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Lectures Health Technology Assessment
This document summarizes all lectures, including the pre-recorded lectures, of the course Health Technology Assessment for the academic year .
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Voorbeeld van de inhoud
Lecture 1 (12-10-2021) – Introduction to HTALife expectancy at birth is increasing over time, and so are health expenditures. Most of the money spent
on health care is public money; in the Netherlands, about 85% of the health care expenditures is publicly
financed. If it is publicly financed, then decisions have to be made as resources are scarce.
When deciding about whether a certain drug should be reimbursed, it is important to know whether there
are alternative drugs available. In addition, you could look at the estimated price of one quality-adjusted
life year (QALY) and you should take into account uncertainty (for instance with regard to the range in
months or years of reduced symptoms, or with regard to the range in expected additional life expectancy).
We often rely on QALYs because they are comparable across diseases. The number of patients that is
eligible for the drug also affects the decision to invest in a certain medical intervention or to reimburse
costs. For instance, when more people require a drug to live a healthy life, then it is probably more likely
that the drug will be reimbursed. Pharmaceutical companies are also less likely to invest in the
development of drugs for a disease that is extremely rare. Finally, people are generally more likely to
prefer investments in drugs for children diseases over investments in drugs for elderly diseases. This is
because you can probably gain more QALYs for children, but this might make the drug also costlier.
Health Technology Assessment (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. Economic evaluation is usually the core
of HTA; it allows you to compare two alternative health interventions regarding costs and benefits. HTA
is an important advisory tool and even compulsory for deciding on reimbursement in many countries.
There are six phases in performing an economic evaluation study:
• (1) Study design
o (1.1) Perspective; it is important to know from which perspective we want to make an
analysis. It relates to the question who is going to pay for the medical intervention. The
perspective determines which costs and effects to include in the assessment. Two
dominant perspectives are the health care perspective and the societal perspective.
Following the health care perspective, we only consider costs and effects that fall within
the health care budget. Following the societal perspective, all relevant costs and effects
are considered; for instance, you also consider travel costs to the hospital if these travel
costs are higher for one treatment than for another. There are also other perspectives,
such as the patient perspective and the health insurer perspective.
o (1.2) Choice of comparator; you want to compare your medical intervention against a
comparator. You need to select the most efficient alternative as a comparator, which can
be a standard treatment. You can also consider ‘no treatment’ as the comparator if there
are no suitable alternatives available.
o (1.3) Type of analyses; you need to determine which type of analysis to apply. We
distinguish four different types:
▪ Cost Minimization Analysis (CMA) only considers costs. If the effects of a medical
intervention are the same, then you should focus on their costs.
▪ Cost-Benefit Analysis (CBA) consider costs and effects in monetary terms.
, ▪ Cost-Effectiveness Analysis (CEA) considers costs in monetary terms, but the
effects in natural units. Natural units are more focused on a single disease. As a
result, measuring effects in natural units makes comparisons between several
diseases more difficult.
▪ Cost-Utility Analysis (CUA) considers the costs in monetary terms, but the effects
in QALYs. As said earlier, QALYs are more comparable across diseases.
o (1.4) Time horizon; you must select the time horizon that captures all consequences of a
certain medical intervention. This can be a lifetime horizon.
o Casus: suppose that there are three treatments for obesity. These are a lifestyle program,
pharmacotherapy (medication) and bariatric surgery. Perform the first step of an
economic evaluation study for the obesity treatments.
▪ Perspective; the perspective depends on who is going to pay for the treatment. If
the patient is going to pay, you might take a patient perspective, in which case
you take into account all costs and benefits for the patient. Following a societal
perspective, however, requires us to take into account all costs and benefits for
society. An example of the benefit for society could be that the treated persons
might have a higher productivity when they are no longer obese.
▪ Comparator; you can compare the three options against each other.
▪ Type of analysis; it might be wise to use the CUA because this type of analyses
provides comparable outcomes (which is helpful if you want to make
comparisons against other diseases).
▪ Time horizon; you should consider a lifetime horizon because obesity can impact
your health over your whole life.
• (2) Measuring and valuing costs
o You should identify all relevant cost items, measure the resource use, and then value the
resource use. Which costs to include depends on the perspective.
o Casus: give some examples for costs that you would include for our obesity example.
▪ You could think of treatment costs (including labor costs), or costs related to
cardiovascular diseases that are more likely to emerge for obese people.
Productivity losses can also be a cost; if you take a surgery, you will probably not
work for some time. This is especially relevant for the societal perspective. When
doing an economic evaluation study, make sure that you state whether the cost
components include or exclude taxes.
• (3) Measuring and valuing benefits
o You should identify, measure and value the effects of interventions. For this, you can use
diseases-specific measures or generic measures.
• (4) Discounting
o People tend to have a time preference for both costs and health effects. Specifically, we
want positive health effects now while we want to postpone cost. This is because costs
that are due later in time weigh less and effects later in time have less value.
• (5) Sensitivity analysis
o The values used in economic evaluations are estimates. In other words, they involve
uncertainty. You can use sensitivity analysis to find out how sensitive cost-effectiveness
outcomes are to changes in the parameters.
, • (6) Applying decision rule
o You need to calculate the Incremental Cost-Effectiveness Ratio (ICER) and compare this
to a certain threshold. This threshold can be based on QALYs.
o To illustrate this, suppose that treatment A costs $50,000 and treatment B costs $40,000.
Treatment A results in 4 QALYs whereas treatment B results in 3 QALYs. In that case, the
ICER equals ($50,000 – $40,000) / (4 – 3) = $10,000. In other words, the ICER is $10,000
per QALY of life years gained. You could compare this number against the willingness to
pay for a QALY or against the current healthcare production.
To summarize, economic evaluations are about rationalizing rationing decisions. They are not about
saving costs, but about efficiency in health care spending and getting value for money.
Lecture 2 (12-10-2021) – Medical Costs and Discounting
When examining the costs of COVID-19, you could think of R&D costs. In addition, there are societal costs
resulting from the lockdowns. One could also argue that life expectancy increases due to the COVID-19
vaccine, which might also be taken into account when examining costs.
Costs are simply defined as quantity times price. As disused earlier, there are three steps of estimating
costs in an economic evaluation. We always start by identifying the resource items of which we want to
quantify the costs. While doing so, we focus on costs that are important and relevant. Then, we measure
the resource use. Resource use can for instance be measured in terms of hours of nursing time, number
of physician visits, lost workdays, gained life-years etc. Finally, we estimate the value of the resources.
With regard to the identification of resource items, it is important to determine the perspective in order
to know what costs to include. For instance, we can take the healthcare perspective. Health care resources
consumed consist of the costs of organizing and operating the program including dealing with the adverse
events caused by the program. When identifying health care resources, we need to consider both variable
costs (such as supplies or the time of health professionals) and fixed overhead costs (such as light, heat,
rent, or capital costs). As said, when identifying costs, you need to be aware of the perspective; two main
perspectives are the healthcare perspective and the societal perspective. Following the healthcare
perspective, you could think of the costs for medication, material, staff, room and food. The societal
perspective also covers the healthcare perspective’s costs, but additionally covers costs related to
traveling, informal care, and productivity losses, etc. Hence, the societal perspective is broader than the
healthcare perspective.
• From a societal perspective, decisions are based on all costs. From a healthcare perspective,
decisions are based on health care sector costs relevant for patients, family, health care providers
and the government. From an insurance company perspective, decisions are based on the costs
financed by insurance companies. From a care provider perspective, decisions are based on costs
particular to the institution. From a patient and family perspective, decisions are based on ‘out-
of-pocket’ expenses and the costs related to time.
• When identifying resource items, remember to only include costs that are important and relevant.
How to identify or find these costs? You can start by studying, analyzing and describing the natural
history of the disease and the treatment pathway(s). For this, you can consult literature,
, treatment guidelines, expert opinions, etc. You should focus on large costs items that really have
an impact. In addition, focus on those costs for which you expect there to be differences between
the intervention and the alternatives, as we are mainly interested in differences between several
interventions. However, if we want to examine the impact on the healthcare budget, then it is
important to include all costs for a certain treatment (even if these are not different from the
alternatives), even though some of these costs might be similar for other treatments.
With regard to the measurement of resource items, remember that costs need to be measured accurately
and in appropriate units. You need to consider the chosen perspective, the services that are actually used,
and the time horizon (for instance, several months versus a lifetime). Where to find information on cost
measurement? You could think of registries, questionnaires, diaries, and clinical practice guidelines.
With regard to the estimation of the value of resources, the goal is to obtain an estimate of the worth of
resources depleted by an illness or intervention. What if the price is ‘old’ or in another currency? You
might need to convert currencies, or to index old prices to new prices (as $1 one year ago is worth more
today). How to value the cost of medical services per unit? Prices on competitive markets are usually equal
to opportunity costs. Opportunity costs refer to the economic net benefit forgone when selecting one
option rather than the next best alternative. It is essentially an answer to the question what the benefits
gained are from adopting intervention, compared to losing the benefits from the displaced intervention.
An issue with healthcare markets, however, is that these markets are generally not competitive markets
as prices are often negotiated. Hence, you need to be careful with relying on prices, charges, or tariffs as
a proxy for costs as these are often negotiated.
• It is better to calculate the true resource costs per treatment than simply relying on (negotiated)
prices. For individual physical therapy, for instance, you could add personnel costs to material and
building costs and then divide the total by the main service provided (which could be a treatment
session). For hospital care, however, this is somewhat more complex. That is because the costs
consist of various staff (nurses, doctors, etc.), many departments, materials, buildings, overhead,
and supportive or administrative departments (who do not provide direct services to a patient).
• For hospitals, overhead costs are the resources used to serve different departments and programs
that are not directly linked to patient services. Overhead costs need to be attributed to programs.
How? There is no ‘right’ approach, but there are three main allocation methods:
o Direct allocation; overhead costs are directly allocated to final cost centers.
o Step-down allocation (either with or without iterations); overhead departments are
stepwise allocated to other overhead departments and the final cost center.
• Suppose that the treatment costs for treatment A and B are €50 and €100, respectively. In
addition, power costs €2,000, cleaning costs €1,000, and the medical staff costs €7,000. We are
informed that power costs are divided equally over the cleaning and medical staff departments,
that cleaning costs can be attributed in a 1:3 ratio to treatment A and B, and that the costs of the
medical staff are for 20% related to treatment A and for 80% related to treatment B. In this case,
the total costs for treatment A are €50 + (€1,000 + €2, ) × 1/4 + (€7,000 + €2,) × 0.2
= €2,150 and the total costs for treatment B are €100 + (€2, + €1,000) × 3/4 + (€7,000 +
€2,) × 0.8 = €8,000.
• Prices are usually highest at the beginning of a treatment. That is because a lot of treatment is
done when the patient arrives in the hospital.
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