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Cubi-Molla P, Mott D, Henderson N, Zamora B, Grobler M, Garau M. Resource allocation in public sector programmes: does the value of a life differ between governmental departments? COST EFFECTIVENESS AND RESOURCE ALLOCATION 2023; 21:96. [PMID: 38102674 PMCID: PMC10722785 DOI: 10.1186/s12962-023-00500-5] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [Grants] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 11/10/2022] [Accepted: 11/19/2023] [Indexed: 12/17/2023] Open
Abstract
BACKGROUND The value of a life is regularly monetised by government departments for informing resource allocation. Guidance documents indicate how economic evaluation should be conducted, often specifying precise values for different impacts. However, we find different values of life and health are used in analyses by departments within the same government despite commonality in desired outcomes. This creates potential inconsistencies in considering trade-offs within a broader public sector spending budget. We provide evidence to better inform the political process and to raise important issues in assessing the value of public expenditure across different sectors. METHODS Our document analysis identifies thresholds, explicitly or implicitly, as observed in government-related publications in the following public sectors: health, social care, transport, and environment. We include both demand-side and supply-side thresholds, understood as societies' and governments' willingness to pay for health gains. We look at key countries that introduced formal economic evaluation processes early on and have impacted other countries' policy development: Australia, Canada, Japan, New Zealand, the Netherlands, and the United Kingdom. We also present a framework to consider how governments allocate resources across different public services. RESULTS Our analysis supports that identifying and describing the Value of a Life from disparate public sector activities in a manner that facilitates comparison is theoretically meaningful. The optimal allocation of resources across sectors depends on the relative position of benefits across different attributes, weighted by the social value that society puts on them. The value of a Quality-Adjusted Life Year is generally used as a demand-side threshold by Departments of transport and environment. It exceeds those used in health, often by a large enough proportion to be a multiple thereof. Decisions made across departments are generally based on an unspecified rationing rule. CONCLUSIONS Comparing government expenditure across different public sector departments, in terms of the value of each department outcome, is not only possible but also desirable. It is essential for an optimal resource allocation to identify the relevant social attributes and to quantify the value of these attributes for each department.
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Affiliation(s)
| | | | | | - Bernarda Zamora
- Department of Surgery and Cancer, Imperial College London, London, UK
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Ochalek J, Gibbs NK, Faria R, Darlong J, Govindasamy K, Harden M, Meka A, Shrestha D, Napit IB, Lilford RJ, Sculpher M. Economic evaluation of self-help group interventions for health in LMICs: a scoping review. Health Policy Plan 2023; 38:1033-1049. [PMID: 37599510 PMCID: PMC10566324 DOI: 10.1093/heapol/czad060] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [Grants] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 12/21/2022] [Revised: 06/29/2023] [Accepted: 07/25/2023] [Indexed: 08/22/2023] Open
Abstract
This scoping review aims to identify and critically appraise published economic evaluations of self-help group (SHG) interventions in low- and middle-income countries (LMICs) that seek to improve health and potentially also non-health outcomes. Through a systematic search of MEDLINE ALL (Ovid), EMBASE Ovid, PsychINFO, EconLit (Ovid) and Global Index Medicus, we identified studies published between 2014 and 2020 that were based in LMICs, included at least a health outcome, estimated intervention costs and reported the methods used. We critically analysed whether the methods employed can meaningfully inform decisions by ministries of health and other sectors, including donors, regarding whether to fund such interventions, and prioritized the aspects of evaluations that support decision-making and cross-sectoral decision-making especially. Nine studies met our inclusion criteria. Randomized controlled trials were the most commonly used vehicle to collect data and to establish a causal effect across studies. While all studies clearly stated one or more perspectives justifying the costs and effects that are reported, few papers clearly laid out the decision context or the decision maker(s) informed by the study. The latter is required to inform which costs, effects and opportunity costs are relevant to the decision and should be included in the analysis. Costs were typically reported from the provider or health-care sector perspective although other perspectives were also employed. Four papers reported outcomes in terms of a generic measure of health. Contrary to expectation, no studies reported outcomes beyond health. Our findings suggest limitations in the extent to which published studies are able to inform decision makers around the value of implementing SHG interventions in their particular context. Funders can make better informed decisions when evidence is presented using a cross-sectoral framework.
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Affiliation(s)
- Jessica Ochalek
- Centre for Health Economics, University of York, York YO10 5DD, United Kingdom
| | - Naomi K Gibbs
- Centre for Health Economics, University of York, York YO10 5DD, United Kingdom
| | - Rita Faria
- Centre for Health Economics, University of York, York YO10 5DD, United Kingdom
| | - Joydeepa Darlong
- Research, The Leprosy Mission Trust India, New Delhi 110001, India
| | | | - Melissa Harden
- Centre for Reviews and Dissemination, University of York, York YO10 5DD, United Kingdom
| | - Anthony Meka
- Programs Department, RedAid Nigeria, Enugu 400102, Nigeria
| | - Dilip Shrestha
- Anandaban Hospital, The Leprosy Mission Nepal, Kathmandu Post Box No-151, Nepal
| | - Indra Bahadur Napit
- Anandaban Hospital, The Leprosy Mission Nepal, Kathmandu Post Box No-151, Nepal
| | - Richard J Lilford
- Institute of Applied Health Research, College of Medical and Dental Sciences, University of Birmingham, Birmingham B15 2TT, United Kingdom
| | - Mark Sculpher
- Centre for Health Economics, University of York, York YO10 5DD, United Kingdom
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Shupo F, Abrams KR, Ademi Z, Wayi-Wayi G, Zibelnik N, Kirchmann M, Rutherford C, Makarounas-Kirchmann K. Cost-Effectiveness Analysis of Siltuximab for Australian Public Investment in the Rare Condition Idiopathic Multicentric Castleman Disease. PHARMACOECONOMICS - OPEN 2023; 7:777-792. [PMID: 37306929 PMCID: PMC10471559 DOI: 10.1007/s41669-023-00426-x] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Grants] [Track Full Text] [Subscribe] [Scholar Register] [Accepted: 05/21/2023] [Indexed: 06/13/2023]
Abstract
OBJECTIVES This paper presents an Australian model that formed part of the health technology assessment for public investment in siltuximab for the rare condition of idiopathic Multicentric Castleman Disease (iMCD) in Australia. METHODS Two literature reviews were conducted to identify the appropriate comparator and model structure. Survival gain based on available clinical trial data were modelled using an Excel-based model semi-Markov model including time-varying transition probabilities, an adjustment for trial crossover and long-term data. A 20-year horizon was taken, and an Australian healthcare system perspective was adopted, with both benefits and costs discounted at 5%. The model was informed with an inclusive stakeholder approach that included a review of the model by an independent economist, Australian clinical expert opinion and feedback from the Pharmaceutical Benefits Advisory Committee (PBAC). The price used in the economic evaluation reflects a confidential discounted price, which was agreed to with the PBAC. RESULTS An incremental cost-effectiveness ratio of A$84,935 per quality-adjusted life-year (QALY) gained was estimated. At a willingness-to-pay threshold of A$100,000 per QALY, siltuximab has a 72.1% probability of being cost-effective compared with placebo and best supportive care. Sensitivity analyses results were most sensitive to the length of interval between administrations (from 3- to 6-weekly) and crossover adjustments. CONCLUSION Within a collaborative and inclusive stakeholder framework, the model submitted to the Australian PBAC found siltuximab to be cost-effective for the treatment of iMCD.
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Affiliation(s)
- Francis Shupo
- EUSA Pharma UK (LTD.), Breakspear Park, Breakspear Way, Hemel Hempstead, HP2 4TZ, UK
| | - Keith R Abrams
- Visible Analytics Limited, 3 King's Meadows, Oxford, OX2 0DP, UK
| | - Zanfina Ademi
- Faculty of Pharmacy and Pharmaceutical Sciences, Centre for Medicine Use and Safety, School of Public Health and Preventive Medicine, Monash University, Clayton, Australia
| | - Grace Wayi-Wayi
- EUSA Pharma UK (LTD.), Breakspear Park, Breakspear Way, Hemel Hempstead, HP2 4TZ, UK
| | - Natasa Zibelnik
- EUSA Pharma UK (LTD.), Breakspear Park, Breakspear Way, Hemel Hempstead, HP2 4TZ, UK
| | | | | | - Kelly Makarounas-Kirchmann
- KMC Healthcare, Frankston South, VIC, Australia.
- School of Public Health and Preventive Medicine, Monash University, Clayton, Australia.
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Gandjour A. A Model-Based Estimate of the Cost-Effectiveness Threshold in Germany. APPLIED HEALTH ECONOMICS AND HEALTH POLICY 2023; 21:627-635. [PMID: 37039954 PMCID: PMC10088581 DOI: 10.1007/s40258-023-00803-x] [Citation(s) in RCA: 2] [Impact Index Per Article: 2.0] [Reference Citation Analysis] [Abstract] [Grants] [Track Full Text] [Download PDF] [Figures] [Subscribe] [Scholar Register] [Accepted: 03/07/2023] [Indexed: 06/01/2023]
Abstract
PURPOSE Value-based pricing of new, innovative health technologies defined as pricing through economic evaluation requires the use of a basic cost-effectiveness threshold. This study presents a cost-effectiveness model that determines the cost-effectiveness threshold for life-extending new, innovative technologies based on health system opportunity costs. METHODS To estimate health system opportunity costs, the study used German data and examined the period between 1896 and 2014. To this end, it determined intertemporal differences in the remaining lifetime spending and life expectancy by age and gender. To account for the age composition of the population, it weighted age-specific intertemporal changes in the remaining lifetime spending and life expectancy by the age-specific population size. To estimate life expectancy gains solely attributable to the health care system, it used aggregated data on amenable mortality. It calculated the cost-effectiveness ratio of health care spending in the German health care system on average and at the margin. RESULTS Based on the cost-effectiveness ratio of health care spending at the margin, the threshold value for life-prolonging new, innovative technologies was at least €42,634 per life-year gained, with a point estimate of €88,107 per life-year gained. Based on the average ratio, the threshold value dropped below €34,000 per life-year gained. CONCLUSION This study provides new evidence on the cost-effectiveness threshold for value-based pricing of new, innovative technologies. Data from Germany suggest that a threshold value based on health care spending at the margin is considerably higher than that based on the average ratio.
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Affiliation(s)
- Afschin Gandjour
- Frankfurt School of Finance and Management, Adickesallee 32-34, 60322, Frankfurt am Main, Germany.
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Turner HC, Sandmann FG, Downey LE, Orangi S, Teerawattananon Y, Vassall A, Jit M. What are economic costs and when should they be used in health economic studies? COST EFFECTIVENESS AND RESOURCE ALLOCATION 2023; 21:31. [PMID: 37189118 DOI: 10.1186/s12962-023-00436-w] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [Grants] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 11/08/2022] [Accepted: 03/18/2023] [Indexed: 05/17/2023] Open
Abstract
Economic analyses of healthcare interventions are an important consideration in evidence-based policymaking. A key component of such analyses is the costs of interventions, for which most are familiar with using budgets and expenditures. However, economic theory states that the true value of a good/service is the value of the next best alternative forgone as a result of using the resource and therefore observed prices or charges do not necessarily reflect the true economic value of resources. To address this, economic costs are a fundamental concept within (health) economics. Crucially, they are intended to reflect the resources' opportunity costs (the forgone opportunity to use those resources for another purpose) and they are based on the value of the resource's next-best alternative use that has been forgone. This is a broader conceptualization of a resource's value than its financial cost and recognizes that resources can have a value that may not be fully captured by their market price and that by using a resource it makes it unavailable for productive use elsewhere. Importantly, economic costs are preferred over financial costs for any health economic analyses aimed at informing decisions regarding the optimum allocation of the limited/competing resources available for healthcare (such as health economic evaluations), and they are also important when considering the replicability and sustainability of healthcare interventions. However, despite this, economic costs and the reasons why they are used is an area that can be misunderstood by professionals without an economic background. In this paper, we outline to a broader audience the principles behind economic costs and when and why they should be used within health economic analyses. We highlight that the difference between financial and economic costs and what adjustments are needed within cost calculations will be influenced by the context of the study, the perspective, and the objective.
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Affiliation(s)
- Hugo C Turner
- MRC Centre for Global Infectious Disease Analysis, School of Public Health, Imperial College London, London, UK.
| | - Frank G Sandmann
- Department of Infectious Disease Epidemiology, London School of Hygiene and Tropical Medicine, London, UK
- European Centre for Disease Prevention and Control (ECDC), Stockholm, Sweden
| | - Laura E Downey
- The George Institute for Global Health, School of Public Health, Imperial College London, London, UK
- The George Institute for Global Health, University of New South Wales, Sydney, Australia
| | - Stacey Orangi
- Health Economics Research Unit, KEMRI-Wellcome Trust Research Programme, Nairobi, Kenya
| | - Yot Teerawattananon
- Health Intervention and Technology Assessment Program (HITAP), Ministry of Public Health, Nonthaburi, Thailand
- Saw Swee Hock School of Public Health, National University of Singapore, Singapore, Singapore
| | - Anna Vassall
- Department of Global Health and Development, London School of Hygiene and Tropical Medicine, 15-17 Tavistock Place, London, WC1H 9SH, UK
| | - Mark Jit
- Department of Infectious Disease Epidemiology, London School of Hygiene and Tropical Medicine, London, UK
- School of Public Health, University of Hong Kong, Hong Kong Special Administrative Region, China
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Sampson C, Zamora B, Watson S, Cairns J, Chalkidou K, Cubi-Molla P, Devlin N, García-Lorenzo B, Hughes DA, Leech AA, Towse A. Supply-Side Cost-Effectiveness Thresholds: Questions for Evidence-Based Policy. APPLIED HEALTH ECONOMICS AND HEALTH POLICY 2022; 20:651-667. [PMID: 35668345 PMCID: PMC9385803 DOI: 10.1007/s40258-022-00730-3] [Citation(s) in RCA: 12] [Impact Index Per Article: 6.0] [Reference Citation Analysis] [Abstract] [MESH Headings] [Grants] [Track Full Text] [Subscribe] [Scholar Register] [Accepted: 03/29/2022] [Indexed: 05/04/2023]
Abstract
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.
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Affiliation(s)
| | | | - Sam Watson
- University of Birmingham, Birmingham, UK
| | - John Cairns
- London School of Hygiene and Tropical Medicine, London, UK
| | | | | | | | - Borja García-Lorenzo
- Kronikgune Institute for Health Services Research, Basque Country, Spain
- Assessment of Innovations and New Technologies Unit, Hospital Clínic Barcelona, University of Barcelona, Barcelona, Spain
| | - Dyfrig A Hughes
- Centre for Health Economics and Medicines Evaluation, Bangor University, Bangor, UK
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Vallejo-Torres L, García-Lorenzo B, Edney LC, Stadhouders N, Edoka I, Castilla-Rodríguez I, García-Pérez L, Linertová R, Valcárcel-Nazco C, Karnon J. Are Estimates of the Health Opportunity Cost Being Used to Draw Conclusions in Published Cost-Effectiveness Analyses? A Scoping Review in Four Countries. APPLIED HEALTH ECONOMICS AND HEALTH POLICY 2022; 20:337-349. [PMID: 34964092 PMCID: PMC9021093 DOI: 10.1007/s40258-021-00707-8] [Citation(s) in RCA: 2] [Impact Index Per Article: 1.0] [Reference Citation Analysis] [Abstract] [MESH Headings] [Grants] [Track Full Text] [Subscribe] [Scholar Register] [Accepted: 11/23/2021] [Indexed: 05/19/2023]
Abstract
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.
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Affiliation(s)
- Laura Vallejo-Torres
- Departamento de Métodos Cuantitativos en Economía y Gestión, Universidad de Las Palmas de Gran Canaria, Las Palmas de Gran Canaria, Spain.
| | - Borja García-Lorenzo
- Kronikgune Institute for Health Services Research, Barakaldo, Basque Country, Spain
- Assessment of Innovations and New Technologies Unit, Hospital Clínic Barcelona, University of Barcelona, Barcelona, Catalonia, Spain
| | - Laura Catherine Edney
- Flinders Health and Medical Research Institute, Flinders University, Bedford Park, SA, Australia
| | - Niek Stadhouders
- IQ Healthcare, Radboud University and Medical Center, Nijmegen, The Netherlands
| | - Ijeoma Edoka
- Health Economics and Epidemiology Research Office, Department of Internal Medicine, School of Clinical Medicine, Faculty of Health Sciences, University of the Witwatersrand, Johannesburg, South Africa
- School of Public Health, Faculty of Health Sciences, University of the Witwatersrand, Johannesburg, South Africa
| | - Iván Castilla-Rodríguez
- Departamento de Ingeniería Informática y de Sistemas, Universidad de La Laguna, La Laguna, Spain
| | - Lidia García-Pérez
- Canary Islands Health Research Institute Foundation (FIISC), Santa Cruz de Tenerife, Spain
- Evaluation Unit (SESCS), Canary Islands Health Service (SCS), Santa Cruz de Tenerife, Spain
- Research Network on Health Services in Chronic Diseases (REDISSEC), Madrid, Spain
- Red Española de Agencias de Evaluación de Tecnologías Sanitarias y Prestaciones del Sistema Nacional de Salud (RedETS), Madrid, Spain
| | - Renata Linertová
- Canary Islands Health Research Institute Foundation (FIISC), Santa Cruz de Tenerife, Spain
- Evaluation Unit (SESCS), Canary Islands Health Service (SCS), Santa Cruz de Tenerife, Spain
- Research Network on Health Services in Chronic Diseases (REDISSEC), Madrid, Spain
- Red Española de Agencias de Evaluación de Tecnologías Sanitarias y Prestaciones del Sistema Nacional de Salud (RedETS), Madrid, Spain
| | - Cristina Valcárcel-Nazco
- Canary Islands Health Research Institute Foundation (FIISC), Santa Cruz de Tenerife, Spain
- Evaluation Unit (SESCS), Canary Islands Health Service (SCS), Santa Cruz de Tenerife, Spain
- Research Network on Health Services in Chronic Diseases (REDISSEC), Madrid, Spain
- Red Española de Agencias de Evaluación de Tecnologías Sanitarias y Prestaciones del Sistema Nacional de Salud (RedETS), Madrid, Spain
| | - Jonathan Karnon
- Flinders Health and Medical Research Institute, Flinders University, Bedford Park, SA, Australia
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Karnon J, Partington A, Afzali H. Strategies for Avoiding Neglect of Opportunity Costs by Decision-Makers. APPLIED HEALTH ECONOMICS AND HEALTH POLICY 2022; 20:9-11. [PMID: 34468955 DOI: 10.1007/s40258-021-00681-1] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [MESH Headings] [Track Full Text] [Subscribe] [Scholar Register] [Accepted: 08/17/2021] [Indexed: 06/13/2023]
Affiliation(s)
- Jonathan Karnon
- Flinders Health and Medical Research Institute, Flinders University, Adelaide, SA, Australia.
- NHMRC Partnership Centre for Health System Sustainability, Sydney, Australia.
| | - Andrew Partington
- Flinders Health and Medical Research Institute, Flinders University, Adelaide, SA, Australia
- NHMRC Partnership Centre for Health System Sustainability, Sydney, Australia
| | - Hossein Afzali
- Flinders Health and Medical Research Institute, Flinders University, Adelaide, SA, Australia
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Charlton V. The ethics of aggregation in cost-effectiveness analysis or, "on books, bookshelves, and budget impact". FRONTIERS IN HEALTH SERVICES 2022; 2:889423. [PMID: 36925796 PMCID: PMC10012697 DOI: 10.3389/frhs.2022.889423] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Subscribe] [Scholar Register] [Received: 03/04/2022] [Accepted: 09/14/2022] [Indexed: 03/18/2023]
Abstract
In deciding how to allocate resources, healthcare priority-setters are increasingly paying attention to an intervention's budget impact alongside its cost-effectiveness. Some argue that approaches that use budget impact as a substantive consideration unfairly disadvantage individuals who belong to large patient groups. Others reject such claims of "numerical discrimination" on the grounds that consideration of the full budget impact of an intervention's adoption is necessary to properly estimate opportunity cost. This paper summarizes this debate and advances a new argument against modifying the cost-effectiveness threshold used for decision-making based on a technology's anticipated budget impact. In making this argument, the paper sets out how the apparent link between budget impact and opportunity cost is largely broken if the effects of a technology's adoption are disaggregated, while highlighting that the theoretical aggregation of effects during cost-effectiveness analysis likely only poorly reflects the operation of the health system in practice. As such, it identifies a need for healthcare priority-setters to be cognizant of the ethical implications associated with aggregating the effects of a technology's adoption for the purpose of decision-making. Throughout the paper, these arguments are illustrated with reference to a "bookshelf" analogy borrowed from previous work.
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Affiliation(s)
- Victoria Charlton
- Department of Global Health and Social Medicine, King's College London, London, United Kingdom
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