Cost Effectiveness Analysis (CEA) and its Role in the US Healthcare System Presented by Kenice Frank Advised by Peter Neumann, Sc.D in completion of the Harvard Health Policy Summer Program INTRODUCTION •Harvard Center for Risk Analysis (HCRA) The Cost Effectiveness Analysis (CEA) Registry provides public electronic access to a comprehensive database of cost-effectiveness ratios. Its goals are to find opportunities for targeting resources to save lives and improve health and to move towards standardization of cost- effectiveness methodology in the field. Specific Objectives: 1. Create a comprehensive database of CUAs 2. Catalogue the methods used and examine whether studies have been improving 3. Construct a league table of cost/QALY ratios that adhere to Panel recommendations 4. Expand the above to include CEAs that report outcomes in terms of cost per life year gained (LY) PHS 398/2590 ( Rev. 05/01) Importance of the CEA Registry Is the quality of reporting •Are studies adhering to in published CUAs recommended protocols? improving? Are pharmaceuticals •Which cancer prevention cost-effective? and treatment interventions are most cost-effective? Definitions Cost Utility Analysis (CUA) -a form of economic analysis used to guide procurement decisions, especially health technology assessment (HTA) - cost is measured in monetary units; the item being considered needs to be expressed in a quantitative form Sensitivity Analysis (SA) -aims to ascertain how the model depends upon the information fed into it, upon its structure and upon the framing assumptions made to build it. http://en.wikipedia.org/wiki/Cost- utility_analysis Definitions Incremental Analysis – a method used to analyze the difference between the intervention and the alternative treatments Discounting – a method used to adjust future costs and benefits to their market value; people prefer things now instead of later http://en.wikipedia.org/wiki/Cost- utility_analysis What is CEA? CEA is a systematic method of comparing two or more alternative programs by measuring the costs and consequences of each. The health outcomes of all the programs to be compared must be measured in the same common units Cost Utility Analysis (CUA) -a form of economic analysis used to guide procurement decisions, especially health technology assessment (HTA) - cost is measured in monetary units; the item being considered needs to be expressed in a quantitative form Sensitivity Analysis (SA) -aims to ascertain how the model depends upon the information fed into it, upon its structure and upon the framing assumptions made to build it. Berger et al., 2003 Timeline project timeline Upgrade of Website Assessment of Website and Maintenance and User Needs and Restructuring of Integration of New Outreach and Public Month Website Evaluation Database Data Dissamination Gather user feedback on New data beta test of acquisition and 22 ( June 2005) website integration Revise website based on beta Drafting of 23 ( July 2005) test newsletter Evaluate website Revision of 24 (August 2005) performance documentation Limitations The life expectancy alone does not take into account the quality of additional time that is gained This is why we use QALYs QALYs QALY = Quality Adjusted Life Year Advantages: 1. Capture gains from prolongation and improved quality of life in a single measure 2. Incorporate the value or preferences people place on different outcomes 8/9/2011 Drummond et al., 1997 The Impact of a Technology on Costs and Health Intervention is Increases less effective and costs more costly Decrease in QALYS Increase in QALYS Decreases Intervention is costs more effective and less costly $ Laupacis A. et al., Can Med Assoc J 1992;146:475 Why CEA? Despite the United States’ resistance to CEA, it has still emerged as the recommended technique for conducting economic evaluation of health and medical interventions CEA’s rising popularity can be easily noticed by the rising numbers of CEA publications being made in mainstream medical journals. Why CEA? The mere presence of this type of increase indicates a system that is in need of CEA’s services. Figure 1: Growth in Published Cost-Utility Analyses, 1976-2001 100 90 85 80 70 64 # Studies 60 50 4341 40 25 19 20 1515 1 1 0 0 2 1 1 1 0 4 2 0 3 3 5 0 1976 1979 1982 1985 1988 1991 1994 1997 2000 Year Source: CUA Registry, Harvard School of Public Health, as of February 2003. METHODS CEA Registry Process MEDLINE Literature Searches Screening Article reading & data abstraction CUA Registry Phase III Data Collection Screening Out Readers fill out a Methods, Ratios and Weights form for each article to extract the data that will go into the database Phase III Data Collection Methods Form • intervention types •form completion • prevention stage •cost measurements • primary affiliation of •reporting of results author(s) •sensitivity analysis • study sponsorship/funding •discussion section • perspective • discounting Phase III Data Collection Ratios Form target population intervention comparator $/QALY from article population size impact in $ ratio uncertainty direct medical costs non-health care costs $/QALY intervention comparator Phase III Data Collection Preference Weights Form secondary data usage population sample sample size elicitation method(s) health state weight range total # of weights RESULTS Cost-Utility Analyses Of Pharmaceuticals Published, Phase II (1998-2001) Phase I Phase II Type of Intervention Number Percent Number Percent 1 Pharmaceutical 73 32.00% 460 48.40% 2 Surgical 41 18.00% 138 14.50% 3 Diagnostic 26 11.40% 157 16.50% 4 Screening 24 10.50% 143 15.00% 5 Medical Procedure 16 7.00% 154 16.20% 6 Care Delivery 13 5.70% 81 8.50% 7 Health Education 12 5.30% 76 8.00% 8 Immunization 9 3.90% 35 3.70% Updated by Kenice Frank using Phase II data Interventions Type Frequencies Change in Intervention Type Frequencies 500 450 400 Number of Studies 350 300 Phase I 250 Phase II 200 150 100 50 0 1 2 3 4 5 6 7 8 9 10 Intervention Type Updated by Kenice Frank using Phase II data Cost-Utility Analyses Of Pharmaceuticals Published, Phase II (1998-2001) Drug as percent of Study characteristics Total Nondrug Drug total All studies 949 489 460 48.5% Country of study United States 620 348 272 43.8% Other 329 141 188 57.1% Condition Circulatory system 205 114 91 44.4% Neoplasm 148 80 69 46.3% Infectious and parasitic 224 83 141 62.9% Genitourinary system 91 82 9 9.9% Digestive system 22 3 19 86.4% Musculoskeletal system 62 20 42 67.7% Endocrine, nutritional, and metabolic 81 55 26 32.1% Nervous system and sense organs 27 12 15 55.6% Mental disorders 38 27 11 30.0% Source of study funding Government 375 235 140 37.3% Foundation 166 134 32 19.3% Pharmaceutical company 161 33 128 79.5% Medical device company 161 33 128 79.5% Health care organization 37 36 1 2.7% Other 27 20 7 26.0% Not disclosed 349 152 197 56.4% None 4 1 3 75.0% *Some studies had more than one sponsor. Updated by Kenice Frank using Phase II data Drug as % of total (Worldwide) % Drug Drug as % of total Drug as % of total (Other) - Phase II (U.S)- Phase II % Drug % Drug Median Cost-Effectiveness Ratios, By Type Of Intervention Intervention Type Number of Ratios Median Cost Effectiveness Immunization 28 24,169 Care delivery 56 21,478 Surgical 91 16,338 Pharmaceutical 286 23,900 Screening 123 25,700 Other Public Health 6 509,721 Health education/ counseling 45 31,000 Diagnostic 88 39,211 Device 42 41,950 Medical Procedure 105 38,000 All Interventions 870 28,350 Average acceptable median CE ratio is $50,000/QALY •incremental cost of more than $50,000/QALY gained = rejected •incremental cost of less than or equal to $50,000/QALY gained = accepted Updated by Kenice Frank, using Phase 2 information DISCUSSION Problems in CEA References Neumann, P. J. (2005). using cost-effectiveness analysis to improve health care. New York, Oxford Press. ISPOR (2003). Health care, cost, quality and outcomes. Lawrenceville, ISPOR. Neumann, P. J., E. A. Sandberg, et al. (2000). "Are Pharmaceuticals Cost-Effective? A Review of the Evidence." Health Affairs 19(2). Neumann, P. J. (2002). "The Quality and Usefulness of Pharmacoeconomic Studies for Drug Coverage Decisions." Pharmaceutical News 9(1): 15-20. Neumann, P. J. (2004). "Why Don't Americans Use Cost- Effectiveness Analysis." The American Journal of Managed Care 10(5): 308-312. Acknowledgements HCRA • Peter Neumann, Sc.D. HMS – Joan Reede, M.D., M.PH, • Jenny Palmer, M.S. M.S. • James Fraumeni, A.B. – Binta Beard, M.S. • Joshua Cohen, Ph.D. – Xue Fen Su, M.S. • Adi Eldar-Lissai, MBA – Jo Cole AND National Library of Medicine Questions or Comments?? Thank You!! Enjoy the rest of the presentations!
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