Economic returns to medical research funding.

Following the publication of the final paper in a planned series of four studies estimating the economic returns from biomedical and health research, we reflect on what we have learnt from these types of assessment.

Illustrating potential efficiency gains from using cost-effectiveness evidence to reallocate Medicare expenditures.

OBJECTIVES: The Centers for Medicare & Medicaid Services does not explicitly use cost-effectiveness information in national coverage determinations. The objective of this study was to illustrate potential efficiency gains from reallocating Medicare expenditures by using cost-effectiveness information, and the consequences for health gains among Medicare beneficiaries. METHODS: We included national coverage determinations from 1999 through 2007. Estimates of cost-effectiveness were identified through a literature review. For coverage decisions with an associated cost-effectiveness estimate, we estimated utilization and size of the "unserved" eligible population by using a Medicare claims database (2007) and diagnostic and reimbursement codes. Technology costs originated from the cost-effectiveness literature or were estimated by using reimbursement codes. We illustrated potential aggregate health gains from increasing utilization of dominant interventions (i.e., cost saving and health increasing) and from reallocating expenditures by decreasing investment in cost-ineffective interventions and increasing investment in relatively cost-effective interventions. RESULTS: Complete information was available for 36 interventions. Increasing investment in dominant interventions alone led to an increase of 270,000 quality-adjusted life-years (QALYs) and savings of $12.9 billion. Reallocation of a broader array of interventions yielded an additional 1.8 million QALYs, approximately 0.17 QALYs per affected Medicare beneficiary. Compared with the distribution of resources prior to reallocation, following reallocation a greater proportion was directed to oncology, diagnostic imaging/tests, and the most prevalent diseases. A smaller proportion of resources went to cardiology, treatments (including drugs, surgeries, and medical devices, as opposed to nontreatments such as preventive services), and the least prevalent diseases. CONCLUSIONS: Using cost-effectiveness information has the potential to increase the aggregate health of Medicare beneficiaries while maintaining existing spending levels.

Factors predicting Medicare national coverage: an empirical analysis.

BACKGROUND: Interventions considered to be particularly controversial or expected to significantly impact the Medicare program in the United States are considered in National Coverage Determinations. Medicare coverage for such interventions is limited to those deemed "reasonable and necessary" for the diagnosis or treatment of an illness or injury. What constitutes reasonable and necessary has not, however, been clearly defined. OBJECTIVE: To determine factors associated with positive National Coverage Determinations. RESEARCH DESIGN: A dataset of coverage decisions from 1999 to 2007 (n=195) was created with the following variables: direction of coverage decision; quality of supporting evidence; availability of alternative interventions; cost-effectiveness of intervention; type of intervention; coverage requestor; and year of decision. Univariate and multivariate logistic regression analysis was used to determine factors associated with positive coverage. RESULTS: The following variables were independently associated with positive Medicare coverage: good or fair quality supporting evidence (adjusted odds ratio, OR=6.04, P<0.01); presence of an alternative intervention (OR=0.130, P<0.01); no associated estimate of cost-effectiveness (OR=0.190, P<0.05). In addition, in comparison with coverage decisions made in the years 1999 to 2001, those made in the years 2002 to 2003, 2004 to 2005, and 2006 to 2007, were associated with positive coverage [ORs of 0.311 (P<0.05), 0.310 (P<0.1), and 0.109 (P<0.01), respectively]. CONCLUSIONS: Findings suggest that good or fair quality supporting evidence is a strong predictor of positive coverage. Availability of alternative interventions, more recent decisions, and lack of an associated estimate of cost-effectiveness are associated with a decreased likelihood of positive coverage. The findings highlight Medicare's move to evidence-based coverage decisions, and suggest that coverage decisions are influenced by the availability of cost-effectiveness evidence.

Integrating health economics into the product development cycle: a case study of absorbable pins for treating hallux valgus.

BACKGROUND: The probability of reimbursement is a key factor in determining whether to proceed with or abandon a product during its development. The purpose of this article is to illustrate how the methods of iterative Bayesian economic evaluation proposed in the literature can be incorporated into the development process of new medical devices, adapting them to face the relative scarcity of data and time that characterizes the process. METHODS: A 3-stage economic evaluation was applied: an early phase in which simple methods allow for a quick prioritization of competing products; a mid-stage in which developers synthesize the data into a decision model, identify the parameters for which more information is most valuable, and explore uncertainty; and a late stage, in which all relevant information is synthesized. A retrospective analysis was conducted of the case study of absorbable pins, compared with metallic fixation, in osteotomy to treat hallux valgus. RESULTS: The results from the early analysis suggest absorbable pins to be cost-effective under the beliefs and assumptions applied. The outputs from the models at the mid-stage analyses show the device to be cost-effective with a high probability. Late-stage analysis synthesizes evidence from a randomized controlled trial and informative priors, which are based on previous evidence. It also suggests that absorbable pins are the most cost-effective strategy, although the uncertainty in the model output increased considerably. CONCLUSIONS: This example illustrates how the method proposed allows decisions in the product development cycle to be based on the best knowledge that is available at each stage.

Does Medicare have an implicit cost-effectiveness threshold?

BACKGROUND: Despite the huge cost of the program, the Centers for Medicare and Medicaid Services (CMS) has maintained a policy that cost-effectiveness is not considered in national coverage determinations (NCDs). OBJECTIVE: To assess whether an implicit cost-effectiveness threshold exists and to determine if economic evidence has been considered in previous NCDs. METHODS: A literature search was conducted to identify estimates of cost-effectiveness relevant to each NCD from 1999-2007 (n = 103). The economic evaluation that best represented each coverage decision was included in a review of the cost-effectiveness of medical interventions considered in NCDs. RESULTS: Of the 64 coverage decisions determined to have a corresponding cost-effectiveness estimate, 49 were associated with a positive coverage decision and 15 with a noncoverage decision. Of the positive decisions, 20 were associated with an economic evaluation that estimated the intervention to be dominant (costs less and was more effective than the alternative), 12 with an incremental cost-effectiveness ratio (ICER) of less than $50,000, 8 with an ICER greater than $50,000 but less than $100,000, and 9 with an ICER greater than $100,000. Fourteen of the sample of 64 decision memos cited or discussed cost-effectiveness information. CONCLUSIONS: CMS is covering a number of interventions that do not appear to be cost-effective, suggesting that resources could be allocated more efficiently. Although the authors identified several instances where cost-effectiveness evidence was cited in NCDs, they found no clear evidence of an implicit threshold.

Mapping of the EQ-5D index from clinical outcome measures and demographic variables in patients with coronary heart disease.

BACKGROUND: The EuroQoL 5D (EQ-5D) is a questionnaire that provides a measure of utility for cost-effectiveness analysis. The EQ-5D has been widely used in many patient groups, including those with coronary heart disease. Studies often require patients to complete many questionnaires and the EQ-5D may not be gathered. This study aimed to assess whether demographic and clinical outcome variables, including scores from a disease specific measure, the Seattle Angina Questionnaire (SAQ), could be used to predict, or map, the EQ-5D index value where it is not available. METHODS: Patient-level data from 5 studies of cardiac interventions were used. The data were split into two groups - approximately 60% of the data were used as an estimation dataset for building models, and 40% were used as a validation dataset. Forward ordinary least squares linear regression methods and measures of prediction error were used to build a model to map to the EQ-5D index. Age, sex, a proxy measure of disease stage, Canadian Cardiovascular Society (CCS) angina severity class, treadmill exercise time (ETT) and scales of the SAQ were examined. RESULTS: The exertional capacity (ECS), disease perception (DPS) and anginal frequency scales (AFS) of the SAQ were the strongest predictors of the EQ-5D index and gave the smallest root mean square errors. A final model was chosen with age, gender, disease stage and the ECS, DPS and AFS scales of the SAQ. ETT and CCS did not improve prediction in the presence of the SAQ scales. Bland-Altman agreement between predicted and observed EQ-5D index values was reasonable for values greater than 0.4, but below this level predicted values were higher than observed. The 95% limits of agreement were wide (-0.34, 0.33). CONCLUSIONS: Mapping of the EQ-5D index in cardiac patients from demographics and commonly measured cardiac outcome variables is possible; however, prediction for values of the EQ-5D index below 0.4 was not accurate. The newly designed 5-level version of the EQ-5D with its increased ability to discriminate health states may improve prediction of EQ-5D index values.

Integrating health economics modeling in the product development cycle of medical devices: a Bayesian approach.

OBJECTIVES: Medical device companies are under growing pressure to provide health-economic evaluations of their products. Cost-effectiveness analyses are commonly undertaken as a one-off exercise at the late stage of development of new technologies; however, the benefits of an iterative use of economic evaluation during the development process of new products have been acknowledged in the literature. Furthermore, the use of Bayesian methods within health technology assessment has been shown to be of particular value in the dynamic framework of technology appraisal when new information becomes available in the life cycle of technologies. METHODS: In this study, we set out a methodology to adapt these methods for their application to directly support investment decisions in a commercial setting from early stages of the development of new medical devices. RESULTS AND CONCLUSIONS: Starting with relatively simple analysis from the very early development phase and proceeding to greater depth of analysis at later stages, a Bayesian approach facilitates the incorporation of all available evidence and would help companies to make better informed choices at each decision point.

Assessing the impact of health technology assessment in The Netherlands.

OBJECTIVES: Investments in health research should lead to improvements in health and health care. This is also the remit of the main HTA program in the Netherlands. The aims of this study were to assess whether the results of this program have led to such improvements and to analyze how best to assess the impact from health research. METHODS: We assessed the impact of individual HTA projects by adapting the "payback framework" developed in the United Kingdom. We conducted dossier reviews and sent a survey to principal investigators of forty-three projects awarded between 2000 and 2003. We then provided an overview of documented output and outcome that was assessed by ten HTA experts using a scoring method. Finally, we conducted five case studies using information from additional dossier review and semistructured key informant interviews. RESULTS: The findings confirm that the payback framework is a useful approach to assess the impact of HTA projects. We identified over 101 peer reviewed papers, more than twenty-five PhDs, citations of research in guidelines (six projects), and implementation of new treatment strategies (eleven projects). The case studies provided greater depth and understanding about the levels of impact that arise and why and how they have been achieved. CONCLUSIONS: It is generally too early to determine whether the HTA program led to actual changes in healthcare policy and practice. However, the results can be used as a baseline measurement for future evaluation and can help funding organizations or HTA agencies consider how to assess impact, possibly routinely. This, in turn, could help inform research strategies and justify expenditure for health research.

[Developing and applying the Payback Framework to assess the socioeconomic impact of health research]. / Desarrollo y aplicación del Modelo Payback para la evaluación del impacto socioeconómico de la investigación en salud.

There is increasing pressure for assessments of the wider socioeconomic impacts of health research. Governments are making greater demands to justify the expenditure of public money. However, there is also a belief that assessing how the wider effects or benefits of health research arise should help to inform the management and organization of health research so as to increase future impacts. Since the mid- 1990s, Buxton and Hanney at the Health Economics Research Group, Brunel University, have been developing and applying the Payback Framework to assess the impacts of health research. Together with their colleagues, these researchers have applied this model in a series of studies to assess the payback from research programs in various fields (including diabetes, arthritis and cardiovascular disease) and in various countries (including the United Kingdom, The Netherlands, Ireland, Australia and Canada). Other teams of researchers have applied the Payback Framework in, for example, Spain and Hong Kong. The Payback Framework consists of two elements, the first being the multi-dimensional categorization of the benefits of health research, which covers five main categories ranging from traditional knowledge production and research training and targeting, to impacts on policy and product development through to health and economic gains. The second element is a logic model of how best to assess these impacts. Application of this framework can be resource intensive, but has provided illustrative 'good news' stories on the payback resulting from research and has helped to inform research management.

Costs of an early intervention versus a conservative strategy in acute coronary syndrome.

BACKGROUND: The Randomised Intervention Treatment of unstable Angina (RITA-3) found that non-ST-elevation myocardial infarction and unstable angina patients randomised to routine early arteriography experienced a lower rate of death or myocardial infarction than patients randomised to conservative therapy over a five year period of follow up. This paper uses data from the RITA-3 trial to compare the health service costs of the two strategies. METHODS: The resource use data included initial arteriography and revascularisation procedures in the early intervention group and subsequently in both groups; in-patient days in hospital for any reason in the first year of follow-up; incidence of myocardial infarction; and cardiac medication. RESULTS: After five years, the early intervention arm accrued a total mean cost of pound sterling 11,340 (euro 15,592) and the conservative arm a mean of pound sterling 9749(euro 13,405), an additional mean cost in the intervention arm of pound sterling 1591 (95% CI pound sterling 851 to pound sterling 2276) (euro 2188; 95%CI euro 1160 to euro 3228). On average, costs increased with age and were higher in male patients and in patients with severe angina. However, the incremental cost of the intervention strategy was consistent across different patient sub-groups. CONCLUSION: Over a period of 5 years, the initial additional cost of a strategy of early intervention is only partially offset by subsequent interventions in patients managed conservatively.

Mapping from disease-specific measures to utility: an analysis of the relationships between the Inflammatory Bowel Disease Questionnaire and Crohn's Disease Activity Index in Crohn's disease and measures of utility.

OBJECTIVES: To examine the relationship between the Inflammatory Bowel Disease Questionnaire (IBDQ), Crohn's Disease Activity Index (CDAI) and measures of utility (EQ-5D and the SF-6D indexes), and to estimate algorithms to map the two utility values from IBDQ and CDAI scores. METHODS: A large data set from clinical trials in Crohn's disease provided contemporaneous patient responses to all four questionnaires. Paired observations from multiple time-points were analyzed. We calculated mean utility scores by IBDQ and CDAI score deciles; Spearman correlation coefficients for paired observations between IBDQ and EQ-5D (n = 3320) and IBDQ and SF-6D (n = 3230), and explored regression models using maximum likelihood estimation. The IBDQ/SF-6D model was validated against paired observations from an independent data set. RESULTS: The IBDQ decile analysis demonstrated a consistent positive relationship with both utility indexes. Correlations between the IBDQ and both the EQ-5D and SF-6D were statistically significant (P < 0.0001), with correlation coefficients of 0.76 and 0.85, respectively. A simple linear model between EQ-5D and IBDQ explained 45% of the variance. The residuals plot for the IBDQ/SF-6D model suggested some nonlinearity and a nonlinear model explained 69% of the variance. In the validation analysis, no statistically significant difference was observed between the mean observed SF-6D and the SF-6D scores estimated using the IBDQ/SF-6D regression model. CONCLUSIONS: Given the strength, consistency, and predictable characteristics of the relationships, the algorithms appear to provide valuable and valid methods to estimate utilities from IBDQ scores (but not CDAI) in trials of Crohn's disease patients that have collected IBDQ scores but not utilities.

Economic evaluation and decision making in the UK.

This article reviews the development of economic evaluation of health technologies in the UK and its impact on decision making. After a long period of limited impact from studies mainly carried out as academic exercises, the advent of the National Institute for Health and Clinical Excellence (NICE) in 1999 provided a transparent decision-making context where economic evaluation plays a central role. This article reviews some of the key characteristics about the way NICE works, for example, the way NICE has defined the form of analysis that it requires, reflecting its objective of maximising health gain (QALYs) from the predetermined and limited UK NHS budget. Two broad areas of widespread concern are noted. The first relates to the cost-effectiveness thresholds that NICE uses and the basis for them. The second is the patchy implementation of NICE guidance and the possible reasons for this. But even within the UK, NICE is the exception in making extensive and explicit use of economic evaluation and this article goes on to suggest that if there is to be a more widespread and consistent use of economic evaluation at both central and local levels, then health economists and others need to address three issues. The first is to be clear about what is the correct conceptual basis for determining the cost-effectiveness threshold and then to ensure that NICE has the empirical evidence to set it appropriately. The second is to recognise that even using the limited view of costs adopted by NICE, economic evaluations imply temporal and cross-service budgetary flexibility that the NHS locally does not in practice enjoy. The third issue is that with academic pressures for ever-increasing sophistication of 'state of the art' economic evaluation analysis, the NHS has more and more precise understanding of the cost effectiveness of just a few new technologies and little or no analysis of most. This limits the value of the former by reducing further the scope for appropriately disinvesting from cost-ineffective technologies to meet the additional costs of investing in cost-effective new ones. Whilst NICE stands out as an example of a context where high-quality economic evaluation plays a major role in decision making, the process is far from perfect and certainly is not representative of the use made of economic evaluation by the NHS as a whole. Health economists need to engage with the public and the health service to better understand their perspectives, rather than focusing on academic concerns relating to details of theory and analytical method.

An economic evaluation of pediatric small bowel transplantation in the United Kingdom.

BACKGROUND: Small bowel transplantation (SBTx) offers an alternative to parenteral nutrition (PN) for the treatment of chronic intestinal failure in children: this study estimated its cost-effectiveness in the early phase of a U.K. program. METHODS: Children assessed for SBTx were categorized as: 1) requiring SBTx following PN-related complications (n=23), 2) stable at home not requiring SBTx (n=24), and 3) terminally ill and unsuitable for SBTx (n=6). Costs were estimated from detailed resource-use data. Two comparisons were used for effectiveness: actual survival following transplantation (n=14) compared to: 1) estimated survival without transplantation using a prognostic model, and 2) the waiting list experiences of all patients listed for SBTx (n=23). RESULTS: Mean costs up to 30 months were pounds sterling 207,000 for those transplanted or on the waiting list, pounds sterling 159,000 for those stable on home PN, and pounds sterling 56,000 for those terminally ill. The prognostic model estimated a mean survival gain from transplantation of 0.12 years over 30 months, and suggested that transplantation was cost-saving. The second approach suggested that transplantation reduced survival by 0.24 years at an additional cost of pounds sterling 131,000. CONCLUSIONS: Firm conclusions on cost-effectiveness of SBTx are not possible given the two different estimates. The prognostic model approach (suggesting that pediatric SBTx may provide a small survival benefit at a small reduction in costs) should be less subject to bias, but the model requires external validation. Meanwhile, children at risk of fatal PN-complications should be given the opportunity to receive a SBTx only within a continuing formal assessment of the technology.

Trial-based cost-utility comparison of percutaneous myocardial laser revascularisation and continued medical therapy for treatment of refractory angina pectoris.

This study examined from a health service perspective whether percutaneous myocardial laser revascularisation (PMR) plus standard medical management is cost-effective when compared with standard medical management alone in the treatment of refractory angina. This involved a cost-utility analysis using patient-specific data from a single-centre, randomised, controlled trial carried out in the United Kingdom. Of 73 patients diagnosed as having refractory angina and not suitable for conventional forms of revascularisation, 36 were randomised to PMR plus medical management and 37 to medical management alone. We collected costs to the health service of PMR and all secondary sector health care contacts and cardiac-related medication in the 12 months following randomisation. Patient utility, measured using the EuroQol EQ-5D questionnaire, was combined with 12-month survival data to generate quality-adjusted life years (QALYs). The mean 12-month cost per patient for PMR was 8,307 pounds, and that for medical management was 1,888 pounds, giving a cost difference of 6,410 pounds. The mean QALY difference favoured PMR at 0.126, giving an incremental cost per QALY of 50,873 pounds. The cost-effectiveness acceptability curve indicates that the probability of PMR being cost-effective over the first 12 months is quite low. Whilst a longer period of follow-up might indicate continued benefit from PMR, which would make the intervention economically more attractive, PMR could not be considered cost-effective based on 1-year follow-up data.