Making Decisions in Health Care: Cost-effectiveness and the Value of Evidence

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Making Decisions in Health Care
Cost-effectiveness and the Value of Evidence

• Karl Claxton
• Centre for Health Economics,
• Department of Economics and Related Studies,
• University of York,
• NICE Appraisals Committee

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Overview

• What decisions need to be made?
• Should a technology be adopted?
• How uncertain is this decision?
• Is more evidence needed?
• What can and should NICE do?

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What are the decisions?

• Should a technology be adopted given existing
  information?
• Which clinical strategies are worthwhile?
• For which patient groups?
• Is current evidence sufficient to support use in
  NHS?
• Do we need more evidence?
• What type of evidence is required?
• What additional research should be conducted to
  provide this evidence?

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What are the decisions?

• Should a technology be adopted given existing
  information?
• Which clinical strategies are worthwhile?
• For which patient groups?
• Is current evidence sufficient to support use in
  NHS?
• Do we need more evidence?
• What type of evidence is required?
• What additional research should be conducted to
  provide this evidence?

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Is it worthwhile?
Does it improve health?

• What is an improvement in health?
• Gain in life expectancy
• Improvement in quality of life

Quality adjusted life years (QALYs) A 4.2
QALYs
B 7.7 QALYs Health Gain 3.5 QALYs
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But what about costs?
Cost
10,000 per QALY
QALYs gained
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Is it cost-effective?
Is it worthwhile?
Is the ICER less than the cost-effectiveness
threshold?
10,000 per QALY
If the cost-effectiveness threshold is 20,000
per QALY, B is cost-effective
Is net benefit positive?
Net health benefit QALYs gained QALYs lost
2 1 1 QALY
Net money benefit value of QALYs gained
additional costs
2 x
20,000 20,000
20,000 1 QALY
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What do we need?

• Estimate QALYs gained and costs
• Over time (often patients life time)
• For each alternative
• For each patient group

• Relevant evidence?
• Clinical evidence of effect
• Progression of disease and events
• Quality of life
• Resource use and costs

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Need to Combine evidence
Treatment A Treatment A
QALY Cost




Disease Progression
Treatment B Treatment B
QALY Cost




Costs
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Should a technology be adopted?
Treatment A Treatment A
QALY Cost




10,000 per QALY
Is the ICER less than the cost-effectiveness
threshold?
10,000 per QALY lt 20,000 per QALY, B is
cost-effective
Is net benefit positive?
Treatment B Treatment B
QALY Cost




Net health benefit QALYs gained QALYs lost
2 1 1 QALY
Net money benefit value of QALYs gained
additional costs
2 x 20,000
20,000
20,000 1 QALY
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What are the decisions?

• Should a technology be adopted given existing
  information?
• Which clinical strategies are cost-effective?
• For which patient groups?
• Is current evidence sufficient to support use in
  NHS?
• Do we need more evidence?
• What type of evidence is required?
• What additional research should be conducted to
  provide this evidence?

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How uncertain is a decision?
How things could turn out Net Health Benefit Net Health Benefit Net Health Benefit Best choice
How things could turn out Treatment A Treatment B Treatment C Best choice
Possibility 1 9 12 8 B
Possibility 2 12 10 9 A
Possibility 3 14 17 11 B
Possibility 4 11 10 10 A
Possibility 5 14 16 12 B
Average 12 13 10
Whats the best we can do now?
But we are not always right
Choose B and expect 13 QALYs
Chance that B is the best 3/5 0.6
Chance that A is the best 2/5 0.4
Chance that C is the best 0/5 0
So if we adopt B the probability of error 0.4
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How uncertain is the decision?
Choose A
Choose B
B
A
ICER 25,000 per QALY
C
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Why does uncertainty matter?
How things could turn out Net Health Benefit Net Health Benefit Net Health Benefit Best we could do if we knew What we could lose
How things could turn out Treatment A Treatment B Best choice Best we could do if we knew What we could lose
Possibility 1 9 12 B 12 0
Possibility 2 12 10 A 12 2
Possibility 3 14 17 B 17 0
Possibility 4 11 10 A 11 1
Possibility 5 14 16 B 16 0
Average 12 13 13.6 0.6
Whats the best we can do now?
Could we do better?
Choose B and expect 13 QALYs
If we knew we get 13.6 QALYs
Maximum benefit of more evidence is 0.6 QALYs
But is it worth it?
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Do we need more evidence?
Choose A
Choose B
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Do we need more evidence?
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What type of evidence?
Quality of life
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Is current evidence sufficient?

• Summary
• Uncertainty matters because we might need more
  evidence
• Value of evidence (information)
• How uncertain is the decision?
• Consequences of getting the decision wrong
• Number of patients who could benefit
• Costs of getting more evidence

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Decisions in a joined up world?

• Adopt technologies if we expect them to be cost
  effective based on existing evidence
• But only if we simultaneously address question
• Is the evidence sufficient?
• Demand or commission further research to inform
  this choice in the future

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In a fragmented world?

• Sponsored research?
• No powers to demand research (or disclosure or
  access to ipd)
• A remit for coverage with evidence?
• Could it be enforced?

• Publicly funded research?
• Separation of the remit for adoption and research
  commissioning
• NICE cant control research prioritising and
  commissioning
• Some limited influence
• Prioritising and commissioning not consistent
  with adoption decisions

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What can NICE do?

• Separation of adoption and research decisions
• Adoption decisions without accountability for
  impact on future research
• Research decisions without accountability for
  relevance to adoption decisions
• Dangers
• Adoption decisions undermine evidence base for
  practice
• Incentives and ethics
• Commissioned research does not inform decisions
• Adoption becomes the only policy instrument

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Account for the cost of uncertainty
What we loose if we reject a technology
What we loose if we accept technology
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Clear signals and incentives
Provide more evidence!
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Clear signals and incentives
Reduce price (but dont tell)
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Why only in research?

• Clear signals
• No because it is not a cost-effective use of
  resources
• No because there is currently insufficient
  evidence to justify NHS use
• Spell out the key evidence needed (not the
  research)
• Clear incentives
• If and when additional evidence is made available
  then considered for early review
• Incentives to sponsors (evidence and price)
• Incentives for others stakeholders to lobby for
  publicly funded research
• Clear signals to research commissioners

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What should NICE do?

• Appraisal process
• Already generates much of the analysis and
  information
• Explicit consideration of which uncertainties are
  most important
• Clear consideration of the evidence (not the
  research) needed
• STA makes this the most pressing issue
• Issuing guidance when evidence base is least
  mature
• Piecemeal nature of STA guidance

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Dangers and opportunities?

• Real danger
• Potential damage to evidence base for current and
  future NHS practice
• Costs to the NHS of changing guidance
• Real opportunity
• Address evidence needs of the NHS
• Provide clear signals and incentives