using cost-effectiveness analysis to inform state policy · using cost-effectiveness analysis to...
TRANSCRIPT
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 1
USING COST-EFFECTIVENESS ANALYSIS TO INFORM STATE POLICY
Jeffrey S. Hoch, PhD
Associate Director, Center for Healthcare Policy and Research
Professor and Chief, Division of Health Policy Management
Department of Public Health Sciences,
University of California, Davis
Health Policy and Management
T: @j_hoch
https://twitter.com/j_hoch
2
© Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 2
Disclaimer
▪The opinions expressed in this talk are mine and are not meant to represent official positions of the people or groups with whom I work.
© Jeffrey Hoch, PhD
4
THIS SESSION IS NOT…HOW TO DO CEA
Mathy, Statsy, or Numbery
Focused on health & other areas
© Jeffrey Hoch, PhD
WHY YOU SHOULD CARE
Costs challenge
patients and
payers
01
Paying for Value(not volume) is a popular ‘solution’
02Cost-effectiveness analysis is a way to look at Value.
03
6
© Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 3
WHAT IS VALUE?
“In most industries, “value” as defined by consumers is associated with in four attributes:
Accessibility: “can I get what I need or want from you?”
Service: “is dealing with you a pleasant experience?”
Effectiveness: “is what you’re providing going to satisfy my need or want?”
Costs: “what’s the cost to me and my family and is it worth it?”
https://tinyurl.com/ow7rfl7
process
outcome
cost
7
© Jeffrey Hoch, PhD
The trip and
the options
What it “costs”what you “get”
The Trade-off
8
© Jeffrey Hoch, PhD
https://tinyurl.com/y9eygdms
9
© Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 4
“In collaboration with the partner organizations, Consumer Reports has created resources… to engage
in… conversations about the overuse of medical tests and procedures that provide little benefit and in
some cases harm.
“Choosing Wisely recommendations should not be used to establish coverage decisions or exclusions.
Rather, they are meant to spur conversation about what is appropriate and necessary treatment. As
each patient situation is unique, providers and patients should use the recommendations as guidelines
to determine an appropriate treatment plan together.
Policy is made for a population, not a patient.
How to use Cost-Effectiveness Analysis (CEA) to look at
Value at the population (policy) level?
10
© Jeffrey Hoch, PhD
COUNT DOWN TO USE
4 Quadrants
3 Findings
2 Items of interest
1 Thing
https://tinyurl.com/ycmqu724
11
© Jeffrey Hoch, PhD
WHERE ARE WE?
An economic evaluation
tells you a tradeoff
located in one of 4 areas
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
12
© Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 5
Less effective More effective
Costs more
Costs less
4 potential outcomes
2 dimensions
x
2 directions
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
13
© Jeffrey Hoch, PhD
2 X 2 TABLE = 4 QUESTIONS
“More or less” means > 2 options.
• Are they relevant/correct?
Whose cost?
• Decision maker’s perspective included?
Which outcome (what to use as effect)?
• Is one that matters included?
Over what time horizon?
• Over policy/clinically relevant time period?
“more than” or “less than” 1 option is
compared to a 2nd option.
Does the “usual care” in the analysis match
your context / reality?
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
14
© Jeffrey Hoch, PhD
2 X 2 TABLE = 4 QUESTIONS
“More or less” means > 2 options.
• Are they relevant/correct?
Whose cost?
• Decision maker’s perspective included?
Which outcome (what to use as effect)?
• Is one that matters included?
Over what time horizon?
• Over policy/clinically relevant time period?
The decision maker cares about the
decision maker’s costs (i.e., not paying =
not a cost)
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
15
© Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 6
2 X 2 TABLE = 4 QUESTIONS
“More or less” means > 2 options.
• Are they relevant/correct?
Whose cost?
• Decision maker’s perspective included?
Which outcome (what to use as effect)?
• Is one that matters included?
Over what time horizon?
• Over policy/clinically relevant time period!
What are you trying to accomplish with
this policy or program?
What amount of “success” does the new option offer?
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
16
© Jeffrey Hoch, PhD
2 X 2 TABLE = 4 QUESTIONS
“More or less” means > 2 options.
• Are they relevant/correct?
Whose cost?
• Decision maker’s perspective included?
Which outcome (what to use as effect)?
• Is one that matters included?
Over what time horizon?
• Over policy/clinically relevant time period!
0
200
400
600
800
1000
1200
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Time horizon matters
Costs Benefits
cost benefit
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
17
© Jeffrey Hoch, PhD
2 X 2 TABLE = 4 QUESTIONS
“More or less” means > 2 options.
• Are they relevant/correct?
Whose cost?
• Decision maker’s perspective included?
Which outcome (what to use as effect)?
• Is one that matters included?
Over what time horizon?
• Over policy/clinically relevant time period!
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
18
© Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 7
Less effect More effect
Costs more
Costs less
4 potential outcomes
RightCost?
RightEffect?
Both Cost and Effect
19
© Jeffrey Hoch, PhD
EXAMPLE OF THE MAIN TYPES OF CHALLENGES
1) Can you find the right box?
• YES or NOT yet
II) Is the information useful/relevant?
• YES or NOT yet
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
20
© Jeffrey Hoch, PhD
A NEW SMOKING CESSATION PROGRAM
A 6 month study shows that a new smoking cessation program costs $2,500 per person.
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
21
© Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 8
A NEW SMOKING CESSATION PROGRAM
A 6 month study shows that a new smoking cessation program costs $2,500 per person.
Some of the benefits reported by those who quit include:
Better appearance
Better breath and whiter teeth
Appetite for food is rediscovered
An improved sense of smell
Better lung capacity
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
22
© Jeffrey Hoch, PhD
EXAMPLE COMPLETED
The new smoking cessation program helps more people quit smoking
than the standard practice and costs more over a 50 year time horizon.
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
23
© Jeffrey Hoch, PhD
COUNT DOWN TO USE
4 Quadrants
3 Findings
2 Items of interest
1 Thing
https://tinyurl.com/ycmqu724
24
© Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 9
Less effective More effective
Costs more
Costs less
4 potential outcomes
2 dimensions
x
2 directions
Easy NO
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
25
© Jeffrey Hoch, PhD
Less effective More effective
Costs more
Costs less
4 potential outcomes
2 dimensions
x
2 directions
Easy YES
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
26
© Jeffrey Hoch, PhD
Less effective More effective
Costs more
Costs less
4 potential outcomes
2 dimensions
x
2 directions
It Depends
It Depends
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
27
© Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 10
Less effective Similar Effect More effective
Costs more
Similar Costs
Costs less
3 potential findings
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
28
© Jeffrey Hoch, PhD
TEST YOUR UNDERSTANDING
• What do you need to know?
https://tinyurl.com/y8avgp854 Quadrants,3 Findings, 2 Items of interest, 1 Thing
29
© Jeffrey Hoch, PhD
TEST YOUR UNDERSTANDING, CONTINUED
• What might you find?
https://tinyurl.com/y8avgp854 Quadrants,3 Findings, 2 Items of interest, 1 Thing
30
© Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 11
COUNT DOWN TO USE
4 Quadrants
3 Findings
2 Items of interest
1 Thing
https://tinyurl.com/ycmqu724
31
© Jeffrey Hoch, PhD
Less effective Same Effect More effective
Costs more
Costs the same
Costs less
2 items of interest: 1) Estimate
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
32
© Jeffrey Hoch, PhD
Less effective Same Effect More effective
Costs more
Costs the same
Costs less
2 items of interest: 2) Uncertainty
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
33
© Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 12
ESTIMATE
• How much extra cost?
• How much extra effect?
• How much extra cost per extra effect?
• How much more extra benefitthan extra cost?
• What other values are possible?
• What is the 95% CI?
UNCERTAINTY
USING 2 ITEMS OF INTEREST: 1) ESTIMATE & 2) UNCERTAINTY
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
$75,000 extra cost and 6 more months of life
$75,000 / 0.5 years = $150,000 per year of life
34
© Jeffrey Hoch, PhD
Patient outcome
Cost
C
E
35
© Jeffrey S. Hoch, PhD4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing = 6 months or 0.5 year
= $75,000
$75,000 extra cost and 6 more months of life
$75,000 / 0.5 years = $150,000 per year of life
More Effective, E > 0Less Effective, E < 0
More Costly, C > 0
Less Costly, C < 0
Less Costly/Less Effective
Lose-Lose
Win-Win
More Costly/More Effective
COST-EFFECTIVENESS PLANE
© Jeffrey S. Hoch, PhD
36
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
36
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 13
More Effective, E > 0Less Effective, E < 0
More Costly, C > 0
Less Costly, C < 0
Less Costly/Less Effective
More Costly/More Effective
COST-EFFECTIVENESS PLANE
© Jeffrey S. Hoch, PhD
37
0.5 yr 1.0 year
$75,000
$150,000
$75,000 extra cost and 6 more months of life
$75,000 / 0.5 years = $150,000 per year of life
Extra cost
Extra cost per
1 extra effect (ICER)
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
THE STORY
OF ONE
ARTICLE…
© JEFFREY S. HOCH, PHD
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
38
Estimates
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
39
© Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 14
Uncertainty
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
40
© Jeffrey Hoch, PhD
WHAT IS THE DECISION MAKER WILLING TO PAY?
Is $150k per year of life worth it?
YES!This is cost-
effective!
noThis is not cost-
effective
WTP
WTF?
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
41
© Jeffrey Hoch, PhD
WTP
P(CE)
Uncertainty
42
© Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 15
COUNT DOWN TO USE
4 Quadrants
3 Findings
2 Items of interest
1 Thing
https://tinyurl.com/ycmqu724
43
© Jeffrey Hoch, PhD
In a perfect theory world (where budget determines WTP)….
Calculate all of the extra cost per extra effect (using CEA) and then purchase from lowest to highest until you run out of your budget
© Jeffrey Hoch, PhD
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
44
In a perfect theory world (where WTP determines budget)….
Use CEA results to purchase from lowest to highest until you hit the magical WTP threshold (e.g., £30,000)
© Jeffrey Hoch, PhD
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
45
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 16
Neither the budget nor the WTP are known and no payer is “buying” everything at once. No rec committee knows…
© Jeffrey Hoch, PhD
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
46
There is something odd about the choreography of the CEA…
47
© Jeffrey Hoch, PhD4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
WHAT IS BEING CONSIDERED?
“Given the available evidence on comparative effectiveness and incremental cost-effectiveness, and considering other benefits, disadvantages, and contextual considerations, what is the long-term value for money of treatmentwith acupuncture and usual care versus usual care alone for patients with chronic low back pain?
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
48
© Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 17
CHBRP
Clinical
evidence
Patient
values
Cost-effectivenessFeasibility of Adoption
(into the Health System)
The 4 key areas
50
© Jeffrey S. Hoch, PhD4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
LESSONS FROM FRONT ROW SEATS…
1) Other evidence in addition to economic evidence is used in decision
making
2) almost no one is a health
economist among policy advisors and policy makers
3) Good & Useful can be better than Perfect & Right
© Jeffrey Hoch, PhD
4 Quadrants, 3 Findings, 2 Items of interest, 1 Thing
51
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 18
TO USE CEA, YOU MUST HAVE …
4 Quadrants
3 Findings
2 Items of interest
1 Thing
https://tinyurl.com/ycmqu724
52 © Jeffrey Hoch, PhD
FINAL EXAM
• 1) Is this cost-effective?
• 2) How do people view CEA?
53 © Jeffrey Hoch, PhD
FINAL EXERCISE
• Example: Cost-effectiveness of epoetin-alpha (EPO) to augment
preoperative autologous blood donation (PAD) in elective surgery
• Concerns:
• Allogeneic (someone else’s) blood might have disease
• Autologous (your own) blood is costly to get, and so is EPO
“Economic analysis of erythropoietin use in orthopaedic surgery.” by Coyle D, Lee KM, Fergusson DA, Laupacis A. Transfus Med . 1999 Mar;9(1):21-30.
54 © Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 19
FEEDING DATA TO A MODEL
55 © Jeffrey Hoch, PhD
COST EFFECTIVENESS RESULTS
Is EPO cost-effective? 56 © Jeffrey Hoch, PhD
COST EFFECTIVENESS RESULTSBY HOMER
Is EPO cost-effective? 57 © Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 20
COST EFFECTIVENESS RESULTSBY HOMER SIMPSON
Is EPO cost-effective? What do we already know (what can we already achieve w/o EPO)?58
© Jeffrey Hoch, PhD
Intervention Life Years Extra Life Years
Cost Extra Cost
Cost per life year gained
No intervention EPO
13.037758 13.037782
0.000024
269 1857
1588
$66.3 million
PAD EPO + PAD
13.037725 13.037731
0.000006
968 2903
1935
$329.3 million
Incremental cost-effectiveness ratio (ICER) = C / E
ICER = Extra cost / Extra effect
“extra cost of 1 more unit of extra effect”
COST EFFECTIVENESS RESULTS
59 © Jeffrey Hoch, PhD
TO USE CEA, YOU MUST HAVE …
4 Quadrants
3 Findings
2 Items of interest
1 Thing
https://tinyurl.com/ycmqu724
More costly,
more effective
Easy no
C = $1935 E= 3 minutes;
C/E = 330 mill per 1 YR
NO uncertainty shown
60 © Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 21
TO USE CEA, YOU MUST HAVE …
4 Quadrants
3 Findings
2 Items of interest
1 Thing
https://tinyurl.com/ycmqu724
61 © Jeffrey Hoch, PhD
DIFFERENT OPINIONS
SOUND L IKE…
62 © Jeffrey Hoch, PhD
WHAT HAPPENED
IN ONTARIO?
63 © Jeffrey Hoch, PhD
“Using CEA to inform state policy” 30 November 2017
© Jeffrey S. Hoch, PhD 22
TO USE CEA, YOU MUST HAVE …
4 Quadrants
3 Findings
2 Items of interest
1 Thing
https://tinyurl.com/ycmqu724
64 © Jeffrey Hoch, PhD
AS HEALTHCARE BECOMES MORE EXPENSIVE…
There will be more focus on “value” (i.e., cost and effectiveness of new treatments).
Cost-effectiveness analysis (CEA) is a tool used throughout the world to help inform policy.
The questions you ask when “smart shopping” are the same ones users of CEA should ask
65 © Jeffrey Hoch, PhD
66© Jeffrey S. Hoch, PhD
E: [email protected]: @j_hochhttps://twitter.com/j_hoch