cost effectiveness analysis
TRANSCRIPT
ECONOMIC EVALUATION OF HEALTH INTERVENTIONS
Abdur Razzaque SarkerMHE (Health Economics), MSS (Economics)
Health Economics and Financing Research, icddrband
PhD Fellow in Strathclyde University, UKEmail: [email protected]
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Topic
Cost Analysis (Cont..) Cost Minimization Analysis Cost Effectiveness Analysis (CEA) Cost utility Analysis ( CUA) CEA/CUA Exercise Group Work
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What is economic evaluation?
Economic evaluation is the comparative analysis of at least two health care interventions or alternatives in terms of both their costs and consequences.
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Cost‐Minimization Analysis
Cost‐Effectiveness Analysis
Cost‐Utility Analysis
Cost‐Benefit Analysis
Types of Economic Evaluations
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Cost‐Minimization Analysis
Compare the costs of two or more interventions with identical outcome and choose the least costly one.
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Alternative AInjury prevention by building a speed-breakerCost per injury prevented = 500 TakaNumber of injury prevented = 200
Alternative BInjury prevention by building a foot over-bridgeCost per injury prevented = 1200 TakaNumber of injury prevented = 200
The outcomes (number of injury prevented) are identical for alternatives ‘A’ and ‘B’. Alternative ‘A’ has lower cost of intervention. Using CMA, we can choose alternative ‘A’, i.e. building a speed-breaker
Cost minimization analysis (CMA)
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Cost-effectiveness analysis (CEA) Compare ‘cost per consequence’ of two or
more interventions, where the consequences are measured by “natural” units (life years gained, saved years of life)
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OutcomeYears of life savedHospital days preventedNumber of case preventedReduction in cholesterolBlood pressure reduction
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Cost-effectiveness analysis (CEA) Cost-effectiveness ratio (CER)
Incremental cost-effectiveness ratio (ICER)
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If effectiveness of alternative ‘A’ is higher and its costs is lower than those of alternative ‘B’.
Alternative ‘A’ is called dominant Alternative ‘B’ is called dominated
Law of Dominance & Law of Extended Dominance
Alternative Cost Saved years of Life
'A' 2,000 600 'B' 3,000 500
Dominance
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Extended dominanceIf we compare the interventions based on ICERs, we choose that programs which is ‘more effective, using law of extended dominance’.
One intervention (C) is said to be ‘extended dominant’ if its ICER is lower than the previous intervention(B). And the rolled out intervention is called ‘extended dominated’ (B).
Alternative Cost Effect C E C/E‘No' 0 0 0 0 0
'A' 200 4 200 4 50
'B' 300 5 100 1 100
'C' 380 6 80 1 80
Alternative Cost Effect C E C/E‘No' 0 0 0 0 0
'A' 200 4 200 4 50
'B' 300 5 100 1 100
'C' 380 6 80 1 80Exte
nded
dom
inat
ed
Exte
nded
dom
inan
t
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Cost Utility Analysis ( CUA)
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Cost-utility analysisCompare ‘cost per consequence’ of two or more interventions, where the consequences are measured by “utility” related to health (quality-adjusted life years, disability adjusted life years)
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Cost-utility analysis
Unlike CEA, effects in CUA are measured in terms of utility
- Quality-adjusted life years (QALYs)- Disability-adjusted life years (DALYs)
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Example Program Cost per
patients (C) life year saved
Quality increase
QALYs gain (E)
No program 0 0 0 0E (Pneumonia) 500 20 0.93 18.6A (Polio) 100 10 0.92 9.2D(Diphtheria) 400 19 0.88 16.72C(Syphilis) 300 15 0.86 12.9B (TB) 200 14 0.93 13.02
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There are five different treatment (interventions) for producing saved years of life (S YoL). Our aim is to choose those interventions which survive the cost-effectiveness analysis and to rank them from highest to lowest cost-effectiveness.
Cost per patients and S YoL are presented below. We assume that each disease group has 200 patients to be treated.Intervention Cost per
patients (C) SYoL (E)
No 0 0E (Pneumonia)
500 20
A (Polio) 100 10D (Diphtheria )
400 19
C (Syphilis) 300 15B (TB) 200 14
Example of allocating resources using cost-effectiveness and cost-utility
analysis
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Steps of choosing cost-effective interventions1. Sort the interventions according to ‘cost per patient’ in
ascending order2. Find dominated interventions 3. Keep the survived interventions using the same sorting
procedure as in step 14. Calculate ICER between interventions5. Find the interventions which are ‘extended dominated’
and roll them out 6. Keep the survived interventions 7. Calculate the ICER of the survived interventions and roll
out the ‘extended dominated interventions’ and continue this process until all extended dominant interventions are rolled out
8. Now you find the interventions which have survived the cost-effectiveness analysis
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Step 1: Sort in ascending order using cost of treatmentIntervention Cost per patients (C) SYoL (E)No 0 0A (Polio) 100 10B (TB) 200 14C(syphilis) 300 15D(Diptheria) 400 19E (Pneumonia) 500 20
Intervention Cost per patients (C)
SYoL (E)
No 0 0E (Pneumonia) 500 20A (Polio) 100 10D (Diphtheria ) 400 19C (Syphilis) 300 15B (TB) 200 14
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Step 2: Find Dominated interventions
There is no dominated intervention
Intervention Cost per patients (C) SYoL (E) No 0 0A (Polio) 100 10B (TB) 200 14C(Syphilis) 300 15D(Diptheria) 400 19E (Pneumonia) 500 20
If effectiveness of alternative ‘A’ is higher and its costs is lower than those of alternative ‘B’. Alternative ‘B’ is called dominated
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Intervention Cost per patients (C) S YoL (E)No 0 0A (Polio) 100 10B (TB) 200 14C(syphilis) 300 15D(Diptheria) 400 19E (Pneumonia) 500 20
Step 3: Keep the survived interventions using step 1All interventions are kept
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Step 4: Calculate ICER between interventions
Intervention
Cost per patients (C) SYoL (E) ∆C ∆E ∆C/∆E
No 0 0 0 0 0
A (Polio) 100 10100 10 10
B (TB) 200 14100 4 25
C(syphilis) 300 15100 1 100
D(Diptheria) 400 19
100 4 25
E (Pnumonia) 500 20
100 1 100
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Step 5: Find ‘extended dominated’ interventions and roll them out
Intervention Cost per patients (C)
SYoL (E)∆C ∆E ∆C/∆E
No 0 0 0 0 0A (Polio) 100 10 100 10 10B (TB) 200 14 100 4 25C(syphilis) 300 15 100 1 100D(Diphtheria) 400 19 100 4 25E (Pneumonia) 500 20 100 1 100
One intervention (D) is said to be ‘extended dominant’ if its ICER is lower than the previous intervention(C). Here, alternative D is called the extended dominant alternative. And the rolled out intervention is called ‘extended dominated’. Here , C is extended dominated by D.
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Step 6: Keep the survived interventions
Intervention Cost per patients (C)
S YoL (E)
No 0 0A (Polio) 100 10B (TB) 200 14D(Diphtheria) 400 19E (Pneumonia) 500 20
Step 7: Recalculate ICER of survived interventions and roll out the ‘extended dominated interventions’
Intervention Cost per patients (C)
S YoL (E) ∆C ∆E ∆C/∆ENo 0 0 0 0 0A (Polio) 100 10 100 10 10B (TB) 200 14 100 4 25D(Diphtheria) 400 19 200 5 40E (Pneumonia) 500 20 100 1 100
Observation: No ‘extended dominated intervention’ is found.
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Step 8: Interventions which have survived the cost-effectiveness analysis
Intervention Cost per patients (C)
S YoL (E)
No 0 0A (Polio) 100 10B (TB) 200 14D(Diphtheria) 400 19E (Pneumonia)
500 20
Here, A is most cost effective alternative.
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Allocating budget among the interventionsConditions: Total budget = US$ 80,000Maximum 200 patients from each disease group can be treated
How to allocate?We start allocating the budget in the most cost-effective intervention (A) and gradually allocate in the next ones. Alternative Cost per
patientS YoL No of
patients treated
Total cost of treatment
Budget left
Total S YoL
A 100 10 200 20,000 60,000 2,000B 200 14 200 40,000 20,000 2,800D 400 19 50 20,000 0 950E 500 20 Total 450 80,000 5,750
Result:Using the total budget (US$ 80,000 a sum of 450 patients can be treated whichGives a total saved years of life (SYoL) of 5,750.
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Any other combination gives maximum outcome based on budget??? Alternative
Cost per patient
S YoL No of patients treated
Total cost of treatment
Budget left
Total SYol
B 200 14 200 40,000 40,000 2800D 400 19 100 40,000 0 1900A 100 10 E 500 20
Total 300 4700
Alternative Cost per patient
S YoL No of patients treated
Total cost of treatment
Budget left
Total SYol
D 400 19 200 80,000 0 3800A 100 10 B 200 14 E 500 20
Total 200 3800
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Exercise
