New Study Says REEG(R) Can Slash Cost Of Mental Health Treatments - Benefits To Treatment-Resistant Patients

Main Category: Psychology / Psychiatry
Also Included In: Mental Health
Article Date: 02 Oct 2008 - 3:00 PDT

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CNS Response, Inc. (OTCBB: CNSO) released a report from Analysis Group, a national economics consulting firm, which shows the dramatic savings CNS's technology can bring to payers. The technology, called referenced-EEG(R), is a personalized reference lab test that guides physicians to psychiatric medications that work based on a biomarker database. Physicians using rEEG(R) can cut payer costs by avoiding drug treatments that fail. The Analysis Group study is the first that models the cost impact of rEEG(R) to payers.

The Analysis Group study focused on treatment-resistant (TR) patients, who add significantly to treatment costs -- more than $8,000 annually, according to a 2004 study by investigators Howard Birnbaum and Paul Greenberg of Analysis Group. "This patient group is so costly because they have almost double the office visits, more than three times the outpatient claims and nearly four times the inpatient claims of patients who are not treatment-resistant," noted Dr. Birnbaum. Without the evidence-based guidance provided by rEEG(R), physicians typically resort to "trial and error" in choosing among the over 100 FDA-approved drugs for treating psychiatric disorders.

The study authors found that a sample health plan with 20 million members utilizing rEEG(R) for its 80,000 patients with treatment-resistant mental disorders would save up to 40 percent in behavioral care costs, and approximately $212 million annually in direct health care costs. An even greater savings in reduced absence and productivity losses brings the total to over $550 million, illustrating that the impacts of treatment failure are not limited to behavioral health costs, but are in fact even greater for health plans, disability plans, and employers.

"We spend over $30 billion on retail prescription drugs each year for behavioral disorders, but for many these medications don't work, or lose their effect over time. The myth is that these costs are limited to behavioral care," said George Carpenter, President of CNS Response. "The reality is that these patients drive four times higher spending for regular medical care, almost seven times more in prescription costs, and represent the majority of lost work days for employers. Patients have ordered over 5,000 rEEG(R) tests to date, in many cases paying on their own, and their insurers gained the benefit. This report and budget impact model present clear evidence of the direct savings for payers reimbursing rEEG(R) testing for their most costly plan members."

These latest economic results come on top of clear evidence from a series of clinical studies on rEEG(R) in treatment-resistant patients. The patients studied suffered from a range of disorders including depression, bipolar, attention-deficit hyperactivity disorder and anxiety and did not show significant improvement from initial or subsequent treatment regimens. By helping physicians prescribe more effective, individualized medications, rEEG(R) consistently -- and often dramatically -- improved the patients' quality of life.

"rEEG(R) is a win for everyone," said Carpenter, "the patient, the physician and the payer."

About CNS Response

CNS Response is a life-sciences data company whose patented system provides treatment guidance to psychiatrists and other physicians for patients with behavioral (mental or addictive) disorders. This technology allows CNS Response to create and provide simple reports ("rEEG(R) Reports") that specifically guide physicians to treatment strategies based on the patient's own physiology. http://www.cnsresponse.com

rEEG(R) utilizes traditional electroencephalography (EEG) in conjunction with a normative database and a proprietary clinical (symptomatic) database to identify the following: (1) medication classes most likely to be needed; and (2) medications within these classes with the most probable treatment potential for each patient. Reports are provided to physicians in a relationship analogous to that of a reference laboratory. Prospective, retrospective and field studies of treatment-resistant patients have reported treatment success of 70% or greater in managed care, outpatient psychiatric and residential substance abuse clinical settings.

In addition to providing analytical support to physicians, CNS Response is also an aid to pharmaceutical developers, who can use rEEG to (1) stratify study populations to improve the success of FDA clinical trials; (2) provide insight on effective therapeutic dosing of investigational drugs; (3) identify additional indications for psychiatric medications; (4) provide insight into effective drug combinations; and (5) discover opportunities for decision analytics and support. In addition to these applications, CNS Response continues to investigate the use of rEEG analysis for development of proprietary pharmaceutical opportunities.

About Analysis Group Economics

Analysis Group provides economic, financial, and business strategy consulting to leading corporations, law firms, and government agencies. The firm has more than 450 professionals, with offices in Boston, Chicago, Dallas, Denver, Los Angeles, Menlo Park, New York, San Francisco, Washington, and Montreal. Analysis Group's Health Economics practice provides a broad range of consulting services, including cost of illness research; cost-effectiveness modeling; pricing and contracting strategy; and other health outcomes studies.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

Except for the historical information contained herein, the matters discussed are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements involve risks and uncertainties as set forth in the Company's filings with the Securities and Exchange Commission. These risks and uncertainties could cause actual results to differ materially from any forward-looking statements made herein.

Analysis Group Economics