Transcript Cost Effectiveness Analysis (CEA) and Role in the US

Cost Effectiveness
Analysis (CEA) and its
Role in the US Healthcare
System
Presented by Kenice Frank
Advised by Peter Neumann, Sc.D
in completion of the Harvard Health Policy
Summer Program
INTRODUCTION
•Harvard Center for Risk Analysis (HCRA)

The Cost Effectiveness Analysis (CEA)
Registry provides public electronic
access to a comprehensive database of
cost-effectiveness ratios. Its goals are to
find opportunities for targeting resources
to save lives and improve health and to
move towards standardization of costeffectiveness methodology in the field.
Specific Objectives:
1.
Create a comprehensive database of CUAs
2.
Catalogue the methods used and examine
whether studies have been improving
3.
Construct a league table of cost/QALY ratios
that adhere to Panel recommendations
4.
Expand the above to include CEAs that
report outcomes in terms of cost per life year
gained (LY)
PHS 398/2590 ( Rev. 05/01)
Importance of the CEA Registry

Is the quality of reporting
in published CUAs
improving?

Are pharmaceuticals
cost-effective?
•Are studies adhering to
recommended protocols?
•Which cancer prevention
and treatment interventions
are most cost-effective?
Definitions

Cost Utility Analysis (CUA)
-a
form of economic analysis used to guide
procurement decisions, especially health technology
assessment (HTA)
- cost is measured in monetary units; the item being
considered needs to be expressed in a quantitative form

Sensitivity Analysis (SA)
-aims to ascertain how the model depends upon the
information fed into it,
upon its structure and upon the
framing assumptions made to build it.
http://en.wikipedia.org/wiki/Costutility_analysis
Definitions

Incremental Analysis – a method used to
analyze the difference between the
intervention and the alternative treatments

Discounting – a method used to adjust future
costs and benefits to their market value;
people prefer things now instead of later
http://en.wikipedia.org/wiki/Costutility_analysis
What is CEA?

CEA is a systematic method of comparing two or more alternative programs by measuring
the costs and consequences of each.

The health outcomes of all the programs to be compared must be measured in the same
common units

Cost Utility Analysis (CUA)
-a form of economic analysis used to guide
procurement
especially health technology assessment (HTA)
- cost is measured in monetary units; the item being considered
expressed in a quantitative form

Sensitivity Analysis (SA)
-aims to ascertain how the model depends upon the information
upon its structure and upon the framing assumptions made to build it.
Berger et al., 2003
decisions,
needs to be
fed into it,
Timeline
project timeline
Month
22 ( June 2005)
Assessment of
User Needs and
Website Evaluation
Gather user
feedback on
beta test of
website
Evaluate
website
performance
Website
Maintenance and
Integration of New
Data
Outreach and Public
Dissamination
New data
acquisition and
integration
Revise website
based on beta
test
23 ( July 2005)
24 (August 2005)
Upgrade of
Website and
Restructuring of
Database
Drafting of
newsletter
Revision of
documentation
Limitations

The life expectancy alone does not take into
account the quality of additional time that is
gained
This is why we use QALYs
QALYs

QALY = Quality Adjusted Life Year

Advantages:
1. Capture gains from prolongation and
improved quality of life in a single measure
2. Incorporate the value or preferences
people place on different outcomes
7/16/2015
Drummond et al., 1997
The Impact of a Technology on Costs
and Health
Increases
costs
Intervention is
less effective and
more costly
Increase in QALYS
Decrease in QALYS
Decreases
costs
Intervention is
more effective and
less costly
$
Laupacis A. et al., Can Med Assoc
J 1992;146:475
Why CEA?

Despite the United States’ resistance to CEA, it
has still emerged as the recommended
technique for conducting economic evaluation
of health and medical interventions

CEA’s rising popularity can be easily noticed by
the rising numbers of CEA publications being
made in mainstream medical journals.
Why CEA?
The mere presence of this type of increase indicates a
system that is in need of CEA’s services.
Figure 1:
Growth in Published Cost-Utility Analyses, 1976-2001
100
90
85
80
# Studies

70
64
60
4341
40
20
19
1515
1 1 0 0 2 1 1 1 0 4 2 0 3 3
50
25
5
0
1976
1979
1982
1985
1988
1991
1994
1997
Year
Source: CUA Registry, Harvard School of Public Health, as of February 2003.
2000
METHODS
CEA Registry Process
MEDLINE Literature
Searches
Screening
Article reading
& data abstraction
CUA Registry
Phase III Data Collection

Screening Out

Readers fill out a Methods, Ratios
and Weights form for each article to
extract the data that will go into the
database
Phase III Data Collection
Methods Form
•
intervention types
•form completion
•
prevention stage
•cost measurements
•
primary affiliation of
author(s)
•reporting of results
•
study sponsorship/funding
•discussion section
•
perspective
•
discounting
•sensitivity analysis
Phase III Data Collection
Ratios Form

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
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
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
target population
intervention
comparator $/QALY from article
population size
impact in $
ratio uncertainty
direct medical costs
non-health care costs
$/QALY
intervention comparator
Phase III Data Collection
Preference Weights Form







secondary data usage
population sample
sample size
elicitation method(s)
health state
weight range
total # of weights
RESULTS
Cost-Utility Analyses Of Pharmaceuticals Published,
Phase II (1998-2001)
Type of Intervention
Phase I
Phase II
Number Percent
Number Percent
1
Pharmaceutical
73
32.00%
460
48.40%
2
Surgical
41
18.00%
138
14.50%
3
Diagnostic
26
11.40%
157
16.50%
4
Screening
24
10.50%
143
15.00%
5
Medical Procedure
16
7.00%
154
16.20%
6
Care Delivery
13
5.70%
81
8.50%
7
Health Education
12
5.30%
76
8.00%
8
Immunization
9
3.90%
35
3.70%
Updated by Kenice Frank using
Phase II data
Interventions Type Frequencies
Change in Intervention Type Frequencies
500
450
Number of Studies
400
350
300
Phase I
250
Phase II
200
150
100
50
0
1
2
3
4
5
6
7
Intervention Type
Updated by Kenice Frank using
Phase II data
8
9
10
Cost-Utility Analyses Of Pharmaceuticals Published,
Phase II (1998-2001)
Study characteristics
All studies
Country of study
United States
Other
Condition
Circulatory system
Neoplasm
Infectious and parasitic
Genitourinary system
Digestive system
Musculoskeletal system
Endocrine, nutritional, and metabolic
Nervous system and sense organs
Mental disorders
Source of study funding
Government
Foundation
Pharmaceutical company
Medical device company
Health care organization
Other
Not disclosed
None
Total
949
Nondrug
489
Drug
460
Drug as percent of
total
48.5%
620
329
348
141
272
188
43.8%
57.1%
205
148
224
91
22
62
81
27
38
114
80
83
82
3
20
55
12
27
91
69
141
9
19
42
26
15
11
44.4%
46.3%
62.9%
9.9%
86.4%
67.7%
32.1%
55.6%
30.0%
375
166
161
161
37
27
349
4
235
134
33
33
36
20
152
1
140
32
128
128
1
7
197
3
37.3%
19.3%
79.5%
79.5%
2.7%
26.0%
56.4%
75.0%
*Some studies had more than one sponsor.
Updated by Kenice Frank using
Phase II data
Drug as % of total
(Worldwide)
% Drug
Drug as % of total
(Other) - Phase II
Drug as % of total
(U.S)- Phase II
% Drug
% Drug
Median Cost-Effectiveness Ratios, By Type Of Intervention
Intervention Type
Number of Ratios
Median Cost Effectiveness
Immunization
Care delivery
Surgical
Pharmaceutical
Screening
Other Public Health
Health education/ counseling
Diagnostic
Device
Medical Procedure
All Interventions
28
56
91
286
123
6
45
88
42
105
870
24,169
21,478
16,338
23,900
25,700
509,721
31,000
39,211
41,950
38,000
28,350
Average acceptable median CE ratio is $50,000/QALY
•incremental cost of more than $50,000/QALY gained = rejected
•incremental cost of less than or equal to $50,000/QALY gained = accepted
Updated by Kenice Frank, using
Phase 2 information
DISCUSSION
Problems in CEA
References

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
Neumann, P. J. (2005). using cost-effectiveness analysis
to improve health care. New York, Oxford Press.
ISPOR (2003). Health care, cost, quality and outcomes.
Lawrenceville, ISPOR.
Neumann, P. J., E. A. Sandberg, et al. (2000). "Are
Pharmaceuticals Cost-Effective? A Review of the
Evidence." Health Affairs 19(2).
Neumann, P. J. (2002). "The Quality and Usefulness of
Pharmacoeconomic Studies for Drug Coverage
Decisions." Pharmaceutical News 9(1): 15-20.
Neumann, P. J. (2004). "Why Don't Americans Use CostEffectiveness Analysis." The American Journal of
Managed Care 10(5): 308-312.
Acknowledgements
•
•
•
•
•
HCRA
Peter Neumann, Sc.D.
Jenny Palmer, M.S.
James Fraumeni, A.B.
Joshua Cohen, Ph.D.
Adi Eldar-Lissai, MBA
HMS
– Joan Reede, M.D., M.PH,
M.S.
– Binta Beard, M.S.
– Xue Fen Su, M.S.
– Jo Cole
AND
National Library of Medicine
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