Presentation on theme: "Health Economics for Prescribers"— Presentation transcript:
1 Health Economics for Prescribers Richard Smith (MED)David Wright (CAP)1
2 Stages in economic evaluation Deciding upon study questionViewpoint taken.Alternatives appraised.Assessment of costs and benefitsIdentification of relevant C&B.Measurement of C&B.Valuation of C (&B).Adjustment for timing.Making a decision.Adjustment for uncertainty.Lecture 2Lectures 3 & 4Lecture 3Lecture 593
3 ‘Drummond’ checklistWas a well-defined question posed in answerable form?Was a comprehensive description of alternatives given?Was there evidence that effectiveness had been established?Were all the important and relevant costs and consequences for each alternative identified?Were costs and consequences measured accurately/appropriately?Were costs and consequences valued credibly?Were costs and consequences adjusted for differential timing?Was an incremental analysis performed?Was allowance made for uncertainty?Did presentation/discussion of results include all issues of concern?93
4 Lecture 5: Pharmaco-economic evaluation – analysis and results Use of modelsDecision-treeMarkov (state transition) modelUncertainty (sensitivity analysis) [checklist 9]Presentation & discussion of results [checklist 10]IndicesWider discussion – limitations, other studies, other viewpoints, generalizability, feasibility, etcUsing economic evaluationQALY ‘league tables’NICEPharmaceutical companies and pharmacists93
5 1. Use of models What is a ‘model’? Why use a model? A simplification of reality to capture the ‘essence’ of the problem with the minimum level of complexityWhy use a model?To synthesise data from multiple sourcesTo handle uncertainty & assumptions, e.g.To extrapolate from intermediate to final outcomesTo predict outcomes that are unknown or are unethical to collectHandle ambiguity of clinical data and variations in interpretation93
6 Types of models Descriptive Prescriptive Deterministic Stochastic describesPrescriptivesuggestsDeterministiccertaintyStochasticprobability93
8 Example stochastic, prescriptive model (decision-tree) LeavesDecision nodeBranchesChance node93
9 Analysis of decision-tree Decision tree is averaged out to get the expected value (EV) for each strategy (from decision node)EV is the sum of products of the estimates of probability of events and their outcomes (payoff)EV = 0.5x x0 = £5093
10 Example of decision tree for cancer screening 93
14 Markov Modelling Used when disease progresses over time Patients grouped into a finite number of (Markov) statesTime progresses in equal increments (Markov cycles)All events or progression are represented as transitions from one state to another with a certain probabilityTransitions (probability of improvement or deterioration) calculated from epidemiological and/or clinical dataSpending one cycle in a given state is associated with a certain cost and a defined outcome93
15 States (levels of disability) Example of Markov modelStates (levels of disability)ABCDE1Cycles (years)234This is a Markov model, which reflects the change in disease (levels of disability) over time (years).A could be no disability, B mild, C moderate, D severe and E death.From A a state of no disability disease could progress either to mild, moderate or severe. If it became mild then treatment could either be successful at reversing this (move back to state A) or simply slow down the progression (stay in B) or it might not work and progress to moderate disability. Ditto again, but this time if move into death then stay there.
16 Important points about models StructureType of model (eg Decision-tree or Markov)Elements of model (eg nodes, branches, states)Sources of dataProbabilityValues (cost and outcomes)Conduct of sensitivity analysis to assess impact of these on the final result93
17 2. Handling uncertainty Sensitivity analysis Systematically examining the influence of uncertainties in the variables and assumptions employed on the estimated resultsE.g. change in a unit cost value of 10% lead to change in result of >10% (sensitive) or <10% (insensitive)?Further analysis might includeAlternative (sub)perspectivesUse of intermediate outcome measuresSubgroup analysis93
19 Process of sensitivity analysis Identifying the (uncertain) variablesAll variables in the analysis are potential candidatesGive reasons for exclusion rather than inclusionSpecifying the plausible range over which they should varyReviewing the literatureConsulting expert opinionUsing a specified confidence interval around the meanRecalculating results based on combinations of the best guesses, most and least conservative, usually based on…One-way analysis (each variable separately)Multi-way analysis (number of variables together)Extreme scenario analysis (all variables in extreme combinations)Threshold analysis (amount of variance needed to achieve specified result)93
20 3. Presentation and discussion of results What do the decision makers want to know?Is there a health gain?Is there a cost difference?What is the relationship between cost and outcome differences?Is the cost justified by the benefit (CEA/CUA)?Is there a net gain (CBA)?Is this result robust or sensitive to parameters?93
21 Overall index depends on type of economic evaluation Type of AnalysisResultConsequencesCostsCost MinimisationCost BenefitCost UtilityCost EffectivenessMoneySingle or multiple effects not necessarily common. Valued as “utility” eg. QALYDifferent magnitude of a common measure eg., LY’s gained, blood pressure reduction.Least cost alternative.Identical in all respects.Cost per unit of consequence eg. cost per LY gained.Cost per unit of consequence eg. cost per QALY.As for CUA but valued in money.Net £cost: benefit ratio.93
22 Discussion – placing results in context DescriptionDescribe and interpret the meaning of the resultsExplicitly discuss any possible bias and results of sensitivity analysisLimitationsGuide to interpreting and generalizing the resultsNeed to compensate for the study’s shortcomingsRelevance of the studyPlace the results into the decision context (see study question)Compare with other studiesWithin the same disease area or across interventionsMacro implicationsWhat effect would the intervention have on the health of the larger population?What are the resource implications, how much would it cost to provide it for everyone under the NHS?93
23 Be wary!Any conclusion that a treatment is “cost-effective” should be viewed criticallyStrictly true only if it dominates the comparatorIf the ICER is estimated, so intervention is more effective and more costly, then who is the author to say that society is willing to pay that amount for the outcome?Although can say, for example, that the intervention is cost effective when compared to other accepted interventions93
24 4. Using economic evaluations QALY ‘league tables’NICEPharmaceutical companies and pharmacists93
25 QALY League TablesHealth care interventions can be compared in terms of their relative cost-effectiveness if comparable outcomes are employed (QALYs, life years)This allows analysts to place their findings in a broader context of cost-effectivenessThis allows for decisions to be made about allocating resources between competing interventions (ranking of results)93
26 Example league table for UK 5 ‘hipQALYs’or1 ‘heartQALY’?Threshold93
27 Objections to their use Differences in methodologyChoice of comparatorChoice of discount rateMethod of estimating utility valuesRange of costs includedApplication of decision rules in practiceIssue of divisibility or returns to scaleWhat ‘threshold’ should be used?93
28 NICE (National Institute for Health and Clinical Effectiveness) Intended to provide “authoritative, robust and reliable guidance on current best practice”Remit to produce national guidance onIndividual technologies, appraisalManagement of specific conditions, clinical guidanceClinical auditCriteria for making decisionsclinical prioritiesclinical need“broad balance of benefits and costs”guidance on resources likely to be available93
29 NICE mess Does not have implementation budget Issues of transparency Lobbying by patient and provider groupsToo NICE to say no?Doesn’t advise on what to disinvest inIssues of “mandatory” vs. “advisory” guidanceRefusal to rank technologies in any form of hierarchy, and thus refusal to admit explicitly a cost per QALY threshold (although recently changed) but implicitly…Once we have identified what the most appropriate outcome is we need to see about measuring it.Before doing that want to highlight the general ways that this data is collected. This is similar to how we would collect cost data. As with cost data or resource use each has its merits.
30 Value of a QALY It appears NICE believe a QALY has a value of ~£30,000 But is this the value the public place on a QALY?Recall one of the principles of welfare economicsrelevant source of monetary value of health outcomes is individual WTPSo, what is the public’s willingness to pay for a QALY?Current ‘cutting edge’ research in economic evaluation (team from UEA, Newcastle & Aberdeen)There are two possible outcomes which place a value on health.One is to elicit a preference for a health state which is then used to weight time in that health state. The most common way to do this is the QALY, although we will discuss others.Alternatively you can place a monetary value on health and then compare money gained to money spent. This results in a cost benefit analysis and we will discuss this in full next week.
31 Pharmaceutical companies and pharmacists Think about this for the next workshop when looking at checklist item 10 on “issues of concern to users”……you will be users of this information so what issues are relevant to you?No matter what measure you use the important thing is what you do with them, use them to adjust the quantity of life in a health state to give an outcome measure which represents both quality and quantity.
32 Final thoughts ...Practical problems when using results of an evaluationThe way in which a health care system operatesThe fact that there exists political rationing criteria over and above that of ‘efficiency’ – need to take account of thisEconomic evaluation is an aid to the decision making process – it does not make decisionsIt might not provide the perfect basis for decision makingBut the question is: is it better than anything else“Don’t let the pursuit of the perfect lead you to dismiss that which is merely very good” Alan WilliamsNo matter what measure you use the important thing is what you do with them, use them to adjust the quantity of life in a health state to give an outcome measure which represents both quality and quantity.