Cost-effectiveness, QALYs, and incremental cost-effectiveness ratios

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    treatments that they provide. This manuscript discusses the concepts of value-based

    healthcare, outcomes measures, and cost-effectiveness and the inuence they will have on

    past decade.36 Spine care-related expenditures totaled $86


    comes. The legislation established the Patient-Centered Out-

    S E M I N S P I N E S U R G 2 6 ( 2 0 1 4 ) 2 7Corresponding author.E-mail address: (J.A. Rihn).billion in 2005, representing a 65% increase from 1997.2 Thisincrease in cost did not, however, translate into improvedhealth status.2

    comes Research Institute, whose board is comprised ofpatients, doctors, hospital executives, drug makers, devicemanufacturers, insurers, payers, government ofcials, and

    1040-7383/$ - see front matter & 2014 Elsevier Inc. All rights reserved.

    nvisits. Rates of imaging, injections, opiate use, and surgeryfor spine problems have increased substantially over the

    able Care Act passed in 2010 is expected to investigatepayment for healthcare services as related to clinical out-

    2Back and neck pain are among the most common com-plaints encountered in clinical practice. Low back pain aloneaccounted for approximately 2% of all physician ofce


    In light of this, it is reasonable to expect that spineproviders will be required to measure the value of the tments that they provide. The Patient Protection and Afnecessarily translate into improved care. Although the UnitedStates spends more on healthcare than any other industrial-ized nation, it ranks only 37th out of 191 countries in theoverall performance of the healthcare system.1 Spine carehas not been immune to these elevating costs and its valuehas become an increasing focus for policy makers andphysicians.

    been practiced. Concentrating solely on cost may be detri-mental and would ignore the altruistic purpose of medicine,resulting in cost-shifting rather than cost-saving. There isalso the concern of spurring increased clinical volume inresponse to decreasing reimbursement. The economic crisisfacing our country demands that reform consider both costand quality.1. Introduction

    The cost of healthcare in the Unitegrow at an unsustainable rate. Emincreased demand from an aginguted to higher costs. Greater expend States has continued toerging technology and anpopulation have contrib-diture, however, does not

    Given the currenand payers have mhealthcare. This conalso achieving themoney. A value-bastages over the trad& 2014 Elsevier Inc. All rights reserved.

    t economic environment, policy makersoved towards a system of value-basedcept involves cost-cutting of course, butgreatest quality of care for the leasted healthcare system may have advan-itional fee-for-service medicine that hasour future practice.www.elsevier.c

    Cost-effectiveness, QALYs, andcost-effectiveness ratios

    Ravi R. Patel, MDa, Todd J. Albert, MDb, andaDepartment of Orthopaedic Surgery, Emory University Hospital, AtbDepartment of Orthopaedic Surgery, Thomas Jefferson University HPhiladelphia, PA

    a b s t r a c t

    The cost of healthcare

    Spine care has not b

    environment, policy m

    of value-based health/locate/semss


    effrey A. Rihn, MDb,n

    a, GAital, The Rothman Institute, 925 Chestnut St, 5th Floor,

    the United States has continued to grow at an unsustainable rate.

    immune to these elevating costs. Given the current economic

    ers and payers have started to consider a move towards a system

    . Spine care providers will be required to measure the value of the

  • and indirect cost should be considered when measuring

    pants in healthcare delivery system (i.e., physicians, legisla-

    R Gtors, patients, and the global payer community). With fewexceptions, medical professionals do not routinely measuretheir clinical outcomes. And this must change if we are tomeasure the quality and the value of the care we provide.A notable challenge to outcome studies is determining the

    clinical signicance of a change or difference in a health-related quality-of-life measure. An outcome questionnairewill report a numerical score and statistical analysis can bereadily performed. But the question arises whether a stat-istical improvement translates to an improvement in apatient sense of health or well-being. The minimal clinicallyimportant difference (MCID) has been dened as the smallestvalue. A cost-effectiveness analysis essentially combinesthese measures as cost divided by some measure of benet.In the following sections, we will review the methods foroutcome assessment as well as the measurement of cost andvalue of spine care.

    3. Outcome measures

    Several spine care-related process of care measures andoutcome measures are currently used to assess quality, buteach has its downsides and limitations. The ideal outcomemeasure should be patient-focused and assess the effects ofan intervention that are most important to the patient(i.e., pain, function, and return to work or previous level ofactivity). It should be reliable, valid, simple to collect, simpleto score, and allow comparison of effectiveness across otherdisease states. Furthermore, measurements should be able tobe effectively communicated amongst the various partici-health experts. Its purpose is to examine the relative healthoutcomes, clinical effectiveness, and appropriateness of dif-ferent medical treatments by evaluating existing studies andconducting its own. This is particularly applicable to spinecare, a eld where the use of new devices and biologics hasbeen commonplace even though the benets or the relativeadvantages over existing technologies have not all beenclearly dened.7 For this reason, it is important for the spinecare provider to understand the concept of value as itpertains to spine care delivery and the methods in whichvalue can be determined.

    2. Value-based healthcare

    How does one dene value? It is a very encompassing andabstruse term that is applied to many aspects of our lives. Inregards to healthcare, value may be dened as the quality ofan intervention divided by the cost of the interventionmeasured over time. Although supercially simplistic, thisequation is very complex and even the individual variablesare difcult to quantify. Several methods have been proposedto measure quality of care, including outcome measures(disease specic or general), process of care measures, safetymeasures, and patient satisfaction measures. Both direct cost

    S E M I N S P I N E S Uchange in outcome measures that the patient considersmeaningful.8 Although beyond the scope of this publication,recent studies have been performed to investigate MCID as itrelates to disorders of the spine.811 The goal of treating apatient, however, is not to obtain a minimal clinical improve-ment. Thus, the idea of substantial clinical benet (SCB) hasalso been proposed as a benchmark for outcome measuresused in spine-related research. Values for SCB in the settingof cervical fusion have been dened for the Neck DisabilityIndex (NDI) (9.5), SF-36 physical component summary score(6.5), and numeric rating scales for neck and arm pain (3.5).12

    Values for SCB in the setting of lumbar fusion have beendened for the Oswestry Disability Index (ODI) (18.8), SF-36physical component summary score (6.2), and numeric ratingscales for back and leg pain (2.5).13

    3.1. Process measures

    Process measures evaluate various aspects of patient carebefore, during, and after a treatment is provided to a patient.These measures are typically hospital-based measuredrecorded in electronic databases. Examples include operativetime, length of hospital stay, infection rate, the use ofappropriate perioperative antibiotic or thromboembolic pro-phylaxis, complications, readmission, and reoperations.These values are binary or numerical, and therefore areeasily recorded, stored, and understood. Furthermore, theyare considered free of bias that is encountered with patient-reported outcome measures. Process measures form thefoundation for the current Physician quality reporting initia-tive (PQRI) measurements required by the US govern-ment.14,15 These measures are currently used by hospitals,payers, and third party physician and hospital graders (e.g.,Health grades) to evaluate quality of care.It is unclear and unlikely, however, that process measures

    are able to truly reect the quality of care a patientreceives.14,15 Although they are important, these measuresare not patient-centered in that they do not address thosethings that are most important to the patient (i.e., pain andreturn to work or play). For instance, does decreased averageoperative time or hospital length of stay translate intoimproved patient function and satisfaction? It seemsunlikely. Process measures can be obtained with ease, andthe mere accessibility may cause policy makers and payers tomake inappropriate quality-of-care extrapolations. It is ourresponsibility as spine care clinicians to ensure that processmeasures are not the only measures that are used to gradeperformance or to make payment and coverage decisions.

    3.2. Disease-specic measures

    As the name implies, disease-specic measures assesshealth-related quality-of-life measures in patients afictedby a particular pathologic process. Spine disease-specicmeasures relate to an injury (i.e., fracture), disease (i.e., spinalstenosis), or anatomic area (i.e., lumbar spine).16 For example,the Oswestry Disability Index (ODI) is a disease-specicmeasure intended to measure how a disorder of the lumbarspine affects the patient's function.17

    Disease-specic measures have several reported advan-

    2 6 ( 2 0 1 4 ) 2 7 3tages.18 The assessment poses questions that are tailored toa specic condition, as compared to general health measures

  • the gamble.30 The time trade-off method asks the patient tocompare a length of life in a perfect state of health to thelength of life with a given health state. Using these methods,utility can be assigned to numerous health states, with scoresranging from 0 (death) to 1 (perfect health). The Euroquol-5D(EQ-5D), the Health Utility Index, and the SF-6D are indirectmeasures of utility that can be used to assess health out-come.12,25,3032 These are less cumbersome to use comparedto directly measuring utility. They are questionnaire formsthat the patient lls out, with a utility score calculated usingan algorithm that is based on the answers to the questions onthe form.

    R G 2 6 ( 2 0 1 4 ) 2 7that ask general questions about a patient's overall healthand function. They have a high specicity and relevance to aspecic disease or anatomic region of the body. This producesa better ability to detect important and more subtle changesthat occur in the treatment of a disease over time.1923 Also,because the instrument is disease-specic, patients may bemore accepting and responsive to the data collection.18

    Disease-specic measures also have limitations. The assess-ment cannot be administered to patients who do not have therelevant disease or health condition.16 In addition, it does notallow comparison between outcomes of different treatmentsfor patients with different diseases. This is a hindrance whentreatment regimens want to be compared for the purpose ofresource allocation.16,24 It is also possible that the onlyavailable disease-specic measure is in fact not fully specicto the disease in question. For example, a low back painassessment tool may be too generalized and/or not necessa-rily account for the various etiologies of low back pain and thevarious treatment options available.16 Finally, disease-specicmeasures cannot typically be used in the value equationbecause they cannot directly calculate quality-adjusted lifeyears (QALYs). However, several disease-specic measureshave recently been converted to utility measures so thatQALYs can be calculated; the conversions of the ODI and theNDI to the SF-6D are examples.12,25

    3.3. General health measures

    General health measures assess the overall health of thepatient. General measures are designed to be used acrossdifferent diseases and across different demographic andcultural subgroups.16 They give a comprehensive and generaloverview of health-related quality of life. The most well-known general health measure is the SF-36, which wasdeveloped from the Medical Outcomes Study and has under-gone extensive analysis and validation.26,27 General healthmeasures allow comparison across various diseases states,can be used to calculate QALYs and cost-effectiveness, andare more likely to detect unexpected effects of an interven-tion.16,19,28 The limitation of general health measures is thatthey tend to be less responsive to changes in health statusthan disease-specic measures. Therefore, they are less likelyto detect the effects of a particular intervention.16,20,21

    3.4. Utility measures

    Utility measure refers to the desirability or preference thatindividuals exhibit for a particular condition. It can bethought of as a cardinal measure of the strength of one'spreference.29 The decisions are made under uncertainty,based on a set of axioms of rational behavior. In a healthcareapplication, they can be used to measure quality of life.There are several methods of deriving utility directly. The

    standard gamble and the time trade-off methods are the twomost commonly used in healthcare. With the standardgamble method, the patient is asked to compare a life in agiven suboptimal health state to a gamble between theprobabilities (p) of two alternative outcomes, perfect health

    S E M I N S P I N E S U4(p) or death (1p).30 The variable p is varied until the patient isindifferent to the choice between the given health state andThe utility approach has the advantage of providing asingle measure of quality of life that can be used forcomparison across different disease states and can be usedin cost-effectiveness research through the calculation ofQALYs.29 It can be, however, a time-consuming process,particularly if the time trade-off technique or the standardgamble method is used. Moreover, there are still methodo-logical issues that are not fully resolved, such as whoseutilities should be measured.29

    3.5. Quality-adjusted life years (QALYs)

    Quality-adjusted life years (QALYs) has become increasinglyused as a healthcare outcome measure and as an integralpart of costutility analysis.33,34 QALY is a measure of thevalue of a treatment. It combines length of life and quality oflife into a single index number.35 It is calculated as the areaunder the curve when measuring utility over time33 (Fig. 1).QALYs can be incorporated with medical costs to thencompare the cost-effectiveness of a treatment.33 This calcu-lation is based on the idea that the quality of life can bequantied as utility.34 Utility can be thought of as thepreference for a particular health state: the greater thepreference, the greater the utility associated with it.33 Asdescribed above, utility is expressed on a numerical scaleranging from 0 to 1, with 1 representing the utility of perf...


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