The Panel on Cost-Effectiveness in Health and Medicine

Marthe Gold

City University of London

30 October, 2003

U.S. Department of Health and Human Services

ACFHealth CareFinancing Administration

IHSFDAHRSASAMHSAAHRQ

NCHS

CDCNIH

Public Health Service

ASPE

Health and Human Services

Context:Federal Initiatives

Office of Technology Assessment (Congress)– Cost-effectiveness analyses of preventive services

Health Care Financing Administration– Oregon Medicaid Waiver – Coverage decision regs

Agency for Health Care Policy and Research– Guidelines– Technology assessments

Context:Federal Initiatives

National Institutes of Health– Clinical trials

Centers for Disease Control and Prevention– CEAs of preventive strategies – State requests for local decision making

Food and Drug Administration– Regulatory review of drug marketing claims

Disarray in the Field…..

Cost-effectiveness methods incomplete/non standardized. Udvarhelyi S, et al, 1992

Breast cancer screening ratios range from cost saving to $84k/YLS. Brown ML and L Fintor, 1993

Oregon’s priority list a failure due to technical problems in CEA. Eddy, D. 1991

Source of Problems

Flaws in methods– Perspective not identified – Inappropriate choice of comparator – Inadequate or non-generalizable cost/effectiveness

data – No “discounting” – Uncertainty unaccounted for

Source of Problems

Differences in investigator approach– Perspective differs– Non-comparable outcome measures– Differences in how future costs of health care

unrelated to the intervention are handled

The Panel On Cost-Effectiveness in Health and Medicine: Charge

Assess the current practice of CEA

Provide recommendations to improve quality, comparability and utility of studies in the service of decision making

Identify unresolved methodological issues

PCEHM:Reference Case Analysis

“Base case” analysis for analyses designed to inform resource allocation decisions

Defined by a standard set of methods and assumptions

Recommendations for methods drawn from consistent and theoretically grounded series of considerations

A CEA may be valid without following RC methodology.

Recommendation Rationales

Theoretical– theoretical considerations drawn from welfare

economics and expected utility theory

Ethical– ethical considerations justifying deviation from

strictly interpreted welfare economic theory

Accounting consistency– logical consistency/avoidance of double counts

Recommendation Rationales

Pragmatic– best empirical evidence and consideration of the

practical limitations of current techniques

Conventional– conformance to, or establishment of, a convention

to produce standardized procedure

User needs– responds to particular needs of decision makers

PCEHM Recommendation: Perspective

The Reference Case should be based on the societal perspective – Everything counts - (costs and benefits)– “The public interest” viewed ex ante – Provides a benchmark against which to assess

results from other perspectives

PCEHM Recommendations:Outcomes

Morbidity and mortality consequences incorporated into a single measure using QALYs

Preferences (values) should be drawn from a representative sample of the community – Consistent with the societal perspective

-

50,000

100,000

150,000

200,000

250,000

300,000

Stroke Diabetes COPD PUD Asthma

YHL

QWB

DALY

HALYs for 5 Conditions using HALex, QWB, and DALY weights

Gold MR and P Muennig. Med Care, 2002

PCEHM Recommendations: Costs

Costs reflected in the numerator should include: health care services; time patients expend receiving care; care giving; other related associated with the illness; non-health impacts of the intervention

Include or exclude costs associated with diseases other than those affected in added years of life

PCEHM Recommendations: Comparators

The reference case should compare the health intervention of interest to existing practice (status quo)

Cost-effectiveness in decision making for resource allocation

CEA not an “answer” to a resource allocation decision

Other values must enter in, including:– Fairness in distribution of resources, priority to

disadvantaged (e.g., sick, poor, aged)

These values can not easily be embedded in the CEA methodology

Decisions must represent the convergence of many views

Seven years pass….What’s new?

In the medical literature, evidence that quality of CEA studies has improved

AHRQ and CDC include information about CE in their assessments of community-based and clinical preventive services

No impact on Congressional decision-making No (explicit) change in the policies of CMS

On the horizon….Office of Management and Budget

“BCA is an evolving discipline, but one which the administration believes provides important insight into the design of smart regulations……OMB’s final guidance will also promote CEA…it’s advantage is it does not require analysts to determine the monetary cost of life-saving: it reserves that judgment for accountable policy officials.”

(Federal Register, March 2003)

On the horizon….?Centers for Medicare and Medicaid

Huge growth in program costs Huge budget deficit Addition of pharmaceutical benefits How will the U.S. pay for this?

Health Care Spending per CapitaAdjusted for Cost-of-Living Differences, 2001

$4,887

$2,808 $2,792 $2,626$2,350

$2,561

$1,984 $2,191 $1,992$1,710

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

United

Sta

tes

Ger

man

y

Canad

a

Nethe

rland

s

Austra

lia*

Franc

e

Japa

n*

OECD M

edian

United

King

dom

New Z

ealan

d

•2000 OECD estimateOECD Data

U.S. Health Expenditures, 1965-2000Trillions of Dollars

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

Source: National Expenditure Accounts