hea ptp: m212 economic evaluation 1 session 7: defining & assessing benefits for economic...
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HEA PTP: M212 Economic Evaluation 1
Session 7: Defining & Assessing Benefits for Economic Evaluation
1. Why, what and how of benefits.
2. Benefit assessment for CEA.
3. Benefit assessment for CUA.
4. Practical exercise in estimating benefits for CUA.
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Why Measure Benefits?
Efficiency
Maximise benefits for given resources
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Key Features of Economic Evaluation
Economic evaluation is
“The comparative analysis of alternativecourses of action in terms of both their
costs and consequences in orderto assist policy decisions”.
1. Costs and consequences - efficiency!
2. Comparative - relative efficiency
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Benefit Categories
InterventionIntervention
Direct BenefitsDirect Benefits Indirect BenefitsIndirect Benefits
Savings in productivity.Savings in
productivity.
Improved patient health status / utility.
Improved patient health status / utility.
Reduced health services
resource use eg. LoS.
Reduced health services
resource use eg. LoS.
Family and friends quality
of life.
Family and friends quality
of life.
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Should Changes in Productivity be Included?
May depend upon viewpoint (govt., societal, NHS)
Main issues are level of ‘true’ loss and comparability• Measurement of value of loss (gross wage, friction cost)• Double-counting, especially with CUA/CBA• Comparability with ‘health’ focus (viewpoint again)• Comparability with other studies (applies to other variables also)
Solution?• Provide a good reason why they should be measured/included• Report separately from other results• Differentiate measurement and valuation
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Should Benefits be Discounted?
Why not discount?
• Health, unlike resources, cannot be traded over time• Inter-generational equity (cf environmental economics)• If are discounted, may be different rate to cost
Why discount?• Inconsistent treatment costs and benefits• Inconsistent policy, especially in comparison with other sectors• Counter-intuitive conclusions for investment. eg always postpone!• Individuals do trade health over time ((dis)invest in health)
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Negative And Positive Benefits (and Costs!)
C/E ratio = net cost/net benefits
Net cost = positive cost + negative cost
Net benefit = positive benefit + negative benefit
Negative cost = cost saving, eg reduced LoS
Negative benefit = reduced health, eg adverse event
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Types of Economic Evaluation
Type of Analysis ResultResultConsequencesCosts
Cost Minimisation
Cost BenefitCost Benefit
Cost Utility
Cost Effectiveness
Dollars
Single or multiple effects not necessarily common.
Valued as “utility” eg. QALY
Different magnitude of a common measure
eg., LY’s gained, blood pressure reduction.
Least cost alternative.Least cost
alternative.Identical in all
respects.
DollarsDollars
Dollars
DollarsCost per unit of
consequence eg. cost per LY gained.
Cost per unit of consequence eg.
cost per LY gained.
Cost per unit of consequence eg. cost per QALY.
Cost per unit of consequence eg. cost per QALY.
As for CUA but valued in money. eg
willingness-to-pay
As for CUA but valued in money. eg
willingness-to-pay
Net $ cost: benefit ratio.
Net $ cost: benefit ratio.
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How Can Health Be Measured?
Length of life• Mortality (numbers, rates, SMRs)
• Life expectancy
• Life years lost
Quality of life• Numerous QoL measures (generic and specific)
• SF-36, Nottingham Health Profile, Guttman Scale, Rotterdam Symptom Checklist, Hospital Anxiety and Depression scale etc….
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Process of Benefit Assessment
1. Identification:
2. Measurement:
3. Valuation:
Mortality.Quality of life.
Measure in natural physical units (eg. number of deaths averted).
Value benefits if appropriate ie. if performing CUA or CBA.
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Issues in Assessing Benefits for CEA
1. Efficacy vs effectiveness vs efficiency.
2. Intermediate versus final outcome.
3. Sources of data for CEA.
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Efficacy Vs Effectiveness Vs Efficiency
Efficacy = measure of effect under ideal conditions.
Effectiveness = effect under ‘real life’ conditions.
Efficacy does not imply effectiveness
Efficiency = relationship between costs & benefits.
Effectiveness does not imply efficiency
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Intermediate Vs Final Outcome Measures
Final = change in health (status) resulting from the programme.
Intermediate = change in clinical indicator resulting from the programme.
Need to establish causal link betweenintermediate and final outcome measure.
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Examples of Intermediate Vs Final Outcomes Indicators (PBAC (PBS) Oz)
Condition being Final outcome Surrogate Outcome Indicatorstreated indicator
Coronary thrombosis Quality-adjusted Number surviving Number with specified Number achieving coronary(thrombolysis survival level of left ventricular re-perfusion
function
Stable angina Quality-adjusted Number with Number who can walk Number with adequate(various interventions) survival acceptable a specified distance relief of pain
quality of life
Asthma Quality-adjusted Number surviving Number with adequate Number achieving a target(various drugs) survival control of bronchial level of airways functions
hyperreactivity
Depression Quality-adjusted Number avoiding Quality of life (may be Number achieving a target(various drugs) survival suicide improved by drugs) Hamilton or Montgomery-
Asberg Depression RatingScale
Hypertension Quality-adjusted Number avoiding Quality of life (may be Number achieving a target(various drugs) survival a stroke worsened by drugs) blood pressure
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Sources of Effectiveness Data
1. Clinical trials, eg RCT’s.
2. Epidemiological studies, eg cohort studies.
3. Synthesis methods, eg meta-analyses.
4. Use of modelling.
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Randomised Controlled Trials
‘Gold standard’ - minimal bias and confounding.
Disadvantages:
1. Often establishes efficacy, not effectiveness.2. Selective subjects used.3. Limited opportunity to conduct.4. Limited time horizon.5. Costly to conduct.6. Often unethical and/or unfeasible.
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Epidemiological Studies
Real life setting - establish effectiveness
Disadvantages:
1. Potential for significant bias and confounding.2. Causal link can be weak.
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Decision Rules: CEA
CEA result = CEI (c/e). eg cost per LY gained
Decision rule = adopt lowest CEI
Application = technical efficiency
Qst addressed = “Should we undertake program “X” or
program “Y” to treat condition “A”?
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Limitations of Measurements/Need for Valuation
Ambiguity in assessing overall improvement or detriment in health
Allocative efficiency - value of benefits > (opportunity) cost
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Valuation Versus Measurement
Value is determined by benefits sacrificed elsewhere (weighted preference)
Valuation requires a trade-off between benefits - measurement does not
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Methods of Valuing Health
‘Utility’ or ‘preference’ assessment• Quality-Adjusted Life Years (QALYs)• Variants on QALY - Years of Health Life (YHL), Health-Adjusted
Person Years (HAPY), Health-Adjusted Life expectancy (HALE)• Healthy-Year Equivalents (HYEs) (based on ‘sequence’ of SG)• Saved-young-life equivalent (SAVE) (based on PTO)
Monetary terms eg WTP• Willingness-to-pay (WTP)• Human Capital
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Quality Adjusted Life Years(QALYs)
Adjusts data on quantity of life years saved to reflect a valuation of the quality of those years
If healthy: QALY = 1
If unhealthy: QALY < 1
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Qol Profile
0 5 10 15
No Life Years = 15
No QALYs = 11
QL Weighting
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QALY Procedure
Identify possible health states - cover all important and relevant dimensions of QoL
Derive ‘weights’ for each state
Multiply life years (spent in each state) by ‘weight’ for that state
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“Utility” Weight
Utility = satisfaction/well-being - reflects a consumers (weighted) preferences
Utility weights are necessarily subjective - they elicit an individual’s preferences for, or value of, one or more health states.
Must: 1. Have interval properties
2. Be ‘anchored’ at death and ‘good health’
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Techniques For Measuring “Utility”
Variety of techniques available, including:
Time Trade off
Person Trade Off
Standard Gamble
Rating Scale
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Obtaining “Utility” Weights
Two means of obtaining “utility” weights:
1. Evaluation specific/’holistic’ measures - develop evaluation specific (‘holistic’) description of health state and then derive weight for that specific state directly by population survey
2. Use ‘generic’ or ‘multi-attribute’ instruments - use predetermined weights, based on combination of
dimensions of health yielding a finite number of health states/values
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Evaluation Specific/‘holistic’ Measure
Advantages: 1. Sensitive
2. Account for wider QoL(eg process, duration, prognosis)
Disadvantages 1. Cost and time intensive
2. Lack of comparability
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Generic (MAU) Instruments
Advantages: 1. Supply weights “off the shelf”2. Comparability
Disadvantages: 1. Insensitive to small changes in health
2. Dimensions may not be
sufficiently comprehensive
3. Weights may not be
transferable across groups
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Some Other Issues
Choosing respondents for utility estimation - whose values count?
What constitutes a ‘correct’ health state description?
What is the appropriate ‘measurement’ technique?
Aggregation of values?
Biases - ageist, life enhancing versus life-saving etc.
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Decision Rules: CUA
CUA result = CEI (c/e). eg cost per QALY gained
Decision rule = adopt lowest CEI
Application = 1. technical efficiency
2. possibly allocative efficiency within
health care sector
Qst addressed = 1. Should we undertake program “X”
or “Y” to treat condition “Z”?
2. Should we treat condition “A” or “B”?
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Decision Rules: Issues
1. Perspective - Health Care Sector
- Purchaser/Provider
- Societal
2. Comparator
3. Budget constraint/indivisibility
4. NPV vs BCI
5. Limited nature of economic evaluation
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CUA and Rationing
Market system - price mechanism establishes equilibrium (efficient allocation)
Non-market system - absence of price as allocative tool leads to other, non-price, techniques
Issue is one of: (i) philosophical basis for rationing; and (ii) applied technique for rationing
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Methods of Explicit Rationing
L ayp a rticip a tion
M e d ica lp a te rn a lism
P o lit ica lp ro cesses
E q u ity E ff ic ie n cy
T e ch n ica lm e th o ds
E xp lic itra tion ing
(Coast et al, Priority setting: the health care debate, John Wiley, 1996)
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Explicit Rationing: Technical Methods
Single principle
Little distinction between setting priorities at different levels
Examples
• maximising health gain• need-based rationing• lotteries• age-based rationing
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Technical Method: ‘QALY League Tables’
Economic evaluation produces information on cost-effectiveness
If using comparable outcomes (eg QALY) can ‘rank’ according to c/e
Can use resultant ‘league table’ to allocate resource to most c/e first
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League Tables: Handle With Care!
Studies show differences in methodology
• choice of discount rate• method of estimating utility values• range of costs included• choice of comparator
Requires consistent methodology, ‘admission criteria’ for inclusion, applicability in local decision context
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The Oregon Plan
1987 - decision to stop funding for organ transplantation
1989 - Oregon Health Services Commission begins work
1990 - List 1
1991 - List 2
1994 - plan begins
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Oregon List Version 1
Efficiency principle
1600 condition/treatment pairs
Cost/QALY gained
• social values• outcome• cost
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Oregon List Version 1
“... looked at the first two pages of that list and threw it in the trash can”
“... the presence of numerous flaws, aberrations and errors”
(Harvey Klevit, member, Oregon Health Services Commission)
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Oregon List Version 2
Equal treatment for equal need
709 condition/treatment pairs
Method:
• Development & ranking of categories• Ranking C/T pairs within categories
– Public preferences– Outcome
• Professional judgement
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Oregon List Version 2
Top Five C/T pairs
1 Pneumonia - medical
2 Tuberculosis - medical
3 Peritonitis - medical/surgical
4 Foreign body - removal
5 Appendicitis - surgical
Bottom Five C/T pairs
705 Aplastic anaemia - medical
706 Prolapsed urethral mucosa - surgical
707 Central retinal artery occlusion - paracentesis of aqueous
708 Extremely low birth weight, < 23 weeks - life support
709 Anencephaly - life support
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Summary
1. Benefits must be assessed to establish efficiency.
2. Breadth and depth of benefits measured (& valued) varies across type of economic evaluation.
3. Difference between valuation and measurement.
4. Debate on role of CUA (& CEA) in allocative efficiency
5. Beware ‘league tables’!