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Everything You Ever Wanted to Know About Economic Evaluation in

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					 Economic Evaluation in Health Care




  Lonny Erickson, Ph.D

Health Technology Assessment
  Lonny Erickson, Ph.D
    Executive Workshop
    St John’s, NF & Lbr.,
      October 28, 2005
Between Scylla & Charbydis..
  Content of presentation

 Definitionof economic evaluation/ analysis
 5 types of economic analysis
  (definitions & associated jargon)
             potential traps and biases in
 Limitations,
  these analyses and how to deal with them
 Role of economic evaluation in priority
  setting
           Definition
< The comparative analysis of
  alternative courses of action in
  terms of both their costs and
  their benefits. >
                        Drummond et al., 1996
5 Types of Economic
Evaluations
1.   Cost Minimization Analysis
2.   Cost-Effectiveness Analysis
3.   Cost-Utility Analysis(QALYs)
4.   Cost-Benefit Analysis
5.   Cost-Consequence Analysis
       1
Cost-minimization
    Analysis
   1. Cost Minimization
   Analysis
What  is the least costly way to
 get a given health outcome ?

Rare (because effectiveness, utility and
 safety of interventions must be identical)
   Cost-Minimization Analysis
Examples:
   Screening   of hereditary adenomatous polyps:
    genetic versus clincal test (Chikhaoui et al.,
    2002)
   Urea breath test for h.pylori: radioactive vs.
    non-radioactive versions
   Screening for lead poisoning in children
    (Blotzer et al., 1994)
   Cost Minimization Analysis
Potential local examples:

 Vaccine   delivery by nurse practitioners vs.
  MDs
 Regional delivery of specialized services:
   lithotripsy   (ultrasound) for removal of kidney
    stones
   angioplasty
        2
Cost-effectiveness
    Analysis
      (CEA)
   2. Cost-Effectiveness Analysis
 Cost   $ / <natural unit>

 Whatdoes it cost to get a given health
 outcome:
   To gain a year of life
   To prevent a coronary bypass
   To prevent a case of meningitis
   etc.
        Cost Effectiveness Analysis
 Mostcommon type of analysis
 Examples:
       Drug-eluting stents: prevention of revascularization interventions
        (angioplasty & CABG) =+/- 20K$
       Screening for breast cancer 50-69: $5700/ life year gained (LYG)
       Screening for prostate cancer (CETS) or down syndrome (AETMIS,
        2004)
       Prevention of vaccine-preventable diseases, STDs, HIV and AIDS


   Limitation : one indicator at a time in analysis
    3
Cost-utility
 Analysis
  (CUA)
3.Cost Utility Analysis
 Costper quality-adjusted life year
 gained (QALY)
Quality-adjusted life years
(QALYs)

 Combine   quality of a given health status
  and duration of time in this state
 Allows to account for mortality and
  morbidity
 Value given to various states from 0
  (worst) to 1 (<healthy>)
      QALY Example: prevention of
      Meningococcal Disease
Prevention of 100 cases

  LYG due to avoided mortality =
     # of avoided cases x years of life expected x 1
        QALY Example: prevention of
        Meningococcal Disease
Prevention of 100 cases

QALYG due to avoided mortality & morbidity =
        # of avoided cases x years of life expected x 1
+
    #    of avoided cases x years of life expected x
        reduction of value of state (0-1)
Limitations of CUA
 How  do you value health states (0-1) ?
 Discounting of future benefits
 Ethical problems:
      i.e: Is the life of a handicapped person
      really worth less than that of a healthy
      person? (Oregon experience- ethical
      problems)
 But.. Allows some comparison across
  different domains of health care
    Examples of cost/QALY
 Vaccination pneumonia 65+ cost saving
 GP advice to stop smoking       $500
 Kidney transplant    $ 6 000
 Coronary stent vs angioplasty $ 28 000
 Lung transplantation $ 125 000
 Beta interferon for multiple sclerosis $ 700 000


Source: Harvard Cost U database
Intangibles


  Even  with CUA, there are always
  <intangibles>, important factors excluded
  i.e. reduction of public anxiety and media
  outcry via meningitis (or influenza)
  vaccination.
     4
Cost-benefit
 Analysis
   (CBA)
4. Cost Benefit Analysis
   Theoretically the most complete method, but
    in practice the most difficult and most
    criticized.
 Examples:
       Pneumococcal vaccination (INSPQ, 2003)
       Reduction of smoking
       Reduction of HIV and AIDS
       Highway security programs
Cost Benefit Analysis
 Advantage: more global perspective
 Limitations
       Focus on gaining productivity (human capital
        method)
       Ethical problems with value of a human life
       Requirements for data
       Conflict: economic vs. public health
        perspective
            ( i.e.: smoking & death at retirement)
       5
Cost-consequence
    Analysis
Cost Consequence Analysis

 Given the numerous limitations of
 CUA and CBA, just present a table
 comparing the various outcomes &
 let the decision-maker weigh the
 options

                    Coast, BMJ, 2004
Example: Home care vs. hospitalization
                        Hospital        Home care
Health system cost      $ 2000          $ 3200
$/patient
Cost to patient &       $ 50            $ 130
family $/ patient
Mortality               6%              6%
Social activity score   -1.5            2.6

Physical function       1.9             2.6
score
Patient & caregiver     No difference
satisfaction
Caregiver Burden        -3              -1
Cost Consequence Analysis
+   :
  globalperspective
  Decision-maker evaluates what is
   important
  Avoids inadequate hypotheses

-
 :   burden of analysis for hurried
     decision-makers
Economic Evaluations
Limitations, risks and
   how to deal with
         them
Economic
evaluations
should be
approached
with a great
deal of
caution
Economic Evaluations


      Lack
        of
      clarity
Question:

What does
<Cost-effective>
mean exactly?
                   N.B.
 Some  arbritrary values for <cost-
 effective>

 Cost-effective   compared to what?

 Cost-effective    cost-saving

 Health   care generally costs money
Economic Evaluations


      Lack
        of
 transparency
Black Box Economic Studies

   Economic
    Model
                     Result(s)

   ???
    Black Box Economic Studies
        Economic
         Model              Result(s)


                                       
                        
                
                   

            
    
    Black Box Economic Studies
        Economic
         Model              Result(s)


                                       
                        
                
                   

            
    
    Black Box Economic Studies
        Economic
         Model              Result(s)


                                       
                        
                
                   

            
    
Solutions
 Transparency:   table with ingredients for
  model, clinical pathways explicit
 Sensitivity analysis: impact of variation
  of input parameters on results
 Limitations of Economic
 Evaluation
 Efficacy  vs. effectiveness
 Is but one of many factors social, political,
  ethical, feasibility, human resources,
  context ..etc…
 We are not logical
     i.e.: prevention vs. cure
 Routine    vs. <heroic interventions>
   Vaccines   vs. saving premature infants
        Checklist for evaluating
        Economic Evaluation Studies
1.   Was the question properly asked?
2.   Were alternative programs adequately described?
3.   Has the program’s effectiveness been validated?
4.   Were all important & relevant costs & effects
     identified?
5.   Were credible measures for cost and effectiveness
     selected?
6.   Was an appropriate analysis carried out?
7.   Were comparisons between programs properly
     adjusted for time?
8.   Were the biases and direction of biases identified?
Economic Evaluations


 Subjectivity of
  presentation
Critical Questions to ask
 Who   paid for the study?
 What actually went into the study?
 How does the context of the study
  resemble and differ from your context?
 What is driving the model?
 What is likely to change
 Uncertainty… sensitivity of results to
  input parameters in model
Economic Evaluations


     Role in
 priority setting
The role of Economic
Evaluations in Priority setting
 Not the only factor
 Timeliness, relevance to local context
 Quality and completeness vs. clarity
  and brevity for a busy decision-maker
 Importance of informal communication
  channels with experts
More

                      
                                  + /-
expensive



Less
expensive
                      
                                 
            Less effective   more effective
FIN

				
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