Optimal preventive maintenance of leased equipment with corrective minimal repairs

For leased equipment, the lessor carries out the maintenance of the equipment. Usually, the contract of lease specifies the penalty for equipment failures and for repairs not being carried out within specified time limits. This implies that optimal preventive maintenance policies must take these penalty costs into account and properly traded against the cost of preventive maintenance actions. The costs associated with failures are high as unplanned corrective maintenance actions are costly and the resulting penalties due to lease contract terms being violated. The paper develops a model to determine the optimal parameters of a preventive maintenance policy that takes into account all these costs to minimize the total expected cost to the lessor for new item lease. The parameters of the policy are (i) the number of preventive maintenance actions to be carried out over the lease period, (ii) the time instants for such actions, and (iii) the level of action. (c) 2005 Elsevier B.V. All rights reserved.

Warranty and discrete preventive maintenance

Preventive maintenance actions over the warranty period have an impact on the warranty servicing cost to the manufacturer and the cost to the buyer of fixing failures over the life of the product after the warranty expires. However, preventive maintenance costs money and is worthwhile only when these costs exceed the reduction in other costs. The paper deals with a model to determine when preventive maintenance actions (which rejuvenate the unit) carried out at discrete time instants over the warranty period are worthwhile. The cost of preventive maintenance is borne by the buyer. (C) 2003 Elsevier Ltd. All rights reserved.

Utilising survey data to inform public policy: Comparison of the cost-effectiveness of treatment of ten mental disorders

Background Mental health survey data are now being used proactively to decide how the burden of disease might best be reduced. Aims To study the cost-effectiveness of current and optimal treatments for mental disorders and the proportion of burden avertable by each. Method Data for three affective, four anxiety and two alcohol use disorders and for schizophrenia were compared in terms of cost, burden averted and efficiency of current and optimal treatment. We then calculated the burden unavertable given current knowledge. The unit of health gain was a reduction in the years lived with disability (YLDs). Results Summing across all disorders, current treatment averted 13% of the burden, at an average cost of AUS$30 000 per YLD gained. Optimal treatment at current coverage could avert 20% of the burden, at an average cost of AUS$18 000 per YLD gained. Optimal treatment at optimal coverage could avert 28% of the burden, at AUS$16 000 per YLD gained. Sixty per cent of the burden of mental disorders was deemed to be unavertable. Conclusions The efficiency of treatment varied more than tenfold across disorders. Although coverage of some of the more efficient treatments should be extended, other factors justify continued use of less-efficient treatments for some disorders. Declaration of interest None. Funding detailed in Acknowledgements.

Modelling the population cost-effectiveness of current and evidence-based optimal treatment for anxiety disorders

Background. The present paper describes a component of a large Population cost-effectiveness study that aimed to identify the averted burden and economic efficiency of current and optimal treatment for the major mental disorders. This paper reports on the findings for the anxiety disorders (panic disorder/agoraphobia, social phobia, generalized anxiety disorder, post-traumatic stress disorder and obsessive-compulsive disorder). Method. Outcome was calculated as averted 'years lived with disability' (YLD), a population summary measure of disability burden. Costs were the direct health care costs in 1997-8 Australian dollars. The cost per YLD averted (efficiency) was calculated for those already in contact with the health system for a mental health problem (current care) and for a hypothetical optimal care package of evidence-based treatment for this same group. Data sources included the Australian National Survey of Mental Health and Well-being and published treatment effects and unit costs. Results. Current coverage was around 40% for most disorders with the exception of social phobia at 21%. Receipt of interventions consistent with evidence-based care ranged from 32% of those in contact with services for social phobia to 64% for post-traumatic stress disorder. The cost of this care was estimated at $400 million, resulting in a cost per YLD averted ranging from $7761 for generalized anxiety disorder to $34 389 for panic/agoraphobia. Under optimal care, costs remained similar but health gains were increased substantially, reducing the cost per YLD to < $20 000 for all disorders. Conclusions. Evidence-based care for anxiety disorders would produce greater population health gain at a similar cost to that of current care, resulting in a substantial increase in the cost-effectiveness of treatment.

A cost-effectiveness analysis of buprenorphine-assisted heroin withdrawal

The purpose of this study was to conduct a cost - effectiveness analysis of detoxification from heroin using buprenorphine in a specialist clinic versus a shared care setting. A randomized controlled trial was conducted with a total of 115 heroin-dependent patients receiving a 5-day treatment regime of buprenorphine. The specialist clinic was a community-based treatment agency in inner-city Sydney. Shared care involved treatment by a general practitioner supplemented by weekend dispensing and some concurrent counselling at the specialist clinic. Quanti. cation of resource use was limited to inputs for treatment provision. The primary outcome measure used in the economic analysis was the proportion of each group that completed detoxification and achieved an initial 7-day period of abstinence. Buprenorphine detoxification in the shared care setting was estimated to be $24 more expensive per patient than treatment at the clinic, which had an average treatment cost of $332 per patient. Twenty-three per cent of the shared care patients and 22% of the clinic patients reported no opiate use during the withdrawal period. These results suggest that the provision of buprenorphine treatment for heroin dependence in shared care and clinic appear to be equally cost - effective.

A cost-effectiveness analysis of two rehabilitation support services for women with breast cancer

The purpose of this research was to estimate the cost-effectiveness of two rehabilitation interventions for breast cancer survivors, each compared to a population-based, non-intervention group (n = 208). The two services included an early home-based physiotherapy intervention (DAART, n = 36) and a group-based exercise and psychosocial intervention (STRETCH, n = 31). A societal perspective was taken and costs were included as those incurred by the health care system, the survivors and community. Health outcomes included: (a) 'rehabilitated cases' based on changes in health-related quality of life between 6 and 12 months post-diagnosis, using the Functional Assessment of Cancer Therapy - Breast Cancer plus Arm Morbidity (FACT-B+4) questionnaire, and (b) quality-adjusted life years (QALYs) using utility scores from the Subjective Health Estimation (SHE) scale. Data were collected using self-reported questionnaires, medical records and program budgets. A Monte-Carlo modelling approach was used to test for uncertainty in cost and outcome estimates. The proportion of rehabilitated cases was similar across the three groups. From a societal perspective compared with the non-intervention group, the DAART intervention appeared to be the most efficient option with an incremental cost of $1344 per QALY gained, whereas the incremental cost per QALY gained from the STRETCH program was $14,478. Both DAART and STRETCH are low-cost, low-technological health promoting programs representing excellent public health investments.

A cost-effectiveness analysis of fluvastatin in patients with diabetes after successful percutaneous coronary intervention

Background: The Lescol Intervention Prevention Study (LIPS) was a multinational randomized controlled trial that showed a 47% reduction in the relative risk of cardiac death and a 22% reduction in major adverse cardiac events (MACEs) from the routine use of fluvastatin, compared with controls, in patients undergoing percutaneous coronary intervention (PCI, defined as angioplasty with or without stents). In this study, MACEs included cardiac death, nonfatal myocardial infarction, and subsequent PCI and coronary artery bypass graft. Diabetes was the greatest risk factor for MACEs. Objective: This study estimated the cost-effectiveness of fluvastatin when used for secondary prevention of MACEs after PCI in people with diabetes. Methods: A post hoc subgroup analysis of patients with diabetes from the LIPS was used to estimate the effectiveness of fluvastatin in reducing myocardial infarction, revascularization, and cardiac death. A probabilistic Markov model was developed using United Kingdom resource and cost data to estimate the additional costs and quality-adjusted life-years (QALYs) gained over 10 years from the perspective of the British National Health Service. The model contained 6 health states, and the transition probabilities were derived from the LIPS data. Crossover from fluvastatin to other lipid-lowering drugs, withdrawal from fluvastatin, and the use of lipid-lowering drugs in the control group were included. Results: In the subgroup of 202 patients with diabetes in the LIPS trial, 18 (15.0%) of 120 fluvastatin patients and 21 (25.6%) of 82 control participants were insulin dependent (P = NS). Compared with the control group, patients treated with fluvastatin can expect to gain an additional mean (SD) of 0.196 (0.139) QALY per patient over 10 years (P < 0.001) and will cost the health service an additional mean (SD) of 10 (E448) (P = NS) (mean [SD] US $16 [$689]). The additional cost per QALY gained was;(51 (US $78). The key determinants of cost-effectiveness included the probabilities of repeat interventions, cardiac death, the cost of fluvastatin, and the time horizon used for the evaluation. Conclusion: Fluvastatin was an economically efficient treatment to prevent MACEs in these patients with diabetes undergoing PCI.

Assessing cost-effectiveness of drug interventions for schizophrenia

Objective: To assess from a health sector perspective the incremental cost-effectiveness of eight drug treatment scenarios for established schizophrenia. Method: Using a standardized methodology, costs and outcomes are modelled over the lifetime of prevalent cases of schizophrenia in Australia in 2000. A two-stage approach to assessment of health benefit is used. The first stage involves a quantitative analysis based on disability-adjusted life years (DALYs) averted, using best available evidence. The robustness of results is tested using probabilistic uncertainty analysis. The second stage involves application of 'second filter' criteria (equity, strength of evidence, feasibility and acceptability) to allow broader concepts of benefit to be considered. Results: Replacing oral typicals with risperidone or olanzapine has an incremental cost-effectiveness ratio (ICER) of A$48 000 and A$92 000/DALY respectively. Switching from low-dose typicals to risperidone has an ICER of A$80 000. Giving risperidone to people experiencing side-effects on typicals is more cost-effective at A$20 000. Giving clozapine to people taking typicals, with the worst course of the disorder and either little or clear deterioration, is cost-effective at A$42 000 or A$23 000/DALY respectively. The least cost-effective intervention is to replace risperidone with olanzapine at A$160 000/DALY. Conclusions: Based on an A$50 000/DALY threshold, low-dose typical neuroleptics are indicated as the treatment of choice for established schizophrenia, with risperidone being reserved for those experiencing moderate to severe side-effects on typicals. The more expensive olanzapine should only be prescribed when risperidone is not clinically indicated. The high cost of risperidone and olanzapine relative to modest health gains underlie this conclusion. Earlier introduction of clozapine however, would be cost-effective. This work is limited by weaknesses in trials (lack of long-term efficacy data, quality of life and consumer satisfaction evidence) and the translation of effect size into a DALY change. Some stakeholders, including SANE Australia, argue the modest health gains reported in the literature do not adequately reflect perceptions by patients, clinicians and carers, of improved quality of life with these atypicals.

Cost-effectiveness analysis of a kidney and cardiovascular disease treatment program in an Australian aboriginal population

The objective of the study was to assess, from a health service perspective, whether a systematic program to modify kidney and cardiovascular disease reduced the costs of treating end-stage kidney failure. The participants in the study were 1,800 aboriginal adults with hypertension, diabetes with microalbuminuria or overt albuminuria, and overt albuminuria, living on two islands in the Northern Territory of Australia during 1995 to 2000. Perindopril was the primary treatment agent, and other medications were also used to control blood pressure. Control of glucose and lipid levels were attempted, and health education was offered. Evaluation of program resource use and costs for follow-up periods was done at 3 and 4.7 years. On an intention-to-treat basis, the number of dialysis starts and dialysis-years avoided were estimated by comparing the fate of the treatment group with that of historical control subjects, matched for disease severity, who were followed in the before the treatment program began. For the first three years, an estimated 11.6 person-years of dialysis were avoided, and over 4.7 years, 27.7 person-years of dialysis were avoided. The net cost of the program was $1,210 more per person per year than status quo care, and dialyses avoided gave net savings of $1.0 million at 3 years and $3.4 million at 4.6 years. The treatment program provided significant health benefit and impressive cost savings in dialysis avoided. (C) 2005 by the National Kidney Foundation, Inc.

Cost-effectiveness of cholesterol-lowering therapy with pravastatin in patients with previous acute coronary syndromes aged 65 to 74 years compared with younger patients: Results from the LIPID study

Background We compared cost-effectiveness of pravastatin in a placebo-controlled trial in 5500 younger (31-64 years) and 3514 older patients (65-74 years) with previous acute coronary syndromes. Methods Hospitalizations and long-term medication within the 6 years of the trial were estimated in all patients. Drug dosage, nursing home, and ambulatory care costs were estimated from substudies. Incremental costs per life saved of pravastatin relative to placebo were estimated from treatment effects and resource use. Results Over 6 years, pravastatin reduced all-cause mortality by 4.3% in the older patients and by 2.3% in the younger patients. Older patients assigned pravastatin had marginally lower cost of pravastatin and other medication over 6 years (A$4442 vs A$4637), but greater cost offsets (A$2061 vs. A$897) from lower rates of hospitalizations. The incremental cost per life saved with pravastatin was A$55500 in the old and A$167200 in the young. Assuming no treatment effect beyond the study period, the life expectancy to age 82 years of additional survivors was 9.1 years in the older and. 17.3 years in the younger. Estimated additional life-years saved from pravastatin therapy were 0.39 years for older and 0.40 years for younger patients. Incremental costs per life-year saved were A$7581 in the older and A$1.4944 in the younger, if discounted at 5% per annum. Conclusions Pravastatin therapy was more cost-effective among older than younger patients, because of their higher baseline risk and greater cost offsets, despite their shorter life expectancy.

Building business cases for maintenance improvement projects

Many maintenance managers find it difficult to justify investments in maintenance improvement initiatives. In part, this is due to a tendency by mine managers to regard maintenance purely as a cost centre, and not as a process able to influence productive capacity and profit. It is also hindered by a lack of alignment between commonly used maintenance performance measures and key business drivers, and the lack of formal business training amongst maintenance professionals. With this in mind, a model to assist maintenance managers in evaluating the benefits of maintenance improvement projects was recently formulated. The model considers four cost saving dimensions. These are: 1. reduction in the cost of unplanned repairs and maintenance, 2. increased or accelerated production and/or sales, 3. spares inventory reduction, and 4. reduction in over-investment in physical assets and operating costs. This paper discusses the application of this model and a number of numerical examples are given to justify investments in maintenance improvement projects having varying objectives.