assessing cost-effectiveness – what is an icer?- incremental analysis usa chaikledkaew, ph.d
TRANSCRIPT
Assessing cost-effectiveness – what is an ICER?-
Incremental analysis
Usa Chaikledkaew, Ph.D.
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Outline How to conduct health economic
evaluation results? What is an Incremental cost-
effectiveness ratio (ICER)?
What is health economic evaluation?
Refers to a study that considers both the comparative costs associated with two or more health care interventions, and the comparative clinical effects, measured either in clinical units, health preferences, or monetary benefit
OutcomesCosts
$
Source: Drummond et al, 2005
LYGs QALYs
$
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What Counts As An Economic Evaluation?
COSTS (INPUTS) AND CONSEQUENCES
(OUTPUTS) EXAMINED? No Yes
COMPARISON No Outcome
description Cost
description Cost-outcome
description
OF TWO OR MORE
ALTERNATIVES?
Yes Outcome analysis
Cost analysis Full economic evaluation
Source: Drummond et al, 2005 4
Economic Evaluation MethodsMethods Cost Outcome Results
Cost-Minimization Analysis (CMA) ฿ Usually clinical values
(Assume to be equivalent in comparable groups)
Cost per case
Cost-Benefit Analysis (CBA) ฿ ฿ Net benefit
Benefit-to-cost ratioReturn on investment (ROI)
Cost-Effectiveness Analysis (CEA) ฿ Clinical values
Life year gained (LYG)ICER (cost per LYG)
Cost-Utility Analysis (CUA) ฿ Quality-adjusted life
years (QALYs)ICER (cost per QALY)
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Incremental cost-effectiveness ratio (ICER)
The cost that on average needs to be sustained to obtain “an additional success”
(cost of treatment A) – (cost of treatment B)(clinical success treatment A) – (clinical success treatment B)
Or (cost of treatment A) – (cost of treatment B)(LYG A – LYG B)
Or (cost of treatment A) – (cost of treatment B)(QALY A – QALY B)
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Cost-effectiveness threshold or WTP
UK: < £30,000 per QALY gained USA: < $50,000 per QALY gained Countries in the World: < 3 x GDP per DALY
averted Thailand: < 1.2 GNI per capita per QALY
gained (160,000 THB)
Source: (1) Devlin, N. and Parkin, D. Health Economics, 2004; 13: 437-452. (2) Towse, A., Devlin, N., Pritchard, C (eds) (2002) Cost effectiveness thresholds: economic and ethical issues. London: Office for Health Economics/King's Fund. (3) Thavorncharoensap et al. Assessing a societal value for a ceiling threshold in Thailand. 2013. Health Intervention and Technology Assessment Program (HITAP), Ministry of Public health, Nonthaburi, Thailand. 7
How to conduct health economic evaluation
results?
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PE/HEE Study Designs
1. Prospective: alongside clinical trial
2. Model based
Combining different sources e.g. a model, based on input from clinical trials, retrospective data, expert opinion.
1.1 Decision trees
1.2 Markov models
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How to conduct HEE results?Define the problem
Identify the alternative interventions
Identify and measure cost and outcomes
Value costs and effectiveness
Interpret and present results10
Example
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Source: Thavorn et al. Tobacco Control 2008;17:177–182. doi:10.1136/tc.2007.022368
Define the problem
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Perception of the problem• Specific intervention • Specific strategy • Specific drug• Specific surgical
procedure
Define the problem
Selection of objectives• A decision must be made
about how cost-effectiveness will be evaluated.
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Perspective• Patient • Provider • Third Party Payer• Healthy System• Public/Government• Societal
Define the problem
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P.15
Cost Valuation by perspective Category Subcategory Patient Provider 3rd -party
payer Health system
Public/ government
Societal
Direct medical
Treatment/ health care: Study setting
charge cost Reimburse Copay premium
- cost cost
Other health facilities
charge - -/+ reimburse
charge charge charge
Direct non medical
Personal facilities
charge - - - - charge
Travel charge - - - - charge Food charge - - - - charge House charge - - - - charge Time loss income loss - - - - Productivity cost Informal care income loss - - - - Productivity cost Personal care charge - - - - charge Indirect Morbidity cost income loss - - - - Productivity cost
Mortality cost income loss - - - Productivity cost
Other sectors
Welfare travel/food/ fee/material
- -/+ reimburse
- cost cost
Education travel/food/ fee/material
- -/+ reimburse
- cost cost
Identify the alternative interventions
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Choice of comparator(s)
• An intervention should be compared to the comparator (s) which is most likely to be replaced by the intervention in real practice• Current practice may be :
• The most effective clinical practice• The most used practice• May not always reflect the appropriate care that is
recommended according to evidence-based medicine• Minimum clinical practice
• A practice which has the lowest cost and is more effective than a placebo.
• “doing nothing” or no treatment
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Identify the costs
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Sources of cost data• Hospital (charges, unit
cost)• Ministry of Public
Health website• DRG• Reimbursement list• Standard costing menu
Example of cost estimates
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Identify the outcomes
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Quality Adjusted Life Years (QALYs)
Integrate mortality, morbidity, and preferences into a comprehensive index number
Related to outcomes • Life duration• Quality of life
Allows comparisons of the cost-effectiveness results with other medical interventions
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Quality-Adjusted Life Years (QALYs)
Patient 1: • Utility = 0.9• Number of years = 10• QALYs = 0.9 x 10 = 9 QALY
Patient 2:• Utility = 0.5• Number of years = 10• QALYs = 0.5 x 10 = 5 QALYs
* Utility can be ranged from 0 (worst health state) to 1 (best health state/healthy)
QALYs = number of years lived x utility*
Quality weight that represents
HRQOL
Quantity or life
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Valuing costs and outcomes
Model based• Decision tree model• Markov model
Discounting to present value if its been more than one year
Uncertainty analysis
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What is an Incremental cost-effectiveness ratio
(ICER)?
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Interpretation and presentation of results
Incremental cost-effectiveness ratio (ICER)
The cost that on average needs to be sustained to obtain “an additional success”
(cost of treatment A) – (cost of treatment B)(clinical success treatment A) – (clinical success treatment B)
Or (cost of treatment A) – (cost of treatment B)(LYG A – LYG B)
Or (cost of treatment A) – (cost of treatment B)(QALY A – QALY B)
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The need for incremental thinking
Marginal analysis: requires assessment of relative costs and benefits of each marginal addition or reduction in production or consumption
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Number of test Total casesdetected
Total costs ($) Average costs ($)
1 65.9469 77,511 1,1752 71.4424 107,690 1,5073 71.9003 130,199 1,8114 71.9385 148,116 2,0595 71.9417 163,141 2,2686 71.9420 176,331 2,451
Number of test Incremental casesdetected
Incremental costs($)
Incremental costs /case ($)
1 65.9469 77.511 1,1752 5.4956 30.179 5.4923 0.4580 22.509 49.1504 0.0382 17.917 469.5345 0.0032 15.024 4.724.6956 0.0003 13.190 47.107.214
Number of test Total cases detected
Total costs ($) Average costs ($)
1 65.9469 77,511 1,175 2 71.4424 107,690 1,507 3 71.9003 130,199 1,811 4 71.9385 148,116 2,059 5 71.9417 163,141 2,268 6 71.9420 176,331 2,451
Number of test Incremental cases detected
Incremental costs ($)
Incremental costs / case ($)
1 65.9469 77.511 1,175 2 5.4956 30.179 5,492 3 0.4580 22.509 49,150 4 0.0382 17.917 469,534 5 0.0032 15.024 4,724,695 6 0.0003 13.190 47,107,214
Source: 1975 article from Neuhauser and Levicky: “what do we gain from
the sixth stool-guaic” (N Engl J Med) on stool tests do detect colonic
cancer 27
Interpretation and presentation of results
Incremental cost-effectiveness ratio (ICER)
The cost that on average needs to be sustained to obtain “one Life Year gained”
(cost of CPSC) – (cost of treatment of Usual Care)(Life Years of CPSC) – (Life Years of Usual Care)
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ICER of CPSC compared to Usual Care by Age and Sex
Gender/Age Incremental cost
Life years gained
ICERs of CPSCcompared to Usual
Care(year) (THB) (Years) (THB per LY gained†)
Male, 40 -17,504 0.181 -96,705 (Dominant)
Male, 50 -16,356 0.152 -107,603 (Dominant)
Male, 60 -12,387 0.121 -102,373 (Dominant)
Female,
40-21,500 0.244
-88,114 (Dominant)
Female,
50-20,074 0.205
-97,922 (Dominant)
Female,
60-14,889 0.161
-92,479 (Dominant)
*Negative ICER due to higher effectiveness and lower costs of CPSC compared with Usual Care
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B
A
D
C
increase in health effects
more costly
less costly
Intervention is less effective and more costly
Intervention is more effective and more costly
Intervention is less effective and less costly
Intervention is more effective and less costly
Cost-effectiveness plane
decrease in health effects
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Conclusions
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Cost-effectiveness league table of selected interventions in Thailand
Health Interventions Baht/QALY (2008)
Coverage
Antiretroviral treatment vs. palliative care 26,000 Yes
Prevention of vertical HIV transmission (AZT + NVP) vs. null
25,000 Yes
Statin (generic) in men >30% CVD risk vs. null 82,000 Yes
Cytomegalovirus retinitis: Gancyclovir vs. palliative 185,000 Yes
Antidiabetic: Pioglitazone vs. Rosiglitazone 211,000 No
HPV vaccine at age 15 vs. Pap smear, 35-60 years old, q 5 years
247,000 No
Osteoporosis: Alendronate vs. calcium + vitamin D 296,000 No
Osteoporosis: Residronate vs. calcium + vitamin D 328,000 No
Peritoneal dialysis vs. palliative care included anyway cs ethic issues/ surviability
435,000 Yes
Hemodialysis vs. palliative care included anyway cs ethic issues/ surviability
449,000 Yes
Osteoporosis: Raloxifene vs. calcium + vitamin D 634,000 No
Osteoporosis: Calcitonin vs. calcium + vitamin D 1,024,000 No
HPV vaccine at age > 25 vs. Pap smear, 35-60 years old, q 5 years
2,500,000 No
Anemia in cancer patients: Erythropoitin vs. blood transfusion
2,700,000 No
Transtuzumab in breast cancer 5,051,000 No