Cost-Effectiveness/COI

Question 1

Cost

Answer 1

Value of resource associated with the production and/or delivery of a good service

Question 2

Opportunity Cost

Answer 2

• “True cost” of resource
• Value of “next best option”
• Resources committed to one product/service cannot be used for another product/service (“opportunities”)

Question 3

Which costs should be evaluated?

Answer 3

• Only the costs related to illness/treatment/services should be counted
• Not always monetary

Question 4

“Traditional” Method of Costs Categories

Answer 4

1. Direct Medical Costs
2. Direct Non-medical Costs
3. Indirect Costs
4. Intangible Costs

Question 5

Direct Medical Costs

Answer 5

• Associated with provision of healthcare goods and services
• Simplest and most objective
• EX: medications, labs, clinical encounters, procedures, etc.

Question 6

Direct Non-Medical Costs

Answer 6

• Associated with receiving healthcare goods or services that are NOT medical in nature
• EX: transportation, food, lodging, child care, etc.

Question 7

Indirect Costs

Answer 7

• Lost work or earnings potential due to illness
• “Productivity costs”
• Can also be due to premature death
• EX: missed work, lowered productivity, preventative death

Question 8

Intangible Costs

Answer 8

• Difficult to measure/put monetary value on
• What isn’t captured by the other categories
• EX: Pain, suffering, anxiety, fatigue, etc.

Question 9

Perspectives

Answer 9

• Why is the decision maker and what are their concerns
• Determines which costs are relevant
• Important for interpreting results in any cost analysis
• Narrow perspectives may ignore important costs that still occur in reality
• Recommend providing societal perspective additionally if not chosen to begin within

Question 10

Perspective Examples

Answer 10

• Health insurance payer (predominantly seen)
• Healthcare institution
• Society (broadest): healthcare sectors, patient, family, other sectors

Question 11

COI Analysis

Answer 11

• Cost of Illness
• Type of economic analysis used to estimate total economic burden of a particular disease in society
• Illness causes a consumption of resources
• Summarizes economic burden of an illness
• Can be prevalence or incidence based

Question 12

Prevalence Based COI

Answer 12

• Most common
• Number of individuals who have illness and aggregates all of the services utilized for that disease state over a SPECIFIC TIME PERIOD
• Direct costs/productivity loss assigned to the years that they occur
• Includes various stages of the illness

Question 13

Incidence Based COI

Answer 13

• Number of individuals who become ill in a particular time period, then estimate lifetime costs associated with that illness
• Presents future costs, projects future disease states, number of new diagnoses in that time period, estimated averted costs potential

Question 14

Why COI?

Answer 14

• Promotes disease awareness
• Highlight disease costs distribution: healthcare sector, patient/family, society, lost production/QoL
• Demonstrates potential impact of new treatment

Question 15

Prevalence v.s. Incidence

Answer 15

• Both give similar answers in diseases lasting <1 year

- Long term illnesses may have different results based on the method utilized

Question 16

Prevalence Costs Increase When….

Answer 16

• Incidence is lower
• Annual treatment costs decrease over time
• Annual treatment costs and disability losses increase as disease progresses

Question 17

Prevalence Useful

Answer 17

• Draws attention to the current burden being borne by those with the disease
• Policy decisions: information on the magnitude of specific cost categories

Question 18

Incidence Useful

Answer 18

• Support for preventative initiatives (vaccines)

- Demonstrates lifetime impact of disease and how management of disease may change

Question 19

Usefulness of COI Analyses

Answer 19

• Inform us where/how our resources are being spent (only matters if we can do something about it)
• Inform us of the benefits of curing or preventing a particular illness (cost saved)
• Can be used to set priorities for healthcare policies
• Can be used by employers or payers to set reimbursement strategies
• Determining market potential for new product: lower SE, better outcomes, decreased costs, increased QoL?

Question 20

Limitations of COI

Answer 20

• Some costs difficult to measure with current data (intangible)
• Indirect costs often limited to morbidity and don’t consider mortality (premature death)
• Studies don’t evaluate current strategy of care (not an effectiveness study)