Case 3 Economic evaluation of health innovations 01-10-2022
Why do we need to conduct economic evaluations of healthcare innovations?
Rationale of economic evaluation:
Interest in tension between limited financial possibilities (health care budget constraint)
and unlimited / increase of health care needs / costs (new, expensive treatments,
interventions and innovations)
Need for efficient allocation of scarce healthcare resources (reasonable decision making)
Economic evaluation is becoming increasingly important, due to:
- Increased attention to issues of costs and efficiency
- Increased use of economic data in decisions about the reimbursement or pricing of
health technologies.
- Formal use of economic data (e.g. drug reimbursement)
- Fourth hurdle to market access (economic evaluation is important for market access
of drugs)
The steps of an economic evaluation:
1. Choose the perspective
2. Choose the type of economic evaluation
3. The identification of costs
4. Measurement of costs and effects
5. Compare and determine the difference in costs and the difference in effects
6. Estimate the ratio ICER and ICUR
7. Put the ratio into the cost-effectiveness plane and interpret the results
It’s important to assess health technologies because there is a tension between:
- Limited financial possibilities (constraints health care budget), and;
- Unlimited increase of health care costs (e.g. new, expensive treatments and
innovations)
Objectives
- The objective of an economic evaluation is not to save money, but to ensure that
resources are used efficiently
- There are not enough resources to meet all the needs of the society. So choices have
to be made. In other words, efficiently allocate health care resources! What the most
efficient allocation is, can be assessed with economic evaluations.
- In recent years physicians increasingly have to concern themselves not only with the
efficacy of care and its acceptability to patients but also its economic efficiency.
Doing economic evaluations and providing them the results can help in making
decisions
What is an economic evaluation and what are the types of economic evaluations?
What is economic evaluation?
= Comparative analysis between two or more health technologies in terms of costs and
effects
, - They provide a framework for identifying and comparing the costs and benefits of
different options systematic way of evaluation increases the accountability in
decision making, relevant alternatives are clearly identified.
- They inform policy makers about efficient healthcare allocation
Uncertainty in economic evaluation
- Structural uncertainty (assumptions, methods)
- Parameters uncertainty (e.g. treatment effect)
- Heterogeneity (sex, age, subgroups)
Types of economic evaluations
Types of economic evaluations can i.e. be characterised due to different perspectives /
viewpoints for economic analysis (this depends on the objective of the economic evaluation
and it varies between countries:
- Societal perspective:
o Drummond et.al. (2015): costs in healthcare, patient and family costs,
productivity losses, and costs in other sectors
o Evers (2001): direct costs (directly linked to disease), indirect costs (e.g. loss of
productivity and mortality) and intangible costs (cannot be expressed in
monetary terms, e.g. pain, and the ability to perform in day-to-day life))
- Healthcare perspective: HC costs
- Patient perspective: Patient costs
Additionally, economic evaluations can be divided into subtypes concerning the included
aspects:
- Full economic evaluation (see table below).
- Partial economic evaluation: looks at one alternative / treatment and thus does not
compare. An example:
o Cost-of-illness study: a study that estimates and evaluates the HC costs (direct
costs) and the production losses (indirect costs) of one disease or a risk factor.
E.g. burden of disease studies (BoD):
Advantages: highlights the importance of diseases to establish
priorities between interventions and guide research priorities
Disadvantages: no information about the benefits of interventions and
the related costs. Thus, adds little to the creation of an efficient HC
system.
Why do we need to conduct economic evaluations of healthcare innovations?
Rationale of economic evaluation:
Interest in tension between limited financial possibilities (health care budget constraint)
and unlimited / increase of health care needs / costs (new, expensive treatments,
interventions and innovations)
Need for efficient allocation of scarce healthcare resources (reasonable decision making)
Economic evaluation is becoming increasingly important, due to:
- Increased attention to issues of costs and efficiency
- Increased use of economic data in decisions about the reimbursement or pricing of
health technologies.
- Formal use of economic data (e.g. drug reimbursement)
- Fourth hurdle to market access (economic evaluation is important for market access
of drugs)
The steps of an economic evaluation:
1. Choose the perspective
2. Choose the type of economic evaluation
3. The identification of costs
4. Measurement of costs and effects
5. Compare and determine the difference in costs and the difference in effects
6. Estimate the ratio ICER and ICUR
7. Put the ratio into the cost-effectiveness plane and interpret the results
It’s important to assess health technologies because there is a tension between:
- Limited financial possibilities (constraints health care budget), and;
- Unlimited increase of health care costs (e.g. new, expensive treatments and
innovations)
Objectives
- The objective of an economic evaluation is not to save money, but to ensure that
resources are used efficiently
- There are not enough resources to meet all the needs of the society. So choices have
to be made. In other words, efficiently allocate health care resources! What the most
efficient allocation is, can be assessed with economic evaluations.
- In recent years physicians increasingly have to concern themselves not only with the
efficacy of care and its acceptability to patients but also its economic efficiency.
Doing economic evaluations and providing them the results can help in making
decisions
What is an economic evaluation and what are the types of economic evaluations?
What is economic evaluation?
= Comparative analysis between two or more health technologies in terms of costs and
effects
, - They provide a framework for identifying and comparing the costs and benefits of
different options systematic way of evaluation increases the accountability in
decision making, relevant alternatives are clearly identified.
- They inform policy makers about efficient healthcare allocation
Uncertainty in economic evaluation
- Structural uncertainty (assumptions, methods)
- Parameters uncertainty (e.g. treatment effect)
- Heterogeneity (sex, age, subgroups)
Types of economic evaluations
Types of economic evaluations can i.e. be characterised due to different perspectives /
viewpoints for economic analysis (this depends on the objective of the economic evaluation
and it varies between countries:
- Societal perspective:
o Drummond et.al. (2015): costs in healthcare, patient and family costs,
productivity losses, and costs in other sectors
o Evers (2001): direct costs (directly linked to disease), indirect costs (e.g. loss of
productivity and mortality) and intangible costs (cannot be expressed in
monetary terms, e.g. pain, and the ability to perform in day-to-day life))
- Healthcare perspective: HC costs
- Patient perspective: Patient costs
Additionally, economic evaluations can be divided into subtypes concerning the included
aspects:
- Full economic evaluation (see table below).
- Partial economic evaluation: looks at one alternative / treatment and thus does not
compare. An example:
o Cost-of-illness study: a study that estimates and evaluates the HC costs (direct
costs) and the production losses (indirect costs) of one disease or a risk factor.
E.g. burden of disease studies (BoD):
Advantages: highlights the importance of diseases to establish
priorities between interventions and guide research priorities
Disadvantages: no information about the benefits of interventions and
the related costs. Thus, adds little to the creation of an efficient HC
system.
