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

3. Economic Evaluation In Health Care “…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.” Drummond 2005

4. Economic Evaluation and RE-AIM REAIMREAIM 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 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) 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 Typical decision maker perspectives Patient Provider PayorSociety

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=(B N -C N ) – (B S -C S ) where: B=benefit of the program C=cost of the program N=proposed program S=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 Proposed smoking cessation program Reduce smoking among economically disadvantaged people Reduce smoking among economically disadvantaged people Four sources of referral Four sources of referral United Way 211Mental health clinic Food stamps programHousing authority Outcomes of interest Outcomes of interest Referral to QuitLine Referral to QuitLine Abstinent at 6 and 12 months 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 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 Organizational leadership Budget impact on organization Budget impact on organization State health agency leadership State health agency leadership Budget impact (i.e., cost-benefit) Budget impact (i.e., cost-benefit) Includes Medicaid program Includes Medicaid program Cost-effectiveness Cost-effectiveness Assistance in making resource allocation decisions Assistance in making resource allocation decisions

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

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= R C /(Q6 N – Q6 R ) 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 Players are not always rational Economic benefit is but one element of the decision to be made. Economic benefit is but one element of the decision to be made. Classicists would argue that is because the benefit is not properly characterized Classicists would argue that is because the benefit is not properly characterized We have considered only one stakeholder We have considered only one stakeholder Implementation and dissemination studies typically take a broader views of barriers Implementation and dissemination studies typically take a broader views of barriers

17. Conclusion Begin by identifying the policy maker you are trying to influence 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 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 Involve people with economic evaluation experience in your design team early in the process

18. Where we are….