Developed country perspectives on key aspects of the design and implementation of HBP

John Cairns, Professor of Health Economics, London School of

Hygiene and Tropical Medicine

Outline

Using evidence and values to inform priority-setting in the UK and the US (the Oregon list).

How can evidence of comparative clinical and cost effectiveness help define and price services and technologies?

Methodological, informational and political challenges in institutionalising priority-setting in established free-market economies

How does HBP translate in the UK context of a centrally tax-funded system?

Using evidence and values to inform priority-setting in the UK

and the US (the Oregon list).

Background

Oregon UKPopulation 3.8 million 61.2 millionPer capita income $46,970 $36,130Health care expenditure $5,079 $2,992Government share of total spending on health care

46% 82%

Out of pocket as % of private spending

25% 92%

NICE decisions on the adoption of new health technologies in the NHS

NICE makes recommendations regarding the adoption of new health technologies by reviewing evidence on clinical effectiveness and cost-effectiveness

The Incremental Cost Effectiveness Ratio plays an important role in assisting NICE reach a recommendation

Cost-effectiveness is generally measured by the cost per QALY gained. What cost per QALY represents a good use of NHS resources?

ICER =COST new - COST oldQALY new - QALY old

Cost-effectiveness threshold NICE “does not use a precise ICER threshold above which a

technology would automatically be defined as not cost effective or below which it would”.*

£20,000 to £30,000 per QALY gained range Below £20,000 will recommend treatment, above £20,000

a case can be made e.g. the change in health-related quality of life has been inadequately captured, or distinctive benefits not adequately captured in the QALY measure

“Above a most plausible ICER of £30,000 per QALY gained … need to identify an increasingly stronger case”

*Guide to the Methods of Technology Appraisal, June 2008

Appraising life-extending, end of life treatments

Since Jan 2009 NICE has been required to treat particular end of life treatment benefits differently

Three criteria in order to qualify: The treatment is indicated for patients with a short life

expectancy, normally < 24 months There is sufficient evidence to indicate that the treatment

offers an extension to life, normally of at least an additional 3 months, compared to current NHS treatment

The treatment is licensed or otherwise indicated for small patient populations

Appears to have led to decisions implying a threshold of £50,000 per QALY

Company submission

Guidance issued

Assessment team report

Consultee comments

Appraisal committee produce consultation

document

Appraisal committee finalise

recommendations

NICE (Single Technology Assessment)

NICE (Multiple Technology Assessment)

Company submission

Assessment by external review

group

Appraisal committee

produce unrestricted

advice

Appraisal committee produce

restricted advice

Consultee comments

Appraisal committee finalise

recommendations

Guidance issued

Guidance issued

Appeal

Appeal

Prioritisation of Health Services in Oregon, USA

The Oregon Health Plan (OHP) provides an interesting alternative approach. The OHP identifies what care will be available from state resources to the uninsured

It uses clinical effectiveness to prioritise health services but also brings in many other factors. Note that cost-effectiveness plays a limited role

Condition-treatment pairs are ranked A line is drawn above which treatments are included in the

benefit package, below which they are excluded. Where the line is drawn (how far down the list) is determined by the overall budget.

Line: 499 Diagnosis: DENTAL CONDITIONS (EG. SEVERE TOOTH DECAY) Treatment: STABILIZATION OF PERIODONTAL HEALTH, COMPLEX RESTORATIVE, AND REMOVABLE PROSTHODONTICS Line: 500 Diagnosis: CONDUCT DISORDER, AGE 18 OR UNDER Treatment: MEDICAL/PSYCHOTHERAPY Line: 501 Diagnosis: BREAST CYSTS AND OTHER DISORDERS OF THE BREAST Treatment: MEDICAL AND SURGICAL TREATMENT Line: 502 Diagnosis: CERVICITIS, ENDOCERVICITIS, HEMATOMA OF VULVA, AND NONINFLAMMATORY DISORDERS OF THE VAGINA Treatment: MEDICAL AND SURGICAL TREATMENT Line: 503 Diagnosis: CYSTS OF BARTHOLIN'S GLAND AND VULVA Treatment: INCISION AND DRAINAGE, MEDICAL THERAPY *************Funding Level as of 1/1/08 **************************** Line: 504 Diagnosis: LICHEN PLANUS Treatment: MEDICAL THERAPY Line: 505 Diagnosis: DENTAL CONDITIONS (EG. BROKEN APPLIANCES) Treatment: PERIODONTICS AND COMPLEX PROSTHETICS Line: 506 Diagnosis: RUPTURE OF SYNOVIUM Treatment: REMOVAL OF BAKER'S CYST Line: 507 Diagnosis: ENOPHTHALMOS Treatment: ORBITAL IMPLANT Line: 508 Diagnosis: BELL'S PALSY, EXPOSURE KERATOCONJUNCTIVITIS Treatment: TARSORRHAPHY

Criteria Score

•to what degree will the condition impact the health of the individual if left untreated?

•0 (no impact) to 10 (high impact)

Healthy life years

•to what degree does the condition result in pain and suffering?

•0 (no impact) to 5 (high impact)

Impact on suffering

•the degree to which individuals other than the person with the illness will be affected

•0 (no effects) to 5 (widespread effects)

Population effects

•to what degree does the condition affect vulnerable populations?

•0 (no vulnerability) to 5 (high vulnerability)

Vulnerable population

•to what degree does early treatment prevent complications of the disease?

•0 (doesn’t prevent complications) to 5 (prevents severe complications)

Tertiary prevention

Effectiveness & need

Effectiveness

Need for Medical Services

Net Cost

• to what degree does the treatment achieve its intended purpose?

• 0 (no effectiveness) to 5 (high effectiveness)

• the proportion of cases in which medical services would be required after the diagnosis has been established

• 0 (services never required) to 1 (services always required).

• the cost of treatment for the typical case (including lifetime costs associated with chronic diseases) minus the expected costs if treatment is not provided

• 0 (high net cost) to 5 (cost saving).

Total criteria score

Criteria Score Effectiveness Need for service

Rank ordered categories with weights

Maternity & newborn care

Primary prevention & secondary prevention

Chronic disease management

Reproductive services

Comfort care

Fatal conditions

Non-fatal conditions

Self-limiting conditions

Inconsequential care

100

95

75

70

65

40

20

1

5

Two extreme examplesSchizophrenic disordersTotal criteria score = (Impact on healthy life years + Impact on suffering + Population effects + vulnerability of population) X Effectiveness X Need for serviceTotal criteria score = (8 + 4+ 4 + 0) X 3 X 1 = 48Total score = Total criteria score X Category weightTotal score = 48 X 75 = 3600

Grade I Sprains (torceduras) of joints and musclesTotal criteria score = (Impact on healthy life years + Impact on suffering + Population effects + vulnerability of population) X Effectiveness X Need for serviceTotal criteria score = (1 + 1+ 0 + 0) X 2 X 0.1 = 0.4Total score = Total criteria score X Category weightTotal score = 0.4 X 5 = 2

Using economics to inform prioritisation decisions

Information on cost-effectiveness can play a greater or lesser role in guiding prioritisation of services

In the case of NICE decisions over adoption of health technologies by the NHS quite a major role

In the case of determining the benefits package in the Oregon Health Plan cost-effectiveness is of very limited importance. But note the fundamentally economic approach of ranking treatments in terms of their “worth” and then buying as many as the budget will allow starting with the most highly valued.

How can evidence of comparative clinical and cost effectiveness help

define and price services and technologies?

Defining services

In principle can assess the relative cost-effectiveness of different services and use this information when deciding what services to include/exclude (e.g. by comparing to a threshold value)

Evidence can be used to define patient sub-groups in which treatment is more or less cost-effective (e.g. prevention of osteoporotic fracture)

Evidence can be used to identify what treatment will be offered if patients fail on initial treatments (e.g. prevention of osteoporotic fracture)

Evidence can be used to define stopping rules (e.g. cetuximab for colorectal cancer stop after 16 weeks, continued treatment with TNF-α inhibitors for rheumatoid arthritis dependent on adequate response at 6 months)

Setting prices NICE is not allowed to set prices but it has come close (drug

eluting stents only recommended if price differential over bare metal stents is no more than £300)

Recently numerous Patient Access Schemes (e.g. cetuximab for colorectal cancer manufacturer rebates 16% of amount of cetuximab used, trabectedin for soft tissue sarcoma cost met by manufacturer after 5th cycle)

Generally price is an important determinant of cost-effectiveness. So in principle one can ask “What is the maximum price that could be paid before the treatment stops being good value for money?”

Pharmaceutical Benefits Advisory Committee (in Australia) advises at what price drugs appear to be cost-effective

Oregon Essential Benefit Package

Based on the Oregon Health Plan (prioritised list of health services)

Cost sharing (and thus the price faced by patients) depends on the effectiveness and perceived value of the health service

Some services zero cost share, for other services the extent of cost sharing depends on their position in prioritised list

By thus varying the cost to the patient the scheme provides an incentive to use the most effective care

Methodological, informational and political challenges in institutionalising

priority-setting in established free-market economies

Political challenges

There are powerful groups to varying degrees opposed to priority setting (pharmaceutical industry, patient advocacy groups and the medical profession)

Those who gain from a YES decision are very apparent, those who benefit from a NO decision may be unaware that they are even gaining and face challenges organising themselves

Are the benefits sufficiently large and certain to galvanise adequate political support to deliver the changes required?

Methodological challenges

Evidence-based prioritisation is a specialised task. Are there enough individuals with an adequate understanding of the methodologies involved?

The methodologies underlying evaluation of health technologies are evolving rapidly – there is a challenge in keeping up – also there remain legitimate differences of opinion regarding methodology

Informational challenges

An element of acquiescence (if not support) is required from health service planners and healthcare providers. It requires a degree of sophistication (and trust) to make decisions according to opportunity cost.

Any satisfactory prioritisation process will require considerable amounts of information (e.g. regarding comparative effectiveness and cost)

The information available is frequently poor but decisions still have to be made

How does HBP translate in the UK context of a centrally

tax-funded system?

UK doesn’t have an HBP What NICE does in the area of health technology appraisal

might be viewed as a means of managing the process of adding to or removing from an HBP

NICE does have a major clinical guidelines programme which possibly comes closer to defining an HBP in that it suggests appropriate/best diagnosis and treatment pathways but note that these guidelines are often very general and they do not constitute an HBP

Note that recommendations contained in clinical guidelines are not mandatory on the Primary Care Trusts who currently commission services (unlike health technology appraisal decisions)

Essence of NICE

Transparent and robust

procedures

Provision of evidence-based

guidance

Prominent role for cost-

effectiveness data

Predisposing factors

Understanding of and commitment to evidence-based decision-making

Human resources: production

and interpretation

of evidence

Publicly-funded

healthcare system

Some caveats

National versus local

decision-making

Time taken to produce guidance

Legitimacy (e.g. cost per QALY

threshold)

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