CE3 COST-EFFECTIVENESS ANALYSIS AND BUDGET IMPACT ASSESSMENT: A GRAPHICAL WAY TO COMBINE THE TWO FOR THE AID OF DECISION-MAKERS

Abstract

Cost-effectiveness analysis (CEA) has traditionally been seen as a means of satisfying a specific and explicit social objective subject to a fixed budget constraint. As a result, existing CEA methods largely ignore budget impact considerations in health systems where budgets are not fixed. In particular, none of the traditional methods of presenting results (such as the cost-effectiveness plane, ICER tables and CEAC graphs) can be used to summarize the results of a CEA and budget impact assessment simultaneously. Our objective was to develop such a method in a manner which is meaningful to decision makers. We present a novel way of combining cost-effectiveness and budget impact considerations into a single graph. To do this, we disaggregate the incremental costs of the new technology into those which fall on the health budget and displace other technologies (resulting in forgone health) and those which lead to an expansion of the health budget (resulting in a net budget impact). The incremental health benefit of the technology and any forgone health are combined to give the net health benefit of the technology, which is plotted against the net budget impact. Our method clearly reveals the trade-off between the cost-effectiveness and budget impact of the technology in question. This trade-off is simultaneously revealed across a range of plausible values of the cost-effectiveness threshold. Decision makers who are concerned with both the cost-effectiveness and budget impact of new technologies have tended to consider each of these separately, with the inherent trade-off between the two blurred in the process. Our proposed method makes this trade-off explicit and does so across a range of threshold values, enabling analysts to provide meaningful information to decision makers while respecting decision makers' authority in determining the appropriate threshold to use.