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VBCR - June 2015, Volume 4, No 3 - Health Economics
Rosemary Frei, MSc

Can social values be incorporated into cost-effectiveness analyses for healthcare decisions in the United States? It may happen eventually but not in the near term, according to an expert asked by Value-Based Care in Rheumatology to comment on a presentation at the 2015 International Society for Pharmaco­economics and Outcomes Research annual meeting.

The National Institute for Health and Care Excellence in the United Kingdom is starting to include social values in their cost-effectiveness analyses, noted the presenters from Edmonton and Dublin. They made compelling arguments both for incorporating social values and for the complexity of doing so, even in a single-payer system.

They noted that in a single-payer system there are always health services that are displaced or foregone to pay for a new technology, whereas in insurance-based systems there are services or goods that are priced out of coverage as premiums rise to pay for the new technology.

“We need to decide on which value arguments are important, who determines the relative weight placed on each, and how these arguments affect the value assigned to all health services affected by a decision to adopt a new technology,” Mike Paulden, MSc, a research associate in the Faculty of Medicine & Dentistry, University of Alberta, Edmonton, Canada, and James O’Mahony, MA, research fellow, School of Medicine, Trinity College, Dublin, noted in their presentation.

One of their main points was that cost-effectiveness analyses should incorporate 2 important social values. One is preference for net health improvement, meaning the expectation that a new technology with an incremental cost-effectiveness ratio below a certain threshold will yield more quality-adjusted life-years (QALYs) with its use rather than fewer, and vice versa. The second is having an appropriate dollar threshold for the QALYs in each analysis, based on the complex social value and other parameters in each case.

The variables that could or should be included in examining the cost-effectiveness of any given item include disease severity, disease rarity, whether the condition is a childhood illness, the extent of innovation involved, whether it is life-saving, and treatment alternatives, according to Paulden and O’Mahony.

John FitzGerald, MD, PhD, MBA, interim chief of rheumatology, and associate professor, David Geffen School of Medicine at the University of California Los Angeles, praised the presentation and said it is “well ahead of what we’re doing here in the United States.”

“We’ll probably move in that direction but it’ll take time because we don’t have a single-payer system,” said FitzGerald. “And another layer of complexity—in any country—is that there are many choices of treatment substitutes to consider. There’s also the practice of future discounting, where prices are assumed to come down over time as competition is introduced.”

FitzGerald said all of these principles can be shown in examples from rheumatology. Rheumatologists are now often conducting ultrasound-guided knee injections in patients with arthritis, and there are cost-effectiveness studies that justify adding the cost of ultrasound to the cost of injections. However, the studies do not convincingly show that the marginal value from the increased accuracy and reduced pain with ultrasound guidance is worth the considerable extra cost, he said.

Reference

McCabe C, Paulden M, O’Mahony JF. Incorporating social values into cost-effectiveness analysis. Panel presentation at: ISPOR 20th International Annual Meeting; May 16-20, 2015; Philadelphia, PA.

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Last modified: June 29, 2015
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