Cost-Effectiveness Workshop

UCSF Global Health Economics Colloquium

Kisumu

20 January 2014

Purpose of CEA Workshop

• Basic understanding of CEA concepts & methods

• Initial application to an issue of your choosing

• Foundation for further development of ideas and projects

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Purpose of CEA

• “Opportunity cost” is a governing concept: resources used for one purpose cannot be used for another.

• To foster efficient deployment of limited health resources, we measure “opportunity costs”

• Assess the efficiency of available interventions to achieve agreed health goals, e.g.,

– Less frequent vs. more frequent screening;

– Mobile vs. fixed facility service delivery;

– More vs. less intensive treatment.

• Examples from comparisons of interest to you

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CEA Core Approach

• Incremental cost per standardized unit of health gain

- E.g., per death averted or life-year gained

• For specified interventions; always compared with other courses of action (standard of care, other interventions)

• Is the inverse of (and equivalent to) health gain per increment of spending

Key CEA outcome metric: ICER

• ICER – Incremental Cost-Effectiveness Ratio

• Δ costs / Δ health outcomes

– Δ means the difference between actions A and B

• ICER = [Cost A – Cost B] / [LifeYears A – LifeYears B]

• Incorrect: Cost A / LifeYears A. You need a comparator. What are the incremental LYs or QALYs (or DALYs averted)?

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Option Net cost Δ cost QALYs Δ

QALYsICER

Drug A $12,000 ?? 4.0 ?? ??

ICER Numerator

• Net costs = program costs adjusted for resulting changes in medical costs

• Still, A vs B: net cost A – net cost B

• Medical costs can fall (averted disease) or rise(identified or induced need for care)

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ICER Denominator

• Difference between A and B in

o Natural health events (eg new infections or deaths averted), or

o DALYs (disease burden, want to avert), or

o QALYs (health, want to gain)

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“What is a „DALY’ anyway?”

• DALY = Disability-Adjusted Life-Years

• Summary measure of disease burden

• Sum of:

o Mortality (years lost due to premature death) +

o Morbidity (disability weight * duration in years).

• Opposite of QALY (measure of health)

• In global health DALYs used more than QALYs

QALY? DALY? Let’s call the whole thing off (someday)!

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“The DALY Show” video

(if possible)

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For Descriptive Use (burden of disease):

Disability Weights must reflect the relative severity of

the consequences of different disease and disease

stages

Universal across time and over the globe

For Evaluative Use (cost-effectiveness)

Adjust time lived for level of disability from diseases

of interest other causes of disability

Measurement of non-fatal benefit of interventions

may involve modest changes in severity

More demands on accuracy of level of severity

Disability weights: applications

Argument for using DALY DWs is that they are derived through same process and are available for a large number of diseases and health states that are a consequence of disease

QALYs rely on utility weights: a difference between two groups on a scale measuring the Quality of Life is translated into a utility weight

QALY ≠ QALY ≠ QALY if utility weights are plucked from disparate studies using different QoLinstruments and different methods of translating the QoL scores into a utility value

Disability Weight: sources

1. IHME Global Health Data Exchange (GHDx)

http://ghdx.healthmetricsandevaluation.org/record/global-burden-disease-study-2010-gbd-2010-disability-weights

Disability Weights: sources

2. The Lancet 2012 paper

Assignment: find the disability weights for HIV (not on ART)

A Basic CEA Results Table

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Option Net cost Δ cost DALYs Δ

DALYs

ICER

($ per DALY

averted)

No

therapy

$10,000 n/a 4.0 n/a n/a

Drug A $12,000 ? 3.5 ? ?

Net cost = Cost of intervention

Adjusted for induced or averted health care costs

A Basic CEA Results Table

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Option Net cost Δ cost DALYs Δ

DALYs

ICER

($ per DALY

averted)

No

therapy

$10,000 n/a 4.0 n/a n/a

Drug A $12,000 3.5$2,000 0.5 $4,000

CEA Results Table – Negative ICER?!

Option Net cost Δ cost DALYs Δ

DALYs

ICER

(Δ $ / Δ DALY)

No therapy $10,000 n/a 4.0 n/a n/a

Drug A $12,000 $2,000 3.5 0.5 $4,000

Drug B $17,000 ? 3.75 ? ?

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$5,000 - 0.25 - $20,000

CEA Results Table – “Dominance”

Option Net cost Δ cost DALYs Δ

DALYs

ICER

(Δ $ / Δ QALY)

No therapy $10,000 n/a 4.0 n/a n/a

Drug A $12,000 $2,000 3.5 0.5 $4,000

Drug B $17,000 $5,000 3.75 -0.25 Dominated

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“Dominance” =

One option both cheaper and better than comparator

No trade-off = No brainer

Negative ICERs makes no sense.

CEA Table with Multiple Comparisons

Option Net cost Δ cost DALYs Δ

DALYsICER

(Δ $ / Δ DALY)

No therapy $10,000 n/a 4.0 n/a n/a

Drug A $12,000 $2,000 3.5 0.5 $4,000

Drug B $17,000 $5,000 3.75 -0.25 Dominated

Drug C $18,000 $6,000 2.5 1.0 $6,000

Drug D $23,000 $5,000 3.0 -0.5 Dominated

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Array costs from lower to higher.

Compare each option to next higher (non-dominated) option.

Drug C vs. No therapy is inappropriate …

… feasible intermediate options must be evaluated.

No skipping allowed!

Introducing sensitivity analyses - Why do them?

• All CEAs have substantial uncertainty.

• Sensitivity analyses deal with uncertainty systematically, one input at a time and overall.

• Convince audience that results are robust (if you can).

• Show how results hinge on the value of certain inputs

• Show how key uncertainties, however disquieting initially, actually do not affect findings in important ways.

Sensitivity analysis is mandatory in a CEA.

And interesting.

And fun!

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One-way SA: Screening for gestational diabetesTornado diagram showing sensitivity of ICER to 16 key inputs. CCMH, Chennai, India. Inputs varied 50% - 150% of base-case values

Date

Presentation title

Marseille E et al. (2013). "The cost-effectiveness of gestational diabetes screening including prevention of type

2 diabetes: application of a new model in India and Israel." J Matern Fetal Neonatal Med.

Multi-Way SA: Screening for gestational diabetes20,000-trial Monte Carlo simulation, CCMH, Chennai, India. Distribution of ICER values and 90% CI. Input values had beta distributions with minima and maxima at 50% and 150% of base case values

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Analytic horizon – timing is everything

• What time period to portray?

– 30 days? 1 year? 5 years? A lifetime?

• Not standard … the rule is – capture important differences between action options

– For treatment of a self-limited disease (i.e., trying to reduce severity for a few weeks), perhaps 30 days.

– For an intervention with effects that decay by half each 6 months, perhaps 2-3 years

– For management of a chronic disease, perhaps lifetime.

• If in doubt, err toward longer time horizon … little extra work.

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Analytic Time Line

Reference Case for CEA

• $ per QALY gained or DALY averted

• Societal (all payers), direct medical costs

• Discount future spending & health events, 3% per year

• Time horizon adequate to capture effects

• Report currency, price date, conversions

• Sensitivity analyses (evaluating uncertainty)

1. U.S. Preventive Services Task Force.

2. Consolidated Health Economic Evaluation Reporting Standards (CHEERS) statement, BMJ, 2013.

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CEA Research Questions –

Examples

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CEA Example A – Research Questions

Cost-effectiveness of a mobile camp for adult male circumcision in rural Zambia

• RQ1: What is the cost of delivering adult male circumcision per 100 clients circumcised in this mobile camp?

• RQ2: How many HIV infections and disability-adjusted life years (DALYs) will be averted per 100 individuals circumcised, in this population, over twenty years?

• RQ3: What is the incremental cost per DALY averted in this population?

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CEA Example A – RQ1

Cost-effectiveness of a mobile camp for adult male circumcision in rural Zambia

• RQ1: What is the cost of delivering adult male circumcision per 100 clients circumcised in this mobile camp?

Brief methods: Review program financial and service records for 12-month period, to quantify resources used, associated costs, and clients served.

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CEA Example A – RQ2

Cost-effectiveness of a mobile camp for adult male circumcision in rural Zambia

• RQ2: How many HIV infections and disability-adjusted life years (DALYs) will be averted per 100 individuals circumcised, in this population, over twenty years?

Brief methods: Build a decision analysis model incorporating HIV epidemic projections with and without circumcision.

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CEA Example A – RQ3

Cost-effectiveness of a mobile camp for adult male circumcision in rural Zambia

• RQ3: What is the incremental cost per DALY averted in this population?

Brief methods: Calculate the incremental cost-effectiveness ratio (ICER), with net costs (program costs adjusted for changes in future HIV medical care costs) in the numerator, and DALYs averted in the denominator.

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Introducing decision trees

• Graphically portrays the decision & its effects

• Three major components:

– The action options (the decision) under consideration.

– The probabilistic mix of consequences for each option.

– The value of health and cost outcomes for each consequence.

• Calculates the “expected value” for health and cost outcomes for each option, as the weighted mean for the mix of consequences.

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A Basic Decision Tree Voluntary adult male circumcision for HIV prevention in rural Kenya

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HIV infection

0.4

No camp

No HIV infec.

0.6

# men

100 HIV infection

0.2

MC Camp

No HIV infec.

0.8

Mobile circ.

camp?

Adding Health Outcomes

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New HIV

infections

DALYs due

to new HIV

infections

Per person 7

HIV infection

0.4 40 280

No camp

No HIV infec.

0.6 0 0

# men

100 HIV infection

0.2 20 140

MC Camp

No HIV infec.

0.8 0 0

Infections averted DALYs averted

20 140

Mobile circ.

camp?

Adding Intervention Costs

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New HIV

infections

DALYs due

to new HIV

infections

Cost of MC

Camp

Per person 7 $100

HIV infection

0.4 40 280 $0

No camp

No HIV infec.

0.6 0 0 $0

# men

100 HIV infection

0.2 20 140 $2,000

MC Camp

No HIV infec.

0.8 0 0 $8,000

Infections averted DALYs averted Camp cost

20 140 $10,000

Mobile circ.

camp?

No camp?

No costs!

Adding Medical Care Costs

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New HIV

infections

DALYs due

to new HIV

infections

Cost of MC

Camp

Cost of HIV

medical care (if new HIV

infection)

Per person 7 $100 $6,000

HIV infection

0.4 40 280 $0 $240,000

No camp

No HIV infec.

0.6 0 0 $0

# men

100 HIV infection

0.2 20 140 $2,000 $120,000

MC Camp

No HIV infec.

0.8 0 0 $8,000

Infections averted DALYs averted Camp cost Med. Costs averted

20 140 $10,000 $120,000

Mobile circ.

camp?

And Finally – Results!

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New HIV

infections

DALYs due

to new HIV

infections

Cost of MC

Camp

Cost of HIV

medical care (if new HIV

infection)

Total cost

Per person 7 $100 $6,000

HIV infection

0.4 40 280 $0 $240,000 $240,000

No camp

No HIV infec.

0.6 0 0 $0 $0

$240,000

# men

100 HIV infection

0.2 20 140 $2,000 $120,000 $122,000

MC Camp

No HIV infec.

0.8 0 0 $8,000 $8,000

$130,000

Infections averted DALYs averted Camp cost Med. Costs averted Net costs

20 140 $10,000 $120,000 ($110,000)

Dominant

Mobile circ.

camp?

ICER ($/DALY averted)

CEA Example B – Specific Aims

Cost-effectiveness of adherence counseling for HIV anti-retroviral therapy (ART) in a primary care clinic in rural India, as part of an RCT

• Specific Aim 1: Measure the cost in this primary care setting of adherence counseling per client receiving the service and per patient-year of ART.

• Specific Aim 2: Estimate the impact of adherence counseling on HIV disease progression and disability-adjusted life years (DALYs) over three and ten years.

• Specific Aim 3: Calculate the cost per added individual with viral suppression and the cost per DALY averted.

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CEA Example B – Specific Aim 1

Cost-effectiveness of adherence counseling for HIV anti-retroviral therapy (ART) in a primary care clinic in rural India, as part of an RCT

• Specific Aim 1: Measure the cost in this primary care setting of adherence counseling per client receiving the service and per patient-year of ART.

Brief methods: Review program financial and service records for a 12 month period, in order to quantify adherence counseling costs (resources used and associated costs) and client-years of ART. Use time and motion methods to separate staff effort dedicated to adherence counseling from other activities.

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CEA Example B – Specific Aim 2

Cost-effectiveness of adherence counseling for HIV anti-retroviral therapy (ART) in a primary care clinic in rural India, as part of an RCT

• Specific Aim 2: Estimate the impact of adherence counseling on HIV disease progression and disability-adjusted life years (DALYs) over three and ten years.

Brief methods: Build a decision analysis to portray HIV disease progression on ART as a function of viral suppression, and associated DALYs due to premature mortality and morbidity. Set model values for three years from RCT results, and project to ten years using disease state modeling.

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CEA Example B – Specific Aim 3

Cost-effectiveness of adherence counseling for HIV anti-retroviral therapy (ART) in a primary care clinic in rural India, as part of an RCT

• Specific Aim 3: Calculate the cost per added individual with viral suppression and the cost per DALY averted.

Brief methods: Compare program costs to RCT measures of rate of viral suppression. Calculate the ICER ($ per DALY averted) with net costs (adherence counseling costs adjusted for changes in ART costs) in the numerator, and DALYs averted in the denominator.

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Cost-effectiveness of adherence counseling for ART, primary care clinic in rural India, in RCT

Simplified tree

Deaths on ART

(3 years)

DALYs

(death;

alive)

Cost of

Adherence

Counseling

Cost of HIV

medical care

(death; alive)

Total cost

Per person 10 $30 $1,2004 $7,000

Death

0.2 0.2 2 $240 $240

No

Alive

0.8 0.8 3.2 $5,600 $5,600

5.2 $5,840

# patients

1 Death

0.15 0.15 1.5 $5 $180 $185

Yes

Alive

0.85 0.85 3.4 $26 $5,950 $5,976

4.9 $6,160

Comparing DALYs averted 0.3 Cost $320

$1,067

Adherence

counseling?

ICER ($/DALY averted

Health outcomes Health outcomes

What cost-effectiveness research question are you interested in?

• What is:

– the intervention?

– the comparator?

• What outcome measures are appropriate?

• How will you evaluate intervention benefits?

• How will you measure program costs?

• Will you adjust for changes in direct medical costs resulting from the intervention?

• Can you sketch a tree that portrays the consequences of the intervention and its comparator?

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