Guidelines for pharmacoeconomic studies. Recommendations from the panel on cost effectiveness in health and medicine. Panel on cost Effectiveness in Health and Medicine.

This article reports the recommendations of the Panel on Cost Effectiveness in Health and Medicine, sponsored by the US Public Health Service, on standardised methods for conducting cost-effectiveness analyses. Although not expressly directed at analyses of pharmaceutical agents, the Panel's recommendations are relevant to pharmacoeconomic studies. The Panel outlines a 'Reference Case' set of methodological practices to improve quality and comparability of analyses. Designed for studies that inform resource-allocation decisions, the Reference Case includes recommendations for study framing and scope, components of the numerator and denominator of cost-effectiveness ratios, discounting, handling uncertainty and reporting. The Reference Case analysis is conducted from the societal perspective, and includes all effects of interventions on resource use and health. Resource use includes 'time' resources, such as for caregiving or undergoing an intervention. The quality-adjusted life-year (QALY) is the common measure of health effect across Reference Case studies. Although the Panel does not endorse a measure for obtaining quality-of-life weights, several recommendations address the QALY. The Panel recommends a 3% discount rate for costs and health effects. Pharmacoeconomic studies have burgeoned in recent years. The Reference Case analysis will improve study quality and usability, and permit comparison of pharmaceuticals with other health interventions.

Recommendations for reporting cost-effectiveness analyses. Panel on Cost-Effectiveness in Health and Medicine.

OBJECTIVE: This article, the third in a 3-part series, describes recommendations for the reporting of cost-effective analyses (CEAs) intended to improve the quality and accessibility of CEA reports. PARTICIPANTS: The Panel on Cost-Effectiveness in Health and Medicine, a nonfederal panel with expertise in CEA, clinical medicine, ethics, and health outcomes measurement, convened by the US Public Health Service. EVIDENCE: The panel reviewed the theoretical foundations of CEA, current practices, alternative methods, published critiques of CEAs, and criticisms of general CEA methods and reporting practices. CONSENSUS PROCESS: The panel developed recommendations through 2 1/2 years of discussions. Comments on preliminary drafts were solicited from federal government methodologists, health agency officials, and academic methodologists. CONCLUSIONS: These recommendations are proposed to enhance the transparency of study methods, assist analysts in providing complete information, and facilitate the presentation of comparable cost-effectiveness results across studies. Adherence to reporting conventions and attention to providing information required to understand and interpret study results will improve the relevance and accessibility of CEAs.

The role of cost-effectiveness analysis in health and medicine. Panel on Cost-Effectiveness in Health and Medicine.

OBJECTIVE: To develop consensus-based recommendations guiding the conduct of cost-effectiveness analysis (CEA) to improve the comparability and quality of studies. The recommendations apply to analyses intended to inform the allocation of health care resources across a broad range of conditions and interventions. This article, first in a 3-part series, discusses how this goal affects the conduct and use of analyses. The remaining articles will outline methodological and reporting recommendations, respectively. PARTICIPANTS: The Panel on Cost-Effectiveness in Health and Medicine, a nonfederal panel with expertise in CEA, clinical medicine, ethics, and health outcomes measurement, was convened by the US Public Health Service (PHS). EVIDENCE: The panel reviewed the theoretical foundations of CEA, current practices, and alternative procedures for measuring and assigning values to resource use and health outcomes. CONSENSUS PROCESS: The panel met 11 times during 2 1/2 years with PHS staff and methodologists from federal agencies. Working groups brought issues and preliminary recommendations to the full panel for discussion. Draft recommendations were circulated to outside experts and the federal agencies prior to finalization. CONCLUSIONS: The panel's recommendations define a "reference case" cost-effectiveness analysis, a standard set of methods to serve as a point of comparison across studies. The reference case analysis is conducted from the societal perspective and accounts for benefits, harms, and costs to all parties. Although CEA does not reflect every element of importance in health care decisions, the information it provides is critical to informing decisions about the allocation of health care resources.

Recommendations of the Panel on Cost-effectiveness in Health and Medicine.

OBJECTIVE: To develop consensus-based recommendations for the conduct of cost-effectiveness analysis (CEA). This article, the second in a 3-part series, describes the basis for recommendations constituting the reference case analysis, the set of practices developed to guide CEAs that inform societal resource allocation decisions, and the content of these recommendations. PARTICIPANTS: The Panel on Cost-Effectiveness in Health and Medicine, a nonfederal panel with expertise in CEA, clinical medicine, ethics, and health outcomes measurement, was convened by the US Public Health Service (PHS). EVIDENCE: The panel reviewed the theoretical foundations of CEA, current practices, and alternative methods used in analyses. Recommendations were developed on the basis of theory where possible, but tempered by ethical and pragmatic considerations, as well as the needs of users. CONSENSUS PROCESS: The panel developed recommendations through 2 1/2 years of discussions. Comments on preliminary drafts prepared by panel working groups were solicited from federal government methodologists, health agency officials, and academic methodologists. CONCLUSIONS: The panel's methodological recommendations address (1) components belonging in the numerator and denominator of a cost-effectiveness (C/E) ratio; (2) measuring resource use in the numerator of a C/E ratio; (3) valuing health consequences in the denominator of a C/E ratio; (4) estimating effectiveness of interventions; (5) incorporating time preference and discounting; and (6) handling uncertainty. Recommendations are subject to the ¿rule of reason,¿ balancing the burden engendered by a practice with its importance to a study. If researchers follow a standard set of methods in CEA, the quality and comparability of studies, and their ultimate utility, can be much improved.

Oregon's Medicaid ranking and cost-effectiveness: is there any relationship?

The authors examine whether Oregon's 1990, 1991, 1992, and 1993 prioritized lists were ranked in a manner consistent with cost-effectiveness. Two sets of cost-effectiveness data are used: data from economic analyses and Oregon's own cost-effectiveness data. Comparing the ranks of Oregon's lists with the ranks of cost-effectiveness estimates from the literature reveals Spearman correlations of -0.08 for the 1990 list, +0.39 for the 1991 list, +0.25 for the 1992 list, and +0.24 for the 1993 list. Comparing Oregon's lists with Oregon's own cost-effectiveness data reveals rank correlations of +0.99 for the 1990 list, +0.06 for the 1991 list, -0.05 for the 1992 list, and -0.03 for the 1993 list. Thus, there appear to be essentially no relationship between the 1990 list and cost-effectiveness estimates from the economic literature and modest positive relationships between the 1991-93 lists and the literature. In addition, there is virtually no relationship between the 1991-93 lists and Oregon's own cost-effectiveness data. Further, the correlations are very different from +1.0, suggesting that other factors are at play. For example, the 1993 list that is currently being implemented was ranked primarily by improvement in five-year survival and human judgment, not cost-effectiveness.

Economic evaluation of HIV testing among intravenous drug users. An analytic framework and its application to Italy.

We performed an economic evaluation of HIV testing among intravenous drug users (IVDUs) in Italy using the analytical framework of cost-effectiveness analysis. A semi-Markov model was developed to calculate costs and life expectancy of a cohort of IVDUs with and without an annual HIV testing program. We also investigated the incremental cost-effectiveness of a hypothetical early treatment to prolong the life expectancy of HIV-infected asymptomatic subjects by 1 year. The testing program is cost saving in the low prevalence scenario (0.05), and costs L 14,000,000 (US $8,400) and L 55,800,000 (US $33,500) per year of life saved in areas of medium (0.3) and high (0.6) prevalence, respectively. The incremental cost-effectiveness of the hypothetical early treatment may compare favorably with other health care interventions. The program may be considered a cost-effective procedure in low and medium prevalence areas. Where prevalence is high, more evidence about the magnitude of the behavior change is needed. In these areas, the availability of an effective early treatment may become the economic rationale for implementing such a program.

Five-hundred life-saving interventions and their cost-effectiveness.

We gathered information on the cost-effectiveness of life-saving interventions in the United States from publicly available economic analyses. "Life-saving interventions" were defined as any behavioral and/or technological strategy that reduces the probability of premature death among a specified target population. We defined cost-effectiveness as the net resource costs of an intervention per year of life saved. To improve the comparability of cost-effectiveness ratios arrived at with diverse methods, we established fixed definitional goals and revised published estimates, when necessary and feasible, to meet these goals. The 587 interventions identified ranged from those that save more resources than they cost, to those costing more than 10 billion dollars per year of life saved. Overall, the median intervention costs $42,000 per life-year saved. The median medical intervention cost $19,000/life-year; injury reduction $48,000/life-year; and toxin control $2,800,000/life-year. Cost/life-year ratios and bibliographic references for more than 500 life-saving interventions are provided.

HIV screening of surgeons and dentists: a cost-effectiveness analysis.

OBJECTIVE: To assess the cost-effectiveness of human immunodeficiency virus (HIV) screening strategies of surgeons and dentists. DESIGN: We constructed a model to project costs and HIV transmissions prevented over 15 years for four screening scenarios: 1) one-time voluntary screening, 2) one-time mandatory screening, 3) annual voluntary screening, and 4) annual mandatory screening. One-time screening occurs only in the first year of the program; annual screening occurs once each year. Under mandatory screening, all practitioners are tested and risks of practitioner-to-patient transmission are eliminated for all practitioners testing positive. Voluntary screening assumes 90% of HIV-positive and 50% of HIV-negative practitioners are tested, and risks of transmission in the clinical setting are eliminated for 90% of HIV-positive surgeons and dentists. All costs and benefits are discounted at 5% per annum over 15 years. RESULTS: Using "best-case" scenario assumptions, we find for surgeons that a one-time voluntary screening program would be most cost-effective, at $899,336 for every HIV transmission prevented. For dentists, the one-time voluntary program also is the most cost-effective, at $139,571 per transmission prevented. Annual mandatory programs were least cost-effective for both surgeons and dentists, at $63.3 million and $2.2 million per transmission prevented, respectively. CONCLUSIONS: HIV screening of surgeons and dentists ranks among the more expensive medical lifesaving programs, even using liberal assumptions about program effectiveness. Frequency of screening and whether testing is mandatory or voluntary dramatically affect cost per transmission prevented; these features should be considered carefully in designing specific HIV screening programs.

Cost utility of maintenance treatment of recurrent depression with sertraline versus episodic treatment with dothiepin.

The objective of this study was to model, for patients at risk of recurrent depression, the cost-utility of maintenance therapy with sertraline compared with treatment of acute episodes with dothiepin ('episodic treatment'). Using clinical decision analysis techniques, a Markov state-transition model was constructed to estimate the lifetime costs and quality-adjusted life-years (QALYs) of the 2 therapeutic strategies. The model follows 2 cohorts of 35-year-old women at high risk for recurrent depression over their lifetimes. Model construction and relevant data (probabilities) for performing the analysis were based on existing clinical knowledge. Two physician panels were used to obtain estimates of recurrence probabilities not available in the literature, health utilities, and resource consumption. Costs were obtained from published sources. The baseline analysis showed that it costs 2172 British pounds sterling ($US3692, 1991 currency) to save an additional QALY with sertraline maintenance treatment. Sensitivity analysis showed that the incremental cost-utility ratio ranged from 557 British pounds sterling to 5260 British pounds sterling per QALY. Overall, the resulting ratios are considered to be well within the range of cost-utility ratios that support the adoption and appropriate utilisation of a technology. Based on the study assumptions, long term maintenance treatment with sertraline appears to be clinically and economically justified choice for patients at high risk of recurrent depression.

Cost-effectiveness of screening and early treatment of nephropathy in patients with insulin-dependent diabetes mellitus.

Studies have demonstrated that "antihypertensive" treatment with angiotensin-converting enzyme inhibitors (ACEI) may retard the progress of nephropathy in patients with insulin-dependent diabetes mellitus. To obtain an indication of the potential effect of ACEI treatment and as a guide to future research, the effects of screening and early ACEI treatment programs were estimated using cost-effectiveness models. The preliminary analysis suggests that the early treatment of insulin-dependent diabetes mellitus patients with ACEI is likely to be a very cost-effective use of health care resources. The cost-effectiveness ratio for screening and treatment at the stage of microalbuminuria ($7,900 to $16,500 per year of life saved) compares favorably with those of other medical life-saving interventions. Less-aggressive programs (screening followed by treatment at the stage of proteinuria) would improve life expectancy to a lesser extent but could save net health care costs as well as years of life. Although more exact and comprehensive cost-effectiveness analysis must await clinical trials, these illustrative results demonstrate the range of cost-effectiveness that can be expected from these programs and identify data needed for more decisive policy conclusions.

Covering the uninsured. Interactions among public and private sector strategies.

KIE: Some 37 million Americans are without health insurance, many of them the poor or the near poor. Two proposals to cover millions of these uninsured are examined to determine their financial impact on the public and private sectors. One proposal, which mandates an expansion of employer-provided insurance, would extend coverage to many of the working poor and their dependents. Costs of this expansion would be financed by the private sector, with the public sector affected by the loss of some jobs and tax revenues, and by reduced Medicaid expenditures. A second proposal allows the near poor, those with incomes just above the federal poverty level, to buy into the Medicaid program using their own funds and a public subsidy. The costs of this expanded coverage would be financed by the public sector. A combination of the two proposals would draw on private and public resources and provide health insurance to over 33 million presently uninsured Americans.^ieng

Including the poor: the fiscal impacts of Medicaid expansion.

This article presents the fiscal impacts of the comprehensive reform of the Medicaid program put forth by the Health Policy Agenda for the American People. Proposed reforms include establishment of improved uniform eligibility standards, improvement in the scope and depth of coverage in state Medicaid programs, and increased provider payment rates. We estimate that expanding Medicaid coverage to all currently uninsured nonelderly persons below the federal poverty line would cost approximately $9 billion. A substantial portion of these costs would offset current spending elsewhere in the health care system. Improvement of state packages and increased provider payment could result in sharp increases in costs. We provide a range of estimates considering both the set of benefits provided and the behavior of the private insurance market.

KIE: The fiscal impacts of the comprehensive reform of the Medicaid program put forth by the Health Policy Agenda for the American People are analyzed. The establishment of improved uniform eligibility standards, improvements in the scope and depth of coverage in state Medicaid programs, and increased provider payment rates would cost $9 billion for all currently uninsured nonelderly persons below the federal poverty line. A range of estimates of cost increases are provided which consider both the set of benefits provided and the behavior of the private insurance market.