Economic evaluation of health programmes

Department of Epidemiology, Biostatistics and Occupational Health

Class no. 7: Cost-effectiveness analysis – Part 2

Sept 24, 2008

Plan of class

Review Question 1 from assignment no 1Finish material from previous classQuality of life scalesExtended dominanceNet benefit vs ICER

Relevance of each perspective

Perspective Relevance

Patient Rarely reported; can help to anticipate patient choices

Health and social care system Usually makes decision whether to fund intervention

Government Decision to fund may have wider impact, may be relevant to government as a whole

Society Broadest perspective, ideally the one on which decision would be based

Perspective of analysis: Which costs to include

Cost Patient Health care system

Govern-ment

Society

Direct health care costs

Physician visits x x x

Psychologist visits Out-of-pocket

(if any)

If public If public Total cost (public or private)

Medications Out-of-pocket

costs only

Cost borne by RAMQ (if

any)

Cost borne by RAMQ

(if any)

Total cost

Hospitalisations x x x

Other direct costs (exercise intervention)

Any out-of-pocket costs

Any public Any public Total cost of gym

membership or equipment

Perspective of analysis: Which costs to include

Cost Patient Health care system

Government Society

Time costs

Physician and psychologist visits, any hospitalisations (total

time including travel) Time to exercise, self-administer therapies, etc.

Time cost over

and above what is

reflected in

personal income

Time over and above what is

counted in productivity

losses

Travel costs x x

Perspective of analysis: Which costs to include

Cost Patient Health care system

Government Society

Productivity losses (or gains)

Any changes

in personal income

x

Changes in tax revenues

x Administrative costs only

Changes in welfare payments

Any changes

in personal income

x Administrative costs only

Time horizon decision

Should be long enough for consequences directly related to intervention to play themselves out

Do the costs of the 4 interventions have different time profiles?

Depression known to influence physical health care costs (several mechanisms)

Longer follow-up costly; use modeling study

CEA or CUA?

Turtle soup was tangy Tables were attractively decoratedService was prompt and attentiveSalmon was ordinaryDecor was so-soPrice was moderate

VS.Overall value for money: 4/5!

CEA or

CCA

Need for good effectiveness data

Efficacy vs effectivenessStudy protocols may influence outcome

Adjust if possible

Selective use of studies?If no evidence, use sensitivity analysis

Intermediate vs final outcomes

Intermediate outcomes: medication adherence, blood pressure, cholesterol levels…

Usefulness of results depends on strength of evidence linking intermediate and final outcomes

Discounting benefits

Controversy whether to also discount benefits

But logical inconsistencies arise if benefits and costs not discounted at the same rate

So in practice best to discount at the same rate (report results with 5%, 3%, 0% for both)

See book for more detailed discussion

Quality of life scales

Specific measures (e.g., Wisconsin QOL for people with severe mental illness)

General health profiles (e.g., SF-36, GHQ)Preference-based measures

To be discussed as part of Cost-utility analysis

Specific measures

General health profiles

• More responsive to change

• More acceptable to patients and clinicians

• Do not yield results that can be compared across disease domains

• May be less responsive to change

• May be less acceptable to patients and clinicians

• May yield results comparable across disease domains

Extended dominance

Alternative Cost (C) Change in C (∆C)

E (life-years)

Change in E (∆E)

∆C/∆E

A 100 100 5 5 20

B 200 100 7 2 50

C 300 100 12 4 25

Assume 100 patients are to be treated and that the 3 treatments may be used (e.g., 1/3 get A, 1/3 B, etc.).

What treatment(s) should the 100 patients receive to maximize the number of life-years gained?

Suppose you have a budget limit - $20,000. Can a combination of A and C yield more life-years than B?

A

Existing threshold

ratio

New Tx

costs more

New Tx more

effective

0

Increased threshold

ratio

Net benefit instead of ICER

∆C/∆E < RT

NMB = RT ∆E - ∆C > 0

or

NHB = ∆E - ∆C/ RT > 0

Example∆C= $1,000; ∆E = 10 life years

∆C/∆E =100 $ per life-year

Suppose RT = $50 per life-yearThen ∆C/∆E > RT

NMB = 50 x 10 - 1000 = -500 < 0

or

NHB = 10 - 1000/ 50 = -10 < 0

Intervention is too costly for the life-years it provides