Conventional Cost-effectiveness Research Articles

NICE’s Selective Application of Differential Discounting: Ambiguous, Inconsistent, and Unjustified

The National Institute for Health and Clinical Excellence (NICE) recently recommended differential discounting of costs and health effects in the economic appraisal of health care interventions in certain circumstances. The recommendation was published in an amendment to NICE’s Guide to the Methods of Technology Appraisal. The amendment states that differential discounting should be applied where “treatment effects are both substantial in restoring health and sustained over a very long period (normally at least 30 years).” Renewed interest in differential discounting from NICE is welcome; however, the recommendation’s selective application of differential discounting raises a number of concerns. The stated criteria for applying differential discounting are ambiguous. The rationale for the selective application of differential discounting has not been articulated by NICE and is questionable. The selective application of differential discounting leads to several inconsistencies, the most concerning of which is the lower valuation of health gains for those with less than 30 years remaining life expectancy, which can be interpreted as age discrimination. Furthermore, the discount rates chosen by NICE do not appear to be informed by recent advances in the theoretical understanding of differential discounting. NICE’s apparent motivation for recommending differential discounting was to ensure a favorable cost-effectiveness ratio for a pediatric oncology drug. While flexibility may be appropriate to allow some interventions that exceed conventional cost-effectiveness thresholds to be adopted, the selective adjustment of appraisal methods is problematic and without justification.

PRM228 - Nice's selective application of differential discounting: Ambiguous, inconsistent and unjustified

The National Institute for Health and Clinical Excellence (NICE) recently recommended differential discounting of costs and health effects in the economic appraisal of health care interventions in certain circumstances. The recommendation was published in an amendment to NICE’s guide to the methods of technology appraisal. The amendment states that differential discounting should be applied where “treatment effects are both substantial in restoring health and sustained over a very long period (normally at least 30 years)”. Renewed interest in differential discounting from NICE is welcome; however, the recommendation’s selective application of differential discounting raises a number of concerns. The stated criteria for applying differential discounting are ambiguous. The rationale for the selective application of differential discounting has not been articulated by NICE and is questionable. The selective application of differential discounting leads to several inconsistencies, the most concerning of which is the lower valuation of health gains for those with less than 30 years remaining life expectancy, which can be interpreted as age discrimination. Furthermore, the discount rates chosen by NICE do not appear to be informed by recent advances in the theoretical understanding of differential discounting. NICE’s apparent motivation for recommending differential discounting was to ensure a favourable cost-effectiveness ratio for a paediatric oncology drug. While flexibility may be appropriate to allow some interventions that exceed conventional cost-effectiveness thresholds to be adopted, the selective adjustment of appraisal methods is problematic and without justification.

Using resource modelling to inform decision making and service planning: the case of colorectal cancer screening in Ireland

BackgroundOrganised colorectal cancer screening is likely to be cost-effective, but cost-effectiveness results alone may not help policy makers to make decisions about programme feasibility or service providers to plan programme delivery. For these purposes, estimates of the impact on the health services of actually introducing screening in the target population would be helpful. However, these types of analyses are rarely reported. As an illustration of such an approach, we estimated annual health service resource requirements and health outcomes over the first decade of a population-based colorectal cancer screening programme in Ireland.MethodsA Markov state-transition model of colorectal neoplasia natural history was used. Three core screening scenarios were considered: (a) flexible sigmoidoscopy (FSIG) once at age 60, (b) biennial guaiac-based faecal occult blood tests (gFOBT) at 55–74 years, and (c) biennial faecal immunochemical tests (FIT) at 55–74 years. Three alternative FIT roll-out scenarios were also investigated relating to age-restricted screening (55–64 years) and staggered age-based roll-out across the 55–74 age group. Parameter estimates were derived from literature review, existing screening programmes, and expert opinion. Results were expressed in relation to the 2008 population (4.4 million people, of whom 700,800 were aged 55–74).ResultsFIT-based screening would deliver the greatest health benefits, averting 164 colorectal cancer cases and 272 deaths in year 10 of the programme. Capacity would be required for 11,095-14,820 diagnostic and surveillance colonoscopies annually, compared to 381–1,053 with FSIG-based, and 967–1,300 with gFOBT-based, screening. With FIT, in year 10, these colonoscopies would result in 62 hospital admissions for abdominal bleeding, 27 bowel perforations and one death. Resource requirements for pathology, diagnostic radiology, radiotherapy and colorectal resection were highest for FIT. Estimates depended on screening uptake. Alternative FIT roll-out scenarios had lower resource requirements.ConclusionsWhile FIT-based screening would quite quickly generate attractive health outcomes, it has heavy resource requirements. These could impact on the feasibility of a programme based on this screening modality. Staggered age-based roll-out would allow time to increase endoscopy capacity to meet programme requirements. Resource modelling of this type complements conventional cost-effectiveness analyses and can help inform policy making and service planning.

The cost-effectiveness of a new percutaneous ventricular assist device for high-risk PCI patients: mid-stage evaluation from the European perspective

Objective:A new and smaller percutaneous ventricular assist device (pVAD, Impella, Abiomed, Danvers, MA) has been developed to provide circulatory support in hemodynamically unstable patients and to prevent hemodynamic collapse during high-risk percutaneous coronary interventions (PCI). The objective of the study was to assess the cost-effectiveness of this specific device compared to the intra-aortic balloon pump (IABP) from the European perspective. Additional analysis on extracorporeal membrane oxygenation was conducted for observational purposes only, given its use in some European countries.Methods:A combination of a decision tree and Markov model was developed to assess the cost-effectiveness of the small, pVAD. The short-term (30-day) effectiveness and safety (early survival, risk of bleeding, and stroke) were modeled, as well as long-term risk of major adverse cardiovascular events (recurrent myocardial infarction, stroke, and heart failure). The short-term effectiveness and safety data for the device were obtained from two registries (the Europella and USpella), both of which are large multi-center studies in high-risk patient groups. Probabilities of long-term major adverse cardiovascular events were obtained from various published clinical studies. The economic analysis was conducted from a German statutory health insurance perspective and only direct medical costs were included. Cost-effectiveness was estimated over a 10-year time horizon.Results:Compared with IABP, the pVAD generated an incremental quality-adjusted life-year (QALY) of 0.22 (with Euro-registry data) and 0.27 (with US-registry data). The incremental cost-effectiveness ratio (ICER) of the device varied between €38,069 (with Euro-registry data) and €31,727 (with US-registry data) per QALY compared with IABP.Key limitations:Unadjusted, indirect comparisons of short-term effectiveness and safety between the interventions were used in the model. Cost and utility data were retrieved from various sources. Therefore, differences in patient populations may bias the estimated cost-effectiveness.Conclusions:Compared with IABP, the pVAD is a cost-effective intervention for high-risk PCI patients, with ICERs well-below the conventional cost-effectiveness threshold.

Rufinamide

Rufinamide (Inovelon®), a triazole derivative, is an oral antiepileptic drug approved in the EU as adjunctive therapy in the treatment of seizures associated with Lennox-Gastaut syndrome (LGS) in patients aged ≥4 years. The efficacy of oral rufinamide as adjunctive therapy in patients with LGS uncontrolled on one to three concomitant antiepileptic drugs was demonstrated in a pivotal, 12-week, randomized, double-blind trial. Rufinamide significantly reduced the 28-day frequency of both drop attacks and total seizures compared with placebo, and significantly increased the proportions of patients experiencing a ≥50% reduction in each seizure frequency. A significantly higher proportion of rufinamide than placebo recipients recorded an improvement in seizure severity at the end of treatment. Reductions in the frequency of drop attacks and total seizures were maintained in a long-term (up to 3 years), open-label extension study. Oral rufinamide was generally well tolerated in patients with LGS. Somnolence and vomiting were the most common adverse events occurring more frequently with rufinamide than with placebo. Two pharmacoeconomic analyses, using decision-analysis models with 3-month cycles over a time horizon of 3 years, assessed the cost effectiveness and cost utility, respectively, of rufinamide compared with topiramate and lamotrigine as adjunctive therapy in patients with LGS from the perspective of the UK NHS. The cost-effectiveness analysis suggested that rufinamide would be associated with incremental costs of £62 (drop attacks) or £2151 (total seizures) per 1% increase in the number of patients achieving a >50% reduction in seizure frequency over 3 years. The cost-utility analysis predicted that the incremental cost per QALY gained for rufinamide compared with the next less-costly and undominated therapy would be more than 5-fold higher than the commonly accepted willingness-to-pay threshold range in the UK. In conclusion, the available pharmacoeconomic data indicate that rufinamide is more effective, but more expensive, than alternative adjunctive therapies approved for use in patients with LGS in the UK. Rufinamide would appear to be a cost-effective alternative to topiramate. Although rufinamide exceeds conventional cost-effectiveness thresholds when compared with lamotrigine, it may still be considered a valuable treatment option for a devastating orphan disease such as LGS.

INCORPORATING FINANCIAL PROTECTION INTO DECISION RULES FOR PUBLICLY FINANCED HEALTHCARE TREATMENTS

Almost all health systems seek to offer some form of publicly financed healthcare insurance, and governments must therefore choose the size of the benefit package and the types of treatments to cover. Conventionally, the usual approach of economists has been to recommend choices on the basis of cost effectiveness of treatments, using metrics such as the 'cost per quality adjusted life year'. However, this approach is based on the assumption of health maximization subject to a budget constraint and ignores the potential impact of any additional concern with protecting individuals from the financial consequences of a health shock. Furthermore, it does not take account of the possible availability of complementary privately funded health care. This paper develops a model in which risk-averse individuals care about health but also place a value on protection from the financial consequences of rare but costly events. The paper shows how conventional cost-effectiveness analysis can readily be augmented to take account of financial protection objectives. The results depend on whether or not there exists a market in complementary privately funded health care. They have important implications for the methodology adopted by health technology assessment agencies and for the broader design of publicly funded health systems.

Reliable identification at the species level of Brucella isolates with MALDI-TOF-MS

BackgroundThe genus Brucella contains highly infectious species that are classified as biological threat agents. The timely detection and identification of the microorganism involved is essential for an effective response not only to biological warfare attacks but also to natural outbreaks. Matrix-assisted laser desorption/ionization time-of-flight mass spectrometry (MALDI-TOF-MS) is a rapid method for the analysis of biological samples. The advantages of this method, compared to conventional techniques, are rapidity, cost-effectiveness, accuracy and suitability for the high-throughput identification of bacteria. Discrepancies between taxonomy and genetic relatedness on the species and biovar level complicate the development of detection and identification assays.ResultsIn this study, the accurate identification of Brucella species using MALDI-TOF-MS was achieved by constructing a Brucella reference library based on multilocus variable-number tandem repeat analysis (MLVA) data. By comparing MS-spectra from Brucella species against a custom-made MALDI-TOF-MS reference library, MALDI-TOF-MS could be used as a rapid identification method for Brucella species. In this way, 99.3% of the 152 isolates tested were identified at the species level, and B. suis biovar 1 and 2 were identified at the level of their biovar. This result demonstrates that for Brucella, even minimal genomic differences between these serovars translate to specific proteomic differences.ConclusionsMALDI-TOF-MS can be developed into a fast and reliable identification method for genetically highly related species when potential taxonomic and genetic inconsistencies are taken into consideration during the generation of the reference library.

Willingness‐to‐pay for predictive tests with no immediate treatment implications: a survey of US residents

We assessed how much, if anything, people would pay for a laboratory test that predicted their future disease status. A questionnaire was administered via an internet-based survey to a random sample of adult US respondents. Each respondent answered questions about two different scenarios, each of which specified: one of four randomly selected diseases (Alzheimer's, arthritis, breast cancer, or prostate cancer); an ex ante risk of developing the disease (randomly designated 10 or 25%); and test accuracy (randomly designated perfect or 'not perfectly accurate'). Willingness-to-pay (WTP) was elicited with a double-bounded, dichotomous-choice approach. Of 1463 respondents who completed the survey, most (70-88%, depending on the scenario) were inclined to take the test. Inclination to take the test was lower for Alzheimer's and higher for prostate cancer compared with arthritis, and rose somewhat with disease prevalence and for the perfect versus imperfect test [Correction made here after initial online publication.]. Median WTP varied from $109 for the imperfect arthritis test to $263 for the perfect prostate cancer test. Respondents' preferences for predictive testing, even in the absence of direct treatment consequences, reflected health and non-health related factors, and suggests that conventional cost-effectiveness analyses may underestimate the value of testing.

Cost Effectiveness of Imiquimod 5% Cream Compared with Methyl Aminolevulinate-Based Photodynamic Therapy in the Treatment of Non-Hyperkeratotic, Non-Hypertrophic Actinic (Solar) Keratoses

Actinic keratosis (AK) is caused by chronic exposure to UV radiation (sunlight). First-line treatments are cryosurgery, topical 5-fluorouracil (5-FU) and topical diclofenac. Where these are contraindicated or less appropriate, alternatives are imiquimod and photodynamic therapy (PDT). To compare the cost effectiveness of imiquimod and methyl aminolevulinate-based PDT (MAL-PDT) from the perspective of the UK NHS. A decision tree model was populated with data from a literature review and used to estimate costs and QALYs gained and incremental cost effectiveness over 1 year. The model simulated patients who were in secondary care, who had four to nine AK lesions, and for whom cryosurgery, 5-FU and diclofenac were contraindicated or considered less appropriate. Over 1 year, imiquimod cost £174 less than MAL-PDT (year 2006 values) but resulted in 0.005 fewer QALYs gained. The incremental cost-effectiveness ratio (ICER) of MAL-PDT over imiquimod was £34,576. In the probabilistic sensitivity analysis, there was a 75% probability that imiquimod was cost effective compared with MAL-PDT at a threshold of £20,000 per QALY gained, falling to 73% at £30,000. Imiquimod may be the more cost-effective treatment at conventional cost-effectiveness thresholds. A direct head-to-head study of MAL-PDT versus imiquimod is required to reduce uncertainty.

Public Insurance and Financial Risk Protection: Lessons from Thailand

Thailand achieved universal coverage in access to health care in 2002. Since then, there has been a dramatic reduction in the prevalence of catastrophic health expenditures reflecting the capacity of the main public health insurance schemes to protect their members against financial risk from medical care costs. This policy brief draws on evidence from a recent study of the Social Health Insurance (SHI) and Universal Coverage (UC) schemes, identifying the key features of these schemes which have contributed to the reduction in catastrophic expenditures. Qualitative approaches were applied including documentary reviews and in-depth interviews conducted with three groups of stakeholders: purchasers, providers and patients. Conclusions: The combination of deepening coverage from the comprehensive package to include high cost services, and a provider payment system which reduces the incentives for providers to avoid high cost patients, appear to have been key factors in ensuring that UC and SHI members are protected from the risk of financial catastrophe from health care payments. This predominance of the policy objectives of financial risk protection and equity across schemes is illustrated by the recent decision to extend coverage to include RRT, an intervention that does not pass the conventional cost-effectiveness threshold, but which has been shown to have an impoverishing impact on households. Having a clear policy direction on financial risk protection, a comprehensive benefit package, and an active purchasing function based on evidence and clinical monitoring capacities, together provide an important foundation for successful financial risk protection.

Cost-Effectiveness of Sacral Neuromodulation Versus Intravesical Botulinum A Toxin for Treatment of Refractory Urge Incontinence

We determined the cost-effectiveness of sacral neuromodulation vs intravesical botulinum toxin A for the treatment of refractory urge incontinence. We developed a Markov decision model using a societal perspective to compare costs (2008 U.S. dollars) and effectiveness (quality adjusted life-years) of sacral nerve stimulation and botulinum toxin A. Our primary outcome was the incremental cost-effectiveness ratio, which was defined as (sacral nerve stimulation cost - botulinum toxin A cost)/(sacral nerve stimulation quality adjusted life-year - botulinum toxin A quality adjusted life-year). Sensitivity analyses were performed to assess the impact of varying efficacy, costs and adverse event rates over the range of reported values. In the base case scenario sacral nerve stimulation was more expensive ($15,743 vs $4,392) and more effective (1.73 vs 1.63 quality adjusted life-years) than botulinum toxin A during a 2-year period. The incremental cost-effectiveness ratio was $116,427 per quality adjusted life-year. Using conventional incremental cost-effectiveness ratio thresholds of $50,000 and $100,000 per quality adjusted life-year, sacral nerve stimulation was not cost-effective. In sensitivity analyses intravesical botulinum generally remained cost-effective. During a 2-year period botulinum toxin A was cost-effective compared to sacral neuromodulation for the treatment of refractory urge incontinence. Additional data regarding time to failure after botulinum toxin A injections, long-term efficacy with repeat botulinum toxin A injections and long-term complications with both therapies will be helpful for future cost-effectiveness studies.

Cost, Effectiveness, and Cost-Effectiveness

Pluck the goose so as to obtain the most feathers with the least hissing . — —Jean-Baptiste Colbert, Minister of Finance to King Louis XIV of France Incremental or marginal cost-effectiveness ratios are founded on a number of assumptions that weaken their suitability as a way to balance competing economic and clinical priorities. We therefore propose a more relevant and responsible way to gauge the impact of clinical management strategies based on “consumer protection” principles—explicit disclosure of (1) the total magnitude of expected benefit in the target population (in life-years or quality-adjusted life-years), (2) the total monetary cost (in per capita inflation-adjusted dollars), and (3) a formal plan by which the added costs would be paid. Health policy decisions should therefore be based on the inherent trade-offs in the component measures of cost and effectiveness and not on a simple ratio of the two. Cost-effectiveness ratios are thereby rendered superfluous. Incremental or marginal cost-effectiveness ratios are widely viewed as rational ways to balance competing clinical and economic priorities that arise as a consequence of the inevitable disconnect between an individual’s wants and the society’s willingness to pay for those wants.1–5 The purpose of this essay is to question the practical relevance of these ratios with respect to strategic planning in health care, and offer a suitable alternative. In doing so, we will focus on the more pragmatic issues underlying cost-effectiveness analysis, and gloss over a variety of technical details such as the difference between a privately financed free market and the publicly financed healthcare market, between costs and charges, and between unadjusted and quality-adjusted outcomes. Our pragmatic perspective is not likely to be welcomed by orthodox experts in cost-effectiveness analysis. We believe, however, that any such criticisms can be blunted by recognizing the important distinctions between regulatory and clinical …

Measuring the Cost Effectiveness of Multimode Bus Transit in the Presence of Accident Risks

This study employs the directional graph distance function and the multiactivity data envelopment analysis (DEA) approach, which incorporates both desirable and undesirable outputs, in order to provide a more complete representation of the multimode bus production technology from which environmentally and risk-sensitive cost effectiveness measures can be generated. We treat accident cost as the risky output in the sense that we wish to increase desirable outputs and decrease risky output and inputs. The approach is applied to the problem of measuring the cost effectiveness of 24 bus companies in Taiwan. An empirical illustration suggests that the overall cost effectiveness rankings turn out to be very sensitive to whether or not the graph multiactivity DEA approach is adopted. This implies that the conventional DEA cost effectiveness measure may be seriously misleading if it ignores the cost effectiveness of organizations that carry out various activities whilst sharing common resources.

Non‐linearity in the cost‐effectiveness frontier

Conventional cost-effectiveness decision rules rely on the assumptions that all health care programmes are divisible and exhibit constant returns to scale for a homogeneous population; hence, the path between adjacent programmes on a cost-effectiveness frontier must be linear. In this paper we build a framework to analyse non-linear 'expansion' paths. We model the impact of two key sources of non-linearity: economies of scale or scope in the production of health care; and prioritisation of patients who are most likely to benefit from more expensive and more effective treatments. We conclude that the expansion path might be linear, convex or concave, depending on the situation. The path might also exhibit vertical discontinuity due to fixed costs or horizontal discontinuity due to indivisibility. The efficiency of resource allocation might be improved by empirical estimation of expansion paths. We discuss the advantages and disadvantages of this approach compared with a standard stratified analysis.

Review article: economic issues in Crohn's disease--assessing the effects of new treatments on health-related quality of life.

The advent of highly effective yet costly new treatments for Crohn's disease will force clinicians, patients, and society to make important choices regarding the allocation of resources. Pharmacoeconomic analyses can be useful in deciding whether new technologies are of good value in comparison to established treatment regimens. In Crohn's disease conventional cost-effectiveness analyses are of limited use because surgery, death, and disease-related complications occur relatively infrequently. Alternatively, cost-utility models relate the incremental cost of new treatments to improvements in health-related quality of life. These analyses require the collection of valid cost and utility inputs that have only recently become available. Ultimately, cost-utility models should allow decision makers to make sensible choices for patients and society. This article describes the techniques of pharmacoeconomic analysis and reviews existing data on the measurement of costs and quality-of-life outcomes in Crohn's disease.

Preventing the Wernicke‐Korsakoff syndrome in Australia: cost‐effectiveness of thiamin‐supplementation alternatives

Alcoholic Wernicke's encephalopathy has been commonplace in Australia for many years and, as this syndrome is attributed to a deficiency in the diet, it should be preventable. This study employs conventional cost-effectiveness methodology to compare the economic efficiency of several thiamin-supplementation alternatives that have been proposed for the prevention of Wernicke's encephalopathy. A series of rankings of these measures is derived from an estimated cost per case averted for each of the alternatives studied. These rankings identify the least cost-effective thiamin-supplementation alternative as that of enriching bread-making flour with thiamin.

CONVENTIONAL AIR CLEANERS VERSUS ELECTROSTATIC AIR CLEANERS IN HEPA AND INDOOR APPLICATIONS

ABSTRACT In spite of extensive research and development work illustrating the significant advantages of Electrically Stimulated Filters (ESF's), this technology has not been commercially successful. This paper addresses this subject by analyzing conventional filter and ESF cost effectiveness in HEFA, clean room and indoor air cleaning applications. A new cost effective form of ESF technology has been considered: a single (charging and collection) field device. The laboratory performance of five commercially available conventional filters and the new ESF is characterized in terms of efficiency versus particle size, flow rate versus pressure drop and dirt loading characteristics. Using this information and the application requirements, the cost effectiveness of the ESF has been established with respect to conventional filters. Both initial and operating costs are discussed. The results show that ESF technology is cost effective for indoor applications even where space constraints are not important. Space co...

Parasite Screening and Treatment Among Indochinese Refugees

The General Health Policy Model and the Quality of Well-being scale are used to describe a "cost-benefit/utility" evaluation of a screening and treatment program for intestinal parasites among indochinese refugees in the United States. Cost-benefit/utility analysis subsumes conventional cost-effectiveness by explicitly adding social utility factors to the dollar dimension. Using actual data on parasite prevalence and program costs from one screening project and estimated figures for other factors, this article demonstrates calculation of the cost-benefit/utility outcome measure, dollars per well-year. Dollars per well-year for parasite screening are calculated for a number of examples. Further analysis and final conclusions on the worth of parasite screening and treatment programs await more reliable data for some terms of the developed model.

Septic System Problems on an Urban Fringe

Septic systems impact the land use plans, fiscal base, environment, and general public, whether they work or not. Septic systems in New Castle County, Del., were analyzed as a growth management issue. Control of subsidies is recommended as the basic solution. This paper addresses the way in which conventional land use and public policy decisions drive up the already high costs of waste treatment. Conventional cost-effectiveness logic applied to existing waste treatment management alternatives should not take the place of a consideration of the costs of ground-water pollution in determining future land use and waste treatment needs. The public should not sustain large spillover effects and the consequences of poor performance in exchange for the small benefit they receive when a few individuals use septic systems.