 70 years cost $44,000 per incremental life-year gained compared with screening only up to age 60 years, and screening without an upper age limit cost $88,700 per incremental life-year gained compared with screening only up to age 70 years. Other types of cancer, uncertain family pedigrees, and genetic variants of unknown significance were not considered. Widespread colorectal tumor testing to identify families with the Lynch syndrome could yield substantial benefits at acceptable costs, particularly for women with a mutation associated with the Lynch syndrome who begin regular screening and have risk-reducing surgery. The cost-effectiveness of such testing depends on the participation rate among relatives at risk for the Lynch syndrome. National Institutes of Health.
    Annals of internal medicine 07/2011; 155(2):69-79. · 13.98 Impact Factor
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    ABSTRACT: As gene expression profile (GEP) testing for breast cancer may provide additional prognostic information to guide the use of adjuvant chemotherapy, we examined the association between GEP testing and use of chemotherapy, serious chemotherapy-related adverse effects, and total charges during the 12 months following diagnosis. Medical record review was conducted for women age 30-64 years, with incident, non-metastatic, invasive breast cancer diagnosed 2006-2008 in a large, national health plan. Of 534 patients, 25.8% received GEP testing, 68.2% received chemotherapy, and 10.5% experienced a serious chemotherapy-related adverse effect. GEP testing was most commonly used in women at moderate clinical risk of recurrence (52.0 vs. 25.0% of low-risk women and 5.5% of high-risk). Controlling for the propensity to receive GEP testing, women who had GEP were less likely to receive chemotherapy (propensity adjusted odds ratio, 95% confidence interval 0.62, 0.39-0.99). Use of GEP was associated with more chemotherapy use among women at low risk based on clinical characteristics (OR = 42.19; CI 2.50-711.82), but less use among women with a high risk based on clinical characteristics (OR = 0.12; CI 0.03-0.47). Use of GEP was not associated with chemotherapy for the moderate risk group. There was no significant relationship between GEP use and either serious chemotherapy-associated adverse effects or total charges. While GEP testing was associated with an overall decrease in adjuvant chemotherapy, we did not find differences in serious chemotherapy-associated adverse events or charges during the 12 months following diagnosis.
    Breast Cancer Research and Treatment 06/2011; 130(2):619-26. · 4.47 Impact Factor
  • Su-Ying Liang, Daniel Grossman, Kathryn A Phillips
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    ABSTRACT: Little is known about the out-of-pocket expenditures and dispensing patterns for oral contraceptive pills (OCPs), factors associated with these outcomes and whether they change over time. Observational cohort using 1996-2006 Medical Expenditure Panel Surveys. Women spent $16 out-of-pocket per pack, on average (median=$10.41). Of the OCP users, 38% paid $15 or more per pack and 44% obtained one pack per purchase. Over time, fewer women paid $15 or more (52% in 1996-1998 vs. 34% in 1999-2006, p<.001) and fewer obtained one pack per purchase (76% in 1996-1998 vs. 35% in 1999-2006, p<.001). Age and insurance were associated with out-of-pocket expenditures and dispensing patterns. Women paid a substantial amount out-of-pocket for OCPs and dispensing limits remained, although these improved over time. Better insurance coverage of contraception and policies targeting younger women and the uninsured in particular would help overcome barriers to OCP access.
    Contraception 06/2011; 83(6):528-36. · 3.09 Impact Factor
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    ABSTRACT: Scientific advances have improved our ability to target cancer interventions to individuals who will benefit most and spare the risks and costs to those who will derive little benefit or even be harmed. Several approaches are currently used for targeting interventions for cancer risk reduction, screening, and treatment, including risk prediction algorithms for identifying high-risk subgroups and diagnostic tests for tumor markers and germline genetic mutations. Economic evaluation can inform decisions about the use of targeted interventions, which may be more costly than traditional strategies. However, assessing the impact of a targeted intervention on costs and health outcomes requires explicit consideration of the method of targeting. In this study, we describe the importance of this principle by reviewing published cost-effectiveness analyses of targeted interventions in breast cancer. Few studies we identified explicitly evaluated the relationships among the method of targeting, the accuracy of the targeting test, and outcomes of the targeted intervention. Those that did found that characteristics of targeting tests had a substantial impact on outcomes. We posit that the method of targeting and the outcomes of a targeted intervention are inextricably linked and recommend that cost-effectiveness analyses of targeted interventions explicitly consider costs and outcomes of the method of targeting.
    Genetics in medicine: official journal of the American College of Medical Genetics 06/2011; 13(10):853-60. · 3.92 Impact Factor
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    ABSTRACT: Given the likely proliferation of targeted testing and treatment strategies for cancer, a better understanding of the utilization patterns of human epidermal growth factor receptor 2 (HER2) testing and trastuzumab and newer gene expression profiling (GEP) for risk stratification and chemotherapy decision making are important. Cross-sectional. We performed a medical record review of women aged 35 to 65 years diagnosed between 2006 and 2007 with invasive localized breast cancer, identified using claims from a large national health plan (N = 775). Almost all women received HER2 testing (96.9%), and 24.9% of women with an accepted indication received GEP. Unexplained socioeconomic differences in GEP use were apparent after adjusting for age and clinical characteristics; specifically, GEP use increased with income. For example, those in the lowest income category (<$40,000) were less likely than those with an income of $125,000 or more to receive GEP (odds ratio, 0.34; 95% confidence interval, 0.16 to 0.73). A majority of women (57.7%) with HER2-positive disease received trastuzumab; among these women, differences in age and clinical characteristics were not apparent, although surprisingly, those in the lowest income category were more likely than those in the high-income category to receive trastuzumab (P = .02). Among women who did not have a positive HER2 test, 3.9% still received trastuzumab. Receipt of adjuvant chemotherapy increased as GEP score indicated greater risk of recurrence. Identifying and eliminating unnecessary variation in the use of these expensive tests and treatments should be part of quality improvement and efficiency programs.
    The American journal of managed care 05/2011; 17(5 Spec No):e174-81. · 2.12 Impact Factor
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    ABSTRACT: Health technology assessment (HTA) plays an increasing role in translating emerging technologies into clinical practice and policy. Private payers are important users of HTA whose decisions impact adoption and use of new technologies. We examine the current use of HTA by private payers in coverage decisions for personalized medicine, a field that is increasingly impacting oncology practice. Literature review and semistructured interviews. We reviewed 7 HTA organizations used by private payers in decision making and explored how HTA is used by major US private payers (n = 11) for coverage of personalized medicine. All payers used HTA in coverage decisions, but the number of HTA organizations used by an individual payer ranged from 1 (n = 1) to all 7 (n = 1), with the majority of payers (n = 8) using 3 or more. Payers relied more extensively on HTAs for reviews of personalized medicine (64%) than for other technologies. Most payers (82%) equally valued expertise of reviewers and rigor of evaluation as HTA strengths, whereas genomic-specific methodology was less important. Key reported shortcomings were limited availability of reviews (73%) and limited inclusion of nonclinical factors (91%), such as cost-effectiveness or adoption of technology in clinical practice. Payers use a range of HTAs in their coverage decisions related to personalized medicine, but the current state of HTA to comprehensively guide those decisions is limited. HTA organizations should address current gaps to improve their relevance to payers and clinicians. Current HTA shortcomings may also inform the national HTA agenda.
    The American journal of managed care 05/2011; 17 Suppl 5 Developing:SP53-60. · 2.12 Impact Factor
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    ABSTRACT: Administrative claims and medical records are important data sources to examine healthcare utilization and outcomes. Little is known about identifying personalized medicine technologies in these sources. To describe agreement, sensitivity, and specificity of administrative claims compared with medical records for 2 pairs of targeted tests and treatments for breast cancer. Retrospective analysis of medical records linked to administrative claims from a large health plan. We examined whether agreement varied by factors that facilitate tracking in claims (coding and cost) and that enhance medical record completeness (records from multiple providers). Women (35 to 65 y of age) with incident breast cancer diagnosed in 2006 to 2007 (n=775). Use of human epidermal growth factor receptor 2 (HER2) and gene expression profiling (GEP) testing, trastuzumab, and adjuvant chemotherapy in claims and medical records. Agreement between claims and records was substantial for GEP, trastuzumab, and chemotherapy, and lowest for HER2 tests. GEP, an expensive test with unique billing codes, had higher agreement (91.6% vs. 75.2%), sensitivity (94.9% vs. 76.7%), and specificity (90.1% vs. 29.2%) than HER2, a test without unique billing codes. Trastuzumab, a treatment with unique billing codes, had slightly higher agreement (95.1% vs. 90%) and sensitivity (98.1% vs. 87.9%) than adjuvant chemotherapy. Higher agreement and specificity were associated with services that had unique billing codes and high cost. Administrative claims may be sufficient for examining services with unique billing codes. Medical records provide better data for identifying tests lacking specific codes and for research requiring detailed clinical information.
    Medical care 03/2011; 49(6):e1-8. · 3.24 Impact Factor
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    ABSTRACT: Predictive and prognostic biomarkers offer a potential means to personalize cancer medicine, although many reach the market-place before they have been validated, and their adoption is often hindered by variable clinical evidence. Because of this variability in supporting evidence, clinical practice guidelines formulated by panels of subspecialty experts may be particularly important in guiding stakeholders' acceptance and use of new personalized medicine biomarker tests and other nascent technologies. This article provides a structured review of the clinical evidence supporting 4 contemporary biomarker tests in colorectal cancer: K-ras and B-raf mutation analyses, mismatch repair protein testing, and the Oncotype DX Colon Cancer Assay. All 4 tests have been evaluated for guideline inclusion by the NCCN Guidelines Panel for Colon Cancer. This case study shows significant variability in the level of clinical evidence associated with these tests. In the cases of B-raf and mismatch repair protein testing, the available evidence is also inconsistent as it pertains to the specific NCCN Guideline recommendation. Based on this uncertainty in the evidence base, the authors conclude that expert clinical judgment, experience, and consensus may be more heavily weighted than published clinical trial data in the evaluation of new personalized medicine biomarker tests. Potential implications of this conclusion and future directions for research are discussed.
    Journal of the National Comprehensive Cancer Network: JNCCN 01/2011; 9(1):13-25. · 5.11 Impact Factor
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    ABSTRACT: Purpose: Gene expression profiling (GEP) is advocated as a method of risk-stratification for identifying early-stage breast cancer (ESBC) patients most likely to benefit from adjuvant chemotherapy (CTX), thereby sparing low-risk patients the toxicities and costs of CTX. Studies suggest that GEP provides more accurate predictions of cancer recurrence and CTX response than conventional clinical algorithms in ESBC. We assessed the cost-effectiveness of one common GEP test (the 21-gene signature, Oncotype DX) with two common clinical algorithms: National Comprehensive Cancer Center (NCCN) and St. Gallen guidelines for assignment of CTX in post-surgical ESBC patients. Method: We developed probabilistic GEP decision and ESBC natural history Markov models. The models took a health care payer's perspective over a lifetime horizon. The base case cohort was 61-year old hormone receptor-positive, lymph node-negative ESBC US patients. Data were from published literature and the Surveillance Epidemiology and End Results database. Both costs and benefits were discounted 3% annually. We assumed that all women received tamoxifen, and that those deemed high-risk received CTX, those deemed low-risk received no CTX, and 50% of those deemed intermediate-risk received CTX. We estimated incremental cost-effectiveness ratios (ICERs) for life years (LYs) and quality-adjusted LYs (QALYs). We present cost-effectiveness acceptability curves and frontiers and a value of information analysis to determine the potential value of further research in the area. Additionally, deterministic sensitivity analyses were undertaken to investigate specific patient sub-groups based on cohort ages, CTX decisions, recurrence rates, as well as the impact of the cost of the 21-gene signature. Result: In the base case, NCCN was the least costly and the 21-gene signature was the most costly risk-stratification strategy. NCCN dominated St. Gallen guidelines in both LY and QALY analyses. The incremental cost of the 21-gene signature was $17,830/LY and $22,791/QALY vs. NCCN guidelines. ICERs increased with either increasing age or the 21-gene signature cost and decreased with either decreasing age or the 21-gene signature cost vs. NCCN (St. Gallen criteria remained dominated) in both LY and QALY analyses. When the cost of the 21-gene signature was halved, the ICERs of the 21-gene signature vs. NCCN decreased to $8,800/LY and $11,500/QALY. Conclusion: The 21-gene signature appears to be a cost-effective alternative to conventional clinical algorithms in ESBC.
    The 32nd Annual Meeting of the Society for Medical Decision Making; 10/2010
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    ABSTRACT: Personalized medicine is changing oncology practice and challenging decision making. A key challenge is the limited clinical evidence for many personalized medicine technologies. We describe the strategies private payers employed to develop coverage policy for personalized medicine using the example of the 21-gene assay in breast cancer. We examined the coverage policies of six private payers for the 21-gene assay. We then interviewed senior executives (n = 7) from these payers to elucidate factors informing coverage decisions. We additionally focused on the timing of payer decisions compared with the timing of evidence development, measured by publication of primary studies and relevant clinical guidelines. The 21-gene assay became commercially available in 2004. The interviewed payers granted coverage between 2005 and 2008. Their policies varied in structure (eg, whether prior authorization was required). All payers reported clinical evidence as the most important factor in decision making, but all used some health care system factors (eg, physician adoption or medical society endorsement) to inform decision making as well. Payers had different perceptions about the strength of clinical evidence at the time of the coverage decision. Coverage of the 21-gene assay is currently widespread, but policies differ in timing and structure. A key approach private payers use to develop coverage policies for novel technologies is considering both clinical evidence and health care system factors. Policy variation may emerge from the range of factors used and perception of the evidence. Future research should examine the role of health care system factors in policy development and related policy variations.
    Journal of Oncology Practice 09/2010; 6(5):238-42.
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    Contraception 08/2010; 82(2):129-30. · 3.09 Impact Factor
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    ABSTRACT: This article focuses on the overarching question: how can we use existing data to develop the capacity to improve the evidence base on personalized medicine technologies and particularly regarding their utilization and clinical utility? We focus on data from health payers who are key stakeholders in capacity building, as they need data to guide decisions and they develop data as part of operations. Broadly defined, health payers include insurance carriers, third party payers, health-plan sponsors and organized delivery systems. Data from health payers have not yet been widely used to assess personalized medicine. Now, with an increasing number of personalized technologies covered and reimbursed by health payers, and an increasing number of emerging technologies that will require policy decisions, there is a great opportunity to develop the evidence base using payer data and by engaging with these stakeholders. Here, we describe data that are available from, and are being developed by, health payers and assess how these data can be further developed to increase the capacity for future research, using three examples. The examples suggest that payer data can be used to examine clinical utility and approaches can be developed that simultaneously address the characteristics of personalized medicine, real world data and organizations. These examples can now help us to elucidate how to best examine clinical utility in actual practice and build evaluation approaches that can be applied to future technologies.
    Personalized Medicine 07/2010; 7(4):427-439. · 1.51 Impact Factor
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    Kathryn A Phillips, Elena B Elkin, Jennifer S Haas
    Cancer 05/2010; · 5.20 Impact Factor
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    ABSTRACT: Willingness-to‐pay (WTP) estimates derived from discrete‐choice experiments (DCEs) generally assume that the marginal utility of income is constant. This assumption is consistent with theoretical expectations when costs are a small fraction of total income. We analyze the results of five DCEs that allow direct tests of this assumption. Tests indicate that marginal utility often violates theoretical expectations. We suggest that this result is an artifact of a cognitive heuristic that recodes cost levels from a numerical scale to qualitative categories. Instead of evaluating nominal costs in the context of a budget constraint, subjects may recode costs into categories such as ‘low’, ‘medium’, and ‘high’ and choose as if the differences between categories were equal. This simplifies the choice task, but undermines the validity of WTP estimates as welfare measures. Recoding may be a common heuristic in health‐care applications when insurance coverage distorts subjects' perception of the nominal costs presented in the DCE instrument. Recoding may also distort estimates of marginal rates of substitution for other attributes with numeric levels. Incorporating ‘cheap talk’ or graphic representation of attribute levels may encourage subjects to be more attentive to absolute attribute levels. Copyright (C) 2010 John Wiley & Sons, Ltd.
    Health Economics 03/2010; 20(3):323-330. · 2.23 Impact Factor

Publication Stats

2k Citations
648.97 Total Impact Points

Institutions

  • 2004–2012
    • CSU Mentor
      Long Beach, California, United States
  • 2011
    • Partners HealthCare
      Boston, Massachusetts, United States
    • Stanford University
      • Division of Gastroenterology and Hepatology
      Stanford, CA, United States
    • Memorial Sloan-Kettering Cancer Center
      • Epidemiology & Biostatistics Group
      New York City, NY, United States
    • Julphar School of Pharmacy
      San Francisco, California, United States
  • 2010
    • RTI Health Solutions
      Durham, North Carolina, United States
  • 1998–2010
    • University of California, San Francisco
      • • Department of Clinical Pharmacy
      • • School of Pharmacy
      • • Institute for Health Policy Studies
      San Francisco, CA, United States
    • U.S. Department of Veterans Affairs
      Washington, Washington, D.C., United States
  • 2009
    • RTI International
      Durham, North Carolina, United States
    • Center for Women Policy Studies
      Washington, Washington, D.C., United States
    • McMaster University
      • Department of Clinical Epidemiology and Biostatistics
      Hamilton, Ontario, Canada
  • 2008
    • University of Pennsylvania
      • The Wharton School
      Philadelphia, PA, United States
  • 2004–2007
    • Brigham and Women's Hospital
      • Department of Medicine
      Boston, MA, United States
  • 2000
    • University of Washington Seattle
      • Department of Pharmacy
      Seattle, WA, United States