Estimating the marginal cost of a life year in Sweden's public healthcare sector

A systematic review on the direct approach to elicit the demand-side cost-effectiveness threshold: Implications for low- and middle-income countries

Several literature review studies have been conducted on cost-effectiveness threshold values. However, only a few are systematic literature reviews, and most did not investigate the different methods, especially in-depth reviews of directly eliciting WTP per QALY. Our study aimed to 1) describe the different direct approach methods to elicit WTP/QALY; 2) investigate factors that contribute the most to the level of WTP/QALY value; and 3) investigate the relation between the value of WTP/QALY and GDP per capita and give some recommendations on feasible methods for eliciting WTP/QALY in low- and middle-income countries (LMICs). A systematic review concerning select studies estimating WTP/QALY from a direct approach was carried out in seven databases, with a cut off date of 03/2022. The conversion of monetary values into 2021 international dollars (i$) was performed via CPI and PPP indexes. The influential factors were evaluated with Bayesian model averaging. Criteria for recommendation for feasible methods in LMICs are made based on empirical evidence from the systematic review and given the resource limitation in LMICs. A total of 12,196 records were identified; 64 articles were included for full-text review. The WTP/QALY method and values varied widely across countries with a median WTP/QALY value of i$16,647.6 and WTP/QALY per GDP per capita of 0.53. A total of 11 factors were most influential, in which the discrete-choice experiment method had a posterior probability of 100%. Methods for deriving WTP/QALY vary largely across studies. Eleven influential factors contribute most to the level of values of WTP/QALY, in which the discrete-choice experiment method was the greatest affected. We also found that in most countries, values for WTP/QALY were below 1 x GDP per capita. Some important principles are addressed related to what LMICs may be concerned with when conducting studies to estimate WTP/QALY.

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).

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.

Determining the efficiency path to universal health coverage: cost-effectiveness thresholds for 174 countries based on growth in life expectancy and health expenditures

BACKGROUND

Assessment of the efficiency of interventions is paramount to achieving equitable health-care systems. One key barrier to the widespread use of economic evaluations in resource allocation decisions is the absence of a widely accepted method to define cost-effectiveness thresholds to judge whether an intervention is cost-effective in a particular jurisdiction. We aimed to develop a method to estimate cost-effectiveness thresholds on the basis of health expenditures per capita and life expectancy at birth and empirically derive these thresholds for 174 countries.

METHODS

We developed a conceptual framework to assess how the adoption and coverage of new interventions with a given incremental cost-effectiveness ratio will affect the rate of increase of health expenditures per capita and life expectancy at the population level. The cost-effectiveness threshold can be derived so that the effect of new interventions on the evolution of life expectancy and health expenditure per capita is set within predefined goals. To provide guidance on cost-effectiveness thresholds and secular trends for 174 countries, we projected country-level health expenditure per capita and life expectancy increases by income level based on World Bank data for the period 2010-19.

FINDINGS

Cost-effectiveness thresholds per quality-adjusted life-year (QALY) ranged between US$87 (Democratic Republic of the Congo) and $95 958 (USA) and were less than 0·5 gross domestic product (GDP) per capita in 96% of low-income countries, 76% of lower-middle-income countries, 31% of upper-middle-income countries, and 26% of high-income countries. Cost-effectiveness thresholds per QALY were less than 1 GDP per capita in 168 (97%) of the 174 countries. Cost-effectiveness thresholds per life-year ranged between $78 and $80 529 and between 0·12 and 1·24 GDP per capita, and were less than 1 GDP per capita in 171 (98%) countries.

INTERPRETATION

This approach, based on widely available data, can provide a useful reference for countries using economic evaluations to inform resource-allocation decisions and can enrich international efforts to estimate cost-effectiveness thresholds. Our results show lower thresholds than those currently in use in many countries.

FUNDING

Institute for Clinical Effectiveness and Health Policy (IECS).

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 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.

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.

The health cost of reducing hospital bed capacity

In the past two decades, most high-income countries have reduced their hospital bed capacity. This could be a sign of increased efficiency but could also reflect a degradation in quality of care. In this paper, we use repeated cross-sections on mortality and staffed hospital beds per capita in all 21 Swedish regions to estimate the potential death toll from reduced bed capacity. Between 2001 and 2019, mortality and beds decreased across all regions, but regions making smaller bed reductions experienced on average greater decreases in mortality, equivalent to one less death per three beds retained. This estimate is stable to a wide range of specifications and to adjustment for potential confounders, which supports a causal interpretation. Our results imply that by providing one more bed, Swedish health care could produce about three quality-adjusted life years (QALYs) at a cost of SEK 400,000 (∼US$40,000) per QALY. These findings could be informative about the marginal productivity of health care and support the credibility of empirical work attempting to estimate the opportunity cost of funding new healthcare interventions subject to a constrained budget.

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.

Cost-effectiveness analysis of the new oncological drug durvalumab in Italian patients with stage III non-small cell lung cancer

Background

The monoclonal antibody durvalumab, an immune‐checkpoint inhibitor (ICI) antiprogrammed death ligand 1 (PD‐L1), is available for unresectable stage III NSCLC patients as consolidation therapy following induction chemoradiotherapy, with very promising overall survival (OS) and progression‐free survial (PFS) results in registration trials. The purpose of this study was to provide policymakers with an estimate of the cost‐effectiveness of durvalumab in the treatment of non‐small cell lung cancer (NSCLC).

Methods

The study developed a Markov model covering a 5‐year period to compare costs and outcomes of treating PD‐L1 positive patients with or without durvalumab. We conducted a series of sensitivity analyses (Tornado analysis and Monte Carlo simulation) by varying some parameters to assess the robustness of our model and identify the parameters with the greatest impact on cost‐effectiveness.

Results

Prior to the release of durvalumab, the management of NSCLC over a 5‐year period cost €33 317 per patient, with an average life expectancy of 2.01 years. After the introduction of the drug, this increased to €37 317 per patient, with an average life expectancy of 2.13 years. Treatment with durvalumab led to an incremental cost‐effectiveness ratio (ICER) of €35 526 per year. OS is the variable that contributes the most to the variability of the ICER.

Conclusions

The study observed that durvalumab is a cost‐effective treatment option for patients with unresectable stage III NSCLC.

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.

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.

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.

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.

Estimating Cost-Effectiveness Thresholds Under a Managed Healthcare System: Experiences from Colombia

Like most of the world, low- and middle-income countries have faced a growing demand for new health technologies and higher budget constraints. It is necessary to have technical instruments to make decisions based on real-world evidence that allows maximization of the population's health with a limited budget. We estimated the supply-based cost-effectiveness elasticity, which was then used to determine the cost-effectiveness threshold for the healthcare system of Colombia, a middle-income country where multiple insurers, paid under capitation rules, manage the compulsory contributions of the citizens and government subsidies. Using administrative data, we explored the variation of health expenditures and outcomes at the insurer, geographical region, diagnosis group, and year levels. To deal with endogeneity in a two-way fixed-effects model, we instrumented health expenditures using characteristics of the health system such as drug-price regulation. We estimated the threshold to be US$ 4487.5 per YLL avoided (14.7 million COP at 2019 prices) and US$ 5180.8 per QALY gained (17 million COP at 2019 prices), around one times the GDP per capita. To our knowledge, this is the first estimation of the cost-effectiveness threshold elasticity supply-based in a middle-income country with a managed care health system.

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.

Causal impact of social care, public health and healthcare expenditure on mortality in England: cross-sectional evidence for 2013/2014

OBJECTIVES

The first objective is to estimate the joint impact of social care, public health and healthcare expenditure on mortality in England. The second objective is to use these results to estimate the impact of spending constraints in 2010/2011-2014/2015 on total mortality.

METHODS

The impact of social care, healthcare and public health expenditure on mortality is analysed by applying the two-stage least squares method to local authority data for 2013/2014. Next, we compare the growth in healthcare and social care expenditure pre-2010 and post-2010. We use the difference between these growth rates and the responsiveness of mortality to changes in expenditure taken from the 2013/2014 cross-sectional analysis to estimate the additional mortality generated by post-2010 spending constraints.

RESULTS

Our most conservative results suggest that (1) a 1% increase in healthcare expenditure reduces mortality by 0.532%; (2) a 1% increase in social care expenditure reduces mortality by 0.336%; and (3) a 1% increase in local public health spending reduces mortality by 0.019%. Using the first two of these elasticities and data on the change in spending growth between 2001/2002-2009/2010 and 2010/2011-2014/2015, we find that there were 57 550 (CI 3075 to 111 955) more deaths in the latter period than would have been observed had spending growth during this period matched that in 2001/2002-2009/2010.

CONCLUSIONS

All three forms of public healthcare-related expenditure save lives and there is evidence that additional social care expenditure is more than twice as productive as additional healthcare expenditure. Our results are consistent with the hypothesis that the slowdown in the rate of improvement in life expectancy in England and Wales since 2010 is attributable to spending constraints in the healthcare and social care sectors.

Does public long-term care expenditure improve care-related quality of life of service users in England?

Public long-term care (LTC) systems provide services to support people experiencing difficulties with their activities of daily living. This study investigates the marginal effect of changes in public LTC expenditure on care-related quality of life (CRQoL) of existing service users in England. The public LTC program for people aged 18 or older in England is called Adult Social Care (ASC) and it is provided and managed by local authorities. We collect data on the outcomes and characteristics of public ASC users, on public ASC expenditure, and on the characteristics of local authorities across England in 2017/18. We employ an instrumental variable approach using conditionally exogenous elements of the public funding system to estimate the effect of public ASC expenditure on user CRQoL. Our findings show that by increasing public ASC expenditure by £1000 per user, on average, local authorities increase user CRQoL by 0.0030. These results suggest that public ASC is effective in increasing users' quality of life but only to a relatively small extent. When combined with the other potential effects of LTC expenditure (e.g., on informal carers, mortality), this study can inform policy makers in the United Kingdom and internationally about whether social care provides good value for money.

Modifying NICE's Approach to Equity Weighting

The UK's National Institute for Health and Care Excellence (NICE) recently launched a consultation on the methods it uses to evaluate new health technologies, and has highlighted the issue of how 'modifiers', including equity weights, should be incorporated into its processes. The practice of applying equity weights to specific population subgroups, as a means for increasing the effective cost-effectiveness threshold for some new health technologies, is well established in health technology assessment. It is also the subject of extensive discussion in the academic literature. In this paper, we demonstrate that NICE's current approach to equity weighting has the effect of reducing both population health and equity-weighted population health, a fundamental problem that appears to place NICE in contravention of its principles and obligations. We consider two potential methods for modifying NICE's current approach to address this problem. We also consider the merits of NICE abandoning its current approach to equity weighting and adopting a standard 'net benefit' approach in its place. We find that adopting a standard 'net benefit' approach is the most desirable option, as it provides for the most transparency while avoiding specific issues that arise when attempting to modify NICE's current approach. Regardless of the approach NICE uses for equity weighting, we find that protecting the health of National Health Service patients requires that some new technologies be evaluated using an effective cost-effectiveness threshold lower than the 'supply-side' cost-effectiveness threshold. This poses a particular challenge for NICE, given its obligations under the 2019 'Voluntary Scheme' between the UK pharmaceutical industry, the National Health Service, and the UK Government. We conclude by making some recommendations as to how NICE can move forward with the use of 'modifiers' in its decision making.

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.

Implementation of Empagliflozin in Patients with Diabetes Mellitus Type 2 and Established Cardiovascular Disease: Estimation of 5-Year Survival and Costs in Sweden

INTRODUCTION

Cardiovascular disease (CVD) affects approximately 30% of patients with diabetes mellitus type 2 (T2D) and leads to increased morbidity, decreased survival and increased healthcare utilization. The aim of this study was to estimate the impact of treating these patients with the sodium-glucose cotransporter 2 (SGLT2) inhibitor empagliflozin on survival and healthcare utilization.

METHODS

Actual survival and healthcare utilization data from a 5-year retrospective cohort study on patients with T2D and CVD in the Region of Östergötland, Sweden were used as a starting point. Actual data were adjusted in accordance with risk reductions for mortality and CV events related to empagliflozin treatment as reported in the EMPA-REG OUTCOME study.

RESULTS

Applying the risk reductions related to empagliflozin treatment on the cohort of patients with T2D and CVD in Östergötland resulted in an increase in 5-year survival of 96 days per patient and reduced costs for healthcare and drugs other than empagliflozin. Including the cost of empagliflozin, treatment led to an increased net cost per patient of approximately SEK 18,000 over 5 years.

CONCLUSION

Empagliflozin treatment would reduce mortality and healthcare utilization in the patient group. The treatment strategy should be considered cost-effective, supporting a broad implementation of empagliflozin for patients with T2D and established CVD, in line with current national and international guidelines.

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.

Implementation of Key Components of Evidence-Based Family Therapy for Eating Disorders in Child and Adolescent Psychiatric Outpatient Care

BACKGROUND

Restrictive eating disorders with pronounced starvation are serious psychiatric conditions that often begin during childhood or adolescence. An early and efficient intervention is crucial to minimize the risk of the illness becoming longstanding and to limit the consequences. There is good evidence that weight gain during the first month of treatment provides a better prognosis. Only a limited amount of young people suffering from severe restrictive eating disorder receive an evidence-based treatment at present in Sweden. The ROCKETLAUNCH project intends to implement key components of the evidence-based family therapy during the first month of treatment in child and adolescent psychiatric outpatient care.

METHODS

From the southern part of Sweden, 12 local child and adolescent psychiatric outpatient services will take part. All patients with a restrictive eating disorder and pronounced starvation together with their families will be asked to take part in the study. We expect that one hundred 50 patients will be assessed every year. The patients and their families will receive 1 month of intense manualized treatment. Body weight, days in inpatient care, eating disorder, and other psychopathology-related symptoms, will be evaluated after one month and at 12-month follow-up. Economic evaluation of ROCKETLAUNCH will also be carried out alongside the intervention. At each outpatient clinic, data from the 10 previous patients will be gathered to compare the treatment provided at ROCKETLAUNCH with the standard treatment in Sweden.

DISCUSSION

We expect that by implementing the key components of the evidence-based family therapy during the first month of treatment, the prognosis of young newly diagnosed patients with severe restrictive eating disorders, primarily anorexia nervosa will improve, which, in turn, will reduce the need for psychiatric inpatient care.

CLINICAL TRIAL REGISTRATION

www.ClinicalTrials.gov, identifier NCT04060433.