Considering Costs And Evaluating Effectiveness

Front 1

Quantitative decision making

Back 1

- Decision analysis, an objective approach
* Examine a number of options simultaneously
* State all factors and possible outcomes
* Consider low probability events
* Determine the best outcome
* Provide recommendations based on findings
- Any approach will have its limitations

Front 2

Decision making investigations in health care

Back 2

- Model the decision: Identify alternatives being considered
- Incorporate probabilities: Selection of probabilities to measure all possible outcomes
- Incorporate utilities: Factor in a degree of preference for possible outcomes
- Incorporate costs: Determine the financial consequences of possible outcomes

Front 3

Decision Analysis

Back 3

- Often used to describe a quantitative approach
- Considers benefits and harms

Front 4

Cost-effectiveness analysis

Back 4

All types of decision-making analysis which incorporate cost considerations

Front 5

Types of Decision analysis

Back 5

1) Outcomes profile
2) Utility decision analysis
3) QALY decision analysis

Front 6

Benefits and harms

Back 6

measured, no comparison is made

Front 7

Expected utility decision analysis

Back 7

A measure of the relative implications of outcomes is made

Front 8

Utility

Back 8

A measure of a particular health state on a scale of 0 to 1. This is on the same scale as probabilities, allowing incorporation into decision-making investigations
- Usually: 0 = death, 1 = full health
- Expected utility = probability x utility
- This manipulation allows a direct comparison of alternatives

Front 9

Quality Adjusted Life Years (QALYs)

Back 9

- A “QALY” incorporates probability, utility, and life expectancy
- Takes utility decision analysis a step further with incorporation of life expectancy
- Life expectancy measures are employed to estimate average remaining life span

Front 10

Cost effectiveness analysis

Back 10

- Costs plus a consideration of outcomes
1.) Cost consequence analysis
2.) Cost and effectiveness study
3.) Cost-utility analysis
4.) Cost-benefit analysis

Front 11

Cost consequence analysis

Back 11

- Measure and describe costs as well as probabilities of potential outcomes
- Alternatives are not compared

Front 12

Cost and effectiveness study

Back 12

- Determines cost per additional desired outcome
- eg. “The cost of the new Paresis A vaccine, including the total costs of providing the vaccine and treating any complications, is $15,000 per case of Paresis A prevented.”
- Does not consider utility or life expectancy

Front 13

Cost-utility analysis

Back 13

- A cost-effectiveness analysis using QALY
- A “fully-developed” analysis
- Considers costs and health outcomes

Front 14

Cost-benefit analysis

Back 14

- Costs and effectiveness are expressed in $$$
* QALYs are converted into dollars
* Allows comparison of cost and health outcome
- Additional considerations for ALL cost-effectiveness analysis
* The target population should be central to any cost or effectiveness study at the outset
* The social perspective: implies that the impacts of cost and effectiveness are determined regardless of who is affected and who pays the bills

Front 15

Decision tree

Back 15

- diagramming the decision-making process
- decision node between 2 different methods
- chance node between success, unsuccess, and other outcomes

Front 16

Incorporation of probabilities

Back 16

1.) Probabilities
2.) Determination of probabilities

Front 17

Probabilities

Back 17

- Probability for potential outcomes of a particular procedure = 1
- Data is obtained from existing studies, however it may also be subjective, especially for rare but serious events

Front 18

Determination of probabilities

Back 18

- Published literature
- Subjective: An educated guess
: Prone to error

Front 19

Incorporation of utilities

Back 19

- Place on same scale as probabilities
- Success = 1, Death = 0, Like probabilities: at times this may be a subjective determination
- Determine relative values: Death, Blindness
- Expected utility obtained by multiplication
- Final step: “averaging out” the expected utilities
- A sum of the expected utilities or each treatment decision option = overall expected utility for the procedure
- A completed decision tree:
Expected utility decision analysis

Front 20

QALY decision analysis

Back 20

= Probability x Utility x Life expectancy
- Add QALYs for each individual procedure: “averaging out” to obtain Total QALYs
- Comparison of different types of treatment for different age groups may be misleading: ex. Success in a child produces > QALYs than success in a middle-aged individual

Front 21

Decision tree

Back 21

- determines effectiveness
- costs are then compared to effectiveness
- costs are associated with: short term care, short-term non-health care and long-term care

Front 22

Types of summary measures

Back 22

1.) Cost effectiveness ratio
2.) Incremental cost effectiveness ratio

Front 23

Cost effectiveness ratio

Back 23

- Cost per QALY for a given procedure
- Comparison: the “do nothing option”

Front 24

Incremental cost effectiveness ratio

Back 24

- Compare option of interest with conventional treatment
- Used when there is a choice between alternative treatments
- Determines additional cost required/QALY by comparing the option of interest to the conventional treatment
- An expected component of cost-effectiveness studies

Front 25

Inference: Sensitivity analysis

Back 25

- Base case estimate
* Data in analysis represents best data available
- Sensitivity analysis
* Looks at the influence each factor has on the results of the investigation
* Reassess using realistic high and low values
* Credibility interval: The potential range of values
* One way and multiple way sensitivity analysis

Front 26

Discounting

Back 26

Takes into account the reduced importance of benefits, harms, and costs that occur at a later period of time compared to those that occur immediately

Front 27

Cost-QALYs graph

Back 27

- in terms of dollars and QALYs
- 4 quadrants

Front 28

Quadrant D

Back 28

- lower right
- Ideal: increased effectiveness, decreased cost

Front 29

Quadrant C

Back 29

- lower left
- decreased costs, decreased QALYs
- May be deemed cost effective when a slight reduction in QALYs is acceptable

Front 30

Quadrant A

Back 30

- top left
- Costs increased, effectiveness decreased

Front 31

Quadrant B

Back 31

- top right
- increased cost, increased QALYs
- most decision alternatives will be here
- look at incremental cost effectiveness ratio

Front 32

Cost-QALYs graph

Back 32

- allows comparison between options for the SAME condition and/or DIFFERENT conditions

Front 33

Cost effective

Back 33

< $50,000/QALY

Front 34

Borderline

Back 34

$50,000-100,000/QALY

Front 35

Not cost effective

Back 35

> $100,000/QALY