Lonny Erickson, Ph.D Health Technology Assessment Executive Workshop St John s, NF Lbr., October 28, 2005

1. Lonny Erickson, Ph.D Health Technology Assessment Executive Workshop St John�s, NF & Lbr., October 28, 2005

2. Between Scylla & Charbydis..

3. Content of presentation Definition of economic evaluation/ analysis 5 types of economic analysis (definitions & associated jargon) Limitations, potential traps and biases in these analyses and how to deal with them Role of economic evaluation in priority setting

4. Definition < The comparative analysis of alternative courses of action in terms of both their costs and their benefits. > Drummond et al., 1996

5. 5 Types of Economic Evaluations Cost Minimization Analysis Cost-Effectiveness Analysis Cost-Utility Analysis(QALYs) Cost-Benefit Analysis Cost-Consequence Analysis

6. 1 Cost-minimization Analysis

7. 1. Cost Minimization Analysis What is the least costly way to get a given health outcome ? Rare (because effectiveness, utility and safety of interventions must be identical)

8. Cost-Minimization Analysis Examples: Screening of hereditary adenomatous polyps: genetic versus clincal test (Chikhaoui et al., 2002) Urea breath test for h.pylori: radioactive vs. non-radioactive versions Screening for lead poisoning in children (Blotzer et al., 1994)

9. Cost Minimization Analysis Potential local examples: Vaccine delivery by nurse practitioners vs. MDs Regional delivery of specialized services: lithotripsy (ultrasound) for removal of kidney stones angioplasty

10. 2 Cost-effectiveness Analysis (CEA)

11. 2. Cost-Effectiveness Analysis Cost $ / <natural unit> What does it cost to get a given health outcome: To gain a year of life To prevent a coronary bypass To prevent a case of meningitis etc.

12. Cost Effectiveness Analysis Most common type of analysis Examples: Drug-eluting stents: prevention of revascularization interventions (angioplasty & CABG) =+/- 20K$ Screening for breast cancer 50-69: $5700/ life year gained (LYG) Screening for prostate cancer (CETS) or down syndrome (AETMIS, 2004) Prevention of vaccine-preventable diseases, STDs, HIV and AIDS Limitation : one indicator at a time in analysis

13. 3 Cost-utility Analysis (CUA)

14. 3.Cost Utility Analysis Cost per quality-adjusted life year gained (QALY)

15. Quality-adjusted life years (QALYs) Combine quality of a given health status and duration of time in this state Allows to account for mortality and morbidity Value given to various states from 0 (worst) to 1 (<healthy>)

16. QALY Example: prevention of Meningococcal Disease Prevention of 100 cases LYG due to avoided mortality = # of avoided cases x years of life expected x 1

17. QALY Example: prevention of Meningococcal Disease Prevention of 100 cases QALYG due to avoided mortality & morbidity = # of avoided cases x years of life expected x 1 + # of avoided cases x years of life expected x reduction of value of state (0-1)

18. Limitations of CUA How do you value health states (0-1) ? Discounting of future benefits Ethical problems: i.e: Is the life of a handicapped person really worth less than that of a healthy person? (Oregon experience- ethical problems) But.. Allows some comparison across different domains of health care

19. Examples of cost/QALY Vaccination pneumonia 65+ cost saving GP advice to stop smoking $500 Kidney transplant $ 6 000 Coronary stent vs angioplasty $ 28 000 Lung transplantation $ 125 000 Beta interferon for multiple sclerosis $ 700 000 Source: Harvard Cost U database

20. Intangibles

21. 4 Cost-benefit Analysis (CBA)

22. 4. Cost Benefit Analysis Theoretically the most complete method, but in practice the most difficult and most criticized. Examples: Pneumococcal vaccination (INSPQ, 2003) Reduction of smoking Reduction of HIV and AIDS Highway security programs

23. Cost Benefit Analysis Advantage: more global perspective Limitations Focus on gaining productivity (human capital method) Ethical problems with value of a human life Requirements for data Conflict: economic vs. public health perspective ( i.e.: smoking & death at retirement)

24. 5 Cost-consequence Analysis

25. Cost Consequence Analysis Given the numerous limitations of CUA and CBA, just present a table comparing the various outcomes & let the decision-maker weigh the options Coast, BMJ, 2004

26. Example: Home care vs. hospitalization

27. Cost Consequence Analysis + : global perspective Decision-maker evaluates what is important Avoids inadequate hypotheses - : burden of analysis for hurried decision-makers

28. Economic Evaluations Limitations, risks and how to deal with them

30. Economic Evaluations Lack of clarity

32. N.B. Some arbritrary values for <cost-effective> Cost-effective compared to what? Cost-effective ? cost-saving Health care generally costs money

33. Economic Evaluations Lack of transparency

34. Black Box Economic Studies Economic Model

35. Black Box Economic Studies Economic Model

36. Black Box Economic Studies Economic Model

37. Black Box Economic Studies Economic Model

38. Solutions Transparency: table with ingredients for model, clinical pathways explicit Sensitivity analysis: impact of variation of input parameters on results

39. Limitations of Economic Evaluation Efficacy vs. effectiveness Is but one of many factors social, political, ethical, feasibility, human resources, context ..etc� We are not logical i.e.: prevention vs. cure Routine vs. <heroic interventions> Vaccines vs. saving premature infants

40. Checklist for evaluating Economic Evaluation Studies Was the question properly asked? Were alternative programs adequately described? Has the program�s effectiveness been validated? Were all important & relevant costs & effects identified? Were credible measures for cost and effectiveness selected? Was an appropriate analysis carried out? Were comparisons between programs properly adjusted for time? Were the biases and direction of biases identified?

41. Economic Evaluations Subjectivity of presentation

43. Critical Questions to ask Who paid for the study? What actually went into the study? How does the context of the study resemble and differ from your context? What is driving the model? What is likely to change Uncertainty� sensitivity of results to input parameters in model

44. Economic Evaluations Role in priority setting

45. The role of Economic Evaluations in Priority setting Not the only factor Timeliness, relevance to local context Quality and completeness vs. clarity and brevity for a busy decision-maker Importance of informal communication channels with experts