Transcript Economic evaluations in healthcare: monetary valuation of

Economic evaluations in healthcare:
monetary value of a QALY
Ana Bobinac, Phd
Institute for Health policy and Management (iBMG) & Institute
for Health Technology Assessment (iMTA)
Erasmus University Rotterdam
Outline of the presentation
First…
• Economic evaluations of health technologies
o Background
o Methodological framework
o Relevance
Then…
o Monetary value of health – the threshold
o Empirical work
o Methodological considerations
Finally
o Discussion
The issue in newspapers
• “Healthcare costs growing at rates higher than GDP growth”
(published 12.10.2012 in “Glas Istre”)
• “Healthcare system unsustainable”
(published18.10.2012 in “Vecernji list”)
• What does that mean?
Definition
• Sustainability is not a well defined concept.
• Often unsustainable = growth in public spending higher than the growth
of GDP. But that has been the case since the 70s!
Source: OECD Health Statistics, 2012
• When does this growth become “unsustainable”?
Alternative view
• Given that costs grow, sustainability requires: (i) understanding why
expenditures are growing, (ii) having the tools to modify this tendency,
(iii) using these tools
• We then control expenditure!
• Expenditures are sustainable (although not necessarily constant) when
we are in control.
Why control is so important?
• Because costs (investments) create benefits, i.e., costs per se are not
the enemy – uncontrolled costs are the enemy!
•
Indeed, the costs of HC are often stressed, and they are considerable
(18% of the Croatian budget)
•
Politicians nightmare that gives negative ring to HC sector (as being a
cost-item!)
•
BUT… That’s not all. Full picture requires something more!
Costs create benefits – believe it or not!
• The benefits of health care are substantial and important!
• Health benefits comprise many things:
o Increasing life expectancy of patients (e.g. cancer)
o Improving the quality of life of patients (e.g. depression)
o Etc.
Cost drivers
Source: OECD (2006)
Main cost driver
• Non-demographic drivers are far more important than demographic
factors (such as ageing):
o According to NBER (2005), 89% in health expenditures is explained
by nondemographic factors, 11% by demographic factors
o According to Jones (2002), 75% in health expenditures is explained
by nondemographic factors
• Main cost driver is the adoption of new healthcare technologies: new
drugs, new instruments, machines, procedures,…
The need for cost-effectiveness
• “Given its relevant contribution to growing longevity and improving
health status, the role of technology is considered as positive and any
attempt to contain its development must be based on objective costeffectiveness analysis.” (Dybezak & Przywara, 2010)
Economic evaluations (EE) of healthcare
technologies
Aim: maximize the amount of health units produced from a given budget
•
Aim not contain costs but maximize the output at the given level of cost
•
Definition: The identification, measure, and comparison of the costs (i.e. resources
consumed) and outcomes (clinical, economic, and humanistic) of interventions
(pharmaceuticals, non-drug therapies, public health programs) (Drummond et al, 1997)
•
EE operates at the margin: accounts for incremental costs and benefits
•
Most often used EE in healthcare:
o Cost-effectiveness analysis (CEA) – benefits in natural units
o Cost-utility analysis (CUA) – benefits in QALYs
•
“Cost-effectiveness” – a generic term
Economic evaluation framework: CUA
•
CUA compares 2 alternative interventions
•
The standard framework of CUA from societal perspective:
(1) Δc / Δ QALY < v
where Δc is total costs of techn1 minus total costs of (currently used) techn2; ΔQALY is total
gains of techn1 minus total gains of (currently used) techn2
•
Eq.(1) says that:
o benefits (QALY) need to be measured (ΔQALY) and valued (v)
o the incremental costs of producing an incremental health benefit should be lower than its
value to be considered an efficient buy (i.e., <v)
•
Without v, CUA is not a complete economic assessment!
QALY?
•
QALY (Quality-adjusted life year) – composite index of quality of life and length of life
•
Gold standard, most useful measure of effectiveness
•
Comparability of all health outcomes
•
Advantage of CUA: all health benefits (outcomes) can be expressed as QALYs and
mutually comparable
QALY!
•
Ranges between 0 (death) and 1 (perfect health)
QALY= Utility of the health state x duration of health state
•
Utility of health state = quality of life index
•
Quality of life index is calculated using TTO, SG, VAS or DCE methods - QALY tariffs
exist for most developed world
•
•
Half a year in full health is 0.5 QALY
Full year with multiple sclerosis is 0.4 QALY (MS decreases the quality of life by 60%)
CEA & CUA: an example
Outcome of CUA
Intervention
GM-CSF elderly with leukemia
EPO in dialysis patients
Lung transplantation
End stage renal disease
Heart transplantation
Didronel in osteoporosis
Statins in high cholesterol
PTA with Stent
terbinafine in onychomycosis
Breast cancer screening
Viagra
Congenital anorectal malformation
$ / QALY
$235.958
$139.623
$100.957
$53.513
$46.775
$32.047
$18.151
$17.889
$16.843
$5.147
$5.097
$2.778
•
CUA results:
First, ranking health technologies
according to their cost-effectiveness
Second, establish when a health
technology is cost-effective by using v
•
This can be done using the threshold, v –
without v, the EE is incomplete!
•
v has been ignored so far – the focus of
this presentation!
What is v and why is it important?
•
Broadly speaking, v represents the monetary value of health (QALY) gains - a
consumption value the society is willing to sacrifice in order to obtain an extra unit of
health…
or the society’s willingness to pay for a QALY
•
v crucial in determining:
o which intervention to implement, i.e., a deciding factor in interpreting the results of
CUA
o priorities within the healthcare budget
o whether healthcare budget should grow or not
•
v is an empirical question!
•
But what is the value of v?
What do we know about the v?
•
Empirical estimates:
o wide rage of values, methods applied, samples used in empirical studies
in UK, Spain, US, Australia, etc.
o e.g. v varies from US$93,402 to US$428,286 using revealed preference
method (VLS method) based on non-labor and labor safety (Hirth et al.,
2000)
• “Opinions”:
o €80,000 per QALY is upper limit (CVZ in the Netherlands) - value
judgments and “experience”
o “3 times GDP per capita” - rule (of thumb) by WHO
However…
•
Very little evidence on reliability and validity of these estimates
•
ICER thresholds (v) that are currently used lack any empirical underpinning,
for instance…
o €80,000 per QALY (by RVZ),
o ₤20,000 threshold in UK is another example of a value judgment combined with
inferences from NICE’s previous decisions.
•
Importantly:
o No empirical estimates for NL
o No valid estimates anywhere (validity ignored)
o No estimates under uncertainty
o No estimates in large representative sample
My research
•
Aim was to demonstrate the individual monetary value of a QALY (v) in the
general public in the Netherlands
•
Fills the gap by providing a systematic and comprehensive empirical approach
to determining and exploring the v in the Netherlands
•
Several studies (2008-2012) covering:
o large representative samples (n>1000)
o individual and social values
o decision-making under certainty and under risk
o extensive validity testing
Some publications
 Bobinac A, et al. (2011) Get more, pay more? An elaborate test of construct validity of willingness
to pay per QALY estimates obtained through contingent valuation. Journal of Health
Economics 31: 158-168.
 Bobinac A, et al. (2010) Willingness to pay for a QALY: the individual perspective. Value in
Health 13: 1046–1055.
 Bobinac A, et al. (2012) Inquiry into the relationship between the equity weights and the value of a
QALY. Value in Health, in press
 Bobinac A, et al. (2012) Valuing QALY gains applying a societal perspective . Health
Economics, in press
Today’s focus
Bobinac A, et al. (2012)
“Individual willingness to pay for a QALY under risk”, working paper
Paper summary:
Using stated preference method to estimate a monetary value of a non-marketed
good - health. Estimate the individual WTP per QALY in the Dutch population.
Values obtained under uncertainty, entailing the application of prospect theory to
improve the validity of WTP estimates.
SPM: Contingent valuation (CV)
•
CV - most common method to estimate the monetary value of non-marketed goods or
services
•
Gives willingness to pay (WTP) estimates by creating a hypothetical contingent market
•
WTP used for damage assessment claims, insurance claims, valuation of nature
preservation, monetization of environmental risks, valuing a full effect of informal care,
valuing transport safety,…
•
Aim of this study: estimate individual WTP per QALY under uncertainty
o Individual values vs social values
o Uncertainty = realistic but ignored decision-making context in this context
CV: wording of the question
1. Please chose which health state you find better, which one worse (utility score was
automatically assigned to both states, based on Dutch Eq-5D tariffs based on TTO)
2. Please imagine being in a health state you chose as better
3. Please imagine facing a 50% risk of health deterioration, a reduction from the better
health state to the worse health state.
a) Que 1: how much would you pay for own treatment that would reduce the
probability of health deterioration from 50% to 25%?
b) Que 2: how much would you pay for own treatment that would reduce the
probability of health deterioration from 50% to 0%?
Health deterioration would last for 1 year. Payment would be spread over 1 year, in 12
monthly installments.
Example of online questionnaire
Which HS is better?
Pay for avoiding a risk of
worse HS
Analysis: prospect theory application
Table 1: Probability weighting – application of prospect theory
Non-weighted
probabilities
Weighted probabilities
Functional form 1
Functional form 2
Functional form 3
(Tversky and Kahneman,
1992)
(Prelec, 1998)
(Gonzalez and Wu, 1999)
𝑝𝛾
𝑤 𝑝 =
[𝑝 𝛾 + (1 −
1
𝑝)𝛾 ]𝛾
w(p) = exp(-(-ln p)α)
Parameter estimate (Bleichrodt Parameter estimate (Bleichrodt
and Pinto, 2000):
and Pinto Prades, 2000):
γ = 0.674 for losses
α = 0.533
𝑤 𝑝 =
𝛿𝑝𝛾
𝛿𝑝𝛾 + (1 − 𝑝)𝛾
Parameter estimates (Abdellaoui, 2000):
δ = 0.84, γ = 0.65 for losses
Probability combination 1:
Que1
0.50
0.45
0.44
0.46
Que2
0.25
0.29
0.31
0.30
Probability combination 2:
Que1
0.10
0.17
0.21
0.17
Que2
0.05
0.11
0.17
0.11
Probability combination 3:
Que1
0.04
0.10
0.16
0.10
Que2
0.02
0.06
0.13
0.06
Probability combination 4:
Que1
0.02
0.06
0.13
0.06
Que2
0.01
0.04
0.11
0.04
Analysis (cont.)
• Expected QALY gain (EQ) in each scenario was calculated as:
(3) EQ = (U(HS1) – U(HS2)) * p
where U(HS1)–U(HS2) is the QoL decrement based on the Dutch EQ5D tariffs and p the probability of the specific decrement occurring
• p – as weighted and non-weighted
• WTP per QALY
(4) WTP per QALY = (<WTP(OE) / EQ> )* 12
Results: average estimates
Table 2: Average WTP for a QALY estimates from Que1 and Que2 combined, for all probability weighting functions
(€, rounded to hundreds)
Expected QALY gain
Mean (SD)
Min
WTP per QALY: PS
Max Median Mean (SD) Min Max
WTP per QALY: OE
Median
Mean
(SD)
Min Max
Median
Non-weighted results
(NW)
0.012
(0.012)
0.001 0.07
0.008
174,900
(451,900)
250,500
0
5,976,100 52,800
0
5,976,100 81,300
0
1,620,100 36,900
0
1,544,500 37,900
0
1,480,000 23,500
(542,200)
Weighted results*
0.022
- GW function
78,000
0.001 0.06
0.023
(0.011)
0.022
(0.011)
110,100
0
1,407,800 24,800
(168,600)
0.036
(218,900)
55,400
0.001 0.09
(0.02)
(224,100)
75,900
0.001 0.06
- P function
1,470,000 24,300
(172,900)
0.022
- TK function
113,200
0
0.034
80,800
0
(131,700)
1,241,600 15,500
(177,100)
Results: validity
Table 3: Que1 (n = 1004) and Que2 (n = 997) separately (€, rounded to hundreds)
Is WTP behaving according to the
underlying economic theory of
consumer behavior?
In other words:
→ is WTP increasing with
the increase in the size of the
QALY gains?
→ is this increase
proportional, or almost
proportional, to the increase in
the size of QALY gains?
Implications of the results
•
Validity encouraging
•
If individual values considered relevant for determining the ICER threshold, the
estimates with high degree of validity should get support
•
€113,000 per QALY most valid estimate here!
•
The €20,000/80,000 threshold often proposed in the Netherlands seems too low and is
unsupported by preferences expressed here
Discussion:
individual values vs social values
•
However, should individual valuations of own health be used in social
decision-making?
•
This is a normative question!
•
Arguably,
o Monetary valuations for a societal perspective more useful to decisionmakers in collectively funded system (incorporate altruism, solidarity)
o Social monetary values can incorporate equity considerations, i.e.,
different thresholds for different groups of patients (i.e., a QALY is not a
QALY is not a QALY)
Issues in EE
•
Technical issues
o The discount rate
o If indirect costs should be included
o If costs associated to the increase in life expectancy should be included
o The monetary value (shadow price) of a QALY and if it is constant for
every health problem
(the need for) Politics and EE
•
EE only works if the decision-maker want to maximize health give the budget. If other goals are
relevant (e.g., satisfying certain interest groups), EE does not help!
•
EE is then useful, but…
o EE Is not a technique aimed at controlling costs but maximizing health!
o Does not avoid the need of making tough decisions: to cut back from other areas -health or
non-health-, co-payments, taxes… Somebody (politician, administrator) has to take the
decision about how to fund this hypothetical new (cost-effective) treatment. EE is an aid tool
in that context!
o Reduces the degree of arbitrariness of decision makers. Easier to evaluate their decisions.
Conclusions: is EE useful and used?
•
Is EE useful? Yes, if decision-maker:
o Understands what it is
o Is willing to accept the (political) consequences of using the recommendations of
this technique in order to make decisions.
•
Is EE used? Yes
o We see more and more economic evaluations used to regulate the use of medical
technologies making the health system more sustainable…
o Economic evaluation, notably CUA, is widely used (Canada, Australia, UK,
Sweden, The Netherlands, Portugal…) at least for the regulation of
pharmaceutical products.
Ana Bobinac
[email protected]
THANK YOU!