Reduce Harm and Waste - Cost Effectiveness & Economic Analysis

The approach to Reducing Harm and Waste in Realistic Medicine is to focus on value. When resources are limited, interventions are offered to those who will benefit most and who are more willing to accept risk and in these conditions it is more likely that high value healthcare is delivered. However as resources increase, interventions are offered to those less likely to benefit while the likelihood and magnitude of harm stays the same and in these conditions it is more likely that low or negative value healthcare is delivered. A personalised approach to care can help communicate these concepts for patients and help understand what benefit and risk mean for a patient’s personal situation. Personalised care can also reduce the impact of adverse events. Being Open is a best practice framework used in Scotland which creates an environment where patients and families feel supported and healthcare professionals and managers have the confidence to act appropriately. “Psychological harm to families is reduced when they experience compassionate care, their perspective is valued and when they are central to the review of care.” Being Open has also been used to prevent future harm when staff participate with the learning and improvement generated from the adverse event review reports. [The Scottish Government. Personalising Realistic Medicine: Chief Medical Officer for Scotland’s Annual Report 2017-18. Published 2019. https://www.gov.scot/publications/personalising-realistic-medicine-chief-medical-officer-scotland-annual-report-2017-2018/pages/7/]

During the pandemic some healthcare services were scaled back in order to minimise harm. Also, people were reluctant to access services and it is of concern that they have chosen to stay away. Routine care has been delayed and is now becoming more urgent. The organisation and delivery of care will need to be reviewed as demand increases. Shared decision making and personalising care will help people make an informed choice about their care and allow effective and efficient use of services, reducing harm and waste. Modernising Patient Pathways Program (MPPP) is transforming outpatient services across Scotland by ensuring the optimal pathway is chosen at first point of contact. Active Clinical Referral Triage (ACRT) has the potential to reduce waiting times by eliminating unnecessary face to face appointments.  Discharge Patient-Initiated Review (PIR) encourages patient independence and helps to avoid unwarranted use of our clinical resources, as well as our patients' valuable time, by avoiding routine "check-ups”. [The Scottish Government. The Chief Medical Officer for Scotland’s Annual Report 2020-21: Recover, Restore, Renew. Published 2021. https://www.gov.scot/publications/cmo-annual-report-2020-21/ ]

Value can be assessed in many different ways and can include cost-effectiveness analysis, economic analysis, disinvestment, and reducing overuse and overprescribing. Below is a selection of recent journal articles and reports which are about cost effectiveness or economic analysis in healthcare.  If you are looking to answer a specific question please submit a literature search request at the link above.  If you would like to be alerted when new content is available here then please sign in and select Follow.  You are welcome to leave comments and suggestions below in the comments section.

HUSEREAU, D., et al, 2022. Consolidated Health Economic Evaluation Reporting Standards 2022 (CHEERS 2022) statement: updated reporting guidance for health economic evaluations. BMJ, 376, pp. e067975.

LOW, V. and MACAULAY, R., 2022. Accounting for inflation within NICE cost-effectiveness thresholds. Expert Review of Pharmacoeconomics & Outcomes Research, 22(1), pp. 131-137.

PERRY-DUXBURY, M., et al, 2022. The Relevance of Including Future Healthcare Costs in Cost-Effectiveness Threshold Calculations for the UK NHS. PharmacoEconomics, 40(2), pp. 233-239.

TEN HAM, R.M.T., et al, 2022. Key Considerations in the Health Technology Assessment of Advanced Therapy Medicinal Products in Scotland, The Netherlands, and England. Value in Health, 25(3), pp. 390-399.

BERTRAM, M.Y. and EDEJER, T.T.T., 2021. Introduction to the Special Issue on "The World Health Organization Choosing Interventions That Are Cost-Effective (WHO-CHOICE) Update". International Journal of Health Policy & Management, epub ahead of print

ELLIOTT, R.A., et al, 2021. Economic analysis of the prevalence and clinical and economic burden of medication error in England. BMJ Quality & Safety, 30(2), pp. 96-105.

GALLACHER, D., et al, 2021. Development of a model to demonstrate the impact of National Institute of Health and Care Excellence cost-effectiveness assessment on health utility for targeted medicines. Health Economics, epub ahead of print

HULT, M., et al, 2021. Cost-effectiveness calculators for health, well-being and safety promotion: a systematic review. European journal of public health, 31(5), pp. 997-1003.

KIM, D.D. and BASU, A., 2021. How Does Cost-Effectiveness Analysis Inform Health Care Decisions?. AMA Journal of Ethics, 23(8), pp. E639-647.

LOW, V. and MACAULAY, R., 2021. Accounting for inflation within NICE cost-effectiveness thresholds. Expert Review of Pharmacoeconomics & Outcomes Research, 1-7

PERRY-DUXBURY, M., et al, 2021. The Relevance of Including Future Healthcare Costs in Cost-Effectiveness Threshold Calculations for the UK NHS. PharmacoEconomics, epub ahead of print

ARA, R., et al, 2020. Are Current Reporting Standards Used to Describe Health State Utilities in Cost-Effectiveness Models Satisfactory? Value in Health, 23(3), pp. 397-405.
RESULTS: Twenty-four peer-reviewed articles were identified. Only 2 studies referred to a literature review for the HSUs. Most (18 of 24) referenced previously published economic studies (as opposed to the original source) for at least 1 of the HSUs. Only 4 studies referenced the original sources and reported all of the HSUs accurately, and several did not provide all the HSUs. Little information was provided on the methods used to calculate QALYs, for example, the duration of time for acute HSUs, what the baseline HSU was, the method that was used to assign HSUs for subsequent different events, or how constant HSUs for clinical events were combined with age-adjusted baseline values. The huge differences in HSUs used in the studies produced substantial variations in the QALYs and incremental cost-effectiveness ratios generated from the cost-effectiveness model. CONCLUSION: Current standards are poor, and there is a need for greater transparency in reporting the HSUs used in cost-effectiveness models. Copyright © 2020 ISPOR-The Professional Society for Health Economics and Outcomes Research. Published by Elsevier Inc. All rights reserved.

BASU, A., et al, 2020. Health Years in Total: A New Health Objective Function for Cost-Effectiveness Analysis. Value in Health, 23(1), pp. 96-103.
The HYT framework separates life expectancy changes and QOL changes on an additive scale. HYT have the same axiomatic foundations as QALY and perform better than both QALY, in terms of the discriminatory implications, and EVL, in terms of capturing QOL gains during added years of life. HYT are straightforward to calculate within a CEA model. The HYT framework may provide a viable alternative to both the QALY and the EVL; its application to diverse healthcare technologies and stakeholder assessments are important next steps in its development and evaluation. Copyright © 2019 ISPOR-The Professional Society for Health Economics and Outcomes Research. Published by Elsevier Inc. All rights reserved.

CHEN G., et al, 2020. Evaluation of the National Institute for Health and Care Excellence Diagnostics Assessment Program Decisions: Incremental Cost-Effectiveness Ratio Thresholds and Decision-Modifying Factors. Value in Health, 23(10), pp. 1300-1306.
The National Institute for Health and Care Excellence (NICE) Diagnostics Assessment Programme (DAP) evaluates the cost-effectiveness of diagnostic technologies. A decision-making process benchmarking the incremental cost-effectiveness ratio (ICER) against a threshold while considering decision-modifying factors is common to NICE evaluations. This study investigated whether DAP decisions are consistent with the ICER thresholds described in the DAP manual, and to assess the impact of decision-modifying factors.

CUBI-MOLLA, P., et al, 2020. Are cost-effectiveness thresholds fit for purpose for real-world decision making?. OHE Consulting Report, London.
Cost-effectiveness thresholds (CETs) are used in a selected number of countries as tool in decision-making on funding and reimbursements for new healthcare technologies. In this white paper, OHE presents an analysis of the relative merits and shortfalls of current approaches to defining, estimating and applying CETs in health technology assessments. The paper also puts forward a number of policy recommendations to help guide decision makers in ensuring CETs are used to achieve improved health outcomes in the future.

ELLIOTT, R.A., et al, 2020. Economic analysis of the prevalence and clinical and economic burden of medication error in England. BMJ Quality & Safety, epub ahead of print
We estimated that 237 million medication errors occur at some point in the medication process in England annually, 38.4% occurring in primary care; 72% have little/no potential for harm and 66 million are potentially clinically significant. Prescribing in primary care accounts for 34% of all potentially clinically significant errors. Definitely avoidable ADEs are estimated to cost the NHS 98 462 582 per year, consuming 181 626 bed-days, and causing/contributing to 1708 deaths. This comprises primary care ADEs leading to hospital admission (83.7 million; causing 627 deaths), and secondary care ADEs leading to longer hospital stay (14.8 million; causing or contributing to 1081 deaths). Ubiquitous medicines use in health care leads unsurprisingly to high numbers of medication errors, although most are not clinically important. There is significant uncertainty around estimates due to the assumption that avoidable ADEs correspond to medication errors, data quality, and lack of data around longer-term impacts of errors. Data linkage between errors and patient outcomes is essential to progress understanding in this area. Copyright © Author(s) (or their employer(s)) 2020. No commercial re-use. See rights and permissions. Published by BMJ.

SUSSMAN, M., et al, 2020. Do Research Groups Align on an Intervention's Value? Concordance of Cost-Effectiveness Findings Between the Institute for Clinical and Economic Review and Other Health System Stakeholders. Applied Health Economics & Health Policy, 18(4), pp. 477-489.
The Institute for Clinical and Economic Review (ICER) employs fixed cost-effectiveness (CE) thresholds that guide their appraisal of an intervention's long-term economic value. Given ICER's rising influence in the healthcare field, we undertook an assessment of the concordance of ICER's CE findings to the published CE findings from other research groups (i.e., "non-ICER" researchers including life science manufacturers, academics, and government institutions). Disease areas and pharmaceutical interventions for comparison were determined based on ICER evaluations conducted from 1 January 2015 to 31 December 2017.  Among the 13 non-ICER studies meeting inclusion criteria, six disease areas and 14 interventions were assessed. Of the 14 interventions, a more favorable valuation would have been recommended for ten therapies if the CE ratios from other research groups had been used for decision making instead of ICER's findings, representing a 71.4% (10/14) discordance rate. Moreover, these discrepancies were found in each of the evaluated disease areas, with the largest number of discordant valuations found in rheumatoid arthritis (five out of six interventions were discordant) followed by one valuation each in multiple sclerosis (one out of three), non-small cell lung cancer (one out of two), multiple myeloma (one out of one), high cholesterol (one out of one), and congestive heart failure (one out of one). Our findings indicate high discordance when comparing ICER's appraisals to the CE findings of non-ICER researchers. To understand the value of new interventions, the totality of evidence on the CE of an intervention-including results from ICER and non-ICER modeling efforts-should be considered when making coverage and reimbursement decisions.

ZHANG, K., et al, 2020. International cost-effectiveness thresholds and modifiers for HTA decision making.
This paper provides an overview on the use of cost-effectiveness thresholds (CETs) in a number of selected countries in their decision-making process for health technology assessments. In addition to the different levels of CETs in these countries, this review examines whether an explicit or implicit CET is used, and the additional considerations (here termed 'modifiers') that are incorporated when funding and reimbursement decisions are made.

DA SILVA ETGES A.P.B., et al, 2019. An 8-step framework for implementing time-driven activity-based costing in healthcare studies. European Journal of Health Economics, 20(8), pp. 1133-1145.
This article aimed at exploring the literature and practical cases to propose an eight-step framework to apply TDABC in micro-costing studies for health care organizations. The 8-step TDABC framework is presented and detailed exploring online spreadsheets already coded to demonstrate data structure and math formula building. A list of analyses that can be performed is suggested, including an explanation about the information that each analysis can provide to increase the organization capability to orient decision making. The case study developed show that actual micro-costing of health care processes can be achieved with the 8-step TDABC framework and its use in future researches can contribute to increase the number of studies that achieve high-quality level in cost information, and consequently, in health resource evaluation.

HEALTH FINANCIAL MANAGEMENT ASSOCIATION, 2019. NHS efficiency map.
This map is a tool that promotes best practice in identifying, delivering and monitoring cost improvement programmes (CIPs) and quality, innovation, production and prevention (QIPP) schemes in the NHS. The map contains links to a range of tools and guidance to help NHS bodies improve their efficiency.

Hernandez-Villafuerte, K., Zamora, B., Feng, Y., et al.  Exploring variations in the opportunity cost cost-effectiveness threshold by clinical areas: results from a feasability study in England.  Office of Health Economics, March 2019.  Estimating a cost-effectiveness threshold reflecting the opportunity cost of adopting a new technology in a health system is not easy.  This OHE research paper provides empirical evidence on the relationship between health outcomes and health expenditures in England.  Results suggest that setting a cost-effectivess criterion for NICE may not be capable of being syntehsised using scientific methods alone, but involve political judgements.

MEACOCK, R., 2019. Methods for the economic evaluation of changes to the organisation and delivery of health services : principal challenges and recommendations. Health Economics, Policy and Law, 14(1), pp. 119-134. This paper discusses the principal challenges faced when performing economic evaluations of changes to the organisation and delivery of health services and provides recommendations for overcoming them. The general principles of assessing the cost-effectiveness of interventions should be applied to all NHS spending, not just that involving health technologies. Advancements in this area have the potential to improve the allocation of scarce NHS resources.

Briggs, ADM., Scarborough, P.  Wolstenholme, J. (2018) Estimating comparable English healthcare costs for multiple diseases and unrelated future costs for use in health and public health economic modelling.  PLoS ONE 13(5): e0197257. The methodology described allows health and public health economic modellers to estimate comparable English healthcare costs for multiple diseases.  This facilitates the direct comparison of different health and public health interventions enabling better decision making.

Harris, A., Sharma, A.(2018)  Estimating the future health and aged care expenditure in Australia with changes in morbidity.  PLoS ONE 13(5): e0201697.  Ageing will have a direct effect on the growth of health spending but is likely to be dwarfed  by other demand and supply factors.  A focus on greater efficiency in health production and finance is likely to be more effective in delivering high quality care than trying to restrain the damand for health and aged care among the elderly,

Pandya, A., Doran, T., Zhu, J., et al. (2018)  Modelling the cost-effectiveness of pay for performance in primary care in the UK.  BMC Medicine 16(1): 135, 2018 09 29. Compared to stopping the Quality Outcomes Framework (QOF) and returnign all associated incentive payments to the National Health Service, continuing the QQOF  is not cost-effective.  To improve population health efficiently, the UK should redesign the QOF or pursuue alternative interventions.

Timka, T., Nyce, JM., Amer-Wahlin, I. (2018) Value-based reimbursement in collectively financed healthcare requires monitoring of socioeconomic patient data to maintain equality in service provision.  Journal of General Internal Medicine  September 11th.  Value-based purchasing is increasingly discussed in association with efforts to develop modern healthcare systems.  These models are hte most recent example of models derived frmo health economics research intended to reform collectively financed healthcare.  Previous examples have ranged from creation of pseudo-marjets to opening these markets for competition between publicly and privately owned enterprises.  Most value-based purchasing models tend to ignore that health service provision in collectively financed settings is based on an insurance with political, social obligations attached that challenge the notion of free market and individualist premises which these models rest on.  Central social issues related to healthcare in any modern complex society, such as inequality in service provision, can all too easily "disappear" in value-based reform efforts.  Based on an analysis of Swedish policy development, the authors content that managemnet information systems need to be extended to allow routine monitoring of socioeconomic data when models such as value-based purchasing are introduced in collectively financed health services.  The experiences from Sweden are important for health policy in Europe and other regions with collectively financed healthcare plans.