Abstract
BackgroundThe global economic crisis imposes severe restrictions on healthcare budgets, limiting the coverage of new interventions, even when they are cost-effective. Our objective was to develop a tool that can assist decision-makers in comparing the impact of medical intervention alternatives on the entire target population, under a pre-specified budget constraint.MethodsWe illustrated the tool by using a target population of 1,000 patients, and a budget constraint of $1,000,000. We compared two intervention alternatives: the current practice that costs $1,000 and adds 0.5 quality-adjusted-life-years (QALYs) per patient and a new technology that costs 100 % more, and provides 20 % more QALYs per patient. We also developed a formula for defining the maximum premium price for a higher-cost/higher-effectiveness intervention that can justify its adoption under a constrained budget.ResultsUsing the new therapy will add 300 QALYs, compared to 500 QALYS when using the lower-cost, lower-effective intervention, despite a favorable incremental cost-effectiveness ratio (ICER) of $10,000. The maximum price for the higher-efficacy therapy that will preserve the target population outcomes is 20 % higher than the lower-cost therapy.ConclusionsAlthough an intervention associated with higher costs and higher efficacy may have an acceptable ICER, it could provide inferior outcomes in the target population under budget constraints, depending on the relative effectiveness and costs of the interventions. The cost premium that can be justified for a higher-efficacy intervention is directly correlated to its effectiveness premium. Using the proposed tool may assist decision-makers in improving overall healthcare outcomes, especially in times of economic downturn.
Highlights
The global economic crisis imposes severe restrictions on healthcare budgets, limiting the coverage of new interventions, even when they are cost-effective
We demonstrate the model by using a hypothetical scenario in which the target population (IUP) includes 1,000 patients, and the budget constraint B is $1,000,000
In our proposed model which takes into account the budget constraint, we observe a significant reduction in the overall population outcomes, as 200 quality-adjusted life-years (QALYs) will be lost if we prefer the new technology
Summary
The global economic crisis imposes severe restrictions on healthcare budgets, limiting the coverage of new interventions, even when they are cost-effective. The recent global economic crisis imposed severe restrictions on public budgets allocated to healthcare and health spending growth has leveled off in many countries in the last few years, as shown in Fig. 1 [2]. The counter claim is that from a broader societal perspective, it is more important to achieve equity in the supply of medical innovations. These claims have previously been observed and discussed in the Prospective Urban Rural Epidemiological (PURE) study [5]. Only very few costeffectiveness analyses demonstrated cost-savings while providing (acceptable) inferior outcomes [5], and this approach is not implemented in most developed countries
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