The Role of Economic Evaluation What type of evidence is available Professor Ala Szczepura Professor

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The Role of Economic Evaluation - What type of
evidence is available? Professor Ala Szczepura
Professor of Health Services Research Clinical
Sciences Research InstituteWarwick Medical
SchoolUnderstanding Research Critical
Appraisal (URCA)

• Plenary Nine

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Overview of Session

• Overall Aim
• to provide an understanding of the basic language
  and concepts usefulness of economic evaluation
• Content
• the changing health care policy context
• introduction to health economics/ health
  technology assessment
• use of health economics in decision-making

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• The Changing Health Care Policy Context

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Health Care Today
Statements - True or False

• All clinical interventions are of equal value
  effectiveness
• Resources are unlimited
• Public expectations of health care can be
  satisfied
• Countries do not at present ration health care
  

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Major triggers for cost containment economic
evaluation

• Demand has risen every year due to
• Technological advances
• Changing demographic structure
• New diseases e.g. AIDS
• Rising patient expectations

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Health spending under tight control
Growth halted or in decline in most
countries Governments learned to control costs
Managed entry of medicines is now the
norm Economic and outcomes assessment
Source OECD Health Data 97
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International policy debate

• Pressures affecting the policy debate
• Expenditure growing in absolute terms
• Expenditure growing as percentage of GDP
• 1980s policy debate cost containment
• 1990s policy debate efficiency and
  effectiveness with which funds used
• International move to health technology assessment

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The international trend towards Health Technology
Assessment (HTA)

• Health technology defined as all the methods
  used by health professionals to promote health,
  prevent and treat disease, and improve
  rehabilitation long term care
• Health technology assessment (HTA) defined as
  evaluation of the costs, effectiveness and
  broader social ethical implications of a
  technology

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International Harmonization of HTA

• Increased emphasis on HTA in Europe on
  multinational assessments
• 1991 Maastricht Treaty included public health
  as task for European Commission Council
  of Ministers for Health declares importance of
  value for money
• 1994 EUR-ASSESS project funded to improve HTA
  methods, priority setting HTA use
• 1995 HTA-Europe funded by Public Health
  Directorate (DG V) to strengthen HTA
  activities in 15 member states Switzerland (16
  countries)
• 1996 COMETT-ASSESS reports on training needs
  for HTA in Europe
• 1998 Euroscan. New Technology Horizon
  Scanning Group established
• 2002 HTA International (HTAi) launched
  covering Europe/ US/ Asia
• 2006 EUnetHTA launched covering 24 European
  countries. Aim is to ensure
  multinational use of HTA reports

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HTA acceptance and regulation
High
u
Australia
u
Canada
Regulation
u
Italy
Low
High
Low
Acceptance
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Talking the same language

• BASIC PRINCIPLES AND CONCEPTS
• What comes to mind when you hear the term health
  economics or economic evaluation?
• Identify 4 key words / phrases associated
  with the term
• RATIONALE FOR ECONOMIC EVALUATION
• Why is health economics increasingly important?
• Identify 4 key reasons

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• Introduction to Economic Evaluation

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Health Care Today
Inevitable Tensions

• Efficiency vs quality
• Demand vs resources
• Choice vs equity

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What is economic evaluation?

• Economic evaluation is the comparative
  analysis of alternative courses of action in
  terms of both their costs consequences.
  
  (Drummond, 1997)

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Exponential growth of health economics

• Growth rate of research in health economics

Salek eds 1999
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Important issues for economic evaluation.

• question of choices in the use of health care
  resources such as
• what services to provide, when and at what level?
• how and where to provide such services?
• who should get the services?
• these are important questions for those who
  provide health care (e.g. clinicians) as well as
  those who plan care provision or commission care
  (e.g. SHAs, PCTs)

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The clinical argument
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The financial argument
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The economic argument
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• Health Economic Evidence

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The new era of evidence-based medicine

• Traditional requirements
• Safety
• Efficacy

• Emerging requirements
• Clinical effectiveness
• Patient outcomes (QoL)
• Efficiency (cost-effectiveness)

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Health Economic Evidence
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Economic evaluation and its aims

• The fundamental task of economic evaluation is
  to identify, measure, value, and compare the
  costs and consequences of the alternative
  treatments being considered.
• The aim is to help us choose among many
  different health care technologies (drugs,
  procedures, medical devices) those that will
  maximise health benefit for a given budget.
• Opportunity cost is important. If resources
  are used for one purpose, they cannot then
  be used for something else.

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Is it an economic evaluation?
Cost
Yes
Full economic evaluation
Cost analysis
Yes
No
A
Effect
Effect
Outcome trial
? Fad/ Fashion
Cost
No
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The cost-effectiveness plane
Cost
Higher
Reject treatment A
?
Worse
Better
A
Effect
Effect
?
Adopt treatment A
Cost
Lower
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Decision criteria needed
Rejection threshold
Cost
Zone of uncertainty
Increase
Acceptance threshold
Worse
Better
Effect
Decrease
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First challenge in economic evaluation

• Measuring outcomes/ effectiveness
• Valuing outcomes, once measured
• Comparing inputs (costs) with outcomes

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Measurement of effectiveness in economic
evaluations

• In terms of physical units
• blood pressure, years of survival, no of clinical
  benefit responder, etc
• In terms of utilities
• Quality adjusted life year (QALY), Healthy Year
  Equivalent (HYE), Disability Adjusted Life Year
  (DALY)
• In terms of money
• Willingness to pay
• Human capital and productivity approach

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Strength of evidence on effectiveness

• I Evidence from published systematic review(s)
  of multiple well designed randomised controlled
  trials (RCTs)
• II Evidence from at least one published
  properly designed RCT of appropriate size and in
  appropriate clinical setting
• III Evidence from published well designed
  trials, single group pre-post, cohort, time
  series or matched case-controlled studies
• IV Evidence from well-designed non-experimental
  studies from more than one centre or research
  group
• V Opinions of respected authorities, based on
  clinical evidence, descriptive studies or reports
  of expert consensus conferences

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Second challenge in economic evaluation

• Measuring outcomes e.g. health status
• Valuing outcomes, once measured
• Comparing inputs (costs) with outcomes

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Health related quality of life
Health is a state of complete physical,
mental and social well being and not merely the
absence of disease or infirmity
- World Health Organisation, 1948
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The Scope of Health-Related Quality of Life
(HRQoL)
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Third challenge in economic evaluation

• Measuring outcomes e.g. health status
• Valuing outcomes, once measured
• Comparing inputs (costs) with outcomes - economic
  assessment

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Economic assessment methods

• Cost-Minimisation analysis
• Cost-Effectiveness analysis
• Cost-Utility analysis
• Cost-Benefit analysis

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Cost-Minimization Analysis
Cost
A type of analysis used when two
treatments have been deemed equally effective, so
that cost is the only differentiating factor.
Hence CMA compares only costs.
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Cost-Minimization Analysis

• Advantage
• - No requirement to monetize or compare benefits
• Disadvantage
• - Can only evaluate therapies that produce
  identical outcomes

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Economic assessment methods

• Cost-Minimisation analysis
• Cost-Effectiveness analysis
• Cost-Utility analysis
• Cost-Benefit analysis

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The Final Balancing Act
Comparing costs and benefits of alternative
therapies
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Cost-Effectiveness Analysis
Seeks to identify the alternative that costs less
per health outcome unit (measure of
effectiveness) delivered
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Cost-Effectiveness Analysis (CEA)

• Used when the outcomes for two or more
  interventions vary
• but can be expressed in a common unit
• Usually limits its use to comparisons between
  treatments
• affecting the same condition/ patient group
  
• Different procedures can be expressed in terms
  of cost per
• unit outcome
• For example, there is a range of treatments for
  hypertension. Their effectiveness varies, but
  can be expressed in terms of a reduction in
  diastolic blood pressure achieved.
• Could compare the cost per
  reduction of 5 mm Hg

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Cost-effectiveness of HIV treatments
Costs converted _at_ US1.5551 but not inflated
ZDV vs placebo, CD4lt500, 1-yr effect (Schulman,
1991)
ZDV vs none in AIDS, (Moore, 1994)
ZDV/3TC vs ZDV, 200ltCD4lt500
ZDV/ddC vs ZDV CD4lt300 (Simpson, 1994)
ZDV/3TC/indinavir vs ZDV, 200ltCD4lt500 (Moore,
1996)
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Cost-effectiveness of selected interventions
Renal Dialysis
Enalapril in CHF
CABG
ZDV/3TC
Lovastatin
Mammography
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Cost-Effectiveness Analysis

• Advantages
• - no requirement to monetize health benefits
• - results are intuitive to interpret (Cost per
  year life saved
• is easily understood)
• Disadvantages
• - can only compare therapies whose effects are
• measurable in the same units

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Cost-Utility Analysis
Evaluates the costs and consequences of different
interventions in terms of the patients
health-related quality of life and survival time.
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Cost-Utility Analysis
Quality Adjusted Life Year (QALY) A unit that
captures the notion of one year of survival in
perfect health. By using QALYs, both mortality
morbidity are combined into a single outcome
unit This method is useful when evaluating
interventions that are life-extending, yet with
significant side effects, or those that produce
reductions in morbidity rather than mortality.
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Derivation of QALYs
QUALITY WEIGHTING
(Perfect 1 Health)
with treatment B
quality gain
QALY GAIN
without treatment B
quantity gain
TIME
(Death) 0
(Years)
0 1 2 3 4 5
6 7 8
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Cost-Utility Analysis

• Advantages
• - Includes patient preference in analysis of
  benefits
• - Allows comparisons between different disease
  areas
• Disadvantages
• - Utility measurements are not standardised
• - Patient preferences are hard to measure

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Use of QALYs in priority setting

• Requires information on QALYs for different
  procedures plus cost of these procedures
• These can then be ranked into a QALY league table
• Allows explicit comparisons between interventions
• Allows prioritisation of interventions

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Cost per QALY league tables
Source A Maynard (1991)
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Decision-making economic evaluation
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Problems with QALY league tables

• Do not distribute resources according to need,
  but according to the benefits gained per unit of
  cost
• May discriminate against the elderly or
  terminally ill
• May discriminate against the already
  disadvantaged
• May be more appropriate for short-term rather
  than long term interventions e.g. health
  promotion

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Economic evaluation an overview
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Future trends

• There will be a growing mismatch between health
  care demand and governments willingness to
  finance new drugs and interventions
• There will be a growth in the importance of
  evidence from economic evaluations and health
  technology assessments
• Evaluation of cost-effectiveness will become a
  key factor for market entry for new health care
  technologies
• Health care provider and healthcare funding
  agencies will need an improved understanding of
  economic evaluation and the types of evidence
  available

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