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COST-EFFECTIVENESS ANALYSIS

and

SAS

Wanrudee Isaranuwatchai, PhD

SAS Health User Group 11 April 2014

Disclaimer

© Wanrudee Isaranuwatchai, PhD

These views are my view and not the view of the people or place with whom I work.

Overall Objectives

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Economic evaluation 101

CEA and SAS in action

Outline

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Why do economic evaluation?

What is economic evaluation?

How to estimate cost-effectiveness?

How to estimate cost-effectiveness in SAS?

Health Care: Medications, Devices, …

Factors to Consider

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Cost

What you will get (e.g., outcome, effect)

Budget

What is Economics?

Objective and Constraints

Objective Maximize profit, patients treated, quality of care, etc.

Constraints Limited money, time, people, space, machines, etc.

Scarcity and Tradeoffs

Health (41%) Education and social services (59%)

Source: Ontario Ministry of Finance

2011-2012 Program Expense

Scarcity and Tradeoffs

Health (41%) Education and social services (59%)

Source: Ontario Ministry of Finance

2011-2012 Program Expense

Health (70%) Education and social services (30%)

Why Do Economic Evaluation?

© Wanrudee Isaranuwatchai, PhD

Health care resources = scarce

Therefore,

Choices must be made.

Old School Methods

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What we did last time

Gut feelings

Educated guesses

Outline

© Wanrudee Isaranuwatchai, PhD

Why do economic evaluation?

What is economic evaluation?

How to estimate cost-effectiveness?

How to estimate cost-effectiveness in SAS?

Economic Evaluation = a Tool

© Wanrudee Isaranuwatchai, PhD

A technique that objectively compares 2 or more treatments

Considers both cost and effect simultaneously

Different Types of Economic Evaluation

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Cost Benefit Analysis (CBA)

Cost Utility Analysis (CUA)

Cost Effectiveness Analysis (CEA)

Cost Minimization Analysis (CMA)

Budget Impact Analysis

Different Types of Economic Evaluation

© Wanrudee Isaranuwatchai, PhD

Cost Benefit Analysis (CBA)

Cost Utility Analysis (CUA)

Cost Effectiveness Analysis (CEA)

Cost Minimization Analysis (CMA)

Different Types of Economic Evaluation

© Wanrudee Isaranuwatchai, PhD

Cost Benefit Analysis (CBA)

Cost Utility Analysis (CUA)

Cost Effectiveness Analysis (CEA)

Cost Minimization Analysis (CMA)

The Importance of Effect (Outcome)

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CBA Outcomes in $$$

CUA QALY (quality-adjusted life years), Q and q

CEA Natural unit (e.g., number of falls, pain level)

CMA 0 (no outcome)

Perspective

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Perspectives in Health Care

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Patients

Society

Hospital

Government

Industry

Caregivers

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• Cost • Effect • Perspective

Statistically, what economic evaluation is about?

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NOT about hypothesis testing

Creating a cost-effectiveness estimate

Characterizing the uncertainty of the estimate

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Estimates Incremental Cost-Effectiveness Ratio (ICER)

Incremental Net Benefit (INB)

Uncertainty Cost-Effectiveness Acceptability Curve

Fieller’s Theorem Confidence Interval

Confidence Ellipse

Statistically, what economic evaluation is about?

Outline

© Wanrudee Isaranuwatchai, PhD

Why do economic evaluation?

What is economic evaluation?

How to estimate cost-effectiveness?

How to estimate cost-effectiveness in SAS?

Cost-Effectiveness Estimate - ICER

© Wanrudee Isaranuwatchai, PhD

Incremental Cost-Effectiveness Ratio (ICER) One approach

To compare COST and EFFECT between 2 groups

ICER = EXTRA cost for 1 more unit of outcome (effect)

∆C / ∆E

𝐼𝐶𝐸𝑅 =𝐶𝑇𝑋

− 𝐶𝑈𝐶

𝐸𝑇𝑋 − 𝐸𝑈𝐶

WTP Willingness-to-pay

ICER

+ Value

General Decision Rules

What you want > your budget SAY NO

What you want < your budget SAY YES or BUY

© Wanrudee Isaranuwatchai, PhD

General Decision Rules

ICER > WTP Not cost-effective

ICER < WTP Cost-effective to invest

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Compared to UC, is TX cost-effective?

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ICER = Extra cost for 1 unit of effect

Cost-effective:

ICER < WTP

ΔC / ΔE

Outline

© Wanrudee Isaranuwatchai, PhD

Why do economic evaluation?

What is economic evaluation?

How to estimate cost-effectiveness?

How to estimate cost-effectiveness in SAS?

© Wanrudee Isaranuwatchai, PhD

3 approaches to estimate ICER

means

ttest

regression (simple linear regression)

How to estimate ICER in SAS?

Data

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ID TX COST EFFECT

1 1 $100 90

2 1 $200 80

3 1 $300 70

4 0 $600 40

5 0 $500 30

6 0 $400 45

proc means

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proc means

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𝐼𝐶𝐸𝑅 =𝐶𝑇𝑋

− 𝐶𝑈𝐶

𝐸𝑇𝑋 − 𝐸𝑈𝐶

= 200 – 450 70 – 25

= ΔC = -250 = -5.6 ΔE 45

proc ttest: cost

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= ΔC = -250 = -5.6 ΔE 45

ICER = 200 – 450 70 – 25

proc ttest

© Wanrudee Isaranuwatchai, PhD

Cost Diff (1-2) = ΔC

Effect Diff (1-2) = ΔE

ICER = ΔC/ΔE

= -250 / 45

= -5.6

proc reg: cost

proc reg

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MODEL cost = tx; Coefficient of TX dummy = ΔC

MODEL effect = tx; Coefficient of TX dummy = ΔE

ICER = ΔC/ΔE

Compared to UC, is TX cost-effective?

© Wanrudee Isaranuwatchai, PhD

ICER

Cost-effective:

ICER < WTP

Summary 1

© Wanrudee Isaranuwatchai, PhD

Why do economic evaluation? Scarcity having to make choices

What is economic evaluation? A tool to help us compare 2 or more treatments

Consider both COST and EFFECT simultaneously

What is cost-effectiveness? Cost; Effect; Willingness-to-pay; Perspective

ICER < WTP

Summary 2

© Wanrudee Isaranuwatchai, PhD

How to estimate cost-effectiveness? ICER, INB

How to estimate cost-effectiveness in SAS? means, ttest, reg

CEA is about 1. Estimation: ICER, INB

2. Uncertainty: CEAC, Ellipse, CI

THANK YOU wanrudee@isaranuwatchai.com www.clear-healtheconomics.ca