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Cost-Effectiveness Exercise

Cost-Effectiveness Exercise. There are 5 mutually exclusive programmes to fund. Programme A is currently funded. What programme should be chosen?. Programme Cost Effect A 460 16.4 B 860 17.1 C 1 000 17.9 D 1 260 17.7 E 1 830 18.3. Can we eliminate any programme?.

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Cost-Effectiveness Exercise

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  1. Cost-EffectivenessExercise

  2. There are 5 mutually exclusive programmes to fund. Programme A is currently funded. What programme should be chosen? Programme Cost Effect A 460 16.4 B 860 17.1 C 1 000 17.9 D 1 260 17.7 E 1 830 18.3

  3. Can we eliminate any programme? Programme Cost Effect A 460 16.4 B 860 17.1 C 1 000 17.9 D 1 260 17.7 E 1 830 18.3

  4. 1. Order the programmes by cost. By strict dominance, eliminate.... Programme Cost Effect A 460 16.4 B 860 17.1 C 1 000 17.9 D 1 260 17.7 E 1 830 18.3 Strict dominance.

  5. …What do we do next? Programme Cost Effect A 460 16.4 B 860 17.1 C 1 000 17.9 D 1 260 17.7 E 1 830 18.3

  6. 2. Calculate incremental CE ratios for remaining alternatives. Programme Cost Effect C/E Ratio A 460 16.4 28 B 860 17.1 571 C 1 000 17.9 175 E 1 830 18.3 2 075 For A the incremental ratio is equal to the cost of A less 0 divided by 16,4 less 0 (i.e. doing nothing). Thus it is equal to about € 28.

  7. …What do we do next? Programme Cost Effect C/E Ratio A 460 16.4 28 B 860 17.1 571 C 1 000 17.9 175 E 1 830 18.3 2 075

  8. 3. By extended dominance eliminate programme ……..; it has a higher marginal CE ratio than the programme below it. Programme Cost Effect C/E Ratio A 460 16.4 28 B 860 17.1 571 C 1 000 17.9 175 E 1 830 18.3 2 075 Extended dominance.

  9. A linear combination of A and C strictly dominates B. Effect C 17.9 B 17.1 A 16.4 Cost 460 860 1 000

  10. …What do we do next? Programme Cost Effect C/E Ratio A 460 16.4 28 B 860 17.1 571 C 1 000 17.9 175 E 1 830 18.3 2 075

  11. 4. Recalculate incremental CE ratios. Programme Cost Effect C/E Ratio A 460 16.4 28 C 1 000 17.9 360 E 1 830 18.3 2 075 Decision rule?

  12. Fixed budget as decision rule. Programme Cost Effect C/E Ratio A 460 16.4 28 C 1 000 17.9 360 E 1 830 18.3 2 075 • No ranking list! • Stay with A if the budget is € 460. • If budget > € 460, start switching patients to C. • If budget is > € 1 000, start switching patients from C to E.

  13. Price/QALY as decision rule. Programme Cost Effect C/E Ratio A 460 16.4 28 C 1 000 17.9 360 E 1 830 18.3 2 075 • If the WTP/QALY < € 28, no option is implemented. • If 28 < WTP/QALY < 360, A is implemented. • If 360 < WTP/QALY < 2 075, C is implemented. • If WTP/QALY > 2075, E is implemented.

  14. Both independent (IND) and mutually exclusive (ME) programmes. Programme Incremental C/E ratio ME 1 5 000 IND 1 10 000 ME 2 15 000 IND 2 20 000 • Budget = 5 000, implement ME 1. • Budget > 5 000, start to implement IND 1. • Budget > 15 000, start to switch from ME 1 to ME 2. • Budget > 25 000, start to implement IND 2.

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