pharmacoeconomics and management in pharmacy iiistsimonpharmacy.com/docs/ph3340 201314/ph3340 1314...
Post on 14-Mar-2020
3 Views
Preview:
TRANSCRIPT
2013 [UNIT PH 3340] 1
Pharmacoeconomics and
Management in Pharmacy III
[John Vella B.Pharm.(Hons.) M.Sc.(Pharmacoeconomics)]
2013 [UNIT PH 3340] 2
News review
J. Vella [PH 3340]
Elective surgery Lists
3
J. Vella [PH 3340]
Performance audit (i)
• Elective surgery is that which can be delayed by 24hrs at a
minimum
• A source of common patient complaint
• Are these justified?
4
J. Vella [PH 3340]
Performance audit (ii)
• Increased waiting times, why?
5
an ageing population
new technologies
MDH offers more services
J. Vella [PH 3340]
Performance audit (iii)
• The issue of liability in a European context
• High level of patient satisfaction
• Increase of 35% from 28,223 in 2006 to 38,165 in 2012
• 75% of patients waited up to 3 months
• Less than 20% waited more than 1 year
6
J. Vella [PH 3340]
Performance audit (iv)
• An increase in day surgery
• Implement audit trails and IT to track interventions
• Fully implement the Centralised Waiting List system
7
J. Vella [PH 3340]
Performance audit (v)
• Ease the bed shortage issue by tackling LTC patients at
MDH
• Establish and implement maximum waiting times
• Recruit more competent adminstrators and care providers
8
J. Vella [PH 3340]
Budget 2014 (i)
9
J. Vella [PH 3340]
Budget 2014 (ii)
• Health expenditure increased from € 354 million to € 383
million
• 8% annualised
• No details yet on where the funds are going
10
J. Vella [PH 3340]
Budget 2014 (iii)
11
J. Vella [PH 3340]
Budget 2014 (iv)
• 48.7% of the funds are earmarked for wages
• A slight decrease from the 50% of the previous year
• An indication of inefficient utilisation of human resources
12
J. Vella [PH 3340]
Budget 2014 (v)
13
J. Vella [PH 3340]
Budget 2014 (vi)
• An increase in item 5400 of € 10 million
• Substantial funds at hand
• More items on Schedule V and novel treatments
14
J. Vella [PH 3340]
Budget 2014 (vii)
• An increase of 14.7%!
• This augurs well for patients
• What we need is good management of the money in hand
with the appropriate amount of oversight, transparency and
accountability
15
J. Vella [PH 3340]
The NAO report for 2011(i)
• An annual audit of government operations is the remit of the
individuals trusted with its collation and publication
• Of great relevance is the section relating to the Ministry of
Health especially to those of us with a vested interest in the
health sector and the formulation of health policy and its
actuation
16
J. Vella [PH 3340]
The NAO report for 2011(ii)
• This latest version of the NAO report out last week highlights
deficiencies across the board within the public service
• Amongst these are certain grave and fundamental
shortcomings within the healthcare sector
• It is of great concern that no fuss was made over the
following points
17
J. Vella [PH 3340]
Point One - attendance
• The lack of control on employee attendance and the brazen
refusal of doctors' and dentists' unions to accept such a
basic tenet of employment
• One consultant physician claimed € 80,000 in allowances in
one year
• Payroll officials claimed € 30,000 in overtime
18
J. Vella [PH 3340]
Point Two - tendering
• The fact that tendering procedures for medicines and
surgical materials and also non-surgical equipment are
routinely circumvented by direct orders, and the limits and
approvals required for the latter are disregarded at will
• No oversight or accountability in this regard
19
J. Vella [PH 3340]
Point Three – storage & distribution
• The storage of medicines and surgical materials is not centralized
and one of the depots does not provide satisfactory storage
conditions under the regulations laid out by the MA
• This suggests that sub-standard medicinal and supplies are being
passed onto the local treatment chain.
• No IT system to facilitate stock distribution and uniformity across the
whole service
20
J. Vella [PH 3340]
Point Four – stock levels!?
• The discrepancy in stocks held was said to be less than Eur
2,000 on a total figure of over Eur 18 million.
• This range of accuracy is not credible to the trained
observer, as it implies no human error in stock transfers and
no inventory pilferage
• For some reason this did not seem odd to the auditors
21
J. Vella [PH 3340]
Why use PE studies?
• “The main reason for studying pharmacoeconomics is to be
able to estimate and understand the full impact of a new
therapy” 1
• Thus PE can be construed as a driver of change and an aid
to progress within the field of health and pharmaceutical care
• 1 Mauskopf, J,2009
22
J. Vella [PH 3340]
The complexity of PE
23
J. Vella [PH 3340]
A parallel to Malta?
24
J. Vella [PH 3340]
Discussion
• Once again, brand prescribing is the problem
• Italy operates a system of reimbursement and co-payment,
with different localities and councils subsidising medicines to
varying levels
• It is undeniable that further generic consumption would
reduce total healthcare costs
25
J. Vella [PH 3340]
A nation of excess?!1
• The United States spends $1000 per capita on
pharmaceuticals, 3x as much as the UK
• The US also has 5x more CT scans than Germany and 5x
more coronary bypass ops than France
• 60m operations are performed each year, one for each 6
Americans?
1 http://www.healthoutcomescommunicator.com/?p=843
26
J. Vella [PH 3340]
Why?
• Two main reasons can be inferred:
• (i) moral hazard: the healthcare system in the United States
is pay per service, so physicians are rewarded for providing
more services
• (ii) patient demands: patients are better, or worse, informed
and demand unnecessary and futile tests and procedures
27
J. Vella [PH 3340]
Significant FDA ruling
28
J. Vella [PH 3340]
Against current trends
• The FDA ignored public pressure not to revoke the breast
cancer indication
• Lobbyists, especially cancer victim and survivor groups were
ion favour of its retention
• Clinical data exhibited no benefit for Avastin in breast
cancer, and retaining would have meant futile expenditure to
the system29
J. Vella [PH 3340]
Reason must prevail
• A case of logic over emotion, individuals with very little hope of
survival will grasp at any opportunity
• However, the situation must be considered in the context of society
as a whole, and the fact that better outcomes can be achieved for the
same output
• The clout of the oncology producing company must not be
underestimated
30
J. Vella [PH 3340]
Oncology is an important area (i)
31
J. Vella [PH 3340]
Oncology is an important area (ii)
• 2006 sales for pharmaceutical products were $ 36 billion
• 70% of these were products developed in the last 10 years
• 20% of NMEs launched
• 30% of new drug candidates are oncology compounds
• New cases of cancer to grow from 10m in 2000 to 15m in 2015
32
J. Vella [PH 3340]
Flu pandemic could cost $800 billion(i)
33
J. Vella [PH 3340]
Flu pandemic could cost $800 billion(ii)
34
J. Vella [PH 3340]
Flu pandemic could cost $800 billion(iii)
35
J. Vella [PH 3340]
Paranoia or reality?!
• Not due to direct death or sickness
• Most expense to global GDP would actually be caused by
the preventative measures and the accompanying hype and
disruption of normal productive procedures
• Underlies the need for objective reporting and professional
caution and integrity (swine flu scare a few years back)
36
J. Vella [PH 3340]
Playing God?
37
J. Vella [PH 3340]
Public indignation
• NICE is one of the leaders in HTA worldwide
• It is independent of the British health system and is
entrusted to give impartial advice and evaluations
• The article discusses the fact that certain patients suffering
from renal cell carcinoma would not be eligible for state-
funded treatment as they would not be cost-effective
38
J. Vella [PH 3340]
An intractable situation
• A no-win situation, as the maths does not justify a large
expenditure on so few patients, with an uncertain and
curtailed survival prognosis
• On the other hand, human nature does not allow the
abandonment of fellow individuals to their fate on purely
economic grounds, hence the dilemma
39
J. Vella [PH 3340] 40
J. Vella [PH 3340]
Diabetes (i)
• 347 million people worldwide effected with 3.4million deaths
in 2004
• More than 80% of diabetes deaths occur in low- and middle-
income countries
• WHO projects that diabetes will be the 7th leading cause of
death in 2030
41
J. Vella [PH 3340]
Diabetes (ii)
• Diabetes exerts a financial toll on the sufferer and family members
• The most affected are low income countries
• A vicious cycle of spiraling poverty will ensue if the right diagnosis,
treatment and health prevention campaigns are not undertaken
42
J. Vella [PH 3340]
Diabetes (iii)
• Factor in the fact that the working population is already
shrinking
• State systems will not keep up with increased demand
• Malta is at a high risk due to massive obesity rates
43
J. Vella [PH 3340]
Budget 2013 (ii) (Extracted from the Lifestyle Survey 2007, NSO Malta)
44
J. Vella [PH 3340]
Long-term approach to budgeting works
45
J. Vella [PH 3340]
A holistic approach
• The initial extra cost of setting up the video-conferencing and
data transfer equipment involves an initial bulk capital
investment
• In the long run savings and better health outcomes were
observed
• Less transfers to main hospitals and a lower cost of
treatment, combined with better survival rates and patient
QOL
46
J. Vella [PH 3340]
Discussion points (i)
• Still ignoring the warning signs of future epidemics regarding
obesity and dementia
• 50c per citizen per annum is just not enough, in fact
expenditure has decreased from 2011!
• Expenditure on pharmaceutical materials is increased from €
64 to € 68 million
47
J. Vella [PH 3340]
Cost vs effect?
• Expenditure on healthcare has been rising constantly over
the past decade
• We have no tangible evidence that we are getting a
consequent increase in healthcare outcomes
48
J. Vella [PH 3340]
The RPI again!
49
J. Vella [PH 3340]
EU comparisons
50
J. Vella [PH 3340]
Interesting quote
51
J. Vella [PH 3340]
Points to discuss
• The methodology utilised would be worth evaluating
• Are we using a weighted index?
• What sample size?
• What choice of sampling?
• Are medicines stratified according to class and generic or
originator status?
52
J. Vella [PH 3340]
White paper (i)
53
J. Vella [PH 3340]
White paper (ii)
• Just published
• A step forward in the consultative process
• As long as the viewpoints of all sides are taken on board and
given due consideration
54
J. Vella [PH 3340]
White paper (iii)
• Three cornerstones:
(i) patient treatment management and medicine
management
(ii) the modernisation of the entitlement process
(iii) supply chain re-structruring to eliminate OOS syndrome
55
J. Vella [PH 3340]
White paper (iv) – Medicine managment
• A patient-oriented approach
• The problem of polypharmacy and related adverse reactions
• Medicine wastage and returns policy
• Reduction of prescription frequency for chronic
conditions(not longer than 6 months)
• Set up of a Medicines Information Centre
56
J. Vella [PH 3340]
White paper (v) – Overhaul of process
paradigm
• A new ICT system
• E- prescribing and integrated care records
• A single patient health record, accessible through Myhealth
Card and/or PIN
• Electronic tagging of medicines
• Cross-tabulation of patient data with allergy and adverse
reaction databases
57
J. Vella [PH 3340]
White paper (vi) – Medicines procurement
• Four options:
(i) convert POYC to SBU
(ii) extend further to include the end-user
(iii) sub-contract procurement and distribution
(iv) utilise existing pharmacy distributors
58
J. Vella [PH 3340]
White paper (vii)
• It is commendable that this document has been issued
• All stakeholders involved must take an active role
• The future of our healthcare system is at stake
59
2013 [UNIT PH 3340] 60
Basic considerations in PE
J. Vella [PH 3340]
Decision tree
61
J. Vella [PH 3340] 62
Pharmacoeconomics
Input costs Output costsHealthcare
J. Vella [PH 3340]
In & out
• The simplest consideration in PE is that a certain amount of
resource is expended to carry out or produce a healthcare
intervention
• The resulting intervention has a result or outcome
• The quantification of this outcome in various manners is the
crux of PE
63
J. Vella [PH 3340]
Misdirected focus
• Both input costs and output effects are studied
• The greatest focus in recent times has been on the input
costs
• We are totally ignoring the more important output or
outcome, or the ultimate aim of the intervention, the health
of the patient
64
J. Vella [PH 3340]
HTA’s and study aims
• Most Health Technology Assessments are geared towards
the containment of inputs
• Recently various experts in the field have pointed out that
the two most vital and convergent subjects, outcomes and
patient well-being, are more often than not, ignored in
treatment evaluation studies
65
J. Vella [PH 3340]
The end-point of value
• This rationale leads us to the logical end-point that we can
better evaluate healthcare interventions by grading them on
the value they provide to the patient
• Extending this argument, we can move towards systems that
reward better health outcomes and patient QOL, rather than
simply prioritising the short-term view of cost-containment
66
2013 [UNIT PH 3340] 67
Cost considerations in PE
J. Vella [PH 3340]
The cost of an intervention
68
Intervention
Direct Cost Indirect Costs
Wider cost
implications to
society eg. lost
production.
Non-health
services resource
use. Eg. patient
transportation,
informal care
Health services
resource use.
Eg. Inpatient,
outpatient, tests,
drugs
Costs to family
and friends.
J. Vella [PH 3340] 69
Cost breakdown
Cost category Costs
Direct costs(medical & non-
medical)
Cost of medication,
hospitalisation costs
Indirect costs Morbidity, mortality
Intangible costs Pain ,Suffering ,Grief
Opportunity cost Loss of opportunity,
revenue forgone
J. Vella [PH 3340]
Direct medical costs
70
J. Vella [PH 3340]
Direct Non-Medical Costs
71
J. Vella [PH 3340]
Indirect costs
72
J. Vella [PH 3340]
Intangible costs
73
J. Vella [PH 3340]
Opportunity cost (i)
• Defined in economics as the cost of the next-best choice
available for the utilisation of the ‘scarce’ resource at hand
• This is the hidden cost of an economic decision, when
alternatives in a treatment palette are mutually exclusive
• E.g. in a hypothetical scenario a public health service must
decide whether to vaccinate for MMR or Chickenpox
74
J. Vella [PH 3340]
Opportunity cost (ii)
• If the MMR vaccine is chosen, then the cost for the year in
question will be the monetary value of the MMR vaccines
PLUS the fact that children in that vaccination cycle will be at
the risk of contracting Varicella
• This will bring with it all the connected costs to society.
These costs are less than those potentially posed by a lack
of MMR vaccination
75
J. Vella [PH 3340]
More costing!
• Other definitions of costs incurred include:
76
fixed & variable
average & marginal
capital & operating
top down & bottom up
J. Vella [PH 3340]
Fixed and variable costs (i)
• Fixed costs – in the short term do not vary e.g. Labour
costs, utilities and rent
• Variable costs – fluctuate on a constant basis e.g. Raw
materials, part-time employees, sales commissions and
bonus payments
77
J. Vella [PH 3340]
Fixed and variable costs (ii)
78
J. Vella [PH 3340]
Average cost vs marginal cost
• The average cost of an intervention is often quoted
alongside the marginal cost
• Whilst the average cost is easy enough to calculate and
understand, marginal cost is a different concept
• Marginal cost is defined as the cost necessary to achieve
one more positive outcome
79
J. Vella [PH 3340]
A marginal cost of $ 47 million!
80
J. Vella [PH 3340]
All is not what it seems!
• This distinction is imperative as the previous example shows
• The average cost alone would not have revealed that the
sixth test is totally useless, whereas this is immediately
borne out by the astronomical marginal cost
• It is thus possible to dramatically increase healthcare costs
whilst achieving increasingly diminishing returns
81
J. Vella [PH 3340]
Capital and operating costs (i)
• Capital costs are those defined as funds utilised in the
purchase of a tangible asset e.g. a new MRI machine for a
hospital, or a new clinic couch for a pharmacy
• Capital costs are not included in expenses as utility costs
are, but are depreciated over time
• They are deducted from annual profits at a fixed rate over a
fixed time period
82
J. Vella [PH 3340]
Capital and operating costs (ii)
• E.g. a machine costing € 100,000 is depreciated over 5
years at a rate of 20%
• This means that € 20,000 are added to expenses and
deducted from profits yearly
• Operating costs such as wages, utility bills, insurance and
inventory write-offs are immediately subtracted from gross
profits83
J. Vella [PH 3340]
Top down, bottoms up! (i)
• Top down costing means that a global cost is first identified
and then deconstructed into its component cost sectors
• This could be applied to the example of an preliminary
evaluation of the total health expenditure for a country and
then a detailed division of expense by continually subdividing
into segments
84
J. Vella [PH 3340]
Top down, bottoms up! (ii)
• Bottom up costing is the aggregation of all the micro-costs
of the components of a larger framework to complete the
whole structure in a step-wise manner
• Could be applied to the collection of individual patient costs
and ALOS and bed cost plus other myriad factors to
compute a complete country-wide figure
85
J. Vella [PH 3340]
Data sources
• government (tender prices)
• previous research
• provider accounts(N/A in Malta)
published sources
• (eg patient out-of-pocket expenses – travel, time, OTC, child care)
• questionnaires
• diaries
direct valuation
86
J. Vella [PH 3340]
Adjustments
• Choice between these is often dependent
on data availability and time constraints
• Inflation parameters adjust for the variation
of the worth of money over time, and
Purchasing Power Parities adjust for cross-
border fluctuations in the value of money
J. Vella [PH 3340]
Costs and time
• Past costs must be inflated to present day prices to enable a
level comparison
• Future costs must be discounted to account for the fact that
the funds designated for a particular healthcare intervention
could have been invested elsewhere
• This is a factor often disregarded when considering the local
scenario
88
J. Vella [PH 3340]
Rate of inflation (Malta)
89
Ra
te o
f In
fla
tio
n2002
2003
2004
2005
2006
2007
2008
2009
2002 2003 2004 2005 2006 2007 2008 2009
ROI 2.19% 1.30% 2.79% 3.01% 2.77% 1.25% 4.26% 2.08%
J. Vella [PH 3340]
An example of costs and inflation
90
• E.g. if visiting a GP cost Lm 2.50 (€ 5.82) in 2002, to
compare it to today’s (2010) prices we must inflate it by the
rise in the ‘cost of living’
• Using the data in the previous slide the increase was of
18.79% and therefore:
• € 5.82 * 1.1879 = € 6.91
J. Vella [PH 3340]
Inflation (cont.)
• The same applies to all costs
• All costs in a study must be brought to the same point in
time, otherwise comparison is not possible
• Future costs are discounted by a factor called the ‘discount
rate’
• In certain cases this rate differs from the projected rate of
inflation for the general economy
91
J. Vella [PH 3340]
Adjusting for international currencies
• Purchasing Power Parities (PPPs) and exchange rates are two methods that are used to convert different currencies into a common denominator
• PPPs are more appropriate than exchange rates as these eliminate the difference in price levels between countries
• PPPs are calculated from a common basket of goods
2013 [UNIT PH 3340] 93
Types of PE studies
J. Vella [PH 3340]
Stages in economic evaluation
Deciding upon study question
• Viewpoint taken.
• Alternatives appraised.
Assessment of costs and benefits
• Identification of relevant C&B.
• Measurement of C&B.
• Valuation of C (&B).
Adjustment for timing.
Making a decision.
Adjustment for uncertainty.
J. Vella [PH 3340]
Classification of pharmacoeconomic studies
Does it examine two or more alternatives?
No Yes
Does it examine cost and health effects?
Does it examine cost and health effects?
Cost only
Effects only
both Cost only
Effects only
both
Cost description (cost of illness)
Health description
CostOutcomedescription
Cost analysis
Efficacy and/or effectiveness analysis (QOL studies)
Cost minimization analysisCost benefit analysisCost effectiveness analysisCost consequences analysisCost utility analysis
J. Vella [PH 3340]
Main types of PE approaches
• Four main studies are utilised in HTAs or Health Treatment
Assessments
• CMA – Cost Minimisation Analysis
• CEA – Cost Effectiveness Analysis
• CUA – Cost Utility Analysis
• CBA – Cost Benefit Analysis
96
J. Vella [PH 3340]
Types of PE studies
Type of Study Description
Cost Minimisation Analysis – CMA Compares costs in monetary terms of
treatments with identical outcomes
Cost Effectiveness Analysis – CEA Compares costs in monetary terms with
outcomes in natural units
Cost Utility Analysis – CUA Compares costs in monetary terms &
outcomes in terms of years of life
Cost Benefit Analysis - CBA Compares costs and outcomes in
monetary terms
97
J. Vella [PH 3340]
CMA – Cost Minimisation Analysis(i)
98
Costs Treatment Outcomes
J. Vella [PH 3340]
CMA – Cost Minimisation Analysis(ii)
• The simplest of the four types
• The focus is on measuring the left-hand side of the
pharmacoeconomic equation -costs
• The right hand side of the equation—outcomes
• Is assumed to be the same (or is found to be the same)
99
J. Vella [PH 3340]
CMA – Cost Minimisation Analysis(iii)
• A case of when identical outcomes are assumed
• E.g. two generic drugs versions with equivalent therapeutic
effect
• The only differential is the cost
• Definition is less clear when comparing drugs from different
classes, e.g. ACE inhibitors and Beta blockers
100
J. Vella [PH 3340]
CMA – Cost Minimisation Analysis(iv)
• The scope of CMA studies is limited due to the fact that
outcomes must be equal
• Equivalence is not a straightforward comparison in a medical
scenario
• A newer drug might cost more per dose, but have the
desired effect over a shorter period, thus globally incurring
less expenditure
101
J. Vella [PH 3340]
CMA – Cost Minimisation Analysis(v)
• Or a surgical intervention that could be could be carried out
on an in-patient or out-patient basis.
• In this case direct and indirect costs relevant to the
intervention must be considered.
• Direct costs would include paying for the surgical team and
the medical disposables and pharmaceuticals utilised during
the operation
102
J. Vella [PH 3340]
CMA – Cost Minimisation Analysis(vi)
• Indirect costs would include transporting the patient to
hospital, and paying for the nurse and carers while the
patient is resident at the institution in question.
• This method has limited use because it can only compare
alternatives with the same outcomes
103
J. Vella [PH 3340]
CEA – Cost Effectiveness Analysis (i)
• Is the most common type of pharmacoeconomic analysis
found in the pharmacy literature
• Measures costs in money terms and outcomes in natural
health units
• E.g. the number of lives saved or a reduction in blood
pressure
104
J. Vella [PH 3340]
CEA – Cost Effectiveness Analysis (i)
• One could compare the effectiveness of dietary regimens as
opposed to OHA treatment in the initial stages of Type II
Diabetes (NIDDM)
• Different treatments are utilised, but their outcomes are
measured in the same standardized units, mmol/lt of glucose
or maybe an HbA1c reading
105
J. Vella [PH 3340]
CEA – Cost Effectiveness Analysis (ii)
• The same rationale could be applied to two anti-hypertensive
agents from different classes, such as an ACE inhibitor, and
a Ca channel blocker
• Two very different modes of action, but economic end-point
is measured in mm of Hg
106
J. Vella [PH 3340]
CEA – Cost Effectiveness Analysis (iii)
• A disadvantage to CEA is that the alternatives used in the
comparison must have outcomes that are measured in the
same clinical units
• An anti-hypertensive(with outcomes in mmhg) cannot be
compared to an asthma product(with outcomes in FEV)
107
J. Vella [PH 3340]
CEA – Cost Effectiveness Analysis (iv)
• Intermediate Outcomes versus Primary Outcomes
• Primary or final outcomes are preferred, e.g. the eradication
of a disease or life years saved
• Intermediate outcomes are used as proxies or surrogate
end-points
108
J. Vella [PH 3340]
CEA – Cost Effectiveness Analysis (v)
• The limitation of using intermediate outcomes is reduced as
the strength of the association between the intermediate and
primary outcome measures increases
• Use data from RCTs(Randomised Controlled Trials)
cautiously
• RCTs are conducted under a strict adherence to protocol
• This may not reflect real-life conditions
109
J. Vella [PH 3340]
CUA – Cost Utility Analysis (i)
• CUA is an improvement on a CEA in which the unit of
comparison is the number of extra life years gained
• In CUA studies each year of life gained is given a value of
quality ranging from 1.0 to 0
• In the view of some researchers, CUA is an extension or
subset of CEA
110
J. Vella [PH 3340]
CUA – Cost Utility Analysis (ii)
• These years of life are known as QALYs or Quality Adjusted
Life Years
• The quality of life for a particular life state is scored using a
set of utility weights which are tested on population samples
• e.g. of a HRQOL (Health Related Quality Of Life) scale used
is the EQ-5D (European Quality of Life- Five Dimensions)
111
J. Vella [PH 3340]
CUA – Cost Utility Analysis (iii)
• The five dimensions in the EQ-5D are:
112
Number of states Dimension
5 Mobility
5 Self-care
5 Usual activities
5 Pain/discomfort
5 Anxiety/depression
J. Vella [PH 3340]
CUA – Cost Utility Analysis (iv)
• The EQ-5d can have 245 possible combinations used to
describe various life states
• The highest value possible is 1.0 or perfect health
• A figure lower than 0 is possible as some states are deemed
to worse than death
113
J. Vella [PH 3340]
CUA–The composition of the QALY - V
Quality Quantity QALY
114
J. Vella [PH 3340]
CUA – Cost Utility Analysis (vi)
• The main disadvantage of CUA is that there is no consensus
on how to measure these utility weights
• The main disadvantage is that they are measured ‘ante’ to
states they describe
• The people evaluating the debilitating effects of disease
have not experienced the sickness themselves
115
J. Vella [PH 3340]
CUA – Cost Utility Analysis (vii)
“A case in point was brought to light by one of the members of the Citizens’ Council, which is used as a
consulting body by NICE in the UK. A wheel-chair bound member was classified as having a negative
quality of life, when she actually was leading a perfectly functional and productive existence! The
population sampled had simply given high negative value to loss of mobility, whereas an individual who is
in the state attaches so much less importance to it, and much more to, incontinence, for example. This
illustrates that it is extremely difficult to arbitrarily assign life states to the effects of disease, and to the
beneficial results of treatments to improve these states, as both are the products of a multitude of dynamic
factors.”
116
J. Vella [PH 3340]
CBA – Cost Benefit Analysis (i)
• CBA compares both costs and benefits in monetary units
• An advantage of this type of analysis is that many different
outcomes can be compared as long as the outcomes
measures are valued in monetary units
117
J. Vella [PH 3340]
CBA – Cost Benefit Analysis (ii)
118
J. Vella [PH 3340]
CBA – Cost Benefit Analysis (iii)
119
• CEAs commonly use cost-effectiveness ratios
• Based on the costs of treatment divided by benefits of the
treatment
• Lower ratios indicate lower costs and are therefore the
preferred options
J. Vella [PH 3340]
CBA – Cost Benefit Analysis (iv)
120
• CBAs use benefit-to-cost ratios
• based on monetary benefits divided by
monetary costs
• Ratios higher than 1 indicate that the option
is cost beneficial
• higher ratios indicate higher benefits for
each euro spent and therefore are preferred
over lower ratios
J. Vella [PH 3340]
CBA – Cost Benefit Analysis (v)
121
J. Vella [PH 3340]
Other types of studies
• COI- Cost Of Illness
• researchers attempt to determine the total economic burden
(including prevention, treatment, losses caused by morbidity
and mortality, and so on) of a particular disease on society
122
J. Vella [PH 3340]
Cost of illness (ii)
• The costs included in this method are usually summarized
into two categories:
• 1) direct costs, or the costs associated with providing
treatment or prevention (e.g., medical services) and
• 2) indirect costs, or the costs attributable to loss of
productivity of patients with that disease or condition
123
J. Vella [PH 3340]
Cost of illness (ii)
124
2013 [UNIT PH 3340] 125
Points to consider in a PE
study
J. Vella [PH 3340]
Key attributes of cost analyses (i)
• Any evaluation of resource use must
distinguish between three properties:
126
identification
measurement
valuation
J. Vella [PH 3340]
Key attributes of cost analyses (ii)
• perspective is important
• range of costs justified by perspectiveidentification
• need to distinguish between fixed, variable and total cost, and average, marginal costs and incremental cost
• may need to adjust for differential timing (discounting)measurement
• method of valuation needs justification (incl. market prices)
• price does not necessarily equate with cost
• precision – ‘top down’ versus ‘bottom up’
• may need to adjust for inflation or currencies
valuation
127
J. Vella [PH 3340]
Key attributes of cost analyses (iii)
• (i) Comparator: this must be a specific intervention; either
the standard of care or no intervention. Inferior HTAs use
out-dated or inappropriate treatments to achieve the right
statistical impact
• (ii) Perspective: this must be clearly established; it can be
societal, patient, payer, prescriber or hospital focused
128
J. Vella [PH 3340]
Key attributes of cost analyses (iv)
• (iii) Cost apportionment: contributing costs should be
segmented accordingly into direct (medical and non-
medical), indirect and intangible
• (iv) Time horizon: the passage of time must be appreciated
in HTA evaluations; studies must encompass a long enough
timeframe to allow for realistic results
129
J. Vella [PH 3340]
Key attributes of cost analyses (v)
• (v) Discounting: past costs must be inflated to current
prices, and future costs discounted to their NPV
• (vi) Average/marginal costs: distinction must be made
between average cost and the marginal cost, or results will
not be relevant; marginal cost is important as some
treatments may be useless above a certain number of
interventions
130
J. Vella [PH 3340]
Key attributes of cost analyses (vi)
• (vii) Sensitivity: variables in a study have to be changed
over a range of values to see if a particular property or
finding holds in several scenarios
131
top related