The Panel on Cost-Effectiveness in Health and Medicine

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The Panel on Cost-Effectiveness in Health and
Medicine

• Marthe Gold
• City University of London
• 30 October, 2003

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U.S. Department of Health and Human Services
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ContextFederal 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

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ContextFederal 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

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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
• Oregons priority list a failure due to technical
  problems in CEA. Eddy, D. 1991

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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

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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

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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

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PCEHMReference 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.

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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

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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

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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

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PCEHM RecommendationsOutcomes

• 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

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HALYs for 5 Conditions using HALex, QWB, and DALY
weights
Gold MR and P Muennig. Med Care, 2002
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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

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PCEHM Recommendations Comparators

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

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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

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Seven years pass.Whats 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

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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
  regulationsOMBs final guidance will also
  promote CEAits 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)

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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?

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

• 2000 OECD estimate

OECD Data
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U.S. Health Expenditures, 1965-2000Trillions of
Dollars
Source National Expenditure Accounts