Health technology assessment – Health Economics, Policy and Law (GW4546M)
Merel Hoogstad
Lecture 1: Introduction to HTA
Objective: you can describe the relevance, objectives and elements of HTA in health care and know
the steps of an economic evaluation.
Pertuzumab and Ataluren
There is a drug for breast cancer patients, incidence = 5.500 people per year in the UK, with
treatment costs of £24.000 per year. If patients are treated with this drug, they live 6-12 months
longer without symptoms. Would you reimburse the drug?
There is a drug for Duchenne muscular dystrophy, incidence = 60-70 people per year in the UK,
with treatment costs of £220.000 per year. If patients are treated with this drug, they delay the loss
of walking for up to seven years. Would you reimburse the drug?
Definition
Health Technology Assessment (HTA) = ‘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.
Example of indirect, unintended consequences: a patient is treated for cancer to live longer,
but gets another disease in the remaining life.
Economic evaluations
Economic evaluations provide insight costs and effects of (new) interventions which we are always
comparing with an alternative (an existing intervention).
The different phasis in performing an economic evaluation study:
Step 1: Design study
Perspective
How is going to pay? Two dominant perspectives to do the analysis:
1. Health care perspective: you’re including all costs and effects falling on health care budget
(primary care, hospital costs, nursing costs).
2. Societal perspective: you’re including all relevant costs and effects (out-of-pocket
expenditures, transport costs).
3. (Patient perspective)
4. (Health insurer perspective)
Perspectives determines which costs and effects to include in the assessment.
Choice of comparator
You have to choose the most efficient alternative, because you want to know: ‘how is the new
treatment performing compared to most efficient alternative?’. Sometimes there is no alternative,
so the comparator will be ‘no treatment’.
Type of analyses
Only costs (only perform when you know for Cost minimization analysis (CMA)
sure that the effects are equal)
Cost and effects in monetary terms Cost benefit analysis (CBA)
Costs in monetary terms, effects in natural Cost-effectiveness analysis (CEA)
units
(For example: life years or ability to walk)
Costs in monetary terms, effects in QALYs Cost-utility analysis (CUA)
Time horizon
All consequences must be taken into account, if possible, choose a lifetime horizon. Mostly, there
isn’t follow-up data available to do the analysis for a lifetime horizon. How to deal with this? You can
use data from a randomizes trials or an observational study, which most of the time includes more
waves. But, for the analysis you have to extrapolate the data by modelling.
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, Health technology assessment – Health Economics, Policy and Law (GW4546M)
Merel Hoogstad
Casus: obesity and overweight
Worldwide obesity has more than doubled since 1980. In 2014, more than 1.9 billion adults
(39%) were overweight and 600 million (13%) were obese. 41 million children under the age of 5
were overweight or obese in 2014. Obesity is preventable. Three options to treat people with
obesity:
1. Life style program with diets and exercises.
2. Pharmacotherapy.
3. Bariatric surgery.
Exercise 1: perform the first step for obesity treatments
Perspective – who is going to pay? If you choose a patient perspective, you need to take
in account all the costs and benefits that the patient needs to pay. If you choose a
societal perspective, you should also take into account all the effects for society, besides
the effects of the patient (if you help obese people, they have less productivity loss and
they can work longer).
Comparator: life style program vs pharmacotherapy, life style program vs bariatric
surgery, pharmacotherapy vs bariatric surgery or compare them all to each other.
Type of analysis: Cost-effectiveness analysis (CEA), because the effect is the same, but
we want to calculate the costs by kg weight loss for example. You can use the cost-
utility analysis (CUA) if you want to compare this treatment to a treatment for another
disease.
Time horizon: lifetime horizon, because obesity can increase the risk of comorbidity later
on, but also because most treatments work well in short term, but not in the long term.
Step 2: measuring and valuing costs
We need to:
Identify all relevant resource items
Measure resource use
Value resource use
Which costs to include depends on the perspective you
choose in step 1.
Casus: obesity and overweight
Exercise 2: perform the second step for obesity treatments
Treatment costs (Health sector C1)
Productivity costs, relevant if you do the analysis from a societal perspective
(Productivity losses C4)
Costs of diseases that can occur later on, relevant if you compare life style program vs
bariatric surgery or pharmacotherapy. It depends on the result in which category you
scale this.
o If the patient gains more weight and needs more healthcare: C1.
o If the patient gains more weight and cannot care for himself: C3.
o If the patient gains more weight and can work less: C4.
Future spending. If patients live longer, they spend more and they may also receive
social security from the state (Other sectors C2).
Step 3: measuring and valuing benefits
We need to:
Identify all relevant effects of interventions
Measure the effects of interventions (disease specific measures and generic measures)
Value the effects of interventions
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, Health technology assessment – Health Economics, Policy and Law (GW4546M)
Merel Hoogstad
Casus: obesity and overweight
Exercise 3: perform the third step for obesity treatments
Weight gaining difference between the treatments.
Happiness by measuring quality of life, because this effect can be different with different
interventions.
Patient satisfaction at the treatment.
Step 4: discounting
We have time preference for both costs and health effects:
We want positive health effects now.
We want to postpone costs.
Costs later in time weight less and effects later in time have less value.
See lecture 2
Step 5: sensitivity analysis (uncertainty)
The values used in economic evaluations are estimates based on a sample of the population.
Uncertainty is associated with all estimates. You can do sensitivity analysis to find out how sensitive
cost-effectiveness outcomes are to changes in parameters. It’s possible that the uncertainty is
large, but the impact is low or the other way around.
See lecture 6 & 8 and the skill groups
Step 6: applying decision rules
We can calculate the ICER (Incremental Cost-Effectiveness Ratio) and compare this to a threshold.
costs A−costs B
ICER= =€ … per effect
effects A−effects B
€ 50.000−€ 40.000
For example: ICER= '
=€ 10.000 per QALY
4 QAL Y s−3 QALY ' s
After this you can apply the decision rule:
Is ratio below or above the willingness to pay for a QALY?
Is ratio below or above our current healthcare production (marginal returns)?
Summary
Scarcity of resources necessitates rationing.
Rationing in health care is an important and delicate matter (affects vulnerable people,
media attention).
Decisions preferably transparent and accountable.
Economic evaluation is the core of HTA.
o Economic evaluations always compare two or more health technologies.
o Conducting an economic evaluation involves six steps.
Costs per QALY gained valuable, but not sufficient information for decision makers.
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, Health technology assessment – Health Economics, Policy and Law (GW4546M)
Merel Hoogstad
Lecture 2: Medical costs (step 2) & discounting
(step 4)
Objective: you will be able to identify, measure and value medical costs in economic evaluations of
health technologies and to understand the concept of discounting. You will also be able to
distinguish between direct and future medical costs.
Step 2: measuring and valuing costs
Costs
c=q∗p
c = costs
Identify (step 1 of step 2): what costs are we talking about?
q = quantity
Measure (step 2 of step 2). For example: resource use, number of vaccines.
p = price
Value (step 3 of step 2) that we put to the quantity.
Important questions about costs:
Were all the important and relevant costs and consequences for each alternative identified?
Were costs and consequences measured accurately in appropriate physical units prior to
valuation (hours of nursing time, number of physician visits, lost work-days, gained life-
years)?
Were costs and consequences valued credibly?
Were costs and consequences adjusted for differential timing?
Step 1: identify all relevant resource items
Health care resources consist all cost of: organizing and operating the program including dealing
with the adverse events caused by the program.
To identify the resources, you have to list the ingredients of the program, both variable costs (time
of health professionals or supplies) and fixed/overhead costs (light, heat, rent or capital costs). By
identifying the costs, it’s important to choose a perspective: healthcare or society.
Healthcare perspective: medication, material, staff, room, food.
Societal perspective: medication, material, staff, room, food, travel costs, informal care
costs, productivity losses.
There are different kind of perspectives and so, differences in which costs the decision is based on:
Societal (used in the Netherlands): all costs.
Healthcare (used in the UK): health care sector costs relevant for patient, family, health
care providers and government.
Insurance companies: costs finance by insurance companies.
Care providers (hospitals): costs particular to the institution.
Patient and family: ‘out-of-pocket’ expenses, costs of time.
How to identify/find those costs?
Remember: only important and relevant costs need to be included.
Study, analyze and describe the natural history of the disease and the treatment pathway(s). We
can find this in the literature, treatment guidelines, pilot samples, earlier studies, expert opinions
and patient organizations.
Step 2: measure the resource use items
Remember: costs need to be measured accurately and in appropriate units.
In this step you need to consider the chosen perspective, services that are actually used and the
time horizon.
Where to search for information about the cost measurement? Registries (disease or drug-specific),
questionnaires from patients/caregivers, diaries from patients/home care/informal caregiver, clinical
practice guidelines, expert opinion (less preferable, because less reliable) and protocol driven costs.
You can measure costs in two ways:
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