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Center for Applied Value Analysis, Inc.
200 Connecticut Ave.Fifth Floor
Norwalk, CT 06854 USA
(Direct) 203/791-8899(Main) 877/360-2282
www.cavalue.com
Comparative Cost Effectiveness Modeling: Demonstrating a Product’s Value Proposition
Comparative Cost Effectiveness Modeling: Demonstrating a Product’s Value Proposition
3rd Annual
Health Outcomes and Pharmacoeconomics Research
Josh Feldstein President and CEO
© Copyright 2012 Center for Applied Value Analysis, Inc (CAVA). All rights reserved.
© Copyright 2012 CAVA04/08/23 2
Comparative Cost Effectiveness (CCE)
CCE opens vast new pathways for industry,
providers, and payers to improve clinical outcomes
and reduce overall costs
CCE changes the way health care thinks about
health care
CCE quantifies the comparative value of
pharmaceuticals, med-surg devices and
technologies…many for the first time
Center for Applied Value Analysis, Inc.
200 Connecticut Ave.Fifth Floor
Norwalk, CT 06854 USA
(Direct) 203/791-8899(Main) 877/360-2282
www.cavalue.com
Value Analytics and CCE: A Brief Overview…
Value Analytics and CCE: A Brief Overview…
04/08/23
© Copyright 2012 CAVA04/08/23 4
Profound Challenge Facing US Health Care, 1
How to manage the almost limitless flow of product innovation from industry? (Innovation does not always mean improvement)
Pharmaceutical and Medical-Surgical industry, Hospitals, IDNs, ACOs, Payers, and healthcare providers have little or no data on complete course-of-therapy (“episode of care”) economics
Scarcity of objective comparative drug / device cost effectiveness data makes true value-based (head-to-head) purchase / utilization decisions very difficult
Burns LR, Wharton School Colleagues. The Health Care Value Chain. San Francisco, CA: Jossey-Bass; 2002:269.
© Copyright 2012 CAVA04/08/23 5
Profound Challenge Facing US Health Care, 2
Most hospitals seeking to cut costs by 30% over next 3 years
Government, AHRQ, Medicare focusing on CE, but COST is off the table due to political sensitivities
The “dollarized” total episode-of-care cost (i.e., total value) of a medication or medical-surgical device in the real-world clinical setting is often unknown
Increasing scrutiny of industry-provided quantification of a product’s relative value proposition
This is a huge data gap, leading to incalculably large inefficiency in healthcare delivery and fiscal wasteBurns LR, Wharton School Colleagues. The Health Care Value Chain. San Francisco, CA: Jossey-
Bass; 2002:269.
© Copyright 2012 CAVA04/08/23 6
So…Overall Product Value and CCE Modeling is Becoming the New Gold Standard
Definition and Process:
A new awareness of broader, deeper data collection +
The total comparative dollar assessment of an
entire episode of patient care +
Use of CCE data synthesis methods and technologies +
Aligned HCP/Administration / Payer incentives =
Comparative Cost Effectiveness Modeling and Programs
© Copyright 2012 CAVA04/08/23 7
CCE’s Impact at Hospitals and Among Payers…
© Copyright 2012 CAVA04/08/23 8
And With Industry…
Center for Applied Value Analysis, Inc.
200 Connecticut Ave.Fifth Floor
Norwalk, CT 06854 USA
(Direct) 203/791-8899(Main) 877/360-2282
www.cavalue.com
Key DefinitionsKey Definitions
04/08/23 10
Comparative Effectiveness
Comparing the clinical impact / effect of one treatment vs. another treatment over an appropriate episode of care
CE usually excludes costs – May include measurement in “natural” units such
as # of pills or # of office visits, QALYs, etc.
© Copyright 2012 CAVA
© Copyright 2012 CAVA04/08/23 11
Comparative Cost Effectiveness (CCE)
Adds the comparative dimension of total cost over a clearly defined episode of patient care
Looks at comparative outcomes inclusive of the economic impact of AEs, total healthcare resource consumption (time, HR, supplies, etc.), and not JUST product acquisition cost– All comparative AEs: incidence, severity, duration, and
populations identified via in-depth data collection, analysis, synthesis, modeling
Collects and presents cost (or at least resource use data) alongside the comparative effectiveness data
Provides all decision makers with very practical and important comparative product data
© Copyright 2012 CAVA04/08/23 12
Key CCE Value Analytics Challenges
Center for Applied Value Analysis, Inc.
200 Connecticut Ave.Fifth Floor
Norwalk, CT 06854 USA
(Direct) 203/791-8899(Main) 877/360-2282
www.cavalue.com
CCE Modeling Needs TodayCCE Modeling Needs Today
© Copyright 2012 CAVA04/08/23 14
CCE Modeling Impacts Brand Team Thinking, Strategies, Programs, and Results
To quantify objectively the value proposition of your product to purchasers and HCP stakeholders
To address the rapidly emerging New Normal: CCE
Hospitals, IDNs, HCPs, and Payers are increasingly demanding CCE from industry suppliers
Hospitals, IDNs, HCPs, and Payers are becoming increasingly dissatisfied with industry-sponsored, delivered modeling
Industry has a huge opportunity ahead
Some are resistant, some are watching and waiting, some are opportunistic…where are you?
Center for Applied Value Analysis, Inc.
200 Connecticut Ave.Fifth Floor
Norwalk, CT 06854 USA
(Direct) 203/791-8899(Main) 877/360-2282
www.cavalue.com
Value Analytic CCE ModelsValue Analytic CCE Models
© Copyright 2012 CAVA04/08/23 16
Value Analytic Modeling
Rigorous yet easy-to-use management decision making tools (spectrum of weighted evidence)
Combine best available clinical and economic evidence to assess the true, comparative value of one treatment vs. another
Enable users to obtain relevant estimates of clinical and economic consequences associated with pharmaceutical or med-surg device selections
Peer-reviewed for validation
© Copyright 2012 CAVA04/08/23 17
What’s inside a Value Analytic Model?
Interface and integration of medical statistics and health economics, which includes:– Methods for statistical modeling of cost data– Integration of clinical evidence within a
decision-modeling context– Includes missing data in economic evaluations
conducted alongside clinical trials– Publishable statistical (econometric) methodologies to
perform the evidence synthesis analyses
© Copyright 2012 CAVA04/08/23 18
Example of an Online CCE Model Drug Input Dashboard
© Copyright 2012 CAVA04/08/23 19
Sample Online Adverse Event Dashboard
© Copyright 2012 CAVA04/08/23 20
Example of an Online CCE ModelDevice Output Dashboard
© Copyright 2012 CAVA04/08/23 21
Sample Online CCE ModelPharmaceutical Output Example
04/08/23 22
Good Practice Standards for CCE Value Analytic Model Design
• Statement of perspective (e.g. healthcare facility, societal etc.)
• Description of strategies / comparators
• Influence diagram of model / disease pathways
• Development of model structure and assumptions discussed
• Table of model input parameters presented
• Source of parameters clearly stated
• Model parameters expressed as distributions
• Discussion of model assumptions
• Sensitivity analysis performed
• Key drivers / influential parameters identified
• Evaluation of internal consistency undertakenAdapted from Philips Z, Ginnelly L, Sculpher M et al. Review of guidelines for good practice in decision-analytic modeling in health technology assessment. Health Technology Assessment. 2004; 8(36).
© Copyright 2012 CAVA
© Copyright 2012 CAVA04/08/23 23
Value Analytics Program Design
CCE Data Collection
and Integratio
n
Model Launch
Ongoing Enhancemen
ts Model 2.0+
Planning and Due Diligence
Model Structure Design
Ongoing CCE
ManagementEducatio
n
© Copyright 2012 CAVA04/08/23 24
CCE Modeling: Summary CCE modeling for industry communicates your products
total value
For hospitals / systems / payers, CCE modeling result in:– Improved clinical outcomes– Health resource use offsets and reduced total costs
CCE Models deliver help identify strategies for promoting improved therapeutic purchasing choices and improved outcomes while conserving scarce health care resources
Prudently applied CCE modeling is a win-win for the entire healthcare industry, supply and HCP delivery chain
The need to evolve CCE resources and capabilities is NOW
Center for Applied Value Analysis, Inc.
200 Connecticut Ave.Fifth Floor
Norwalk, CT 06854 USA
(Direct) 203/791-8899(Main) 877/360-2282
www.cavalue.com
Comparative Cost Effectiveness Modeling: How to Demonstrate a Product’s Value Proposition
Comparative Cost Effectiveness Modeling: How to Demonstrate a Product’s Value Proposition
3rd Annual
Health Outcomes and Pharmacoeconomics Research
Josh Feldstein President and CEO