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*278. Estimating Potential Cost Savings for Erythropoietin Administration for End Stage Renal Disease Results from the VA Cooperative Studies Program/Health Care Financing Administration End Stage Renal Disease Work Group Collaborative Study

KT Stroupe, Midwest Center for Health Services and Policy Research and Hines VA Cooperative Studies Program Coordinating Center; DM Hynes, Midwest Center for Health Services and Policy Research and Hines VA Cooperative Studies Program Coordinating Center; JW Greer, Health Care Financing Administration, Office of Strategic Planning; DJ Reda, Hines VA Cooperative Studies Program Coordinating Center; D Frankenfield; JS Kaufman, Health Care Financing Administration, Office of Clinical Standards and Quality; Renal Section, VA Boston Health Care System; WG Henderson; WF Owen, Hines VA Cooperative Studies Program Coordinating Center; Duke Institute of Renal Outcomes Research and Health Policy, Duke University Medical Center; M V Rocco, Wake Forest University School of Medicine; JB Wish, Division of Nephrology, University Hospital of Cleveland; J Kang, Health Care Financing Administration, Office of Clinical Standards and Quality; JR Feussner, Department of Veterans Affairs

Objectives: Patients with end stage renal disease (ESRD) require chronic dialysis to replace lost kidney function. Among nearly all ESRD patients receiving chronic dialysis, anemia develops and must be managed by administering recombinant human erythropoietin (epoetin). This hormone, which raises hematocrit levels (indicating better anemia management), has proven effective in improving cardiovascular function and overall quality of life. However, epoetin treatment is costly. In 1998 Medicare, which provides insurance for over 90% of ESRD patients outside the VA, spent over $600 million for epoetin alone. Consequently, strategies to reduce the dose of epoetin required to maintain the desired target hematocrit have been sought. A VA Cooperative Studies Program randomized controlled trial (VA RCT) demonstrated that the epoetin dose required to maintain target hematocrit at 30%-33% was one-third less when administered subcutaneously compared to intravenously. Among ESRD patients in the Medicare program, approximately 90% received their epoetin intravenously in 1998. In this study, we sought to translate the results of the VA RCT to the Medicare program by estimating potential cost savings to Medicare if patients receiving epoetin intravenously switched to subcutaneous administration.

Methods: Using an economic cost projection model we estimated potential savings to the Medicare End Stage Renal Disease (ESRD) Program that could occur by changing route of administration of epoetin from intravenous (IV) to subcutaneous (SC) among hemodialysis patients. Data included clinical results from the VA RCT, the 1998 Medicare ESRD Core Indicators Survey, and 1997-1998 Medicare claims files. To estimate the cost savings, we assumed that the dose required to maintain the target hematocrit was 32% less for patients receiving SC administration, corresponding to the dose reduction found in the VA RCT. We also assumed that 86% of patients receiving IV epoetin switched, corresponding to the portion of patients in the VA RCT who reported mild or less discomfort from SC administration. In sensitivity analyses we varied expected dose reductions (10%-50%) and proportion of patients switching (67%-86%) from IV to SC.

Results: Medicare cost savings are estimated at $163 million annually by changing route of administration to SC for 86% of patients currently receiving epoetin IV and simultaneously reducing the dose by 32%. Assuming a 50% reduction the in reduced dose by switching from IV to SC administration, the cost savings are $198-$254 million. Even assuming a scenario of minimal epoetin dose reduction (10%), Medicare cost savings are estimated at $40-$51 million annually in just the use of this one medication.

Conclusions: Administering epoetin SC rather than IV would provide substantial cost savings to Medicare. For switching to occur, consensus among stakeholders is needed, especially patients whose treatment satisfaction and health-related quality of life are most affected.

Impact: In the current study, we sought to translate the results of the VA RCT to the Medicare program by determining the cost savings to Medicare that could occur if Medicare patients were to switch the route of administration of epoetin. This study provides a clear example of the important implications that VA research can have beyond the VA.