Mind the GapSkills in Health Economics

Dr JK MiotPCMA AGMMarch 2011

Quick Quizz

• Can you name the 4 different types of health economics analyses?

• Do you know the formula for an ICER?• Do you know the difference between a Cost-

utility study and a Cost-effectiveness study?• Do you know the difference between a QoL

measure and a Utility?• Do you know what a Probabilistic Sensitivity

Analysis is?

So what are your skills?

How many of you:• Could build a simple model in Excel?• Have built a simple model in Excel?• Have built a Markov model?• Have done a Probabilistic Sensitivity Analysis?• Could critically appraise a health economics

study?

Another Quick Quizz

Raise your hands if you:• Know the Levels of Evidence Hierarchy?• Know what a double blind randomised control

trial is?• Know what a confidence interval is?• Know the difference between blinding and

allocation concealment?• Could critically appraise a clinical trial?

Can you calculate these?

Event happened

Event did not happen

Active Rx a b (a+b)

Placebo c d (c+d)

(a+c) (b+d)

RxER = CER =RR = RRR =ARR =NNT =Odds = OR =

How good are your Clinical Evaluation Skills?

Did you get it right?Event happened

Event did not happen

Active Rx a b (a+b)

Placebo c d (c+d)

(a+c) (b+d)

RxER = a/(a+b) CER = c/(c+d) RR = RxER/CER RRR = (CER-RxER)/CERARR = RD = CER-RxER RRR = 1- RRNNT = 1/ARROdds = a/b and c/d OR = (a/b)/(c/d) = ad/bc

Evidenced Based Medicine•What is best for the patient?•Aimed to assist clinical decisions

Economic Evaluation•Value, Cost-benefit and Cost-effectiveness•Pharmacoeconomic studies

Budget Impact Analysis•Financial assessment•Payer perspective

Health Technology Assessment (HTA)Clinical, economic, financial and social effects

Aimed at assisting Policy making

Social Impact Analysis•Access and equitable care•Patient perspective

Why do we need Health Economics?

“All effective health technologies should be free”– Archie Cochrane

But– The introduction of new effective technology is faster than

the increase in our ability to pay for them– Uncertainty about both effects and resource use for new

technologies

• Unrestricted Access– Spending scarce healthcare resources on technologies that provide

little if any benefit or may even harm

• Restricted Access– Delaying benefits which could be accrued whilst generating further

evidence on effectiveness

• Need to explore ways to take into account uncertainty while also offering chance for earlier/increased access to novel treatments

Trueman P. ISPOR SA 3rd Annual Conference 2010

Balancing Uncertainty and Access

Trends• Increasing number of high cost drugs requiring health economic

evaluations• Increasing pressure on funders to provide access to these drugs• Increasing requirements for proof of cost-effectiveness for re-

imbursement• Increasing transparency in adoption of HE and re-imbursement

decisions – Australia vs UK• Use of HE to inform multiple-level co-pays and other restrictions

on access• Use of HE earlier in drug development (Phase 2 trials) to inform

stop-go decisions and portfolio reviews

Uses of Health Economics Studies

• Submission for Re-imbursement• Submission for Regulatory approval• Academic and Educational• Publication for information• National Guidance• Policy Determination• Cost-Benefit Analysis

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•Healthcare Funders– Allocate resources equitably– Assist in decision-making for high cost technologies– Ensure sustainability of the fund

•Government/State– Allocate resources to programmes – Decide whether to purchase - Xigris– Decide what to purchase - Syringes

•Manufacturers/Suppliers– Decide whether to market product– Decide where to market – primary vs. specialists– Sell their product – providers, funders, state

•Academics– Research– Teaching

•Healthcare Providers– Provide most cost-effective treatment vs. least/most costly– Choose between alternative treatments

Who uses Health Economic studies and why?

PE Guidelines Worldwide

19931994

19951998

19992001

20022003

20042005

20062007

20082009

20100

5

10

15

20

25

30

35

Who is responsible for evaluating PE submissions

Country National Institution

No full time staff

DoH Other

Australia X 14 X

Belgium X 7 X

Canada X

France X 2 X X

Italy X 0 X

Japan X 6

Netherlands X Varies X

Portugal X 10 X

Sweden X

Switzerland X

UK X 23 X

OECD Health Working Paper No 4 & ISPOR Pharmacoeconomic guidelines around the world

Use of External ConsultantsCountry Consultants with no

pharma linksConsultants with no links to submission

Require pharma links be disclosed

Australia X X X

Belgium X

Canada X

France X X

Italy

Japan

Netherlands X X

Portugal X X

Sweden

Switzerland X X

UK X

OECD Health Working Paper No 4 & ISPOR Pharmacoeconomic guidelines around the world

Objectives of PE Guidelines and Submissions

• Aid to decision-making• Consistency – adhere to std requirements• Transparency – publish outcomes• Clinical appropriateness • Securing value for money

– Inform pricing negotiations– Reduce unnecessary drug use– Bring down cost of drugs

• Sensitise suppliers and decision-makers to need for cost-effective medicines

• Improve cost-effectiveness of prescribing

Main obstacles in achieving objectives

1. Insufficient skilled resources2. Inappropriate prescribing3. Inappropriate drug use by patients4. Inadequate public resources5. Lack of legal authorisation6. Lack of co-operation by manufacturers

Common Problems seen By Australian regulator (PBAC)

• Unsuitable comparators• Incomplete literature search• Methodological errors

– Calculation errors– Modeling errors– Subgroup analyses– Inappropriate adjustments of event rates

• Analyses (trials used) don’t match registered indication

Common Problems seen By Australian regulator

• Use of clinically insignificant outcomes• Surrogate outcomes• Therapeutic equivalent dosages• Duration of trials too short• Too optimistic cost savings with no supporting data

These are largely Clinical and Evidence issues…..!Don’t bother with a pharmacoeconomic evaluation if

the clinical evidence is poor!

• Measuring relevant costs and benefits– Vary from country to country ( transferability)– Value of surrogate endpoints– Local costs and resource utilisation

• Lack of long-term follow-up – extrapolation beyond clinical trials– Especially important in chronic disease– Some modelling is required– Decision needed now - can’t wait until long-term data is available

• Reducing uncertainty to improve confidence in outcome– Sensitivity analysis– Cost-effectiveness acceptability curves plotted from probabilistic model

• How to define cost-effectiveness– Do we need a threshold? – Only relevant from a social perspective?– How make the budget allocation

• How to define the budget?– Payer perspective (which payer?)– What about resource consequences that fall outside the payer? (included in the benefit

measure?)

Other Challenges

What skills are required?• A Health Economics Evaluation is NOT JUST about economics

• Health Economic Evaluation is multi-disciplinary, it combines – Economics – Epidemiology – Biostatistics– Medicine – Pharmacy – Nursing – Accounting– Public Health– Health Administration– Psychometrics– Sociology– Management Sciences– Actuarial Sciences– Finance– ….

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Skills Survey 2009

• N = 107

21.5

39.3

23.4

2.8

1.9

6.5 4.7

Group

Medical AidPharmaceuticalHealth TechnologyPrivate HospitalStateAcademiaConsultant

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Skills Survey 2009

18%

82%

Health Economics Qualification

YesNo

Most people who said ‘yes’ have attended one day industry programs, certificate programs, internal company training, PCMA, etc.

1 • Appreciation of HE role in multi-disciplinary analysis of health problem

2 • Advanced appreciation – able to frame issues, formulate questions, ask advice

3• Economic analysis of simple problems –

require lit. Search, appraisal, synthesis, interpretation

4 • Capacity to respond quickly to emerging issues

5 • Conduct economic evaluations with appropriate methods

6 • Application of economic findings to priority issues and decision making

7 • Priority-driven, policy relevant research programme

8 • Investigator-led research program

Levels of Health Economics Functions

What Levels of Training are needed?Level of Competency Level of Training

CPD Certificate Fellowship Formal Degree

Awareness;• Industrial field force• Healthcare practitioners• Healthcare administrators•Clinical & marketing industry team•Patient groups•Benefits managers

√√√√√√

Application;• Decision-makers for populations• Applied researchers

√√

√√ √

Conceptualise;• Academic/faculty•Senior industry scientists•Senior research consultants

√√√

√√√

Education and Skills needed to conduct, interpret and use economic evaluations in healthcare. ISPOR Panel 4. Value in Health, 1999. 2 (2):88-91

Obstacles to getting people interested in health economics

• Economists– Many different career options– Highly paid jobs/careers in finance– Little interest in health– Not exposed to concepts of HE as undergraduates

• Health Providers– Prefer clinical work– Little interest in health policy and systems– Not exposed to concepts of health economics– Perceived as “the dark side”

Need to create VISIBILITY

Retaining Health Economists• Few specific positions for HE• Only part of job description• Often soft-funded, research grants etc• Use it or Lose it

– Need to continue using skills– Lack of continuous opportunities

• Limited local training options• Often working alone• Lack of focussed career path• Boss doesn’t understand value

Stimulating demand for health economics

1. Sensitise governments and decision makers to value of health economics

2. Develop tools to assist3. Develop skills in using these tools

Strengthening Health Economics Capability in Africa. World Health Organisation. 2008. Prof D McIntyre

Developing skills

• Need to establish critical mass• Networks and Associations are key• Collaboration – scarce resources• Academic involvement• Create opportunities for growth and career

paths

Strengthening Health Economics Capability in Africa. World Health Organisation. 2008.Prof D McIntyre

The Up Side

• Part of the new wave• Shaping health policy• Finding a solution• Growing sector in SA• International career

Using EBM and Health Economics leads to;

•Better clinical outcomes

•More efficient use of resources

•Reduce over-utilisation

•Reduce perverse incentives

•Improved re-imbursement structures

•Improved training and skills

Challenges are Opportunities

“The study of health economics (HE) will stimulate anyone who believes that seeking to improve human health is worth using up some of the world's scarce resources”

Stephen Heasell. Principle Lecturer in Economics, Nottingham Trent University