A cost-effectiveness threshold based on the marginal returns of cardiovascular hospital spending

Use of Cost-Effectiveness Thresholds in Healthcare Public Policy: Progress and Challenges

The article offers a comparative analysis of the influence of cost-effectiveness thresholds in the decision-making processes in financing policies, coverage, and price regulation of health technologies in nine countries. We investigated whether countries used cost-effectiveness thresholds for public health policy decision making and found that few countries have adopted the cost-effectiveness threshold as an official criterion for financing, reimbursement, or pricing. However, in countries where it is applied, such as Thailand, the results have been very favorable in terms of minimizing health technology prices and ensuring the financial sustainability of the health system. Although the cost-effectiveness threshold has opportunities for improvement, particularly in certain institutional contexts and with adequate participation of the different strategic actors in the formulation of public policy, its potential use and added value are significant in various aspects.

Factors associated with the author-reported cost-effectiveness threshold in high-income countries: systematic review and multivariable modelling

OBJECTIVE

The cost-effectiveness threshold (CET) is a key parameter to guide objective reimbursement decisions, yet very few countries have defined a reference CET, and there is no reference method for defining it. Our objective was to determine the factors explaining the author-reported CETs in the literature.

METHODS

Our systematic review targeted original articles referenced in EMBASE and published between 2010 and 2021. Selected studies had to use Quality-Adjusted Life-Year (QALY), and being conducted in high-income countries. Our explanatory variables were: estimated cost-effectiveness ratio (ICER), region of the world, source of funding, type of intervention, disease, year of publication, justification of the author-reported Cost-Effectiveness Threshold (ar-CET), economic perspective, and declaration of interest. Multivariable linear regression models implemented on R software were used, guided by a Directed Acyclic Graph.

RESULTS

Two hundred and fifty four studies were included. The mean ar-CET was €63,338/QALY (standard deviation (SD) 34,965) overall, and €37,748/QALY (SD 20,750) in studies conducted in the British Commonwealth. The ar-CET increased slightly with the ICER (+ 66€/QALY for each additional 10,000€/QALY in the ICER, 95% confidence interval (IC) [31-102], p < 0.001), was higher in the United States (+ 36,225€/QALY; IC [25,582; 46,869]) and Europe (+ 10,352€/QALY; IC [72; 20,631]) compared to the British Commonwealth (p < 0.001), and was higher when the ar-CET was not defined a priori (+ 22,393€/QALY; [5809; 38,876]) compared to state recommendations defined ar-CET (p < 0.001).

CONCLUSIONS

Our results underline the virtuous role of state recommendations in the choice of a low and homogeneous CET. We also highlight the need to integrate the a priori justification of the CET into good publishing guidelines.

Monetary value of health-a practical decision-making framework combining equity considerations and WTP

OBJECTIVE

We estimate the first monetary value of a health gain in Croatia to inform the debate about the appropriate "demand-side" cost-effectiveness thresholds in Croatia but also Central and Eastern Europe, where such debates are still uncommon. We test the empirical support for two equity considerations: age and severity operationalized as proportional shortfall (PS), and propose a pragmatic framework for combining equity considerations with the monetary value of health into a single threshold.

METHODS

We used the contingent valuation method to elicit the willingness to pay per Quality-Adjusted Life Year (QALY) in Croatia, using a representative sample of the population (N = 1,500, online survey). 29 EQ-5D health states were valued using payment scales and open-ended question as payment vehicles. To test the hypotheses, we used both parametric tests and non-parametric tests. Multilinear regression was employed to test the theoretical validity of the results.

RESULTS

The monetary value of a health gain in Croatia is equivalent to 1.15 of GDP per capita (equaling €17,000). Age of patients seems to be an important equity-related characteristic. The WTP per QALY in the age-neutral risk group (€11,900) was nearly equivalent to the WTP per QALY in the adult (neutral) risk group (€11,700) but lower by 16% compared to the WTP per QALY estimated in children (€14,200; p = 0.00). WTP estimates are theoretically valid and to, a small degree, scale sensitive. There is a positive association between the level of proportional shortfall and willingness to pay. To increase the usefulness of our results for the policy-makers, we combine the elicited preferences into a single decision-making framework and construct several cost-effectiveness thresholds based on willingness to pay and equity-related preferences. Based on empirical results, cost-effectiveness thresholds could range up to €20,308 for the most severe health conditions in children or could be lowered to €16,777 for less severe health conditions.

DISCUSSION

In Central and Eastern Europe, in spite of a growing understanding of the importance of further developing value-based assessment frameworks there has been very little empirical research to guide, inform and promote this development. Countries in this region use mainly GDP-based thresholds without empirical evidence to support such important decisions. This may lead to thresholds that are too high, with detrimental consequence for the pricing and reimbursement systems.

A QALY is [still] a QALY is [still] a QALY? : Evaluating proportional shortfall as the answer to the problem of equity in healthcare allocations

Despite clinical evidence of drug superiority, therapeutic modalities, like combination immunotherapy, are mostly considered cost-ineffective due to their high costs per life year(s) gained. This paper, taking an ethical stand, reevaluates the standard cost-effectiveness analysis with that of the more recent justice-enhanced methods and concludes by pointing out the shortcomings of the current methodologies.

Systematic review of the impact of health care expenditure on health outcome measures: implications for cost-effectiveness thresholds

OBJECTIVE

Empirical estimates of the impact of healthcare expenditure on health outcome measures may inform the cost-effectiveness threshold (CET) for guiding funding decisions. This study aims to systematically review studies that estimated this, summarize and compare the estimates by country income level.

METHODS

We searched PubMed, Scopus, York Research database, and [anonymized] for Reviews and Dissemination database from inception to 1 August 2023. For inclusion, a study had to be an original article, estimating the impact of healthcare expenditure on health outcome measures at a country level, and presented estimates, in terms of cost per quality-adjusted life year (QALY) or disability-adjusted life year (DALY).

RESULTS

We included 18 studies with 385 estimates. The median (range) estimates were PPP$ 11,224 (PPP$ 223 - PPP$ 288,816) per QALY gained and PPP$ 5,963 (PPP$ 71 - PPP$ 165,629) per DALY averted. As ratios of Gross Domestic Product per capita (GDPPC), these estimates were 0.376 (0.041-182.840) and 0.318 (0.004-37.315) times of GDPPC, respectively.

CONCLUSIONS

The commonly used CET of GDPPC seems to be too high for all countries, but especially low-to-middle-income countries where the potential health losses from misallocation of the same money are greater.

REGISTRATION

The review protocol was published and registered in PROSPERO (CRD42020147276).

Willingness to pay for cancer prevention versus treatment in China: implications for cost-effectiveness threshold

BACKGROUND

Empirical support for the appropriate cost-effectiveness threshold (CET) in China remains sparse.

OBJECTIVE

This study aimed to estimate the willingness to pay (WTP) for cancer prevention and treatment from the perspective of healthcare policy-makers (i.e. supply side) and to investigate whether there is a difference between the estimated WTP in two scenarios.

METHODS

We conducted a web-based survey from May to July 2022 among experts who offering consultation to the government. We surveyed 79 experts from a national think-tank (84.81% response rate) using contingent valuation method, a method for estimating the monetary value that individuals place on a non-market service.

RESULTS

The mean WTP for two scenarios were estimated at 1.29 times of per capita Gross Domestic Product (GDP) of China and 1.90 times of per capita GDP, respectively. There was a difference between the WTP in the two scenarios and the WTP for treatment was significantly higher than prevention.

CONCLUSION

The findings suggest that though there is a smaller gap between the two scenarios in China as compared to other countries, the WTP may vary under different scenarios. So there's a need to further refine the development of CET by adding parameters like prevention instead of defining one universal threshold.

Estimating the cost-effectiveness threshold of advanced non-small cell lung cancer in China using mean opportunity cost and contingent valuation method

OBJECTIVES

Monetizing health has sparked controversy and has implications for pricing strategies of emerging health technologies. Medical insurance payers typically set up thresholds for quality-adjusted life years (QALY) gains based on health productivity and budget affordability, but they rarely consider patient willingness-to-pay (WTP). Our study aims to compare Chinese payer threshold and patient WTP toward QALY gain of advanced non-small cell lung cancer (NSCLC) and to inform a potential inclusion of patient WTP under more complex decision-making scenarios.

METHODS

A regression model was constructed with cost as the independent variable and QALY as the dependent variable, where the regression coefficients reflect mean opportunity cost, and by transforming these coefficients, the payer threshold can be obtained. Patient WTP was elicited through a contingent valuation method survey. The robustness of the findings was examined through sensitivity analyses of model parameters and patient heterogeneity.

RESULTS

The payer mean threshold in the base-case was estimated at 150,962 yuan (1.86 times per capita GDP, 95% CI 144,041-159,204). The two scenarios analysis generated by different utility inputs yielded thresholds of 112,324 yuan (1.39 times per capita GDP) and 111,824 yuan (1.38 times per capita GDP), respectively. The survey included 85 patients, with a mean WTP of 148,443 yuan (1.83 times per capita GDP, 95% CI 120,994-175,893) and median value was 106,667 yuan (1.32 times the GDP per capita). Due to the substantial degree of dispersion, the median was more representative. The payer threshold was found to have a high probability (98.5%) of falling within the range of 1-2 times per capita GDP, while the robustness of patient WTP was relatively weak.

CONCLUSIONS

In China, a country with a copayment system, payer threshold was higher than patient WTP, indicating that medical insurance holds significant decision-making authority, thus temporarily negating the need to consider patient WTP.

10 Years of AMNOG: What is the Willingness-to-Pay for Pharmaceuticals in Germany?

OBJECTIVES

The German Pharmaceutical Market Restructuring Act (AMNOG, 2011) is a two-stage process to regulate the price of new pharmaceuticals in which price negotiations are conducted based on evidence-based medical benefit assessments using data from prior clinical trials. Although the act does not explicitly set a willingness-to-pay (WTP) threshold, the process itself implicitly establishes a WTP for health improvement. We evaluated the implicit WTP for prescription pharmaceuticals post-AMNOG in the German healthcare system from the decision-maker/payer perspective.

METHODS

We extracted data on patient-group-specific annual treatment costs and endpoints from 2011 to 2021 from the dossiers assessed by the German Federal Joint Committee (FJC; Gemeinsamer Bundesausschuss). Using incremental cost-effectiveness ratios (ICERs), we calculated a WTP for the indications (I) diabetes, (II) cardiovascular disease, and (III) psoriasis weighted according to patient group size, first from the perspective of the decision-maker (approach A), and second from the perspective of the industry (approach B). To put clinical outcome measures into relation to one another, minimum clinically important differences (MCIDs) were derived from the literature and compared.

RESULTS

The annual treatment costs of newly authorized drugs were substantially higher (both pre- and post-negotiation) than that of their comparators (e.g., psoriasis, pre-negotiation: €20,601.59, post-negotiation: €16,763.57; comparators: €5178.00). However, although newly launched drugs were more expensive than their comparators, they brought greater medical benefits and were more aligned with value (r = 0.59, P < 0.001) than older drugs. We estimated WTP to vary widely by indication group [€33,814.08 per 1 percentage point hemoglobin A1c (HbA1c) reduction for diabetes, €10,970.83 per life year gained for cardiovascular disease, and €663.46 per 1% PASI decrease for psoriasis; approach A]. WTP was converted to MCID thresholds: diabetes: €16,907.04; cardiovascular drugs: no MCID existent to convert; and psoriasis: €33,173.00. WTP remained constant over time for diabetes and cardiovascular drugs but increased for psoriasis drugs.

CONCLUSION

This paper is one of the first to estimate the implicit WTP for prescription pharmaceuticals post-AMNOG and suggests that the WTP may vary between different therapeutic areas. Additionally, making different assumptions (approach A versus approach B) with regard to the assumed effectiveness in indication areas that had been declared as having no additional benefit by the FJC may explain the different perspectives of decision-makers and of the pharmaceutical industry on the value of a pharmaceutical.

The Broader Opportunity Costs in the Broader Cost-Effectiveness Analysis Framework

BACKGROUND

The traditional cost-effectiveness analysis framework usually takes a healthcare system perspective, where the aim is to maximise population health from a fixed budget allocated to healthcare. Extensions to this framework have been suggested, including: (i) incorporating impacts that fall outside the healthcare sector; (ii) accounting for outcomes beyond health; and (iii) assessing equity considerations. Several alternatives have been proposed that serve these purposes, for example, the extended "impact inventory", the "beyond-the-QALY" approach and the distributional cost-effectiveness analysis.

OBJECTIVE

This paper aims to develop a comprehensive framework that incorporates into the cost-effectiveness analysis framework some of its most advocated extensions and provides a means of arriving at a unidimensional cost-effectiveness analysis result measure.

METHODS

Building on previous work, I proposed a framework that explicitly incorporates the full extent of the opportunity costs that arise when new dimensions and distributional concerns are included in cost-effectiveness analyses. A hypothetical example is provided as a way of illustration.

RESULTS

Operationalising the proposed framework requires system-wide representative values and/or robust estimates concerning: (i) selecting dimensions; (ii) measuring opportunity costs associated with each dimension; (iii) quantifying equity weights and percentages of beneficiaries and losers meeting equity considerations; and (iv) attaching monetary values to dimensions measured using a non-monetary metric.

CONCLUSIONS

Extending the cost-effectiveness analysis framework entails extending the measurement of the opportunity costs of funding decisions. This implies populating an ambitious puzzle that in some cases poses fundamental conceptual and empirical questions. Potential routes of further research that might facilitate such undertaking are proposed.

The Value of Health in a Cost-Effectiveness Analysis: Theory Versus Practice

A cost-effectiveness analysis has become an important method to inform allocation decisions and reimbursement of new technologies in healthcare. A cost-effectiveness analysis requires a threshold to which the cost effectiveness of a new intervention can be compared. In principle, the threshold ought to reflect opportunity costs of reimbursing a new technology. In this paper, we contrast the practical use of this threshold within a CEA with its theoretical underpinnings. We argue that several assumptions behind the theoretical models underlying this threshold are violated in practice. This implies that a simple application of the decision rules of CEA using a single estimate of the threshold does not necessarily improve population health or societal welfare. Conceptual differences regarding the interpretation of the threshold, widely varying estimates of its value, and an inconsistent use within and outside the healthcare sector are important challenges in informing policy makers on optimal reimbursement decision and setting appropriate healthcare budgets.

The impact of different types of NHS expenditure on health: Marginal cost per QALY estimates for England for 2016/17

English data from 2003 to 2012 suggests that it costs the NHS £10,000 to generate an additional quality-adjusted life year (QALY).  This estimate relates to all NHS expenditure and no attempt was made to explore possible heterogeneity within this total.  Different types of expenditure - such as secondary care, primary care and specialized commissioning - may have different productivities and estimates of these may help policymakers decide where additional investment is most beneficial.  We use the two-stage least squares estimator and data for 2016 to explore the mortality response to three types of healthcare expenditure.  Three specifications are estimated for each type of expenditure: backward selection and regularized regression are used to identify parsimonious specifications, and a full specification with all covariates is also estimated.  The regression results are combined with information about survival and morbidity disease burden to calculate the marginal cost per QALY for each type of expenditure: the most conservative results suggest that this is about £8,000 for locally (CCG) commissioned services, while estimates for specialized commissioning and primary care are more uncertain.  When this heterogeneity is taken into account, the estimated marginal cost per QALY for all NHS expenditure increases slightly, from about £6,000 to £7,000.  Our results suggest that additional investment is likely to be most productive in primary care and in locally commissioned services.

Cost-Effectiveness Analysis of Treating Patients With NTRK-Positive Cancer With the Histology-Independent Therapy Entrectinib

OBJECTIVES

This study tackles several challenges of evaluating histology-independent treatments using entrectinib as an example. Histology-independent treatments are provided based on genetic marker(s) of tumors, regardless of the tumor type. We evaluated the lifetime cost-effectiveness of testing all patients for NTRK fusions and treating the positive cases with entrectinib compared with no testing and standard of care (SoC) for all patients.

METHODS

The health economic model consisted of a decision tree reflecting the NTRK testing phase followed by a microsimulation model reflecting treatment with either entrectinib or SoC. Efficacy of entrectinib was based on data from basket trials, whereas historical data from NTRK-negative patients were corrected for the prognostic value of NTRK fusions to model SoC.

RESULTS

"Testing" (testing for NTRK fusions, with subsequent entrectinib treatment in NTRK-positive patients and SoC in NTRK-negative patients) had higher per-patient quality-adjusted life-years (QALYs) and costs than "No testing" (SoC for all patients), with a difference of 0.0043 and €732, respectively. This corresponded to an incremental cost-effectiveness ratio (ICER) of €169 957/QALY and, using a cost-effectiveness threshold of €80 000/QALY, an incremental net monetary benefit of -€388. When excluding the costs of genetic testing for NTRK fusions, the ICER was reduced to €36 290/QALY and the incremental net monetary benefit increased to €188.

CONCLUSIONS

When treatment requires the identification of a genetic marker, the associated costs and effects need to be accounted for. Because of the low prevalence of NTRK fusions, the number needed-to-test to identify patients eligible for entrectinib is large. Excluding the testing phase reduces the ICER substantially.

Informing a cost-effectiveness threshold for Saudi Arabia

BACKGROUND

Saudi Arabia's Vision 2030 aims to reform health care across the Kingdom, with health technology assessment being adopted as one tool promising to improve the efficiency with which resources are used. An understanding of the opportunity costs of reimbursement decisions is key to fulfilling this promise and can be used to inform a cost-effectiveness threshold. This paper is the first to provide a range of estimates of this using existing evidence extrapolated to the context of Saudi Arabia.

METHODS AND MATERIALS

We use four approaches to estimate the marginal cost per unit of health produced by the healthcare system; drawing from existing evidence provided by a cross-country analysis, two alternative estimates from the UK context, and based on extrapolating a UK estimate using evidence on the income elasticity of the value of health. Consequences of estimation error are explored.

RESULTS

Based on the four approaches, we find a range of SAR 42,046 per QALY gained (48% of GDP per capita) to SAR 215,120 per QALY gained (246% of GDP per capita). Calculated potential central estimates from the average of estimated health gains based on each source gives a range of SAR 50,000-75,000. The results are in line with estimates from the emerging literature from across the world.

CONCLUSION

A cost-effectiveness threshold reflecting health opportunity costs can aid decision-making. Applying a cost-effectiveness threshold based on the range SAR 50,000 to 75,000 per QALY gained would ensure that resource allocation decisions in healthcare can in be informed in a way that accounts for health opportunity costs.

LIMITATIONS

A limitation is that it is not based on a within-country study for Saudi Arabia, which represents a promising line of future work.

Estimating health system opportunity costs: the role of non-linearities and inefficiency

Background

Empirical estimates of health system opportunity costs have been suggested as a basis for the cost-effectiveness threshold to use in Health Technology Assessment. Econometric methods have been used to estimate these in several countries based on data on spending and mortality. This study examines empirical evidence on four issues: non-linearity of the relationship between spending and mortality; the inclusion of outcomes other than mortality; variation in the efficiency with which expenditures generate health outcomes; and the relationship among efficiency, mortality rates and outcome elasticities.

Methods

Quantile Regression is used to examine non-linearities in the relationship between mortality and health expenditures along the mortality distribution. Data Envelopment Analysis extends the approach, using multiple measures of health outcomes to measure efficiency. These are applied to health expenditure data from 151 geographical units (Primary Care Trusts) of the National Health Service in England, across eight different clinical areas (Programme Budget Categories), for 3 fiscal years from 2010/11 to 2012/13.

Results

The results suggest differences in efficiency levels across geographical units and clinical areas as to how health resources generate outcomes, which indicates the capacity to adjust to a decrease in health expenditure without affecting health outcomes. Moreover, efficient units have lower absolute levels of mortality elasticity to health expenditure than inefficient ones.

Conclusions

The policy of adopting thresholds based on estimates of a single system-wide cost-effectiveness threshold assumes a relationship between expenditure and health outcomes that generates an opportunity cost estimate which applies to the whole system. Our evidence of variations in that relationship and therefore in opportunity costs suggests that adopting a single threshold may exacerbate the efficiency and equity concerns that such thresholds are designed to counter. In most health care systems, many decisions about provision are not made centrally. Our analytical approach to understanding variability in opportunity cost can help policy makers target efficiency improvements and set realistic targets for local and clinical area health improvements from increased expenditure.

Supplementary Information

The online version contains supplementary material available at 10.1186/s12962-022-00391-y.

Supply-Side Cost-Effectiveness Thresholds: Questions for Evidence-Based Policy

There is growing interest in cost-effectiveness thresholds as a tool to inform resource allocation decisions in health care. Studies from several countries have sought to estimate health system opportunity costs, which supply-side cost-effectiveness thresholds are intended to represent. In this paper, we consider the role of empirical estimates of supply-side thresholds in policy-making. Recent studies estimate the cost per unit of health based on average displacement or outcome elasticity. We distinguish the types of point estimates reported in empirical work, including marginal productivity, average displacement, and outcome elasticity. Using this classification, we summarise the limitations of current approaches to threshold estimation in terms of theory, methods, and data. We highlight the questions that arise from alternative interpretations of thresholds and provide recommendations to policymakers seeking to use a supply-side threshold where the evidence base is emerging or incomplete. We recommend that: (1) policymakers must clearly define the scope of the application of a threshold, and the theoretical basis for empirical estimates should be consistent with that scope; (2) a process for the assessment of new evidence and for determining changes in the threshold to be applied in policy-making should be created; (3) decision-making processes should retain flexibility in the application of a threshold; and (4) policymakers should provide support for decision-makers relating to the use of thresholds and the implementation of decisions stemming from their application.

How Responsive is Mortality to Locally Administered Healthcare Expenditure? Estimates for England for 2014/15

BACKGROUND

Research using local English data from 2003 to 2012 suggests that a 1% increase in healthcare expenditure causes a 0.78% reduction in mortality, and that it costs the NHS £10,000 to generate an additional quality-adjusted life year (QALY). In 2013, the existing 151 local health authorities (Primary Care Trusts) were abolished and replaced with 212 Clinical Commissioning Groups (CCGs). CCGs retained responsibility for secondary care and pharmaceuticals, but responsibility for primary care and specialised commissioning returned to central administrators.

OBJECTIVES

The aim was to extend and apply existing methods to more recent data using a new geography and expenditure base, while improving covariate selection and examining the responsiveness of mortality to expenditure across the mortality distribution.

METHODS

Instrumental variable regression is used to quantify the relationship between mortality and local expenditure. Backward selection and regularised regression are used to identify parsimonious specifications. These results are combined with information about survival and morbidity disease burden to calculate the marginal cost per QALY. Unconditional quantile regression (UQR) is used to examine the response of mortality to expenditure across the mortality distribution.

RESULTS

Backward selection and regularised regression both suggest that the marginal cost per QALY in 2014/15 was about £7000 for locally commissioned services. The UQR results suggest that additional expenditure generates larger health benefits in high-mortality areas and that, if anything, the average size of this heterogeneous response is larger than the response at the mean.

CONCLUSIONS

The new healthcare geography and expenditure base can be used to update estimates of the health opportunity costs associated with additional expenditure. The variation in the mortality response across the mortality distribution suggests that the use of the response at the mean will, if anything, underestimate the health opportunity costs associated with a national policy or nationally mandated guidance on the use of new technologies. The health opportunity costs of such policies are likely to be greater (lower) in areas of higher (lower) mortality, increasing health inequalities.

Effectiveness and Cost-Effectiveness of 360 Disease-Modifying Treatment Escalation Sequences in Multiple Sclerosis

OBJECTIVES

The rapid expansion in treatment options for relapsing-remitting multiple sclerosis (RRMS) of the past decade requires clinical decision making on the sequential prescription of these treatments. Here, we compare 360 treatment escalation sequences for patients with RRMS in terms of health outcomes and societal costs in The Netherlands.

METHODS

We use a microsimulation model with a societal perspective, developed in collaboration with MS neurologists, to estimate the effectiveness and cost-effectiveness of 360 treatment sequences starting with first-line therapies in RRMS. This model integrated data on disease progression, disease-modifying treatment efficacy, clinical decision rules, age-dependent relapse rates, quality of life, healthcare, and societal costs.

RESULTS

Costs and health outcomes were overlapping among different treatment escalation sequences. In our model for RRMS treatment, optimal lifetime health outcomes (20.24 ± 1.43 quality-adjusted life-years [QALYs], 6.11 ± 0.30 relapses) were achieved with the sequence peginterferon-dimethyl fumarate-ocrelizumab-natalizumab-alemtuzumab. The most cost-effective sequence (peginterferon-glatiramer acetate-ocrelizumab-cladribine-alemtuzumab) yielded numerically worse health outcomes per patient (19.59 ± 1.43 QALYs, 6.64 ± 0.43 relapses), but resulted in €98 127 ± €19 134 less costs than the most effective treatment sequence.

CONCLUSIONS

Effectiveness estimates of treatments have overlapping confidence intervals but the treatment sequence that yields most QALYs is not the most cost-effective option, also when taking uncertainty into account. It is important that neurologists are aware of cost constraints and its relationship with prescription behavior, but treatment decisions should be individually tailored.

Are Estimates of the Health Opportunity Cost Being Used to Draw Conclusions in Published Cost-Effectiveness Analyses? A Scoping Review in Four Countries

BACKGROUND

When healthcare budgets are exogenous, cost-effectiveness thresholds (CETs) used to inform funding decisions should represent the health opportunity cost (HOC) of such funding decisions, but HOC-based CET estimates have not been available until recently. In recent years, empirical HOC-based CETs for multiple countries have been published, but the use of these CETs in the cost-effectiveness analysis (CEA) literature has not been investigated. Analysis of the use of HOC-based CETs by researchers undertaking CEAs in countries with different decision-making contexts will provide valuable insights to further understand barriers and facilitators to the acceptance and use of HOC-based CETs.

OBJECTIVES

We aimed to identify the CET values used to interpret the results of CEAs published in the scientific literature before and after the publication of jurisdiction-specific empirical HOC-based CETs in four countries.

METHODS

We undertook a scoping review of CEAs published in Spain, Australia, the Netherlands and South Africa between 2016 (2014 in Spain) and 2020. CETs used before and after publication of HOC estimates were recorded. We conducted logit regressions exploring factors explaining the use of HOC values in identified studies and linear models exploring the association of the reported CET value with study characteristics and results.

RESULTS

1171 studies were included in this review (870 CEAs and 301 study protocols). HOC values were cited in 28% of CEAs in Spain and in 11% of studies conducted in Australia, but they were not referred to in CEAs undertaken in the Netherlands and South Africa. Regression analyses on Spanish and Australian studies indicate that more recent studies, studies without a conflict of interest and studies estimating an incremental cost-effectiveness ratio (ICER) below the HOC value were more likely to use the HOC as a threshold reference. In addition, we found a small but significant impact indicating that for every dollar increase in the estimated ICER, the reported CET increased by US$0.015. Based on the findings of our review, we discuss the potential factors that might explain the lack of adoption of HOC-based CETs in the empirical CEA literature.

CONCLUSIONS

The adoption of HOC-based CETs by identified published CEAs has been uneven across the four analysed countries, most likely due to underlying differences in their decision-making processes. Our results also reinforce a previous finding indicating that CETs might be endogenously selected to fit authors' conclusions.

The Relevance of Including Future Healthcare Costs in Cost-Effectiveness Threshold Calculations for the UK NHS

BACKGROUND AND OBJECTIVE

The supply-side threshold for the UK National Health Service has been empirically estimated as the marginal returns to healthcare spending on health outcomes. These estimates implicitly exclude future healthcare costs, which is inconsistent with the objective of making the most efficient use of healthcare resources. This paper illustrates how empirical estimates of the threshold within healthcare can be adjusted to account for future healthcare costs.

METHODS

Using cause-deleted life tables and previous work on future costs in England and Wales, we illustrate how such estimates can be adjusted.

RESULTS

While the effect of including future healthcare costs can have substantial effects on incremental cost-effectiveness ratios of specific life-extending interventions, we find that including future costs has relatively little impact (an increase of £743 per quality-adjusted life-year) on the threshold estimate.

CONCLUSIONS

For some life-extending interventions the impact of including future costs on whether an intervention is deemed cost effective may be considerable.

Empirical Estimates of the Marginal Cost of Health Produced by a Healthcare System: Methodological Considerations from Country-Level Estimates

Many health technology assessment committees have an explicit or implicit reference value (often referred to as a 'threshold') below which new health technologies or interventions are considered value for money. The basis for these reference values is unclear but one argument is that it should be based on the health opportunity costs of funding decisions. Empirical estimates of the marginal cost per unit of health produced by a healthcare system have been proposed to capture the health opportunity costs of new funding decisions. Based on a systematic search, we identified eight studies that have sought to estimate a reference value through empirical estimation of the marginal cost per unit of health produced by a healthcare system for England, Spain, Australia, The Netherlands, Sweden, South Africa and China. We review these eight studies to provide an overview of the key methodological approaches taken to estimate the marginal cost per unit of health produced by the healthcare system with the aim to help inform future estimates for additional countries. The lead author for each of these papers was invited to contribute to the current paper to ensure all the key methodological issues encountered were appropriately captured. These included consideration of the key variables required and their measurement, accounting for endogeneity of spending to health outcomes, the inclusion of lagged spending, discounting and future costs, the use of analytical weights, level of disease aggregation, expected duration of health gains, and modelling approaches to estimating mortality and morbidity effects of health spending. Subsequent research estimates for additional countries should (1) carefully consider the specific context and data available, (2) clearly and transparently report the assumptions made and include stakeholder perspectives on their appropriateness and acceptability, and (3) assess the sensitivity of the preferred central estimate to these assumptions.

Avoiding Opportunity Cost Neglect in Cost-Effectiveness Analysis for Health Technology Assessment

Despite being a fundamental tenet of economic analysis there is a lack of clarity regarding the relevance of opportunity costs to cost-effectiveness analysis for health technology assessment. We argue that this is due, in part, to the importance of the decision context in understanding the nature of opportunity costs. Taking the example of the National Institute of Health and Care Excellence (NICE) on behalf of the National Health Service (NHS) in England and Wales, we explore the implications of existing discrepancies between policy thresholds and emerging empirical evidence of health opportunity costs. In particular, we consider analysts communicating the results of cost-effectiveness analysis, and recommend that analysts provide analysis according to both the policy threshold and the latest empirical evidence until the discrepancies are better understood or resolved. A number of conceptually related, but distinct, issues are discussed and clarified.

Cost Analysis of Volar Plate Fixation Versus Plaster Cast Immobilization for Intra-Articular Distal Radial Fractures

BACKGROUND

The aim of this study was to compare the cost-effectiveness and cost-utility between plaster cast immobilization and volar plate fixation for acceptably reduced intra-articular distal radial fractures.

METHODS

A cost-effectiveness analysis was conducted as part of a randomized controlled trial comparing operative (volar plate fixation) with nonoperative (plaster cast immobilization) treatment in patients between 18 and 75 years old with an acceptably reduced intra-articular distal radial fracture. Health-care utilization and use of resources per patient were documented prospectively and included direct medical costs, direct non-medical costs, and indirect costs. All analyses were performed according to the intention-to-treat principle.

RESULTS

The mean total cost per patient was $291 (95% bias-corrected and accelerated confidence interval [bcaCI] = -$1,286 to $1,572) higher in the operative group compared with the nonoperative group. The mean total number of quality-adjusted life-years (QALYs) gained at 12 months was significantly higher in the operative group than in the nonoperative group (mean difference = 0.15; 95% bcaCI = 0.056 to 0.243). The difference in the cost per QALY (incremental cost-effectiveness ratio [ICER]) was $2,008 (95% bcaCI = -$9,608 to $18,222) for the operative group compared with the nonoperative group, which means that operative treatment is more effective but also more expensive. Subgroup analysis including only patients with a paid job showed that the ICER was -$3,500 per QALY for the operative group with a paid job compared with the nonoperative group with a paid job, meaning that operative treatment is more effective and less expensive for patients with a paid job.

CONCLUSIONS

The difference in QALYs gained for the operatively treated group was equivalent to an additional 55 days of perfect health per year. In adult patients with an acceptably reduced intra-articular distal radial fracture, operative treatment is a cost-effective intervention, especially in patients with paid employment. Operative treatment is slightly more expensive than nonoperative treatment but provides better functional results and a better quality of life.

LEVEL OF EVIDENCE

Economic and Decision Analysis Level I. See Instructions for Authors for a complete description of levels of evidence.

How Effective is Marginal Healthcare Expenditure? New Evidence from England for 2003/04 to 2012/13

BACKGROUND

The endogenous nature of healthcare expenditure means that instruments are often used when estimating the relationship between expenditure and mortality. Previous English studies of this relationship have largely relied on statistical tests to justify their instruments. A recent paper proposed that exogenous components of the resource allocation formula, used to distribute the national healthcare budget to local health authorities, be used as instruments.

OBJECTIVES

To estimate the relationship between healthcare expenditure and mortality by disease area for England from 2003/4 to 2012/13 using exogenous elements from the resource allocation formula as instruments for expenditure. To use these disease-specific estimates to calculate the marginal cost per quality-adjusted life year (QALY) for English NHS expenditure. To compare these estimates with those that relied on statistical tests to justify their instruments.

METHODS

The two-stage least squares estimator is used to determine the annual relationship between mortality and healthcare expenditure by disease area across 151 local authorities. These disease-specific outcome elasticities are combined with information about survival and morbidity disease burden in different disease areas to calculate the marginal cost per QALY for English National Health Service (NHS) expenditure.

RESULTS

The results suggest an annual marginal cost per QALY of between £5000 and £10,000. This is similar to that reported previously by studies that used statistical tests to justify their instruments.

CONCLUSION

These cost per QALY estimates are much lower than the threshold currently used by the UK's National Institute for Health and Care Excellence (NICE) (£20,000 to £30,000) to assess whether a new pharmaceutical product should be funded by the NHS. Our estimates suggest that guidance issued by NICE is likely to do more harm than good, reducing health outcomes overall for the NHS. There may be legitimate reasons why such harms are deemed appropriate, but it is only through the type of empirical analysis in this paper that the reasons for these 'harms' are likely to be articulated and explicitly justified.

Operational safety economics: Foundations, current approaches and paths for future research

Due to the COVID-19 pandemic in 2020, the trade-off between economics and epidemic prevention (safety) has become painfully clear worldwide. This situation thus highlights the significance of balancing the economy with safety and health. Safety economics, considering the interdependencies between safety and micro-economics, is ideal for supporting this kind of decision-making. Although economic approaches such as cost-benefit analysis and cost-effectiveness analysis have been used in safety management, little attention has been paid to the fundamental issues and the primary methodologies in safety economics. Therefore, this paper presents a systematic study on safety economics to analyze the foundational issues and explore the possible approaches. Firstly, safety economics is defined as a transdisciplinary and interdisciplinary field of academic research focusing on the interdependencies and coevolution of micro-economies and safety. Then we explore the role of safety economics in safety management and production investment. Furthermore, to make decisions more profitable, economic approaches are summarized and analyzed for decision-making about prevention investments and/or safety strategies. Finally, we discuss some open issues in safety economics and possible pathways to improve this research field, such as security economics, risk perception, and multi-criteria analysis.

Accounting for Country- and Time-Specific Values in the Economic Evaluation of Health-Related Projects Relevant to low- and Middle-Income Countries

Economic evaluation of health-related projects requires principles and methods to address the various trade-offs that need to be made between costs and benefits, across sectors and social objectives, and over time. Existing guidelines for economic evaluation in low- and middle-income countries embed implicit assumptions about expected changes in the marginal cost per unit of health produced by the healthcare sector, the consumption value of health and the appropriate discount rates for health and consumption. Separating these evaluation parameters out requires estimates for each country over time, which have hitherto been unavailable. We present a conceptual economic evaluation framework that aims to clarify the distinct roles of these different evaluation parameters in evaluating a health-related project. Estimates for each are obtained for each country and in each time period, based on available empirical evidence. Where existing estimates are not available, for future values of the marginal cost per unit of health produced by the healthcare sector, new estimates are obtained following a practical method for obtaining projected values. The framework is applied to a simple, hypothetical, illustrative example, and the results from our preferred approach are compared against those obtained from other approaches informed by the assumptions implicit within existing guidelines. This exposes the consequences of applying such assumptions, which are not supported by available evidence, in terms of potentially sub-optimal decisions. In general, we find that applying existing guidelines as done in conventional practice likely underestimates the value of health-related projects on account of not allowing for expected growth in the marginal cost per unit of health produced by the healthcare sector.

Willingness to Pay for Health-Related Quality of Life Gains in Relation to Disease Severity and the Age of Patients

OBJECTIVES

Decision-making frameworks that draw on economic evaluations increasingly use equity weights to facilitate a more equitable and fair allocation of healthcare resources. These weights can be attached to health gains or reflected in the monetary threshold against which the incremental cost-effectiveness ratios of (new) health technologies are evaluated. Currently applied weights are based on different definitions of disease severity and do not account for age-related preferences in society. However, age has been shown to be an important equity-relevant characteristic. This study examines the willingness to pay (WTP) for health-related quality of life (QOL) gains in relation to the disease severity and age of patients, and the outcome of the disease.

METHODS

We obtained WTP estimates by applying contingent-valuation tasks in a representative sample of the public in The Netherlands (n = 2023). We applied random-effects generalized least squares regression models to estimate the effect of patients' disease severity and age, size of QOL gains, disease outcome (full recovery/death 1 year after falling ill), and respondent characteristics on the WTP.

RESULTS

Respondents' WTP was higher for more severely ill and younger patients and for larger-sized QOL gains, but lower for patients who died. However, the relations were nonlinear and context dependent. Respondents with a lower age, who were male, had a higher household income, and a higher QOL stated a higher WTP for QOL gains.

CONCLUSIONS

Our results suggest that-if the aim is to align resource-allocation decisions in healthcare with societal preferences-currently applied equity weights do not suffice.

Cost-Effectiveness Analyses of an Absorbable Antibacterial Envelope for Use in Patients at Increased Risk of Cardiac Implantable Electronic Device Infection in Germany, Italy, and England

OBJECTIVES

To model the cost-effectiveness of the TYRX Absorbable Antibacterial Envelope when used in patients at increased risk of cardiac implantable electronic device (CIED) infection in the context of 3 European healthcare systems: Germany, Italy, and England.

METHODS

A decision tree model with a lifetime horizon was populated using data from the Worldwide Randomized Antibiotic Envelope Infection Prevention Trial, a large multicenter randomized controlled trial. Use of the antibacterial envelope adjunctive to standard of care was compared to standard of care infection prevention alone. Patients in the model were divided into subgroups based on presence of factors known to increase infection risk.

RESULTS

The antibacterial envelope had the most favorable cost-effectiveness profile when patients had previously experienced CIED infection, had a history of immunosuppressive therapy, or had a Prevention of Arrhythmia Device Infection Trial (PADIT) score indicating high risk of infection (scores ≥6) at cost-effectiveness thresholds of €50 000 in Germany (assumed in the absence of an official threshold), €40 000 in Italy, and £30 000 in England. Probabilistic sensitivity analysis indicated that the antibacterial envelope was likely to be cost-effective in patients with other risk factors (including replacement of high power CIEDs, generator replacement with lead modification, and PADIT scores indicating intermediate risk of infection) when used with some device types and in some countries.

CONCLUSIONS

The absorbable antibacterial envelope was associated with cost-effectiveness ratios below European benchmarks in selected patients at increased risk of infection, suggesting the envelope provides value for European healthcare systems by reducing CIED infections.

On the role of cost-effectiveness thresholds in healthcare priority setting

In the past few years, empirical estimates of the marginal cost at which health care produces a quality-adjusted life year (QALY, k) have begun to emerge. In theory, these estimates could be used as cost-effectiveness thresholds by health-maximizing decision makers, but prioritization decisions in practice often include other considerations than just efficiency. Pharmaceutical reimbursement in Sweden is one such example, where the reimbursement authority (TLV) uses a threshold range to give priority to disease severity and rarity. In this paper, we argue that estimates of k should not be used to inform threshold ranges. Instead, they are better used directly in health technology assessment (HTA) to quantify how much health is forgone when a new technology is funded in place of other healthcare services. Using a recent decision made by TLV as a case, we show that an estimate of k for Sweden implies that reimbursement meant forgoing 8.6 QALYs for every QALY that was gained. Reporting cost-effectiveness evidence as QALYs forgone per QALY gained has several advantages: (i) it frames the decision as assigning an equity weight to QALYs gained, which is more transparent about the trade-off between equity and efficiency than determining a monetary cost per QALY threshold, (ii) it makes it less likely that decision makers neglect taking the opportunity cost of reimbursement into account by making it explicit, and (iii) it helps communicate the reason for sometimes denying reimbursement in a way that might be less objectionable to the public than current practice.

Informing a Cost-Effectiveness Threshold for Health Technology Assessment in China: A Marginal Productivity Approach

BACKGROUND

Health technology assessment has been increasingly used in China, having been legally mandated in 2019, to inform reimbursement decisions and price negotiations between the National Healthcare Security Administration and pharmaceutical companies around the price of new pharmaceuticals. The criteria currently used to judge cost effectiveness and inform pricing negotiations, 3 × GDP per capita, is based on the rule of thumb previously recommended by the World Health Organization rather than an estimate based on an empirical assessment of health opportunity costs.

OBJECTIVE

The objective of this study was to inform a cost-effectiveness threshold for health technology assessment in China that accounts for health opportunity cost.

METHODS

The elasticity of health outcomes with respect to health expenditure was estimated using variations across 30 provincial-level administrative divisions in 2017 controlling for a range of other factors and using an instrumental variable approach to account for endogeneity to assess robustness of results. The estimated elasticity was then used to calculate the cost per disability-adjusted life-year (DALY) averted by variations in Chinese health expenditure at the margin.

RESULTS

The range estimated from this study, 27,923-52,247 (2017 RMB) (central estimate 37,446) per DALY averted or 47-88% of GDP per capita (central estimate 63%), shows that a cost per DALY averted cost-effectiveness threshold that reflects health opportunity costs is below 1 × GDP per capita.

CONCLUSION

Our results suggest that the current cost-effectiveness threshold used in China is too high; continuing to use it risks decisions that reduce overall population health.

Assessing the value of human papillomavirus vaccination in Gavi-eligible low-income and middle-income countries

INTRODUCTION

Estimating the value of providing effective healthcare interventions in a country requires an assessment of whether the improvement in health outcomes they offer exceeds the improvement in health that would have been possible if the resources required had, instead, been made available for other healthcare activities in that country. This potential alternative use of the same resources represents the health opportunity cost of providing the intervention. Without such assessments, there is a danger that blanket recommendations made by international organisations will lead to the adoption of healthcare interventions that are not cost effective in some countries, even given existing donor mechanisms intended to support their affordability.

METHODS

We assessed the net health impact to 46 Gavi-eligible countries of achieving one of the WHO's proposed 90-70-90 targets for cervical cancer elimination, which includes 90% coverage of human papillomavirus (HPV) vaccination among girls by 15 years of age, using published estimates of the expected additional benefits and costs in each country and estimates of the marginal productivity of each healthcare system. We calculated the maximum price each country could afford to pay for HPV vaccination to be cost effective by assessing the net health impact that would be expected to be generated at different potential prices.

RESULTS

At Gavi negotiated prices, HPV vaccination offers net health benefits across most Gavi-eligible countries included in this study. However, if Gavi-eligible countries faced the average price faced by non-Gavi eligible countries, providing HPV vaccination would result in reduced overall population health in most countries.

CONCLUSION

Estimates of the net health impact of providing a healthcare intervention can be used to assess the benefit (or lack of) to countries of adhering to global guidance, inform negotiations with donors, as well as pricing negotiations and the value of developing new healthcare interventions.

Valuing health outcomes: developing better defaults based on health opportunity costs

BACKGROUND

Current health economic analysis guidelines emphasize the importance of using nationally appropriate cost and valuation inputs. However, some countries lack national data, and some analyses focus on interventions with costs and benefits at regional or global scales.

METHODS

Recognizing the need for better estimates of appropriate values for application at these levels than those used in the past, we characterize population-weighted dollar per disability-adjusted life year (DALY) averted by World Bank Income Level based on available national estimates of the marginal productivity of the healthcare system.

RESULTS

The defaults suggested here reflect health opportunity costs across countries more consistent with existing evidence than those previously used or recommended. As countries change income levels and healthcare spending, and as additional or updated marginal productivity of healthcare expenditure estimates become available, we expect the defaults to change.

CONCLUSION

The best option for informing decisions around resource allocation in health care such that they improve health outcomes overall remains the use of time-appropriate country-specific estimates of the marginal productivity of the healthcare system. Instead of single, time-invariant defaults, health economists should seek to develop valuation inputs that better account for health opportunity costs and do so over time.

Cured Today, Ill Tomorrow: A Method for Including Future Unrelated Medical Costs in Economic Evaluation in England and Wales

OBJECTIVES

In many countries, future unrelated medical costs occurring during life-years gained are excluded from economic evaluation, and benefits of unrelated medical care are implicitly included, leading to life-extending interventions being disproportionately favored over quality of life-improving interventions. This article provides a standardized framework for the inclusion of future unrelated medical costs and demonstrates how this framework can be applied in England and Wales.

METHODS

Data sources are combined to construct estimates of per-capita National Health Service spending by age, sex, and time to death, and a framework is developed for adjusting these estimates for costs of related diseases. Using survival curves from 3 empirical examples illustrates how our estimates for unrelated National Health Service spending can be used to include unrelated medical costs in cost-effectiveness analysis and the impact depending on age, life-years gained, and baseline costs of the target group.

RESULTS

Our results show that including future unrelated medical costs is feasible and standardizable. Empirical examples show that this inclusion leads to an increase in the ICER of between 7% and 13%.

CONCLUSIONS

This article contributes to the methodology debate over unrelated costs and how to systematically include them in economic evaluation. Results show that it is both important and possible to include future unrelated medical costs.

Cost-Effectiveness of Insulin Degludec Versus Insulin Glargine U300 in the Netherlands: Evidence From a Randomised Controlled Trial

INTRODUCTION

This study aimed to evaluate the short-term cost-effectiveness of insulin degludec 200 units/mL (degludec) versus insulin glargine 300 units/mL (glargine U300) from a Dutch societal perspective.

METHODS

A previously published model estimated costs [2018 euros (EUR)] and effectiveness [quality-adjusted life years (QALYs)] with degludec compared with glargine U300 over a 1-year time horizon. The model captured hypoglycaemia rates and insulin dosing. Clinical outcomes were informed by CONCLUDE (NCT03078478), a head-to-head randomised controlled trial in insulin-experienced patients with type 2 diabetes.

RESULTS

Treatment with degludec was associated with mean annual cost savings (EUR 24.71 per patient) relative to glargine U300, driven by a lower basal insulin dose and lower severe hypoglycaemia rate with degludec compared with glargine U300. Lower rates of non-severe nocturnal and severe hypoglycaemia resulted in improved effectiveness (+ 0.0045 QALYs) with degludec relative to glargine U300. In sensitivity analyses, changes to the vast majority of model parameters did not materially affect model outcomes.

CONCLUSIONS

This short-term analysis, informed by the latest clinical trial evidence, demonstrated that degludec was a cost-effective treatment option relative to glargine U300. As such, our modelling analysis suggests that degludec would represent an efficient use of Dutch public healthcare resources in this patient population.

Reflecting the Health Opportunity Costs of Funding Decisions Within Value Frameworks: Initial Estimates and the Need for Further Research

PURPOSE

Evaluating whether a new health technology provides good value for money requires an assessment of its opportunity cost. If the opportunity cost of the new health technology exceeds the benefits, however measured, a net loss is produced. Value frameworks using economic evaluation methods have been developed to guide the assessment of the value of new technologies within health care in response to rising spending. However, few explicitly consider health opportunity costs and fewer still base health opportunity costs on empirical estimates. This may partly be due to the dearth of estimates available, with only a handful of countries having estimates based on within-country data. To fill this gap, this study provides estimates of cost per disability-adjusted life year (DALY) averted for 33 high-income countries and the remaining Organization for Economic Cooperation and Development (OECD) and BRIICS countries (Brazil, Russia, India, Indonesia, China and South Africa).

METHODS

Cost per DALY averted for each country was based on estimated elasticities of the health effects of changes in expenditure on health outcomes from applying an existing published econometric model that uses cross-country data to an expanded dataset and other existing elasticities drawn from selected UK within-country studies to country-level data on health expenditure, demographic characteristics, and burden of ill health. To provide a comprehensive picture of the state of research around empirical estimates of health opportunity costs for these countries, results from this study are reported against previously published estimates of cost per quality-adjusted life year (QALY) gained for the same countries.

FINDINGS

All but one of the ranges estimated fall below 3× the gross domestic product (GDP) per capita, the upper end of the widely applied range of 1-3× GDP per capita. The range of estimates based on applying an existing published econometric model that uses cross-country data to an expanded dataset are higher than when cost per DALY averted is calculated from other existing elasticities of the health effects of changes in expenditure drawn from selected UK within-country studies. They also tend to be higher than published estimates of cost per QALY gained.

IMPLICATIONS

This study provides placeholder cost per DALY averted estimates that reflect health opportunity costs for 33 high-income countries and the remaining OECD and BRIICS countries. These estimates can be used to estimate the health opportunity costs of government health care expenditure until country-specific health opportunity cost are estimated using within-country data.

The marginal benefits of healthcare spending in the Netherlands: Estimating cost-effectiveness thresholds using a translog production function

New technologies may displace existing, higher-value care under a fixed budget. Countries aim to curtail adoption of low-value technologies, for example, by installing cost-effectiveness thresholds. Our objective is to estimate the opportunity cost of hospital care to identify a threshold value for the Netherlands. To this aim, we combine claims data, mortality data and quality of life questionnaires from 2012 to 2014 for 11,000 patient groups to obtain quality-adjusted life-year (QALY) outcomes and spending. Using a fixed effects translog model, we estimate that a 1% increase in hospital spending on average increases QALY outcomes by 0.2%. This implies a threshold of €73,600 per QALY, with 95% confidence intervals ranging from €53,000 to €94,000 per QALY. The results stipulate that new technologies with incremental cost effectiveness ratios exceeding the Dutch upper reference value of €80,000 may indeed displace more valuable care.

Severity-Adjusted Probability of Being Cost Effective

BACKGROUND

In the context of priority setting, a differential cost-effectiveness threshold can be used to reflect a higher societal willingness to pay for quality-adjusted life-year gains in the worse off. However, uncertainty in the estimate of severity can lead to problems when evaluating the outcomes of cost-effectiveness analyses.

OBJECTIVES

This study standardizes the assessment of severity, integrates its uncertainty with the uncertainty in cost-effectiveness results and provides decision makers with a new estimate: the severity-adjusted probability of being cost effective.

METHODS

Severity is expressed in proportional and absolute shortfall and estimated using life tables and country-specific EQ-5D values. We use the three severity-based cost-effectiveness thresholds (€20.000, €50.000 and €80.000, per QALY) adopted in The Netherlands. We exemplify procedures of integrating uncertainty with a stylized example of a hypothetical oncology treatment.

RESULTS

Applying our methods, taking into account the uncertainty in the cost-effectiveness results and in the estimation of severity identifies the likelihood of an intervention being cost effective when there is uncertainty about the appropriate severity-based cost-effectiveness threshold.

CONCLUSIONS

Higher willingness-to-pay thresholds for severe diseases are implemented in countries to reflect societal concerns for an equitable distribution of resources. However, the estimates of severity are uncertain, patient populations are heterogeneous, and this can be accounted for with the severity-adjusted probability of being cost effective proposed in this study. The application to the Netherlands suggests that not adopting the new method could result in incorrect decisions in the reimbursement of new health technologies.

Future Costs in Cost-Effectiveness Analyses: Past, Present, Future

There has been considerable debate on the extent to which future costs should be included in cost-effectiveness analyses of health technologies. In this article, we summarize the theoretical debates and empirical research in this area and highlight the conclusions that can be drawn for current practice. For future related and future unrelated medical costs, the literature suggests that inclusion is required to obtain optimal outcomes from available resources. This conclusion does not depend on the perspective adopted by the decision maker. Future non-medical costs are only relevant when adopting a societal perspective; these should be included if the benefits of non-medical consumption and production are also included in the evaluation. Whether this is the case currently remains unclear, given that benefits are typically quantified in quality-adjusted life-years and only limited research has been performed on the extent to which these (implicitly) capture benefits beyond health. Empirical research has shown that the impact of including future costs can be large, and that estimation of such costs is feasible. In practice, however, future unrelated medical costs and future unrelated non-medical consumption costs are typically excluded from economic evaluations. This is explicitly prescribed in some pharmacoeconomic guidelines. Further research is warranted on the development and improvement of methods for the estimation of future costs. Standardization of methods is needed to enhance the practical applicability of inclusion for the analyst and the comparability of the outcomes of different studies. For future non-medical costs, further research is also needed on the extent to which benefits related to this spending are captured in the measurement and valuation of health benefits, and how to broaden the scope of the evaluation if they are not sufficiently captured.