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
© Wanrudee Isaranuwatchai, PhD
Economic evaluation 101
CEA and SAS in action
Outline
© Wanrudee Isaranuwatchai, PhD
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
© Wanrudee Isaranuwatchai, PhD
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
© Wanrudee Isaranuwatchai, PhD
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)
© Wanrudee Isaranuwatchai, PhD
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
© Wanrudee Isaranuwatchai, PhD
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?
© Wanrudee Isaranuwatchai, PhD
NOT about hypothesis testing
Creating a cost-effectiveness estimate
Characterizing the uncertainty of the estimate
© Wanrudee Isaranuwatchai, PhD
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
© Wanrudee Isaranuwatchai, PhD
Compared to UC, is TX cost-effective?
© Wanrudee Isaranuwatchai, PhD
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
© Wanrudee Isaranuwatchai, PhD
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
© Wanrudee Isaranuwatchai, PhD
= 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
© Wanrudee Isaranuwatchai, PhD
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
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