The Role of Perspective in Economic Evaluation for Cancer Prevention

1. The Role of Perspective in Economic Evaluation for Cancer Prevention Steven Kymes, Ph.D. Research Associate Professor of Ophthalmology And Visual Sciences Center for Economic Evaluation in Medicine

2. Disclosure: Steven Kymes, Ph.D. • Research Support / Grants Pfizer, Genzyme Genentech • Consulting / Employment Pfizer, Allergan, Genzyme, • Genentech, TreeAge

3. “…deals with both the inputs and outputs… ...costs and consequences of (health) activities… ...seeks to identify and to make explicit one set of criteria which may be useful in deciding among different uses for scarce resources.” Economic Evaluation In Health Care Drummond 2005

4. Economic Evaluation and RE-AIM R E A I M Where economic evaluation fits into the paradigm

5. The Perspective of the Decision Maker • Each economic evaluation study must begin by considering the policy being influenced and the perspective of the decision maker • The “decision maker” is the person or institution who can affect the policy change (i.e., decides on Adoption and Implementation) • Typical decision maker perspectives Patient Provider Payor Society

6. The goal in decision analysis is to maximize the decision maker’s desired outcome*(*economic evaluation itself is radically agnostic concerning the desired outcome)

7. When we conduct economic evaluation, the desired outcome to be maximized is net benefit:Net Benefit=(BN-CN) – (BS-CS)where: B=benefit of the programC=cost of the programN=proposed programS=status quo program

8. We of course make the strong assumption that the decision maker is rational player acting on behalf of the firm, and that all costs and benefits can be quantified.

9. …but who is the decision maker? • Proposed smoking cessation program • Reduce smoking among economically disadvantaged people • Four sources of referral United Way 211 Mental health clinic Food stamps program Housing authority • Outcomes of interest • Referral to QuitLine • Abstinent at 6 and 12 months

10. Smoking Cessation Intervention Original hypothesis being tested: • One of the programs will have a statistically higher rate of referrals (or quitters) than the others Who is the decision maker? What is the result of this study telling the decision maker?

11. Decision Makers Proposed • Organizational leadership • Budget impact on organization • State health agency leadership • Budget impact (i.e., cost-benefit) • Includes Medicaid program • Cost-effectiveness • Assistance in making resource allocation decisions

12. Outcome measure Where CN is the lifetime cost of caring for smokers referred from the new program CR is the lifetime cost of caring for smokers without the program RC is the cost of the program as implemented Net Benefit of Program = (CR – CN) – RC

13. From the perspective of our hypothetical decision maker, the result is the net savings to the healthcare system as a result of implementing the program

14. …note also that the result is unambiguous, a positive result (if it is found) indicates savings…however, uncertainty in the estimate must be addressed in transparent manner

15. Incremental Cost-effectiveness Ratio (ICER) ICER= RC/(Q6N – Q6R) Literal measure of “bang for the buck” and is useful for the decision maker seeking to determine the most effective allocation of resources

16. Limitations • Players are not always rational • Economic benefit is but one element of the decision to be made. • Classicists would argue that is because the benefit is not properly characterized • We have considered only one stakeholder • Implementation and dissemination studies typically take a broader views of barriers

17. Conclusion • Begin by identifying the policy maker you are trying to influence • Carefully structure your evaluation strategy to identify outcome measures that are relevant to the policy makers • Involve people with economic evaluation experience in your design team early in the process

18. Where we are….