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Assessing cost-effectiveness – what is an ICER?- Incremental analysis . Usa Chaikledkaew, Ph.D. Outline. How to conduct health economic evaluation results? What is an Incremental cost-effectiveness ratio (ICER)?. Costs. Outcomes. $. What is health economic evaluation?. LYGs QALYs $.

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assessing cost effectiveness what is an icer incremental analysis

Assessing cost-effectiveness – what is an ICER?- Incremental analysis

Usa Chaikledkaew, Ph.D.

outline
Outline
  • How to conduct health economic evaluation results?
  • What is an Incremental cost-effectiveness ratio (ICER)?
what is health economic evaluation

Costs

Outcomes

$

What is health economic evaluation?

LYGs QALYs$

Source: Drummond et al, 2005

Refers to a study that considers both the comparative costs associated with two or more health care interventions, and the comparative clinical effects, measured either in clinical units, health preferences, or monetary benefit

what counts as an economic evaluation
What Counts As An Economic Evaluation?

Source: Drummond et al, 2005

incremental cost effectiveness ratio icer
Incremental cost-effectiveness ratio (ICER)
  • (cost of treatment A) – (cost of treatment B)
  • (clinical success treatment A) – (clinical success treatment B)
  • Or (cost of treatment A) – (cost of treatment B)
  • (LYG A – LYG B)
  • Or (cost of treatment A) – (cost of treatment B)
  • (QALY A – QALY B)

6

  • The cost that on average needs to be sustained to obtain “an additional success”
cost effectiveness threshold or wtp
Cost-effectiveness threshold or WTP
  • Source: (1) Devlin, N. andParkin, D. Health Economics, 2004; 13: 437-452.
  • (2) Towse, A., Devlin, N., Pritchard, C (eds) (2002) Costeffectivenessthresholds: economicandethicalissues.London: Office for Health Economics/King's Fund.
  • (3) Thavorncharoensap et al. Assessing a societal value for a ceiling threshold in Thailand. 2013. Health Intervention and Technology Assessment Program (HITAP), Ministry of Public health, Nonthaburi, Thailand.

UK: < £30,000perQALYgained

USA: < $50,000per QALY gained

Countries in the World: < 3 x GDP per DALY averted

Thailand: < 1.2 GNI per capita per QALY gained (160,000 THB)

pe hee study designs
PE/HEE Study Designs

9

  • Prospective: alongside clinical trial
  • Model based

Combining different sources e.g. a model, based on input from clinical trials, retrospective data, expert opinion.

1.1 Decision trees

1.2 Markov models

how to conduct hee results
How to conductHEE results?

Define the problem

Identify the alternative interventions

Identify and measure cost and outcomes

Value costs and effectiveness

Interpret and present results

example
Example

Source: Thavorn et al. Tobacco Control 2008;17:177–182. doi:10.1136/tc.2007.022368

defin e the p roblem
Definetheproblem
  • Perceptionoftheproblem
    • Specificintervention
    • Specific strategy
    • Specificdrug
    • Specific surgicalprocedure
defin e the p roblem1
Definetheproblem
  • Selectionofobjectives
    • A decisionmustbemadeabouthowcost-effectivenesswillbeevaluated.
slide14

Define theproblem

  • Perspective
    • Patient
    • Provider
    • Third Party Payer
    • Healthy System
    • Public/Government
    • Societal
choice of comparator s
Choice of comparator(s)
  • An intervention should be compared to the comparator (s) which is most likely to be replaced by the intervention in real practice
    • Current practice may be :
      • The most effective clinical practice
      • The most used practice
      • May not always reflect the appropriate care that is recommended according to evidence-based medicine
    • Minimum clinical practice
      • A practice which has the lowest cost and is more effective than a placebo.
      • “doing nothing” or no treatment

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identify the costs
Identify the costs
  • Sources of cost data
    • Hospital (charges, unit cost)
    • Ministry of Public Health website
    • DRG
    • Reimbursement list
    • Standard costing menu

18

quality adjusted life years qalys
Quality Adjusted Life Years (QALYs)

21

  • Integrate mortality, morbidity, and preferences into a comprehensive index number
  • Related to outcomes
    • Life duration
    • Quality of life
  • Allows comparisons of the cost-effectiveness results with other medical interventions
quality adjusted life years qalys1
Quality-Adjusted Life Years (QALYs)

QALYs = number of years lived x utility*

Quality weight that represents HRQOL

Quantity or life

22

  • Patient 1:
    • Utility = 0.9
    • Number of years = 10
    • QALYs = 0.9 x 10 = 9 QALY
  • Patient 2:
    • Utility = 0.5
    • Number of years = 10
    • QALYs = 0.5 x 10 = 5 QALYs

* Utility can be ranged from 0 (worst health state) to 1 (best health state/healthy)

valuing costs and outcomes
Valuing costs and outcomes
  • Model based
    • Decision tree model
    • Markov model
  • Discounting to present value if its been more than one year
  • Uncertainty analysis
interpretation and presentation of results
Interpretation and presentation of results

25

  • (cost of treatment A) – (cost of treatment B)
  • (clinical success treatment A) – (clinical success treatment B)
  • Or (cost of treatment A) – (cost of treatment B)
  • (LYG A – LYG B)
  • Or (cost of treatment A) – (cost of treatment B)
  • (QALY A – QALY B)

25

Incremental cost-effectiveness ratio (ICER)

The cost that on average needs to be sustained to obtain “an additional success”

the need for incremental thinking
The need for incremental thinking
  • Marginal analysis: requires assessment of relative costs and benefits of each marginal addition or reduction in production or consumption

26

slide27

Source: 1975 article from Neuhauser and Levicky: “what do we gain from the sixth stool-guaic” (N Engl J Med) on stool tests do detect colonic cancer

27

interpretation and presentation of results1
Interpretation and presentation of results

28

  • (cost of CPSC) – (cost of treatment of Usual Care)
  • (Life Years of CPSC) – (Life Years of Usual Care)

28

Incremental cost-effectiveness ratio (ICER)

The cost that on average needs to be sustained to obtain “one Life Year gained”

icer of cpsc compared to usual care by age and sex
ICER of CPSC compared to Usual Care by Age and Sex

*Negative ICER due to higher effectiveness and lower costs of CPSC

compared with Usual Care

29

slide30

D

A

C

  • Cost-effectiveness plane

more costly

B

Intervention is more

effective and more costly

Intervention is less

effective and more costly

decrease in health effects

increase in health effects

Intervention is more

effective and less costly

Intervention is less

effective and less costly

less costly

30