Chapter 4 Advances in cost-effectiveness analysis of health interventions

The price of cost-effectiveness thresholds under therapeutic competition in pharmaceutical markets

Health systems around world are increasingly adopting cost-effectiveness (CE) analysis to inform decisions about access and reimbursement. We study how CE thresholds imposed by a health plan for granting reimbursement affect drug producers' pricing incentives and patients' access to new drugs. Analysing a sequential pricing game between an incumbent drug producer and a potential entrant with a new drug, we show that CE thresholds may have adverse effects for payers and patients. A stricter CE threshold may induce the incumbent to switch pricing strategy from entry accommodation to entry deterrence, limiting patients' access to the new drug. Otherwise, irrespective of whether entry is deterred or accommodated, a stricter CE threshold is never pro-competitive and may in fact facilitate a collusive outcome with higher prices of both drugs. Compared to a laissez-faire policy, the use of CE thresholds when an incumbent monopolist is challenged by therapeutic substitutes can only increase the surplus of a health plan if it leads to entry deterrence. In this case the price reduction by the incumbent necessary to deter entry outweighs the health loss to patients who do not get access to the new drug.

The effects of a hypertension diagnosis on health behaviors: A two-dimensional regression discontinuity analysis

This paper explores how a diagnosis of hypertension might affect a person's health-related behaviors. The analysis uses a two-dimensional regression discontinuity design because hypertension is diagnosed when a person's systolic or diastolic blood pressure (SBP or DBP) surpasses a pre-established threshold. We find that those closely above the SBP threshold significantly adjusted their lifestyle, such as reducing daily fat intake and quitting smoking, while those just surpassing the DBP cutoff did not. Further mechanism analysis suggests that the possibility of constraints, rather than education and income gradients, does more to explain the disparate behaviors of subjects near the SBP and DBP thresholds. Those around the DBP threshold generally have tighter work schedules and undertake more competitive jobs, which hinder them from improving their lifestyle. Overall, our findings complement the existing literature by posing a new perspective for understanding people's potential reluctance to adjust their behavior.

What is the evidence on the added value of implant-supported overdentures? A review

Background

Implant‐supported overdentures (IODs) have been reported to increase patients' oral health‐related quality of life (OHRQoL) in comparison with conventional dentures (CDs); however, the conclusiveness of evidence on the clinical effectiveness and value for money of IODs versus CDs remains unclear.

Purpose

To review how the added value of IODs is demonstrated in the literature.

Materials and methods

MEDLINE, EMBASE, and the Cochrane Database were searched for randomized control trials, controlled clinical trials, and prospective cohort studies containing evaluations of the economic and health benefits and costs of IODs. Information about the clinical effectiveness, such as magnitude of bite forces or chewing efficacy, OHRQoL, costs, and cost‐effectiveness of IODs, was extracted.

Results

A total of 17 articles were included, reporting 15 economic evaluations: 11 cost‐utility analyses (CUAs), 2 of which were combined with a cost‐effectiveness analysis (CEA), and 2 cost–benefit analyses (CBAs). Seven CUAs used the Oral Health Impact Profile (OHIP) questionnaire while four used satisfaction questionnaires to assess the OHRQoL. One study applied quality‐adjusted prosthesis years (QAPYs) for this purpose. The CBAs expressed both the beneficial outcome and the costs of the IOD in monetary terms. The included studies employed a large variety of economic evaluation methods, which limited cross‐study comparability.

Conclusions

On the basis of existing economic evaluations, IODs have frequently been suggested to be a cost‐efficient treatment alternative to CDs; however, the comparability between the various economic evaluation studies was limited due to the different outcome measures used. In addition, it remains unclear whether the additional health benefits of IODs outweigh the higher costs. This is largely dependent on the decision maker's valuation of oral health outcomes. Future research is encouraged to further elucidate patient willingness to pay for IODs and the societal return on investing in IODs more generally.

A cost comparison of an enhanced primary care diabetes service and standard care

BACKGROUND

Type 2 diabetes, which contributes 90% of all cases of diabetes mellitus is now mostly managed in the primary care settings in the UK and other advanced health care systems. The UK National Health Service as a whole could potentially benefit if more patients were managed in primary care settings since primary care-based care is likely to be more cost-effective. We initially compared eight larger general practices (Enhanced practices) in Leicester, UK with neighbouring smaller practices (Core practices) matched for comparable demographic characteristics. Even though this initial study did not find any statistically significant differences in terms of clinical outcomes there was trend in favour of the enhanced practices. In this current study, we conducted a cost comparison of enhanced practice model of diabetes care, to standard care delivered in the core practices.

METHODS

Data and information were combined from a number of sources and a cost comparison evaluation was carried out in WinBUGs. A probabilistic approach was taken, to allow uncertainty to be included around analysis parameters where appropriate. The analysis evaluated a straight-forward cost comparison of enhanced versus standard care.

RESULTS

The cost per person with diabetes per year was £255 (95% CrI 175, 380) in the core practices and £173 (95% CrI 96, 291) in the enhanced practices, resulting in an annual cost saving of -£83 (95% CrI -148, -28) per patient. If the enhanced model of diabetes care were delivered across all the practices in the UK, the cost would be £575,100,000 (95% CrI 320,700,000, 970,700,000), resulting in an annual cost saving of -276,200,000 (95% CrI -495,400,000, -94,480,000).

CONCLUSION

A cost comparison analysis of our larger enhanced primary care based diabetes service confirms significant cost saving, probably driven by economies of scale. These benefits could be multiplied manifold if the service was implemented nationally.

Cost of Increasing Years-of-Life-Gained (YLG) Using Fecal Immunochemical Testing as a Population-Level Screening Model in a Rural Appalachian Population

PURPOSE

Given the innovation of fecal immunochemical testing (FIT) to detect polyps in the rectum and colon for removal by colonoscopy, it is important to determine the cost per Life-Year Gained (LYG) when using FIT as a population-level screening model. This is particularly true for medically underserved rural populations. Accordingly, the purpose of this study was to make this determination among rural Appalachians experiencing isolation and economic challenges.

METHODS

The study occurred in an 8-county area of southeastern Kentucky. Kits were distributed to 1,424 residents. Seven hundred thirty-two kits (51.4%) were completed and returned. A Markov decision-analytic model was developed using PrecisionTree 7.6.

FINDINGS

Reactive test results occurred for 144 of the completed kits (19.7%). Thirty-seven colonoscopies were verified, with 15 of these indicating precancerous changes or actual cancer. Program costs were estimated at $461,952, with the average cost per person screened estimated at $324. Cost per LYG was $7,912.

CONCLUSIONS

In contrast to an average cost per LYG of $17,200, our findings suggest a highly favorable cost-effectiveness ratio for this population of medically underserved rural residents. Cost-benefit analyses suggest that the screening program begins to yield positive net benefits at the stage when project recipients undergo colonoscopy, suggesting that this is the key step for behavioral intervention and intensified outreach.

Relationship between preoperative patient-reported outcomes and hospital length of stay: a prospective cohort study of general surgery patients in Vancouver, Canada

OBJECTIVES

As an aging population drives more demand for elective inpatient surgery, one approach to reducing length of stay is enhanced evaluation of patients' preoperative health status. The objective of this research was to determine whether patient-reported outcome measures collected preoperatively can identify patients at risk for longer lengths of stay.

METHODS

This study was based on a prospectively recruited cohort of patients who were scheduled for elective inpatient general surgery in Vancouver, Canada. All participants completed a number of patient-reported outcome measures preoperatively, including the EQ-5D for general health status, the Patient Health Questionnaire (PHQ-9) for depression, and the pain intensity (P), interference with enjoyment of life (E), and interference with general activity (G), known as the PEG, for pain. Patient-reported outcome data were linked to hospital discharge summaries. Multivariate regression was performed to estimate risk of longer lengths of stay, adjusting for patient and clinical characteristics. The primary outcome was length of stay and its associated cost. Data collection took place between October 2012 and November 2016.

RESULTS

Participation among the population of 2307 eligible patients was 50.5%, providing 1165 participants. Preoperative patient-reported outcomes were not concordant with hospital reported diagnoses of depression or pain. Patients' preoperative depression and pain scores were independently positively associated with longer length of stay after adjusting for patient-level characteristics. Patients whose PHQ-9 score was 10, representing clinically significant depression, were estimated to have a 1.53 day longer hospitalization, which was associated with an estimated incremental hospital cost of $1667.

CONCLUSIONS

Preoperative self-reported assessment of depression and pain can assist with identifying patients at higher risk of longer lengths of stay. Patient's self-reported preoperative measures of depression and pain should be incorporated into patient pathways. They provide opportunities for improving management of general surgery patients and possibly play a role in aligning hospital funding with patients' needs.

A Review of Economic Evaluations of Community Mental Health Care

The authors review the methodology and findings of economic evaluations of 42 community mental health care programs reported in the English-language literature between 1979 and 2003. There were three substantial methodological problems in the literature: costs were often not completely specified, the quality of econometric analysis was often low, and most evaluations failed to integrate cost and health outcome information. Well-conducted research shows that care in the community dominates hospital in-patient care, achieving better outcomes at lower or equal cost. It is less clear what types of community programs are most cost-effective. Future research should focus on identifying which types of community care are most cost effective and at what level of intensity they are most effective.

Cost-Effectiveness of Echocardiography to Identify Intracardiac Thrombus among Patients with First Stroke or Transient Ischemic Attack

Background and Purpose . Echocardiography to select stroke patients for targeted treatments, such as anticoagulation (AC), to reduce recurrent stroke risk is controversial. The authors' objective was to evaluate the cost-effectiveness of imaging strategies that use transthoracic (TTE) and transesophageal (TEE) echocardiography for identifying intracardiac thrombus in new stroke patients. Methods . Model-based cost-effectiveness analysis of 7 echocardiographic imaging strategies and 2 nontesting strategies with model parameters based on systematic evidence review related to effectiveness of echocardiography in newly diagnosed ischemic stroke patients (white males aged 65 years in base case). Primary outcome was cost per quality-adjusted life year (QALY). Results . All strategies containing TTE were dominated by others and were eliminated from the analysis. Assuming that AC reduces recurrent stroke risk from intracardiac thrombus by 43% over 1 year, TEE generated a cost per QALY of $137,000 (relative to standard treatment) among patients with 5% thrombus prevalence. Cost per QALY dropped to $50,000 in patients with at least 15% intracardiac thrombus prevalence, or, if an 86% relative risk reduction with AC is assumed, in patients with thrombus prevalence of at least 6%. Probabilistic analyses indicate considerable uncertainty around the cost-effectiveness of echocardiography across a wide range of intracardiac thrombus prevalence (pretest probability). Conclusions . Current evidence on cost-effectiveness is insufficient to justify widespread use of echocardiography in stroke patients. Additional research on recurrent stroke risk in patients with intracardiac thrombus and on the efficacy of AC in reducing that risk may contribute to a better understanding of the circumstances under which echocardiography will be cost-effective. Key words: cost-effectiveness; decision analysis; stroke; transesophageal echocardiography; transthoracic echocardiography; diagnostic imaging. (Med Decis Making 2007;27:161—177)

Assessing cost-utility of predictive biomarkers in oncology: a streamlined approach

Evaluation of cost-utility is critical in assessing the medical utility of predictive or prognostic biomarkers. Current methods involve complex state-transition models, requiring comprehensive data inputs. We propose a simplified decision-analytic tool to explore the relative effect of factors contributing to the cost-utility of a biomarker. We derived a cost-utility metric, the "test incremental cost-effectiveness ratio" (TICER) for biomarker-guided treatment compared to no biomarker use. This method uses data inputs readily accessible through clinical literature. We compared our results with traditional cost-effectiveness analysis of predictive biomarkers for established (HER2-guided trastuzumab, ALK-guided crizotinib, OncotypeDX-guided adjuvant chemotherapy) and emerging (ROS1-guided crizotinib) targeted treatments. We conducted sensitivity analysis to determine which factors had the greatest impact on TICER estimates. Base case TICER for HER2 was $149,600/quality-adjusted life year (QALY), for ALK was $22,200/QALY, and for OncotypeDX was $11,600/QALY, consistent with literature-reported estimates ($180,000/QALY, $202,800/QALY, $8900/QALY, respectively). Base case TICER for ROS1-guided crizotinib was $205,900/QALY. Generally, when treatment cost is considerably greater than biomarker testing costs, TICER is driven by clinical outcomes and health-related quality of life, while biomarker prevalence and treatment cost have a lesser effect. Our simplified decision-analytic approach produces values consistent with existing cost-effectiveness analyses. Our results suggest that biomarker value is mostly driven by the clinical efficacy of the targeted agent. A user-friendly web tool for complete TICER analysis has been made available for open use at http://medicine.yale.edu/lab/pusztai/ticer/ .

Incremental cost per quality-adjusted life year gained? The need for alternative methods to evaluate medical interventions for ultra-rare disorders

Drugs for ultra-rare disorders (URDs) rank prominently among the most expensive medicines on a cost-per-patient basis. Many of them do not meet conventional standards for cost-effectiveness. In light of the high fixed cost of R&D, this challenge is inversely related to the prevalence of URDs. The present paper sets out to explain the rationale underlying a recent expert consensus on these issues, recommending a more rigorous assessment of the clinical effectiveness of URDs, applying established standards of evidence-based medicine. This may include conditional approval and reimbursement policies, which should be combined with a firm expectation of proof of a minimum significant clinical benefit within a reasonable time. In contrast, current health economic evaluation paradigms fail to adequately reflect normative and empirical concerns (i.e., morally defensible 'social preferences') regarding healthcare resource allocation. Hence there is a strong need for alternative economic evaluation models for URDs.

Endogenous cost-effectiveness analysis and health care technology adoption

Increased health care spending has placed pressure on public and private payers to prioritize spending. Cost-effectiveness (CE) analysis is the main tool used by payers to prioritize coverage of new therapies. We argue that reimbursement based on CE is subject to a form of the "Lucas critique"; the goals of CE policies may not materialize when firms affected by the policies respond optimally to them. For instance, because 'costs' in CE analysis reflect prices set optimally by firms rather than production costs, observed CE levels will depend on how firm pricing responds to CE policies. Observed CE is therefore endogenous. When CE is endogenously determined, policies aimed at lowering spending and improving overall CE may paradoxically raise spending and lead to the adoption of more resource-costly treatments. We empirically illustrate whether this may occur using data on public coverage decisions in the United Kingdom.

Ramsey waits: allocating public health service resources when there is rationing by waiting

The optimal allocation of a public health care budget across treatments must take account of the way in which care is rationed within treatments since this will affect their marginal value. We investigate the optimal allocation rules for public health care systems where user charges are fixed and care is rationed by waiting. The optimal waiting time is higher for treatments with demands more elastic to waiting time, higher costs, lower charges, smaller marginal welfare loss from waiting by treated patients, and smaller marginal welfare losses from under-consumption of care. The results hold for a wide range of welfarist and non-welfarist objective functions and for systems in which there is also a private health care sector. They imply that allocation rules based purely on cost effectiveness ratios are suboptimal because they assume that there is no rationing within treatments.

Long-acting medications for the hyperkinetic disorders. A note on cost-effectiveness

New long-acting medications for attention-deficit/ hyperactivity disorder (ADHD) have become available, which combine certain advantages over conventional short-acting drugs with higher acquisition costs. Choices between these drugs should thus be driven by their clinical profiles and by an acceptable balance of increased costs and additional benefits. Accordingly, the notion of relative cost-effectiveness should be central to recommendations about the use of these drugs in practice. A recent technology assessment on behalf of the National Institute for Health and Clinical Excellence (NICE) did not identify differences between compounds in terms of clinical efficacy and described drug cost as the major driver of cost-effectiveness. The underlying economic model was restricted to a cost-utility analysis that used only a fraction of the available clinical evidence base and did not address the distinction between efficacy and effectiveness. Cost-effectiveness evaluations including the potential impact of improved treatment compliance indicate a relatively more attractive cost-effectiveness of long-acting medications than suggested by the NICE assessment. These evaluations provide health economic support to treatment recommendations recently published by the European Network for Hyperkinetic Disorders. Limitations of currently available economic evaluations include their short time horizon, and future research should assess treatment effects on long-term sequelae associated with ADHD.

Cost-effectiveness of highly active antiretroviral therapy in South Africa

BACKGROUND

Little information exists on the impact of highly active antiretroviral therapy (HAART) on health-care provision in South Africa despite increasing scale-up of access to HAART and gradual reduction in HAART prices.

METHODS AND FINDINGS

Use and cost of services for 265 HIV-infected adults without AIDS (World Health Organization [WHO] stage 1, 2, or 3) and 27 with AIDS (WHO stage 4) receiving HAART between 1995 and 2000 in Cape Town were compared with HIV-infected controls matched for baseline WHO stage, CD4 count, age, and socioeconomic status, who did not receive antiretroviral therapy (ART; No-ART group). Costs of service provision (January 2004 prices, USD 1 = 7.6 Rand) included local unit costs, and two scenarios for HAART prices for WHO recommended first-line regimens: scenario 1 used current South African public-sector ART drug prices of $730 per patient-year (PPY), whereas scenario 2 was based on the anticipated public-sector price for locally manufactured drug of $181 PPY. All analyses are presented in terms of patients without AIDS and patients with AIDS. For patients without AIDS, the mean number of inpatient days PPY was 1.08 (95% confidence interval [CI]: 0.97-1.19) for the HAART group versus 3.73 (95% CI: 3.55-3.97) for the No-ART group, and 8.71 (95% CI: 8.40-9.03) versus 4.35 (95% CI: 4.12-5.61), respectively, for mean number of outpatient visits PPY. Average service provision PPY was $950 for the No-ART group versus $1,342 and $793 PPY for the HAART group for scenario 1 and 2, respectively, whereas the incremental cost per life-year gained (LYG) was $1,622 for scenario 1 and $675 for scenario 2. For patients with AIDS, mean inpatients days PPY was 2.04 (95% CI: 1.63-2.52) for the HAART versus 15.36 (95% CI: 13.97-16.85) for the No-ART group. Mean outpatient visits PPY was 7.62 (95% CI: 6.81-8.49) compared with 6.60 (95% CI: 5.69-7.62) respectively. Average service provision PPY was $3,520 for the No-ART group versus $1,513 and $964 for the HAART group for scenario 1 and 2, respectively, whereas the incremental cost per LYG was cost saving for both scenarios. In a sensitivity analysis based on the lower (25%) and upper (75%) interquartile range survival percentiles, the incremental cost per LYG ranged from $1,557 to $1,772 for the group without AIDS and from cost saving to $111 for patients with AIDS.

CONCLUSION

HAART is a cost-effective intervention in South Africa, and cost saving when HAART prices are further reduced. Our estimates, however, were based on direct costs, and as such the actual cost saving might have been underestimated if indirect costs were also included.

Impact of uncertainty on cost-effectiveness analysis of medical strategies: The case of high-dose chemotherapy for breast cancer patients

Objectives: The object of this study was to determine, taking into account uncertainty on cost and outcome parameters, the cost-effectiveness of high-dose chemotherapy (HDC) compared with conventional chemotherapy for advanced breast cancer patients.

Methods: An analysis was conducted for 300 patients included in a randomized clinical trial designed to evaluate the benefits, in terms of disease-free survival and overall survival, of adding a single course of HDC to a four-cycle conventional-dose chemotherapy for breast cancer patients with axillary lymph node invasion. Costs were estimated from a detailed observation of physical quantities consumed, and the Kaplan–Meier method was used to evaluate mean survival times. Incremental cost-effectiveness ratios were evaluated successively considering disease-free survival and overall survival outcomes. Handling of uncertainty consisted in construction of confidence intervals for these ratios, using the truncated Fieller method.

Results: The cost per disease-free life year gained was evaluated at 13,074€, a value that seems to be acceptable to society. However, handling uncertainty shows that the upper bound of the confidence interval is around 38,000€, which is nearly three times higher. Moreover, as no difference was demonstrated in overall survival between treatments, cost-effectiveness analysis, that is a cost minimization, indicated that the intensive treatment is a dominated strategy involving an extra cost of 7,400€, for no added benefit.

Conclusions: Adding a single course of HDC led to a clinical benefit in terms of disease-free survival for an additional cost that seems to be acceptable, considering the point estimate of the ratio. However, handling uncertainty indicates a maximum ratio for which conclusions have to be discussed.

Clarifying Efficiency-Equity Tradeoffs Through Explicit Criteria, With a Focus on Developing Countries

Expenditures on health in many developing countries are being disproportionately spent on health services that have a low overall health impact, and that disproportionately benefit the rich. Without explicit consideration of priority setting, this situation is likely to remain unchanged: resource allocation is too often dictated by historical patterns, and maintains vested interests. This paper explores how prioritization between different health interventions can be rationalised by the use of clearly defined criteria. A number of key efficiency and equity criteria are examined, in particular analysing how potential tradeoffs could be incorporated into the decision making process.

Behavioral interventions and cost-effectiveness analysis

Behavioral health interventions are often gauged with a dichotomous outcome, "success" or "failure." Hidden by this dichotomy is a series of behavior changes that can be followed with the Transtheoretical Model (stages of change). There has been little consideration, however, about whether this information can and should be used in cost-effectiveness analysis. We review the stages of change model and its applications to behavioral health interventions. We then discuss analytical methods for including stages of change, or similar behavior change models, in cost-effectiveness analysis (CEA). This is typically not done but it may be critical for study design and for interpreting CEA results.

Adjusting to changes in health: implications for cost-effectiveness analysis

This article introduces a model in which individuals incur adjustment costs associated with adaptations made following changes in their health. With adjustment costs, patients' preferences for health states depend on their initial health in such a way that improvements have lower values than corresponding deteriorations. Improvement and deterioration must therefore be treated asymmetrically in CEA. The inclusion of adjustment costs also has other consequences. It produces a more stringent CEA criterion, and may affect the relative rankings of interventions. In addition, when health is multi-dimensional, and adjustment costs are incorporated, we show that a consensus on even ordinal rankings of health states becomes impossible.

Using decision analytic methods to assess the utility of family history tools

Family history may be a useful tool for identifying people at increased risk of disease and for developing targeted interventions for individuals at higher-than-average risk. This article addresses the issue of how to examine the utility of a family history tool for public health and preventive medicine. We propose the use of a decision analytic framework for the assessment of a family history tool and outline the major elements of a decision analytic approach, including analytic perspective, costs, outcome measurements, and data needed to assess the value of a family history tool. We describe the use of sensitivity analysis to address uncertainty in parameter values and imperfect information. To illustrate the use of decision analytic methods to assess the value of family history, we present an example analysis based on using family history of colorectal cancer to improve rates of colorectal cancer screening.

Costeffectiveness of diagnostic tests

We review the principles underlying cost-effectiveness analysis of diagnostic tests and procedures. We use two clinical examples, diagnostic testing for early multiple sclerosis and for Helicobacter pylori to illustrate the methods of analysis and to show how the results can be useful for physicians or payers of health services in making decisions about provision and use of diagnostic services. Economic assessments of diagnostic tests are inherently more difficult than assessments of therapeutic interventions, mainly because of uncertainty about the relation between diagnosis and end results (outcomes) of care. Nonetheless, because of the increasing importance of diagnostic technology in medicine and healthcare, only with such assessments will the most value be gained from restricted medical resources.