Cost or Charge? Depends on the analysis and the perspective! Societal perspective demands costs Provider might be interested in both Charges might be more relevant from payor perspective Cost = money needed to provide service = expenses Charges =actual amount paid by payor = revenue = costs profit/loss
Cost or Charge? Costing study “Micro-cost” all used resources “as they go”: x unites · $ unit price = $ sub-total Tedious! Might not be generalizable (e.g., n=1 hospital) Claims studies Analyze billing records Medicare charges (~20% under indemnity plan rates) accepted proxy for real costs
Efficacy or Effectiveness? Evidence-based medicine frameworks, e.g. AHA Classification of Recommendations Class I: Conditions for which there is evidence and/or general agreement that a given procedure or treatment is useful and effective. Class II: Conditions for which there is conflicting evidence and/or a divergence of opinion about the usefulness/efficacy of a procedure or treatment. Class III: Conditions for which there is evidence and/or general agreement that the procedure/treatment is not useful/effective, and in some cases may be harmful. Levels of evidence Level of Evidence A: Data derived from multiple randomized clinical trials Level of Evidence B: Data derived from a single randomized trial, or non-randomized studies Level of Evidence C: Consensus opinion of experts Source: Circulation/AHA
Efficacy or Effectiveness? Many health outcomes, some disease-specific, some general Mortality/survival Progression-free survival Time to cure Gold-standard study type in medicine, RCT, comparable w/ real world outcomes? Heterogeneity of patients What about patient-reported outcomes?
Efficacy or Effectiveness? Patient-reported outcomes! Health-related Quality of life as measured by Surveys (SF-36, EQ-5D…) Standard gamble Time trade-off Visual analogue scale Summarized as utility 1 = best HRQoL possible 0 = death
Efficacy or Effectiveness? Adjustment of life-time by utility, representing health-related quality of life Unit: QALY (quality-adjusted life year) Source: Drummond 1997
Efficacy or Effectiveness? Source: Adapted from Willich 2006
What kind of study? Cost-minimization analysis Looks just at costs Does not take (health) outcomes into account Cost-benefit analysis Widely used in public policy (Health) outcomes monetarized Controversial to attach $$$ to life saved, life year gained etc.
What kind of study? Cost-effectiveness analysis (CEA) Introduced to medicine by Milton Weinstein (HSPH) in the late 1970s Ratio of incremental costs over incremental effectiveness Effectiveness can be expressed in all kinds of ways, eg life years gained , ulcers healed Cost-utility analysis Special case of CEA: effectiveness expressed in quality-adjusted life years (QALYs) gained
27 Incremental Cost-Effectiveness Ratio $ Strategy A - $ Strategy B ICER = Health benefits Strategy A - Health benefits Strategy B eg, $ per QALY gained
What kind of study? Economic analysis “along the trial” Decision-analytic modeling
Why use decision-analytic (DA) models for health economic evaluation? “Juggle” or combine Short-term clinical results (eg, RCTs) with long-term observational studies Diagnostics with treatments Costs Duration (LYs) and quality of life (QALYs) Transfer to different Patient cohort Epidemiology Baseline characteristics Compliance HC provider Standard of care Payor Coverage Country Extrapolate to long-term (ideally life time)
How do DA models for health economic evaluation look like? Mathematical and statistical models E.g., regression models, “area under the curve” Decision trees Markov models Modifications incl. “memory” Markov chains and decision processes Sequential decisions Influence diagrams Causal inference Compartment models System dynamics Discrete event simulations Flexible, growing popularity Agent-based models Communicable diseases Great “taxonomy” and overview in Stahl JE. Pharmacoeconomics 2008; 26 (2): 131-148 30
What is a good way to communicate results? High value Acceptable value Low value Cost-saving $0 $50K $100K $150K $200K $300K Cost per quality-adjusted life year (QALY) Clinical Effectiveness Superior (A) Incremental (B) Comparable (C) Unproven/Potential (U/P) Inadequate (I) Cost-effectiveness
What is a good way to communicate results? Clinical Effectiveness Cost-effectiveness Integrated Evidence Rating Matrix™ developed by Institute for Clinical and Economic Review
Thank you! Feel free to get in touch via email: email@example.com I blog at http://value-strategies.blogspot.com I’m new to the Twitterverse: @ben_geisler