Recent advances in the methods of cost-benefit analysis in healthcare. Matching the art to the science

Optimizing the Implementation of Clinical Predictive Models to Minimize National Costs: Sepsis Case Study

BACKGROUND

Sepsis costs and incidence vary dramatically across diagnostic categories, warranting a customized approach for implementing predictive models.

OBJECTIVE

The aim of this study was to optimize the parameters of a sepsis prediction model within distinct patient groups to minimize the excess cost of sepsis care and analyze the potential effect of factors contributing to end-user response to sepsis alerts on overall model utility.

METHODS

We calculated the excess costs of sepsis to the Centers for Medicare and Medicaid Services (CMS) by comparing patients with and without a secondary sepsis diagnosis but with the same primary diagnosis and baseline comorbidities. We optimized the parameters of a sepsis prediction algorithm across different diagnostic categories to minimize these excess costs. At the optima, we evaluated diagnostic odds ratios and analyzed the impact of compliance factors such as noncompliance, treatment efficacy, and tolerance for false alarms on the net benefit of triggering sepsis alerts.

RESULTS

Compliance factors significantly contributed to the net benefit of triggering a sepsis alert. However, a customized deployment policy can achieve a significantly higher diagnostic odds ratio and reduced costs of sepsis care. Implementing our optimization routine with powerful predictive models could result in US $4.6 billion in excess cost savings for CMS.

CONCLUSIONS

We designed a framework for customizing sepsis alert protocols within different diagnostic categories to minimize excess costs and analyzed model performance as a function of false alarm tolerance and compliance with model recommendations. We provide a framework that CMS policymakers could use to recommend minimum adherence rates to the early recognition and appropriate care of sepsis that is sensitive to hospital department-level incidence rates and national excess costs. Customizing the implementation of clinical predictive models by accounting for various behavioral and economic factors may improve the practical benefit of predictive models.

Cost-effectiveness of chronic hepatitis C screening and treatment

Hepatitis C virus (HCV) infection is the second most common cause of chronic liver disease in South Korea, with a prevalence ranging from 0.6% to 0.8%, and HCV infection incidence increases with age. The anti-HCV antibody test, which is cheaper than the HCV RNA assay, is widely used to screen for HCV infections; however, the underdiagnosis of HCV is a major barrier to the elimination of HCV infections. Although several risk factors have been associated with HCV infections, including intravenous drug use, blood transfusions, and hemodialysis, most patients with HCV infections present with no identifiable risk factors. Universal screening for HCV in adults has been suggested to improve the detection of HCV infections. We reviewed the cost-effectiveness of HCV screening and the methodologies used to perform screening. Recent studies have suggested that universal HCV screening and treatment using direct-acting antivirals represent cost-effective approaches to the prevention and treatment of HCV infection. However, the optimal timing and frequency of HCV screening remain unclear, and further studies are necessary to determine the best approaches for the elimination of HCV infections.

Aspects of economic costs and evaluation of health surveillance systems after a radiation accident with a focus on an ultrasound thyroid screening programme for children

Health surveillance initiatives targeted at populations evacuated from, and residing in, areas affected by radiation contamination were implemented by international institutions as well as national and local governments after the nuclear accidents of Chernobyl and Fukushima Dai-ichi nuclear power plants. Most of these initiatives included a component of childhood thyroid cancer monitoring, with the more comprehensive schemes corresponding to national programmes of health monitoring for adults and children around general health and wellbeing. This article provides a short overview of available data on the costs and resources associated with surveillance responses to two recent nuclear accidents: Chernobyl and the Fukushima Dai-Ichi nuclear plant accidents. Moreover, because the balance of costs and benefits of health surveillance after a nuclear accident can influence decisions on implementation, we also present a brief overview of the principles of economic evaluation for collecting and presenting data on costs and outcomes of a surveillance programme after a nuclear accident. We apply these principles in a balance sheet analysis of a post-accident ultrasound thyroid screening programme for children.

Impacts from Economic Development and Environmental Factors on Life Expectancy: A Comparative Study Based on Data from Both Developed and Developing Countries from 2004 to 2016

Both economic development level and environmental factors have significant impacts on life expectancy at birth (LE). This paper takes LE as the research object and selects nine economic and environmental indicators with various impacts on LE. Based on a dataset of economic and environmental indicators of 20 countries from 2004 to 2016, our research uses the Pearson Correlation Coefficient to evaluate the correlation coefficients between the indicators, and we use multiple regression models to measure the impact of each indicator on LE. Based on the results from models and calculations, this study conducts a comparative analysis of the influencing mechanisms of different indicators on LE in both developed and developing countries, with conclusions as follow: (1) GDP per capita and the percentage of forest area to land area have a positive impact on LE in developed countries; however, they have a negative impact on LE in developing countries. Total public expenditure on education as a percentage of GDP and fertilizer consumption have a negative impact on LE in developed countries; however, they have a positive impact on LE in developing countries. Gini coefficient and average annual exposure to PM2.5 have no significant effect on LE in developed countries; however, they have a negative impact on LE in developing countries. Current healthcare expenditures per capita have a negative impact on LE in developed countries, and there is no significant impact on LE in developing countries. (2) The urbanization rate has a significant positive impact on LE in both developed countries and developing countries. Carbon dioxide emissions have a negative impact on LE in both developed and developing countries. (3) In developed countries, GDP per capita has the greatest positive impact on LE, while fertilizer consumption has the greatest negative impact on LE. In developing countries, the urbanization rate has the greatest positive impact on LE, while the Gini coefficient has the greatest negative impact on LE. To improve and prolong LE, it is suggested that countries should prioritize increasing GDP per capita and urbanization level. At the same time, countries should also work on reducing the Gini coefficient and formulating appropriate healthcare and education policies. On the other hand, countries should balance between economic development and environmental protection, putting the emphasis more on environmental protection, reducing environmental pollution, and improving the environment's ability of self-purification.

A framework for making predictive models useful in practice

OBJECTIVE

To analyze the impact of factors in healthcare delivery on the net benefit of triggering an Advanced Care Planning (ACP) workflow based on predictions of 12-month mortality.

MATERIALS AND METHODS

We built a predictive model of 12-month mortality using electronic health record data and evaluated the impact of healthcare delivery factors on the net benefit of triggering an ACP workflow based on the models' predictions. Factors included nonclinical reasons that make ACP inappropriate: limited capacity for ACP, inability to follow up due to patient discharge, and availability of an outpatient workflow to follow up on missed cases. We also quantified the relative benefits of increasing capacity for inpatient ACP versus outpatient ACP.

RESULTS

Work capacity constraints and discharge timing can significantly reduce the net benefit of triggering the ACP workflow based on a model's predictions. However, the reduction can be mitigated by creating an outpatient ACP workflow. Given limited resources to either add capacity for inpatient ACP versus developing outpatient ACP capability, the latter is likely to provide more benefit to patient care.

DISCUSSION

The benefit of using a predictive model for identifying patients for interventions is highly dependent on the capacity to execute the workflow triggered by the model. We provide a framework for quantifying the impact of healthcare delivery factors and work capacity constraints on achieved benefit.

CONCLUSION

An analysis of the sensitivity of the net benefit realized by a predictive model triggered clinical workflow to various healthcare delivery factors is necessary for making predictive models useful in practice.

Dementia and Imagination: A Social Return on Investment Analysis Framework for Art Activities for People Living With Dementia

BACKGROUND AND OBJECTIVES

Arts activities may benefit people living with dementia. Social return on investment (SROI) analysis, a form of cost-benefit analysis, has the potential to capture the value of arts interventions, but few rigorous SROI analyses exist. This article presents a framework for an SROI analysis.

RESEARCH DESIGN AND METHODS

One hundred twenty-five people with mild to severe dementia and 146 caregivers were recruited to the Dementia and Imagination study across residential care homes, a hospital and community venues in England and Wales for a 12-week visual arts program. Quantitative and qualitative data on quality of life, support, and program perceptions were obtained through interviews. SROI was undertaken to explore the wider social value of the arts activities.

RESULTS

An input of £189,498 ($279,320/€257,338) to deliver the groups created a social value of £980,717 ($1,445,577/€1,331,814). This equates to a base case scenario of £/$/€5.18 of social value generated for every £/$/€1 invested. Sensitivity analysis produced a range from £/$/€3.20 to £/$/€6.62 per £/$/€1, depending on assumptions about benefit materialization; financial value of participants' time; and length of sustained benefit.

DISCUSSION

To our knowledge, this is the first study applying SROI to an arts intervention for people with dementia. Arts-based activities appear to provide a positive SROI under a range of assumptions.

IMPLICATIONS

Decision makers are increasingly seeking wider forms of economic evidence surrounding the costs and benefits of activities. This analysis is useful for service providers at all levels, from local government to care homes.

Optimising implementation of European guidelines on cardiovascular disease prevention in clinical practice: what is needed?

Cardiovascular disease is a model example of a preventable condition for which practice guidelines are particularly important. In 2016, the joint task force created by the European Society of Cardiology (ESC) together with 10 other societies released the new version of the European guidelines on cardiovascular disease prevention. To facilitate the implementation of the ESC guidelines, a dedicated prevention implementation committee has been established within the European Association of Preventive Cardiology. The paper will first explore potential barriers to the guidelines’ implementation. It then develops a discussion that seeks to inform the future development of the committee’s work, including a new definition of the guidelines’ stakeholders (health policy-makers, healthcare professionals and health educators, patient organisations, entrepreneurs and the general public), future activities within four specific areas: strengthening awareness of the guidelines among stakeholders; supporting organisational changes to facilitate the guidelines’ implementation; motivating stakeholders to utilise the guidelines; and present ideas on new implementation strategies. Providing multifaceted cooperation between healthcare professionals, healthcare management executives and health policy-makers, the novel approach proposed in this paper should contribute to a wider use of the 2016 ESC guidelines and produce desired effects of less cardiovascular disease morbidity and mortality. Furthermore, the solutions presented within the paper may constitute a benchmark for the implementation of practice guidelines in other medical disciplines.

The business case for quality improvement

Value in healthcare can be defined as providing the optimal outcome per health dollar spent. Improving the value of healthcare for patients and healthcare organizations requires an understanding and evaluation of the costs and benefits. Investing in quality improvement (QI) work can bring about financial results for healthcare organizations over time, have beneficial organizational effects, and improve outcomes for patients. This article continues a series of QI educational papers in the Journal of Perinatology, and reviews financial and economic measures used to create the business case for QI. Ultimately, the business case for QI is better defined as a business strategy for success.

Economic Evaluation of Complex Health and Social Care Interventions

The use of economic evaluation in relatively complex areas of health and social care has been limited. The level of complexity is influenced by the nature of the problems and interventions under evaluation, being dependent upon the degree of user involvement and the complexity of the inputs and outcomes. Complexity does not preclude the achievement of a good quality economic evaluation, but it can add significant difficulties. Efforts must be made to ensure scientific validity of evaluations, whilst recognising that the complexity inherent in many health and social care interventions may require deviations from and additions to traditional evaluation models. Fundamentally, the net effect will be the need for more time and money than would perhaps be required for the evaluation of a simpler intervention.

[Social value added index: a proposal for analyzing hospital efficiency]

OBJECTIVE

The objective of this paper is to demonstrate that it is possible to monetize the social value generated by a hospital and use it to establish a different perspective to analyze the efficiency of public spending.

METHOD

A public hospital in Spain was selected using the case method. It is suitable for two reasons; first, the hospital activity is small and therefore dialogue with stakeholders is easy; and second, as it is a hospital of a residential nature, it allows an easy, modifiable and testable approximation of social accounting in hospitals.

RESULTS

It establishes the monetary translation of the activity of a hospital, including the social part of the economic transactions (market), the variables that have not been created based on economic transaction, but have been perceived and valued by the stakeholders (not market), and the satisfaction of the stakeholders (emotional). This socio-emotional value amounts to approximately 60 million Euros per year from 2013 to 2017.

CONCLUSIONS

The social value generated for the stakeholders, and its monetization, allows more efficient management of decisions towards the social purpose of public hospitals. In particular, the social value added index can be a tool for the social-efficiency of hospitals, as it establishes how much social value it generates from the public funding allocated to it. Thus, the decline in this value in recent years denotes a problem that, without this analysis with a social perspective and from the stakeholders, could not have been detected.

Value Denominator: The Fundamentals of Costing for Orthopaedic Surgeons

In any discipline, improving quality and efficiency of services acts as a unifying goal. In health care, the goal of achieving high-value care is the new doctrine for all individual entities: payors, providers, and patients. Value is defined as the ratio of outcomes to costs incurred. Therefore, a strong understanding and interpretation of cost measures is crucial to accurately deriving health care value. Health care costing is not simply limited to the costs of implants or the procedure but the costs required to deliver treatment throughout the episode of care. Consequently, physicians serve a keystone role toward driving change in health care costs and initiate high-value care practices. However, physicians require a better understanding of health care costs and institutional accounting practices. To this effort, it is critical that health care providers begin to close the knowledge gap around health care costing and provide leadership when advocating for high-value patient care. This review is purposed to provide a basic review of fundamental components for health care economics, deciphering health care costing, and preview current strategies that prioritize high-value patient care.

On value frameworks and opportunity costs in health technology assessment

OBJECTIVES

Proceeding from a basic concept underpinning economic evaluation, opportunity cost, this study aims to explain how different approaches to economics diverge quite dramatically in their ideas of what constitutes appropriate valuation, both in principle and practice. Because the concept of opportunity cost does not inherently specify how valuation should be undertaken or specify how appropriate any economic value framework (EVF) might be, the three main economics-based approaches to providing evidence about value for health technology assessment are described.

METHODS

This paper describes how the three main EVFs-namely, the extra-welfarist, welfarist, and classical-are most typically understood, applied, and promoted. It then provides clarification and assessment of related concepts and terminology.

RESULTS

Although EVFs differ, certain underlying characteristics of valuation were identified as fundamental to all approaches to economic evaluation in practice. The study also suggests that some of the rhetoric and terms employed in relation to the extra-welfarist approach are not wholly justified and, further, that only the welfarist approach ensures adherence to welfare-economic principles. Finally, deliberative analysis, especially when connected with a classical economic approach, can serve as a useful supplement to other analytical approaches.

CONCLUSIONS

All three approaches to economic evaluation have something to offer assessment processes, but they all display limitations too. Therefore, the author concludes that the language of economic evaluation should be used with sufficient humility to prevent overselling of EVFs, especially with regard to the qualities of evidence they provide for priority setting processes.

Using Nominal Group Technique to Identify Key Attributes of Oncology Treatments for a Discrete Choice Experiment

Background. Responding to rising oncology therapy costs, multiple value frameworks are emerging. However, input from economists in their design and conceptualization has been limited, and no existing framework has been developed using preference weightings as legitimate indicators of value. This article outlines use of the nominal group technique to identify valued treatment attributes (such as treatment inconvenience) and contextual considerations (such as current life expectancy) to inform the design of a discrete choice experiment to develop a preference weighted value framework for future decision makers. Methods. Three focus groups were conducted in 2017 with cancer patients, oncology physicians, and nurses. Using the nominal group technique, participants identified and prioritized cancer therapy treatment and delivery attributes as well as contextual issues considered when choosing treatment options. Results. Focus groups with patients (n = 8), physicians (n = 6), and nurses (n = 10) identified 30 treatment attributes and contextual considerations. Therapy health gains was the first priority across all groups. Treatment burden/inconvenience to patients and their families and quality of evidence were prioritized treatment attributes alongside preferences for resource use and cost (to patients and society) attributes. The groups also demonstrated that contextual considerations when choosing treatment varied across the stakeholders. Patients prioritized existence of alternative treatments and oncologist/center reputation while nurses focused on administration harms, communication, and treatment innovation. The physicians did not prioritize any contextual issues in their top rankings. Conclusions. The study demonstrates that beyond health gains, there are treatment attributes and contextual considerations that are highly prioritized across stakeholder groups. These represent important candidates for inclusion in a discrete choice experiment seeking to provide weighted preferences for a value framework for oncology treatment that goes beyond health outcomes.

Projecting the impact of a nationwide school plain water access intervention on childhood obesity: a cost-benefit analysis

OBJECTIVE

This study aimed to project the societal cost and benefit of an expansion of a water access intervention that promotes lunchtime plain water consumption by placing water dispensers in New York school cafeterias to all schools nationwide.

METHODS

A decision model was constructed to simulate two events under Markov chain processes - placing water dispensers at lunchtimes in school cafeterias nationwide vs. no action. The incremental cost pertained to water dispenser purchase and maintenance, whereas the incremental benefit was resulted from cases of childhood overweight/obesity prevented and corresponding lifetime direct (medical) and indirect costs saved.

RESULTS

Based on the decision model, the estimated incremental cost of the school-based water access intervention is $18 per student, and the corresponding incremental benefit is $192, resulting in a net benefit of $174 per student. Subgroup analysis estimates the net benefit per student to be $199 and $149 among boys and girls, respectively. Nationwide adoption of the intervention would prevent 0.57 million cases of childhood overweight, resulting in a lifetime cost saving totalling $13.1 billion. The estimated total cost saved per dollar spent was $14.5.

CONCLUSION

The New York school-based water access intervention, if adopted nationwide, may have a considerably favourable benefit-cost portfolio.

Conjoint Analysis of Treatment Preferences for Nondisplaced Scaphoid Fractures

PURPOSE

We used conjoint analysis to assess the relative importance of factors that influence a patient's decision between surgical or nonsurgical management of a nondisplaced scaphoid fracture. Our hypothesis was that out-of-pocket costs will have a greater influence on decision making than the time spent in a cast or brace, degree of soreness, or the risk of treatment failure.

METHODS

Two-hundred and fifty participants were recruited using Amazon Mechanical Turk and asked to assume that they had experienced a nondisplaced scaphoid waist fracture. They then indicated their relative preferences among 13 pairs of alternatives with variations in the following attributes: time in a cast, time in a brace, duration of ongoing soreness, risk of treatment failure (by which we meant scaphoid nonunion), out-of-pocket costs based on estimates of direct costs ($500-2,500), and apprehension about surgery. A conjoint analysis was used to determine the relative importance of these factors when choosing between surgical or nonsurgical management.

RESULTS

The factor with the greatest influence on treatment choice was the cost of the procedure. After assessing the respondent's apprehension to undergo surgery, a sensitivity analysis showed the proportion of respondents who would choose surgery given different outcomes. To make the predicted share of those who are "not worried" about surgery equal to those who are "somewhat worried" or "a little worried" would require that the cost of surgery increase by $2,700. In addition, 2 weeks in a cast, 3 weeks in a brace, 2 months of soreness, or a 2% increase in the risk of fracture nonunion generates the same surgical choice probability as a $2,000 increase in the out-of-pocket cost of surgery.

CONCLUSIONS

As conceptualized in this conjoint analysis, out-of-pocket costs and apprehension about surgery seem to have a greater impact on a decision for surgery than the time spent in a brace or cast and the risk of treatment failure.

TYPE OF STUDY/LEVEL OF EVIDENCE

Economic and decision analysis III.

Assessing value-for-money in maternal and newborn health

Responding to increasing demands to demonstrate value-for-money (VfM) for maternal and newborn health interventions, and in the absence of VfM analysis in peer-reviewed literature, this paper reviews VfM components and methods, critiques their applicability, strengths and weakness and proposes how VfM assessments can be improved. VfM comprises four components: economy, efficiency, effectiveness and cost-effectiveness. Both ‘economy’ and ‘efficiency’ can be assessed with detailed cost analysis utilising costs obtained from programme accounting data or generic cost databases. Before-and-after studies, case–control studies or randomised controlled trials can be used to assess ‘effectiveness’. To assess ‘cost-effectiveness’, cost-effectiveness analysis (CEA), cost-utility analysis (CUA), cost-benefit analysis (CBA) or social return on investment (SROI) analysis are applicable. Generally, costs can be obtained from programme accounting data or existing generic cost databases. As such ‘economy’ and ‘efficiency’ are relatively easy to assess. However, ‘effectiveness’ and ‘cost-effectiveness’ which require establishment of the counterfactual are more difficult to ascertain. Either a combination of CEA or CUA with tools for assessing other VfM components, or the independent use of CBA or SROI are alternative approaches proposed to strengthen VfM assessments. Cross-cutting themes such as equity, sustainability, scalability and cultural acceptability should also be assessed, as they provide critical contextual information for interpreting VfM assessments. To select an assessment approach, consideration should be given to the purpose, data availability, stakeholders requiring the findings and perspectives of programme beneficiaries. Implementers and researchers should work together to improve the quality of assessments. Standardisation around definitions, methodology and effectiveness measures to be assessed would help.

Discretely Integrated Condition Event (DICE) Simulation for Pharmacoeconomics

Several decision-analytic modeling techniques are in use for pharmacoeconomic analyses. Discretely integrated condition event (DICE) simulation is proposed as a unifying approach that has been deliberately designed to meet the modeling requirements in a straightforward transparent way, without forcing assumptions (e.g., only one transition per cycle) or unnecessary complexity. At the core of DICE are conditions that represent aspects that persist over time. They have levels that can change and many may coexist. Events reflect instantaneous occurrences that may modify some conditions or the timing of other events. The conditions are discretely integrated with events by updating their levels at those times. Profiles of determinant values allow for differences among patients in the predictors of the disease course. Any number of valuations (e.g., utility, cost, willingness-to-pay) of conditions and events can be applied concurrently in a single run. A DICE model is conveniently specified in a series of tables that follow a consistent format and the simulation can be implemented fully in MS Excel, facilitating review and validation. DICE incorporates both state-transition (Markov) models and non-resource-constrained discrete event simulation in a single formulation; it can be executed as a cohort or a microsimulation; and deterministically or stochastically.

A systematic review of stated preference studies reporting public preferences for healthcare priority setting

BACKGROUND

There is current interest in incorporating weights based on public preferences for health and healthcare into priority-setting decisions.

OBJECTIVE

The aim of this systematic review was to explore the extent to which public preferences and trade-offs for priority-setting criteria have been quantified, and to describe the study contexts and preference elicitation methods employed.

METHODS

A systematic review was performed in April 2013 to identify empirical studies eliciting the stated preferences of the public for the provision of healthcare in a priority-setting context. Studies are described in terms of (i) the stated preference approaches used, (ii) the priority-setting levels and contexts, and (iii) the criteria identified as important and their relative importance.

RESULTS

Thirty-nine studies applying 40 elicitation methods reported in 41 papers met the inclusion criteria. The discrete choice experiment method was most commonly applied (n = 18, 45.0 %), but other approaches, including contingent valuation and the person trade-off, were also used. Studies prioritised health systems (n = 4, 10.2 %), policies/programmes/services/interventions (n = 16, 41.0 %), or patient groups (n = 19, 48.7 %). Studies generally confirmed the importance of a wide range of process, non-health and patient-related characteristics in priority setting in selected contexts, alongside health outcomes. However, inconsistencies were observed for the relative importance of some prioritisation criteria, suggesting context and/or elicitation approach matter.

CONCLUSIONS

Overall, findings suggest caution in directly incorporating public preferences as weights for priority setting unless the methods used to elicit the weights can be shown to be appropriate and robust in the priority-setting context.

An exploration of parents' preferences for foot care in juvenile idiopathic arthritis: a possible role for the discrete choice experiment

Background

An increased awareness of patients’ and parents’ care preferences regarding foot care is desirable from a clinical perspective as such information may be utilised to optimise care delivery. The aim of this study was to examine parents’ preferences for, and valuations of foot care and foot-related outcomes in juvenile idiopathic arthritis (JIA).

Methods

A discrete choice experiment (DCE) incorporating willingness-to-pay (WTP) questions was conducted by surveying 42 parents of children with JIA who were enrolled in a randomised-controlled trial of multidisciplinary foot care at a single UK paediatric rheumatology outpatients department. Attributes explored were: levels of pain; mobility; ability to perform activities of daily living (ADL); waiting time; referral route; and footwear. The DCE was administered at trial baseline. DCE data were analysed using a multinomial-logit-regression model to estimate preferences and relative importance of attributes of foot care. A stated-preference WTP question was presented to estimate parents’ monetary valuation of health and service improvements.

Results

Every attribute in the DCE was statistically significant (p < 0.01) except that of cost (p = 0.118), suggesting that all attributes, except cost, have an impact on parents’ preferences for foot care for their child. The magnitudes of the coefficients indicate that the strength of preference for each attribute was (in descending order): improved ability to perform ADL, reductions in foot pain, improved mobility, improved ability to wear desired footwear, multidisciplinary foot care route, and reduced waiting time. Parents’ estimated mean annual WTP for a multidisciplinary foot care service was £1,119.05.

Conclusions

In terms of foot care service provision for children with JIA, parents appear to prefer improvements in health outcomes over non-health outcomes and service process attributes. Cost was relatively less important than other attributes suggesting that it does not appear to impact on parents’ preferences.

Economic analysis of the health impacts of housing improvement studies: a systematic review

BACKGROUND

Economic evaluation of public policies has been advocated but rarely performed. Studies from a systematic review of the health impacts of housing improvement included data on costs and some economic analysis. Examination of these data provides an opportunity to explore the difficulties and the potential for economic evaluation of housing.

METHODS

Data were extracted from all studies included in the systematic review of housing improvement which had reported costs and economic analysis (n=29/45). The reported data were assessed for their suitability to economic evaluation. Where an economic analysis was reported the analysis was described according to pre-set definitions of various types of economic analysis used in the field of health economics.

RESULTS

25 studies reported cost data on the intervention and/or benefits to the recipients. Of these, 11 studies reported data which was considered amenable to economic evaluation. A further four studies reported conducting an economic evaluation. Three of these studies presented a hybrid 'balance sheet' approach and indicated a net economic benefit associated with the intervention. One cost-effectiveness evaluation was identified but the data were unclearly reported; the cost-effectiveness plane suggested that the intervention was more costly and less effective than the status quo.

CONCLUSIONS

Future studies planning an economic evaluation need to (i) make best use of available data and (ii) ensure that all relevant data are collected. To facilitate this, economic evaluations should be planned alongside the intervention with input from health economists from the outset of the study. When undertaken appropriately, economic evaluation provides the potential to make significant contributions to housing policy.

Healthy-days time equivalents for outcomes of acute rotavirus infections

Rotavirus is the most common cause of severe gastroenteritis in infants and young children worldwide. Health-state utility measures used in economic evaluations of rotavirus vaccines do not reflect differences between mild and severe symptoms of rotavirus gastroenteritis and, therefore, do not adequately capture preferences for non-fatal outcomes associated with rotavirus common in industrialized countries. This paper describes the development and results of a survey specifically designed to develop quality-adjusted time equivalents for rotavirus gastroenteritis among a sample of parents with young children in the United States as an alternative to conventional QALY measures in assessing cost-effectiveness.

Specialized Rheumatology Nurse Substitutes for Rheumatologists in the Diagnostic Process of Fibromyalgia: A Cost-Consequence Analysis and a Randomized Controlled Trial

Objective.

To perform a cost-consequence analysis of the substitution of specialized rheumatology nurses (SRN) for rheumatologists (RMT) in the diagnostic process of fibromyalgia (FM), using both a healthcare and societal perspective and a 9-month period.

Methods.

Alongside a randomized controlled trial, we measured costs and consequences of a nurse-led diagnostic consult (SRN group, n = 97) versus a rheumatologist-led diagnostic consult [usual care (UC) group, n = 96]. Patients were followed for 9 months. Every second month a questionnaire on medical consumption and social participation was filled out. Satisfaction was measured 1 week after the first consultation. During followup, health status was measured by health-related quality of life (EQ-5D), functional status (Fibromyalgia Impact Questionnaire), fatigue (Checklist Individual Strength), and self-efficacy (Generalized Self-Efficacy Scale).

Results.

Patients in the SRN group were significantly more satisfied. Improvements in health status were similar in both groups after 9 months of followup. Total costs for healthcare consumption and patient and family costs were significantly lower in the SRN group (€1298 vs €1644; difference €346; 95% CI –€746 to –€2). Total societal costs were €3853 per patient for the SRN group and €5293 for the UC group after 9 months of followup (difference €1440; 95% CI –€3721 to €577).

Conclusion.

From both a healthcare and societal perspective, the nurse-led diagnostic process can be recommended. Patients in the SRN group were significantly more satisfied, improvements in health status were similar in both groups, and total societal costs were lower for the SRN group compared to the RMT group after 9 months’ followup. Registered with Current Controlled Trials, no.ISRCTN77212411.

Viewpoint: Economic evaluation of package of care interventions employing clinical guidelines

Increasingly attention is shifting towards delivering essential packages of care, often based on clinical practice guidelines, as a means to improve maternal, child and newborn survival in low-income settings. Cost effectiveness analysis (CEA), allied to the evaluation of less complex intervention, has become an increasingly important tool for priority setting. Arguably such analyses should be extended to inform decisions around the deployment of more complex interventions. In the discussion, we illustrate some of the challenges facing the extension of CEA to this area. We suggest that there are both practical and methodological challenges to overcome when conducting economic evaluation for packages of care interventions that incorporate clinical guidelines. Some might be overcome by developing specific guidance on approaches, for example clarity in identifying relevant costs. Some require consensus on methods. The greatest challenge, however, lies in how to incorporate, as measures of effectiveness, process measures of service quality. Questions on which measures to use, how multiple measures might be combined, how improvements in one area might be compared with those in another and what value is associated with improvement in health worker practices are yet to be answered.

Economic evaluation of an intensive home visiting programme for vulnerable families: a cost-effectiveness analysis of a public health intervention

BACKGROUND

Recent reviews have shown that home visiting programmes that address parenting have the potential to improve long term health and social outcomes for children. However there are few studies exploring the cost-effectiveness of such interventions. The objective of this study was to evaluate the cost-effectiveness of an intensive home visiting programme directed at vulnerable families during the antenatal and postnatal periods.

METHODS

The design was an economic evaluation alongside a multicentre randomized controlled trial, in which 131 eligible women were randomly allocated to receive 18 months of intensive home visiting (n=67) or standard services (n=64). Due to the public health nature of the intervention a cost-effectiveness analysis was undertaken from a societal perspective.

RESULTS

The mean 'societal costs' in the control and intervention arms were 3874 pounds and 7120 pounds, respectively, a difference of 3246 pounds (p<0.000). The mean 'health service only' costs were 3324 pounds and 5685 pounds respectively, a difference of 2361 pounds (p<0.000). As well as significant improvements in maternal sensitivity and infant cooperativeness there was also a non-significant increase in the likelihood of the intervention group infants being removed from the home due to abuse and neglect. These incremental benefits were delivered at an incremental societal cost of 3246 pounds per woman.

CONCLUSIONS

The results of the study provide evidence to suggest that, within the context of regular home visits, specially trained home visitors can increase maternal sensitivity and infant cooperativeness and are better able to identify infants in need of removal from the home for child protection. The extent to which these benefits are 'worth' the societal cost of 3246 pounds per woman however is a matter of judgment.

The costs and consequences of three policy options for reducing heroin dependency

INTRODUCTION AND AIMS

This study compares the costs and consequences of three interventions for reducing heroin dependency: pharmacotherapy maintenance, residential rehabilitation and prison.

DESIGN AND METHODS

Using Australian data, the interventions' cost - consequence ratio was estimated, taking into consideration reduction in heroin use during the intervention; the length of intervention; and post-intervention effects (as measured by abstinence rates). Sensitivity analyses were conducted, including varying the magnitude and duration of treatment effects, and ascribing positive outcomes only to treatment completers. A hybrid model that combined pharmacotherapy maintenance with a prison term was also considered.

RESULTS

If the post-programme abstinence rates are sustained for 2 years, then for an average heroin user the cost of averting a year of heroin use is approximately AUD$5000 for pharmacotherapy maintenance, AUD$11,000 for residential rehabilitation and AUD$52 000 for prison. Varying the parameters does not change the ranking of the programmes. If the completion rate in pharmacotherapy maintenance was raised above 95% (by the threat of prison for non-completers), the combined model of treatment plus prison may become the most cost-effective option.

DISCUSSION AND CONCLUSIONS

Relative performance in terms of costs and consequences is an important consideration in the policy decision-making process, and quantitative data such as those reported herein can provide insights pertinent to evidence-based policy.

Balancing patient preferences and clinical needs: community versus hospital based care for patients with suspected DVT

OBJECTIVE

To establish patients' preferences and willingness to pay (WTP) for different service models for suspected deep vein thrombosis (DVT).

METHODS

We analysed patient responses to a discrete choice experiment (DCE) questionnaire which had been targeted at patients in Leicester, UK. The questionnaire elicited preferences/WTP for attributes of DVT provision including speed of diagnosis; access; continuity of care; and minimizing hospital visits. Additionally we evaluated trade-offs between clinical and service attributes. We analysed responses from 256 patients with suspected DVT (65% response rate).

RESULTS

Respondents are WTP pound 4.82 per extra hour of dedicated DVT service provision; pound 17.12 per hospital visit avoided; pound 115.73 per day's reduction in diagnostic wait; and pound 179.32 for 'much' not 'some' continuity, or pound 56.88 for 'some' not 'lack' of continuity in nursing.

CONCLUSIONS

Research evaluating different DVT service models usually reports on clinical efficacy in centres of excellence. Results show prompt diagnosis is valued by patients and may improve efficacy by reducing unnecessary anticoagulation. However, patients value 'process' measures such as continuity of care also. To ensure optimal provision, clinical benefit measurement ought to be augmented with information on patients' preferences.

The methodological quality of economic evaluations of guideline implementation into clinical practice: a systematic review of empiric studies

OBJECTIVES

Despite the emphasis on efficiency of health-care services delivery, there is an imperfect evidence base to inform decisions about whether and how to develop and implement guidelines into clinical practice. In general, studies evaluating the economics of guideline implementation lack methodological rigor. We conducted a systematic review of empiric studies to assess advances in the economic evaluations of guideline implementation.

METHODS

The Cochrane Effective Professional and Organisational Change Group specialized register and the MEDLINE database were searched for English publications between January 1998 and July 2004 that reported objective effect measures and implementation costs. We extracted data on study characteristics, quality of study design, and economic methodology. It was assessed whether the economic evaluations followed methodological guidance.

RESULTS

We included 24 economic evaluations, involving 21 controlled trials and three interrupted time series designs. The studies involved varying settings, targeted professionals, targeted behaviors, clinical guidelines, and implementation strategies. Overall, it was difficult to determine the quality of study designs owing to poor reporting. In addition, most economic evaluations were methodologically flawed: studies did not follow guidelines for evaluation design, data collection, and data analysis.

CONCLUSIONS

The increasing importance of the value for money of providing health care seems to be reflected by an increase in empiric economic evaluations of guideline implementation. Because of the heterogeneity and poor methodological quality of these studies, however, the resulting evidence is still of limited use in decision-making. There seems to be a need for more methodological guidance, especially in terms of data collection and data synthesis, to appropriately evaluate the economics of developing and implementing guidelines into clinical practice.

Recombinant erythropoietin for chemotherapy-related anaemia: economic value and health-related quality-of-life assessment using direct utility elicitation and discrete choice experiment methods

OBJECTIVE

To assess both the health-related quality of life (HR-QOL) and the economic value of erythropoietin treatment in chemotherapy-related anaemia using direct utility elicitation and discrete choice experiment (DCE) methods from a societal perspective in the UK.

METHODS

The time trade-off (TTO) method was employed to obtain utility values suitable for the calculation of QALYs for no, mild, moderate and severe anaemia. Health-state descriptions were developed using the Functional Assessment of Cancer Therapy - Anaemia (FACT-AN) subscale and the EQ-5D questionnaires, and were validated by clinical experts and patients. In addition, a DCE was implemented to elicit preferences for various anaemia treatment scenarios. The DCE analysis comprised important aspects of treatment identified from a literature review and by consultation with expert clinicians and cancer patients. The DCE included cost as an attribute in order to elicit willingness-to-pay (WTP) values (pound, 2004 values). The two methods were applied in the same cross-sectional sample of 110 lay people. Face-to-face interviews were conducted between February and March 2004.

RESULTS

The mean utility scores were 0.86 (standard error [SE] 0.014) for the no-anaemia state, and 0.78 (SE 0.016), 0.61 (SE 0.020) and 0.48 (SE 0.020) for the mild, moderate and severe anaemia states, respectively. The DCE results revealed the following preferences as significant predictors of choice: higher level of relief from fatigue, lower duration of administration, subcutaneous/intravenous administration versus cannula injection, GP versus hospital location, lower risk of infection or allergic reactions and lower cost per month to the patient. Attribute levels were valued higher for recombinant erythropoietin than for blood transfusion; this is reflected in an incremental welfare value of 368 pounds (95% CI 318, 419).

CONCLUSIONS

The results highlight a societal view that the severity of chemotherapy-related anaemia will significantly affect cancer patients' HR-QOL. The DCE survey shows that the public value favourably the attributes of treatment with recombinant erythropoietin, and indicates a likely patient preference for treatment with recombinant erythropoietin over blood transfusion.

The CarerQol instrument: a new instrument to measure care-related quality of life of informal caregivers for use in economic evaluations

The societal perspective in economic evaluations dictates that costs and effects of informal care are included in the analyses. However, this incorporation depends on practically applicable, reliable and valid methods to register the impact of informal care. This paper presents the conceptualisation and a first test of the CarerQol instrument, aimed at measuring care-related quality of life in informal caregivers. The instrument combines the information density of a burden instrument (encompassing seven important burden dimensions) with a valuation component (a VAS scale for happiness). The instrument was tested in a Dutch sample of heterogeneous caregivers (n=175) approached through regional caregiver support centres. This first test describes the feasibility as well as convergent and clinical validity of the CarerQol instrument. The seven burden dimensions related well with differences in VAS scores. In all instances, the average CarerQol-VAS scores decreased as the severity of problems increased. Multivariate analyses showed that the seven burden dimensions explained 37-43% of the variation in CarerQol-VAS scores, depending on the model used. The CarerQol seems a promising new instrument to register the impact of informal caregivers in economic evaluations.

A dollar is a dollar is a dollar--or is it?

It is normally stated that an economic evaluation should take the societal perspective and that this implies the incorporation of all costs and effects, regardless of where these occur. Nevertheless, this broad perspective may be in conflict with the narrower perspective of the health-care decision-makers we are usually trying to aid. In this article, it is argued that not all costs have to be considered equally important for health-care decision-making and that there is a discrepancy between the economically preferred societal perspective and the aim of aiding health-care decision-makers. This is related to the concept of local rationality. Three reasons why some costs may be considered more important for health-care decision-makers than others are: 1) relevance; 2) equity; and 3) responsibility. We suggest that it may be useful to adopt a two-perspective approach as a standard, presenting one cost-effectiveness ratio following a strict health-care perspective and one following the common societal perspective. The health-care perspective may assist the health-care policymaker better in achieving health-care goals, while the societal perspective indicates whether the local rationality of the narrow health-care perspective is also in line with societal optimality. More research on actual decisions should provide more insight into the relative weights attached to different types of costs.

Using discrete choice experiments within a cost-benefit analysis framework: some considerations

A great advantage of the stated preference discrete choice experiment (SPDCE) approach to economic evaluation methodology is its immense flexibility within applied cost-benefit analyses (CBAs). However, while the use of SPDCEs in healthcare has increased markedly in recent years there has been a distinct lack of equivalent CBAs in healthcare using such SPDCE-derived valuations. This article outlines specific issues and some practical suggestions for consideration relevant to the development of CBAs using SPDCE-derived benefits. The article shows that SPDCE-derived CBA can adopt recent developments in cost-effectiveness methodology including the cost-effectiveness plane, appropriate consideration of uncertainty, the net-benefit framework and probabilistic sensitivity analysis methods, while maintaining the theoretical advantage of the SPDCE approach. The concept of a cost-benefit plane is no different in principle to the cost-effectiveness plane and can be a useful tool for reporting and presenting the results of CBAs.However, there are many challenging issues to address for the advancement of CBA methodology using SPCDEs within healthcare. Particular areas for development include the importance of accounting for uncertainty in SPDCE-derived willingness-to-pay values, the methodology of SPDCEs in clinical trial settings and economic models, measurement issues pertinent to using SPDCEs specifically in healthcare, and the importance of issues such as consideration of the dynamic nature of healthcare and the resulting impact this has on the validity of attribute definitions and context.

Willingness to pay to assess patient preferences for therapy in a Canadian setting

Background

Adult outpatient parenteral antibiotic therapy (OPAT) programs have been reported in the literature for over 20 years, however there are no published reports quantifying preference for treatment location of patients referred to an OPAT program. The purpose of this study was to elicit treatment location preferences and willingness to pay (WTP) from patients referred to an OPAT program.

Methods

A multidisciplinary, single centre, prospective study at a 1000-bed Canadian adult tertiary care teaching hospital. This study involved a WTP questionnaire that was administered over a 9-month study period. Eligible and consenting patients referred to the OPAT program were asked to state their preference for treatment location and WTP for a hypothetical treatment scenario involving intravenous antibiotic therapy. Multiple linear regression analysis was performed to determine predictors of WTP.

Results

Of 131 eligible patients, 91 completed the WTP questionnaire. The majority of participants were males, married, in their sixth decade of life and had a secondary school education or greater. The majority of participants were retired or they were employed with annual household incomes less than $60,000. Osteomyelitis was the most common type of infection for which parenteral therapy was required. Of those 87 patients who indicated a preference, 77 (89%) patients preferred treatment at home, 10 (11%) patients preferred treatment in hospital. Seventy-one (82%) of these patients provided interpretable WTP responses. Of these 71 patients, 64 preferred treatment at home with a median WTP of $490 CDN (mean $949, range $20 to $6250) and 7 preferred treatment in the hospital with a median WTP of $500 CDN (mean $1123, range $10 to $3000). Tests for differences in means and medians revealed no differences between WTP values between the treatment locations. The total WTP for the seven patients who preferred hospital treatment was $7,859 versus $60,712 for the 64 patients who preferred home treatment. Income and treatment location preference were independent predictors of WTP.

Conclusion

This study reveals that treatment at home is preferred by adult inpatients receiving intravenous antibiotic therapy that are referred to our OPAT program. Income and treatment location appear to be independently associated with their willingness to pay.

A Comparison of Patients??? and Health Care Professionals??? Preferences for Symptoms During Immediate Postoperative Recovery and the Management of Postoperative Nausea and Vomiting

In this study we sought to examine the differences in patients' and health care professionals' preferences for symptoms during immediate postoperative recovery and the management of postoperative nausea and vomiting (PONV). The key differences between symptoms during immediate postoperative recovery (PONV, sedation, and pain) and management of PONV (prophylaxis, efficacy of antiemetic, and extra cost) were used to develop 14 scenarios in a questionnaire. Fifty-two health care professionals (anesthesiologists and recovery room nurses) and 200 women undergoing elective gynecological surgery were recruited (overall response rate, 97%). From patients' and health care professionals' perspectives, conjoint analysis showed that the most important attribute for immediate postoperative recovery was a reduction in the risk of PONV. Health care professionals placed more importance on postoperative sedation than patients did. They were more concerned about the cost of the antiemetic to the patient than the patients were themselves. There was no preference for a policy of effective treatment versus routine prophylaxis. This study shows that there were small differences in the importance of pain, sedation, efficacy of the antiemetic, and extra cost of treatment between patients and health care professionals.

Feasibility and construct validity of the parent willingness-to-pay technique for children with juvenile idiopathic arthritis

OBJECTIVE

To assess the feasibility and construct validity of the willingness-to-pay (WTP) technique for measuring health care preferences in families of children with juvenile idiopathic arthritis (JIA).

METHODS

Parents were asked to estimate the monthly US dollar amount they would be willing to pay to obtain for their child the following hypothetical drugs: ARTHRO, which guarantees complete clinical response; and NO-STOM-ACHE, a drug that eliminates gastrointestinal (GI) symptoms. A yes/no question was used with random assignment of the starting bids. Parents who agreed to pay the starting bid were then asked whether they would be willing to pay 200% and then 400% of this initial bid. Socioeconomic data and information on medications, disease activity, patient physical function, wellbeing, and health-related quality of life (HRQOL) were obtained.

RESULTS

Sixty-two families of children with JIA were interviewed. GI symptoms were present in 54%, and 53% of the children had joints with active arthritis or limited range of motion. Four parents (7%) were unwilling to pay anything for any of the studied medications. The mean amount (median; mean percentage of available family income) families were willing to pay was $395 ($300; 15%) for ARTHRO and $109 ($80; 4%) for NO-STOM-ACHE. Correlation and regression analysis supported that, adjusted for the available family income, the WTP for ARTHRO was associated with disease activity, pain, and the HRQOL of the patients. After correction for the starting bids and the available family income, the WTP for NO-STOM-ACHE was associated with the patient's HRQOL, pain, and the amount of GI discomfort.

CONCLUSION

The WTP technique is feasible and has construct validity for measuring health care preferences for children with JIA. Relatively large WTP estimates support a possible important negative impact of the disease on families of children with JIA.

A national evaluation of school breakfast clubs: where does economics fit in?

STUDY OBJECTIVE

To describe the economics of UK school breakfast clubs, to estimate costs resulting from clubs and to investigate relationships between costs and outcomes.

DESIGN

A postal survey of schools with a 1-year follow-up, a cluster randomized controlled trial, case studies, semi-structured interviews with parents and a secondary econometric analysis.

SETTING

England, the UK.

MAIN RESULTS

Key economic differences were identified between clubs based in primary schools and those based in secondary schools in terms of both funding levels and cost structures. However, funding levels were not a significant determinant of the observed outcomes in either type of school.

CONCLUSIONS

For formal economic evaluation to succeed during implementation of a new initiative, a clearer understanding of relevant outcomes and the distinction between short- and long-term outcomes and potential individual, institutional and societal benefits are required from an early stage.

Cost-effectiveness of alternative methods of surgical repair of inguinal hernia

Objectives:To assess the relative cost-effectiveness of laparoscopic methods of inguinal hernia repair compared with open flat mesh and open non-mesh repair.

Methods:Data on the effectiveness of these alternatives came from three systematic reviews comparing: (i) laparoscopic methods with open flat mesh or non-mesh methods; (ii) open flat mesh with open non-mesh repair; and (iii) methods that used synthetic mesh to repair the hernia defect with those that did not. Data on costs were obtained from the authors of economic evaluations previously conducted alongside trials included in the reviews. A Markov model was used to model cost-effectiveness for a five-year period after the initial operation. The outcomes of the model were presented using a balance sheet approach and as cost per hernia recurrence avoided and cost per extra day at usual activities.

Results:Open flat mesh was the most cost-effective method of preventing recurrences. Laparoscopic repair provided a shorter period of convalescence and less long-term pain compared with open flat mesh but was more costly. The mean incremental cost per additional day back at usual activities compared with open flat mesh was €38 and €80 for totally extraperitoneal and transabdominal preperitoneal repair, respectively.

Conclusions:Laparoscopic repair is not cost-effective compared with open flat mesh repair in terms of cost per recurrence avoided. Decisions about the use of laparoscopic repair depend on whether the benefits (reduced pain and earlier return to usual activities) outweigh the extra costs and intraoperative risks. On the evidence presented here, these extra costs are unlikely to be offset by the short-term benefits of laparoscopic repair.

The measurement of contingent valuation for health economics

In health economics, contingent valuation is a method that elicits an individual's monetary valuations of health programmes or health states. This article reviews the theory and conduct of contingent valuation studies, with suggestions for improving the future measurement of contingent valuation for health economics applications. Contingent valuation questions can be targeted to any of the following groups: the general population, to value health insurance premiums for programmes; users of a health programme, to value the associated programme costs; or individuals with a disease, to evaluate health states. The questions can be framed to ask individuals how much they would pay to obtain positive changes in health status or avoid negative changes in health status ('willingness to pay'; WTP) or how much they would need to be paid to compensate for a decrease in health status or for foregoing an improvement in heath status ('willingness to accept'; WTA). In general WTP questions yield more accurate and precise valuations than WTA questions. Payment card techniques, with follow-up bidding using direct interviews with visual aids, are well suited for small contingent valuation studies. Several biases may be operative when assessing contingent valuation, including biases in the way participants are selected, the way in which the questions are posed, the way in which individuals interpret probabilities and value gains relative to losses, and the way in which missing or extreme responses are interpreted. An important aspect of all contingent valuation studies is an assessment of respondents' understanding of the evaluation method and the valuation task. Contingent valuation studies should measure the potential influence of biases, the validity of contingent valuation tests as measures of QOL, and the reliability and responsiveness of responses. Future research should address equity concerns associated with using contingent valuation and explore contingent valuation as a measure of utility for health states, particularly those that are minor or temporary.

Value for money of changing healthcare services? Economic evaluation of quality improvement

There are many instances of perceived or real inefficiencies in health service delivery. Both healthcare providers and policy makers need to know the impact and cost of applying strategies to change the behaviour of individuals or organisations. Quality improvement or implementation research is concerned with evaluating the methods of behavioural change. Addressing inefficiencies in healthcare services raises a series of issues, beginning with how inefficiency itself should be defined. The basic concepts of cost analysis and economic evaluations are explained and a model for working through the economic issues of quality improvement is discussed. This model combines the costs and benefits of corrected inefficiency with the costs and degree of behavioural change achieved by a quality improvement method in the policy maker's locality. It shows why it may not always be cost effective for policy makers to address suboptimal behaviour. Both the interpretation of quality improvement research findings and their local application need careful consideration. The limited availability of applicable quality improvement research may make it difficult to provide robust advice on the value for money of many behavioural quality improvement strategies.

Economic evaluation in obstetrics and gynaecology: principles and practice

Greater attention in health care over the last 2 decades has been placed on determining how best to spend the resources available. Economic evaluation is a commonly used tool to compare health-care services and treatments on the basis of costs and benefits. However, the principles on which economic evaluations are based are not well understood, and guidelines for conducting such evaluations in practice are often not followed. This paper describes the overarching principle of opportunity cost, and highlights the implication that decision-making in health care should necessarily be based on both costs and benefits. Two notions of efficiency, technical and allocative, are also presented, and the important point is made that the specific type of economic evaluation chosen must be based not on the unit of benefit in the given study, as is commonly done, but rather on the type of efficiency being addressed. The 3 primary types of economic evaluation are outlined, and a common pitfall in economic evaluation, the incremental cost-effectiveness ratio, is critiqued. Finally, a number of methodological considerations when conducting economic evaluations in practice are presented.

Consumer preference for dinoprostone vaginal gel using stated preference discrete choice modelling

OBJECTIVE

To assess consumer preference for two methods of induction of labour using stated preference discrete choice modelling. The methods of induction were artificial rupture of the membranes (ARM) plus oxytocin and dinoprostone (prostaglandin E(2)) vaginal gel, followed by oxytocin if necessary.

METHODS

Consumer preference was measured in terms of willingness to pay for each of the attributes. These attributes were the method of administration, place of care, length of time from induction to delivery, need for epidural anaesthetic, type of delivery and cost. Levels were assigned to each of the attributes. Pregnant women attending a public hospital antenatal clinic were asked to read a description of the two methods and then to choose between them in 18 different scenarios in which the levels of the attributes were varied.

RESULTS

Women were willing to pay 11 Australian dollars for a 1% reduction in the chance of needing oxytocin as well as the gel and 55 Australian dollars for every 1 hour reduction in the length of time from induction to delivery. For a 1% reduction in the chance of needing an epidural anaesthetic or Caesarean section, women expressed a willingness to pay of 20 Australian dollars and 90 Australian dollars, respectively. All estimates were obtained in 1998 and expressed in Australian dollars (1 Australian dollar = 0.63 US dollars).

CONCLUSION

Women valued the less invasive method of administration of the gel and the associated greater freedom of movement during labour. However, they valued the shorter time from induction to delivery associated with ARM plus oxytocin more highly. A policy which allows women access to the gel for up to two doses would accommodate this consumer preference.

An evaluation of the cost effectiveness of drotrecogin alfa (activated) relative to the number of organ system failures

BACKGROUND

While drotrecogin alfa (activated) was shown to decrease absolute 28-day mortality by 6.1% in patients with severe sepsis in the Recombinant Human Protein C Worldwide Evaluation in Severe Sepsis (PROWESS) study, no mortality benefit was observed in the subset of patients with only one organ system failure. Consequently, some institutions restrict drotrecogin alfa (activated) use to patients with severe sepsis with >/=2 organ system failures.

OBJECTIVE

To measure the cost effectiveness of drotrecogin alfa (activated) for treatment of severe sepsis in relation to the number of organ system failures and determine the economic impact of restricting drotrecogin alfa (activated) use based on the number of organ system failures.

PERSPECTIVE

Policy perspective specific to our 340-bed, level I trauma centre.

METHODS

A Monte Carlo simulation analysis was conducted to evaluate a hypothetical cohort of 10 000 patients with severe sepsis in four scenarios restricting treatment with drotrecogin alfa (activated) to patients with >/=1, >/=2, >/=3 or >/=4 organ system failures. The primary outcomes of 28-day all-cause mortality and serious bleeding were obtained from the PROWESS study. Costs (year 2002 values) were obtained from institutional financial records and literature estimates. The incremental cost per life saved at 28 days with drotrecogin alfa (activated) plus best standard care versus best standard care alone (placebo) was calculated. The incidence of severe sepsis and number of drotrecogin alfa (activated) candidates were estimated through chart review, and projected annual institutional expenditures were derived according to these data.

RESULTS

With increasing number of organ system failures, the proportion of lives saved with drotrecogin alfa (activated) increased, and consequently the ICER decreased. Restriction of drotrecogin alfa (activated) to patients with >/=4 organ system failures was the most cost-effective scenario (0.11 lives saved; 56727 US dollars per life saved). For the nine patients that would be treated annually by our institution under this policy, one life would be saved at a total additional cost of 56160 US dollars per year. Use of the drug in patients with >/=1 or >/=2 organ system failures would save the greatest number of lives per year (4-5); however, restricting drotrecogin alfa (activated) to patients with >/=2 organ system failures would be the cheaper alternative (total additional cost 356022 US dollars vs 462204 US dollars .

CONCLUSION

While restriction of drotrecogin alfa (activated) use to patients with sepsis with >/=4 organ system failures is the most cost-effective alternative, restriction to those with >/=2 organ system failures is the preferred alternative for our institution according to the number of lives saved and available financial resources.

Cost–utility analysis of open versus laparoscopic groin hernia repair: results from a multicentre randomized clinical trial

Background

This study was a pragmatic economic evaluation carried out alongside a multicentre randomized controlled trial comparing laparoscopic with open groin hernia repair. The primary economic evaluation framework employed was a cost–utility analysis.

Methods

At 26 hospitals in the UK and Ireland, 928 patients with a groin hernia were assigned randomly to laparoscopic or open repair. Cost data were identified and measured both within and outwith the trial. Cost data were combined with quality-adjusted life years (QALYs) from the EQ-5D questionnaire to obtain cost-per-QALY ratios.

Results

The mean cost of laparoscopic hernia repair was £1112·64, compared with £788·79 for the open operation. The extra cost of £323·85 in the laparoscopic group was mainly due to additional theatre time and increased equipment and sterilization costs. The estimated incremental cost per QALY of the laparoscopic over the open method was £55 548·00 (95 per cent confidence interval £47 216·00–£63 885·00).

Conclusion

While the results show that a high cost was incurred to produce an additional QALY by using laparoscopic over open hernia repair, sensitivity analyses show that there are specific situations in which laparoscopic repair may be a viable alternative, such as when reusable equipment is employed.

Cost effectiveness of screening for Chlamydia trachomatis: a review of published studies

OBJECTIVE

Screening for Chlamydia trachomatis in the lower genital tract may contribute to the prevention of pelvic inflammatory disease in women. The purpose of this review was to critically appraise, and summarise studies of the cost effectiveness of screening for C trachomatis.

METHODS

A literature search was conducted on Medline and in Health Star from 1990-2000. Keywords were C trachomatis, screening, cost effectiveness. Bibliographies of reviewed articles were also searched. The population studied was asymptomatic sexually active women under 30 years of age in a primary care setting. The intervention assessed was screening for lower genital tract infection with C trachomatis and the outcomes studied were cases of C trachomatis detected, cases of PID prevented, and associated costs. Studies were assessed using the Drummond criteria for economic evaluations. They were assessed qualitatively as they were too heterogeneous to allow quantitative analysis.

RESULTS

10 studies were included. All were modelled scenarios and all found screening to be more cost effective than simply testing symptomatic women, although all were based on probabilities that were assumed. Six of the studies focused on DNA based testing, three of them using urine. The models showed screening to be cost effective at prevalences of 3.1-10.0%, and cost saving (overtesting symptomatic women) at a prevalence as low as 1.1%, if age was used as a selection factor and DNA based tests were used in urine samples.

CONCLUSIONS

At the prevalence of infection expected in the target population, all studies suggest screening is cost effective. However, the assumptions used in the models have been difficult to confirm and there is a need for more data, particularly on the risk of complications in women with asymptomatic lower tract infection.

Health economic evaluation

A glossary is presented on terms of health economic evaluation. Definitions are suggested for the more common concepts and terms.

Critical issues in the economic evaluation of interventions against communicable diseases

Economic appraisal seeks to provide policy-makers with guidance about how scarce resources can be used to derive the greatest possible social benefit. Its use in the health sector has increased dramatically over the last decade although much of it has been focused on the problems of the more developed countries. The relatively sparse literature on communicable diseases has been dominated by interventions related to HIV/AIDS, hepatitis, malaria and tropical diseases. Reviews of this literature from the perspective of specific conditions such as Hepatitis B are already available, and recently the entire literature has been evaluated against the technical criteria for economic evaluations published in standard textbooks. Accordingly, this paper focuses on issues which would make economic appraisal more useful to policy-makers than it currently is. Given that few countries have the resources to undertake all the necessary analysis in their own settings, it is important that studies in one setting are undertaken in a way that allow generalisability to similar settings. Some of the most important challenges this poses for cost-effectiveness analysis (CEA) are identified. Firstly, incremental analysis is appropriate to local decision making when policy-makers are constrained to keep the current interventions and can consider only marginal improvements. However, it does not allow re-evaluation of existing interventions and is not transferable across settings. A version of Generalised CEA is proposed as an alternative. Secondly, data on costs and effectiveness are often not presented appropriately. The challenge for effectiveness is to adjust the evidence from efficacy studies to allow for different patient or population groups, and local variations in adherence, coverage, and infrastructure. For costs, it is important for studies to report the physical resources used in an intervention as well as unit prices. Thirdly, some long-term effects are still not well incorporated into CEA, especially those affecting child development and drug resistance. These questions are technically challenging and require more concerted efforts over the next few years. Finally, it is important for analysts to provide decision-makers with estimates of the resources that would be required to implement interventions claimed to be cost-effective. These improvements would better enable the evidence from economic analyses to enter the policy debate and be weighed against the other goals and objectives of the health system when allocating scarce resources.

The impact of health economics on healthcare delivery. A primary care perspective

With the increasing emphasis on providing efficient and equitable services from primary care and against a background of increasing demands on limited resources, economic theory seeks to facilitate both the direction of primary care and the decisions that are made within it. This paper argues that the impact of health economics, particularly at the microeconomic level, has been limited. This is because health economists have failed to recognise the importance of context, and also reflects their attempts to force reality into a disciplinary matrix which is not always accessible and acceptable to end users. Argument is made for a closer relationship between health economists and those who commission and deliver primary care. It is also desirable to develop pragmatic decision-making frameworks which draw upon economic concepts and principles but reflect the realities of the environment in which they are applied.

Willingness to pay in arthritis: a Danish contribution

OBJECTIVE

To explore the use of willingness-to-pay (WTP) methods with respect to an antagonist of tumour necrosis factor as an antirheumatic drug.

METHODS

One hundred and fifteen rheumatoid arthritis (RA) patients at a tertiary care centre in Odense, Denmark were interviewed using two WTP approaches, the contingent ranking and double-bounded (closed-ended) methods.

RESULTS

The average closed-ended WTP value was DKr581 and the average contingent ranking WTP was DKr643. There were no statistically significant differences in the WTP estimates between the two methods.

CONCLUSION

It is feasible to use these methods with arthritis patients. If, as suggested in a number of recent reviews, a major effort is to be put into undertaking economic appraisals of arthritis programmes, then this should include more cost-benefit studies using WTP approaches of the kind illustrated in this paper.

Evidence-based medicine and health economics: a case study of end stage renal disease

This paper explores the potential for use of an economic evaluation framework alongside systematic reviews. Clinical issues in dialysis therapy for end stage renal disease are used as case studies. The effectiveness data required were obtained from a systematic review of randomized controlled trials. Resource use and cost data were obtained from three sources; the identified randomized controlled trials, a separate review of observational studies and primary data collection. The results of the case studies show that, although simple economic evaluations were possible, issues arose, such as how transferable results are between settings and how appropriate it is to focus on the average patient. The interface between economic evaluation and systematic reviews needs to be further developed in order to ensure that the best available evidence can be used to inform future policy and research.