Methods for the Economic Evaluation of Health Care Programmes
Lecture notes study book Methods for the Economic Evaluation of Health Care Programmes of Michael F. Drummond, Mark J. Sculpher - ISBN: 9780199665884, Edition: 4th Revised edition, Year of publication: - (-)
Lecture 2: Medical Costs. ............................................................................................................................... 6
Lecture 3: Non-medical costs in economic Evaluation in of health care ...................................................... 12
Lecture 4: Quality of Life part A .................................................................................................................. 22
Lecture 5: Quality of Life, part B ................................................................................................................. 27
Lecture 6: introduction modelling in HTA ................................................................................................... 36
Lecture 7: Theoretical foundations of EE of health care ............................................................................. 42
Lectue 8 Dealing with uncertainty in health economic models .................................................................... 47
Lecture 9: Beyond the QALY ....................................................................................................................... 55
Lecture 10 Economic evaluation and policy making ....................................................................................... 60
Lecture 11 Transferability ............................................................................................................................... 71
Part 2: Factors affecting transferability: population, healthcare system ........................................................ 73
Part 3: Factors affecting transferability: analytical approach .......................................................................... 75
Part 4: How to decide on transferability and obtain country-specific ICER? .................................................... 78
Lecture 1
To reimburse or not to reimburse?
• Resources in health are limited
• Decisions regarding reimbursement have far reaching consequences
Learning objectives
• Why HTA
• What is HTA
• Understanding the basic concept of economic evaluations
• Knowing the steps in conducting an economic evaluation
• Medical costs and economic evaluations
Why HTA?
• Health care expenditures increase
• Is this a problem?
• What happens is we reimburse every treatment?
• Positive + negative consequences
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,If choices in health care have to be made:
• It is better to make informed choices!
Health Technology Assessment (HTA)
• Important advisory tool → make transparent and unbiased decisions.
• Compulsory for deciding on reimbursement in many countries: Some drug companies need to
show an economic evaluation. This is becoming requested for other health technology
assessment. They need to show the cost effectiveness
• Assure value for money --> goal: get the most health effects for the resources that we have.
Definition Health Technology Assessment (HTA)
“HTA is the systematic evaluation of properties, effects and/or impacts of health technologies and
interventions. It covers both the direct, intended consequences of technologies and interventions and
their indirect, unintended consequences. - WHO definition ➔ Also need to take unintended
consequences into account. For example on other sectors.
Economic evaluations
• Economic evaluations provide insight in costs and effects of
• (new) interventions
• compared with existing interventions
• Economic evaluations are everywhere
Phases in performing an economic evaluation study:
Step 1: Design the study
a) Perspective – Who is going to pay?
When conducting an economic evaluation you have to decide the perspective. Two dominant
perspectives: this has to do with the question who is going to pay? And for whom are we going to
perform the EE?
1. Health care perspective ➔ costs and effects falling on the health care budget. Costs that are
happening in the health care sector. Patient costs, for example travel costs are not included in
this perspective.
2. Societal perspective
a. All relevant costs and effects, also including health care costs.
b. Does not matter if they are in the health care sector or in the other sectors. Travel
costs are included in this perspective.
Health care perspective recommended in the UK, societal perspective recommended in the NL.
Usually you report the costs of health care sector and societal perspective separately so people can see
whether most costs are made insight or outside the health care perspective.
The choice of the perspective decides whether you should include cost different components
yes or no, and it also decides which effects you should include. Think about the productivity losses of
a relative that has to take care of a patient: not included in the health care perspective, but included in
the societal perspective.
➔ Also patient and health insurer perspective
➔ Perspective determines which costs and effects to include in the assessment.
b) Choice of comparator
We always evaluate one thing to another so you have to choose a proper comparator.
• Most efficient alternative ➔ compare to the most efficient alternative which is now available.
• Standard treatment ➔ compare to the standard treatment
• Consider “no treatment” ➔ compare to no treatment.
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, • Placebo not preferred ➔ a placebo is not recommended because although there is a placebo
effect we will never introduce the placebo treatment in health care. You could compare it but
we will never introduce it into health care.
Choice of the comparator is really important: is it a good comparator?
c) Type of analyses: we have several types of economic evaluations.
o Only costs
o Cost minimization analysis (CMA)
o effects are equal, focus on costs
o ➔ only performing when you know that the effects are equal so you only focus on the
costs, and you choose the treatment with the lowest costs. This is a very unlikely
situation.
o Cost and effects in monetary terms
o Cost benefit analysis (CBA)
o ➔ translating the effects in monetary terms. for example: prolonging life treatment,
prolonging life with 2 years. Value of 1 year 100.000 so 200.000 is benefit from the
treatment.
o ➔ hard with lifetime benefits and also blood pressure --> how to express them in
monetary terms?
o Costs in monetary terms, effects in natural units
o Cost-effectiveness analysis (CEA)
o ➔ effects/outcomes are in natural units for example: progression free life years, heart
attack avoided costs etc.
o Advantage: this is quite relevant for the disease that you are investigating
o Disadvantage: it is difficult to compare to other treatments because of the different
outcome measurements.
o Costs in monetary terms, effects in QALYs
o Cost-utility analysis (CUA)
o ➔ most relevant EE. Cost in monetary terms and effects in QALYs. Combination of
length and quality of life.
o CEA and CUA look quite similar and are often used for each other.
d) Time Horizon:
• All consequences must be taken into account so the time horizon should be long enough:
therefore a lifetime horizon: necessary to conclude all the effects occurring in the years after
treatment. This is what makes it complicated because you don’t have information of a patient
that is treated now and we want life time data we have to wait 30/40 years. Therefore we use
data and extrapolate this.
• How to do so? ➔ modelling : lecture 6.
• Randomised trial (RCT)
• Observational study
• Model (cohort or individual patient model)
• Combination : different sources of data
• Introduces uncertainty of an analysis but it is very important to take life time horizon into
account.
Exercise 1: obesity
Perspective (who is going to pay?): sometimes you only take patient perspective into account. Like the
patient causes it (obesity). Healthcare perspective you don’t take productivity losses into account for
example. Societal perspective is very relevant because obesity of a problem of society and has an
impact on society. You can also choose the patient perspective. Than you only take into account the
consequences for the patient.
Comparator: which comparison will you make? You can choose between lifestyle program,
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, pharmacotherapy and surgery. Most people choose lifestyle compared to surgery. They seem to be the
most far away from each other (completely different treatment options).
Type of analysis: most choose the cost-utility analysis and one of the advantages is that we can
compare the outcomes regarding cost-effectiveness of obesity treatment. Cost-effectiveness is also a
good one because for every treatment op8on you can see how much it costs to loose 1kg for example.
Time horizon: Choosing a time horizon is always balancing between information that you have, time
that you have and the length that you expect that is sufficient. If you take not enough time, you
overes8mate the effect because people fall back into old patterns after longer time. Time horizon of
the economic evaluation doesn’t need to be similar to the time horizon of the study. For example a
RCT can only take 1 of 2 years, but an evalua8on must take all effects and benefits into account. If
you think about a 8me horizon think about when you think there will be a difference in effect/costs
between the two consequences.
Step 2: measuring and valuing costs
What is important in this part:
• Identify all relevant cost items: these different cost categories in the picture below.
• Measure resource use: you do not measure costs
• Value resource use: you attach a certain value to the resources you are measuring.
• You can measure how many times a patient visits the hospital, attach a certain value
or cost to a hospital visit. Multiplying the resource use with the value, you can obtain
the costs.
• Different types of costs: which costs to include depends on the perspective:
• Health sector costs: already discussed.
• Other sectors: education/transport
• Patient/family: referring to out of pocket expenditure.
• Productivity losses: relevance depends on the patient
group you are conducting your EE for.
Societal perspective includes all the costs while health care
perspective only includes health sector costs.
Exercise 2: costs for obesity per sector
Health sector costs: GP, drugs, chronic disease costs (for example diabetes caused by obesity),
physiotherapists, labor costs, laboratory tests in hospital
Other sector costs: unemployment benefits, pensions/aging of population, facilitates to be able to live
at home (elevator)
Patient/family costs: productivity costs (absence work but also less productive when present), drug
costs (when out-of-pocket expenditures are involved)
Productivity losses: people who are obese may not be able to work or work fully
Step 3: measuring and valuing effects
• Identify, measure and value effects of interventions
• Disease specific measures
• Generic measures
• Advantage: enable us to compare over diseases. Disadvantage: not designed
specifically for diseases so may not detect small differences.
Step 4: Discounting: complex because it is very fake. (lecture 2)
• We have time preference for both costs and health effects.:
• We want positive health effects now: (Effects later in time have less value) we want
the effects now because then we are certain that they will occur.
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