ECP4530 ECP5536 Sherron o o Cost Effective Analysis Part 3 Study Guide o Comparing cost per life year LY or quality adjusted life year QALY o Ex Cost for treating prostate cancer with surgery versus watchful waiting versus proton beam therapy Which method is most cost effective Which method costs the least and yields the most life years or quality adjusted life years o Do not have to put a dollar value on life or quality of life Describe how to perform a cost effective analysis o Performing a CEA with QALY Average costs divided by average life years saved LY or QALY o Example Prostate removal surgery can cause complications and lower quality of o Direct costs monetary costs require a dollar outlay o Health care costs are costs incurred by medical care providers ex hospitals and 20 000 LY or 100 000 QALY life o physicians o Non health care costs are monetary costs imposed on any nonmedical personnel including patients ex transportation lodging special equipment special requirements met for dietary restrictions etc o Indirect costs time opportunity cost associated with implementation of the treatment mortality or morbidity o No monetary payment occurs but something is given up ex time lost from work school or leisure due to treatment or time spent in recovery How to measure time lost how much the time contributes to GDP or wage o Costs are discounted when multiple time periods are involved o Pain and suffering are usually omitted Critique the various methods used to quantify quality of life o o Quality adjusted life years methods that adjust a life year for quality taking into account that not all life years are created equal o Health utility index HUI value from 0 1 0 is death and 1 is perfect health o o o o o Measure of quality of life Values applied to life years that adjust for quality Example Figure A Cost Life years gained Health utility index 0 7 higher quality 0 4 lower quality Quality adjusted life years 1 4 3 2 20 000 2 years 110 000 8 years Treatment Option Current procedure New procedure To find QALY multiply life years gained by the health utility index value o Method 1 Rating scales o Category scale present the rater with scenario rate scenario on a scale from 0 death to 10 perfect health o Visual analogue method rater is shown a line 100cm in length with end points well defined Rater marks the line to indicate where his or her preference is similar to category scale Criticism rating is completely based on perception extremely subjective o Method 2 Standard gamble approach o Propose the question Suppose you have to wear glasses to recognize family and friends even if they are in the same room Further suppose that there was an operation that would completely cure you or you would die instantly and painlessly on the operating table What probability of death would make you indifferent between having or not having the operation o Probability U currently health U perfect health 1 U death U death 0 U perfect health 100 Operation successful perfect health Operation unsuccessful 1 Criticism Do people really understand this approach this probability o Method 3 Time tradeoff o Subject is given the choice of living for a defined amount of time in perfect health or a variable amount of time in another health state that is less desirable o Reduce time in well state leaving time in sub optimal state fixed to establish point of indifference Scenario You can life X years in perfect health or Y years with disability Perfectly healthly of yrs sub optimal disabled or sick of yrs X 5 Y 20 5 20 0 25 HUI o o o Key differences in methods o Overall criticisms of various methods Each method is unique and the method utilized makes a difference o Economists say utilities must be derived from explicit tradeoff questions that the rating scale approaches do not do o Psychologists say the approaches such as standard gamble are too complex for respondents and tradeoffs are too artificial o Health ratings propose hypothetical situations and put lower value on adding life years to the disabled o DALY disability adjusted life year 1 DALY 1 year of healthy life lost o o o o o 0 no life lost Individual desires vary o Cost Effectiveness Ratio CER o A ratio of the net costs to the net outcomes of alternative intervention strategies o o o o o o o o o o o life year Difference in cost difference in outcome o Costs are measured in dollars and outcome measures can be different across studies o U S standard threshold when deciding whether or not to approve a treatment based on costs is 50 000 maximum o Example CER if new treatment would replace current treatment based on figure A previous page C2 C1 O2 O1 110 000 20 000 8 2 90 000 6 15 000 per LY Quality adjusted 110 000 20 000 3 2 1 4 50 000 per QALY o o Distinguish between health improving and cost effective o Health improving measures how effective a treatment is with regard to extending life how many life years can be gained from this treatment regardless of the cost versus how much a treatment costs per life year it yields Discuss the cost effectiveness and health effectiveness of various cancer behavior modifications screenings and treatments o War on Cancer Cancer drugs o Provenge extends life an average of 4 months for incurable prostate o Avastin treatment of metastatic cancers extends life an average of 4 7 cancer costs 93 000 months and costs 50 000 o Avastin in U K treatment of metastatic colorectal cancer extends life an average of 6 weeks and costs 110 000 Did treatment improve health Increase life years Was it cost effective 1971 2005 five times spending increase on cancer treatment 1971 1990 8 increase in age adjusted mortality o Take into account people live long enough to even get cancer and in the 1950 s there was an increase in smoking habits 1990 2005 13 fall in age adjusted mortality Why would mortality rates fall o Behavioral changes ex quit start smoking taking vitamins changes in exercise habits etc Screening ex x ray CT scan mammogram etc Treatment ex surgery radiation etc o o o o Explanations for the reduction in breast colorectal and prostate cancer mortality 1990 2004 findings include behavioral changes contributed to 23 with reduced smoking contributing 22 screening contributed 35 and treatment contributed 20 What did not contribute to decline in mortality Colorectal cancer behavioral changes obesity is a risk factor but aspirin and folate decrease risk Tobacco related cancers Chest x rays do not decrease mortality unless you re a