Intro to health economic evaluation

Question 1

Name the different types of economic evaluations to inform the decision as to whether a particular treatment is available on the NHS.

Answer 1

• cost effectiveness analysis
• cost utility analysis
• cost benefit analysis
• cost minimisation analysis

Question 2

Explain - cost effectiveness analysis

Answer 2

• Cost-effectiveness studies are usually employed to compare the financial costs of competing interventions whose outcomes are only measured in terms of health effect (e.g., life years gained, infections treated).
• When there are competing interventions for treatment of the same patient group/condition, ICERs are calculated in cost-effectiveness studies.
• The cost-effectiveness plane illustrates the process used for deciding which intervention to finance when carrying out a cost-effectiveness analysis.

Question 3

Explain- cost utility analysis

concept of utility and QALY

Answer 3

• In health economics, utility measurements are typically combined with survival estimates to generate quality-adjusted life years (QALYs), which are used when carrying out a cost-utility analysis of competing healthcare interventions.
• Utilities are values that reflect what preferences individuals have for different states of health.
• Utility valuation methods commonly used in direct measurement studies include the visual analogue scale, time trade-off and standard gamble.
• A QALY is the arithmetic product of the period of time spent in a particular health state and the utility measurement for the same health state.
• QALYs can be used to compare the effectiveness of competing interventions and are combined with costs associated with each intervention to generate a cost-utility ratio, which is also known as the incremental cost-effectiveness ratio (ICER).

Question 4

Explain- cost benefit analysis

Answer 4

• Cost–benefit studies are useful when there are a number of diverse outcomes associated with the interventions being compared. It enables comparisons between interventions in different areas of healthcare.
• In a cost–benefit analysis, the monetary value placed on a health benefit is usually estimated using a willingness-to-pay valuation method.
• The willingness to pay is the maximum amount an individual would be willing to pay, exchange or sacrifice in order to receive a service or avoid an undesired event/condition.

Question 5

Explain- cost minimisation analysis

concept of clinical equivalence and gold standard of demonstrating this

Answer 5

• A cost-minimization analysis should only be used when the health outcomes of two or more competing interventions are similar.
• Clinical equivalence implies that both the primary health outcome benefits (e.g., clinical improvement of a hospital-acquired pneumonia infection) and the secondary health outcome benefits (e.g., similar safety, efficacy and side-effect drug profiles) are the same in two or more competing interventions.
• The ‘gold standard’ method for demonstrating clinical equivalence is through a randomized controlled trial.
• Superiority randomized controlled trials are primarily used to determine whether a new intervention is more efficacious than the gold standard intervention.
• When a new healthcare intervention has already been introduced into clinical practice, equivalence randomized controlled trials are used to confirm the absence of a significant difference between the new intervention and the existing gold standard intervention.
• Noninferiority randomized controlled trials are designed to ensure that the new intervention does not have an unacceptably worse clinical outcome than the gold standard intervention

Question 6

How do we decide whether it is cost effective?

Answer 6

Calculate the incremental cost-effectiveness ratio (ICER)

Compare the ICER to the cost-effectiveness threshold

Threshold: Societal willingness to pay for a QALY

Is the ICER below the cost-effectiveness threshold of £20,000-30,000/QALY?

Question 7

What is Calculate the incremental cost-effectiveness ratio (ICER)?

Answer 7

CN - CO divided by EN - EO

CN – CO = Difference in (mean) cost (Old intervention Vs new intervention)

EN – EO = Difference in (mean) effect (Old intervention Vs new intervention)