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AN INTRODUCTION TO
HEALTH ECONOMICS andMEDICAL TECHNOLOGIES
PART I: IN THEORY
MASTER OF SCIENCE BIOMEDICAL ENGINEERING2015
HEALTH ECONOMICS FORNON –ECONOMISTS
AN INTRODUCTION TO THE CONCEPTS, METHODS ANDPITFALLS OF HEALTH ECONOMIC EVALUATIONS
PROF. L. ANNEMANS PhDINTERUNIVERSITY CENTER FORHEALTH ECONOMICS RESEARCH (I-CHER)
ISBN 978 90 382 1274 6
« HEALTH IS PRICELESS »
BUT IS IT REALLY ?
WHAT IS A HEALTH ECONOMIC EVALUATION?
The COMPARATIVE ANALYSIS OF ALTERNATIVE COURSES OF ACTION
IN TERMS OF BOTH THEIR COSTSAND HEALTH CONSEQUENCES
TREATMENT OF PERSISTENT AIR LEAKS
new
current
cost of amedical technology
new
current
average othertreatment costs
hospitaldrugs
physicians
+ =
new current
total cost
netsavings
NEW MT VS CURRENT MT
new
current
cost of amedical technology
new
current
average othertreatment costs
hospitaldrugs
physicians
+ =
new current
total cost
net costsNEW MT VS CURRENT MT
new
current
cost of amedical technology
newcurrent
average othertreatment costs
hospitaldrugs
physicians
+ =
new current
total cost
netcostsNEW MT VS CURRENT MT
NEUROSTIMULATORS vs. (INTRATHECAL) DRUG PUMPS FOR CHRONIC PAIN
Neurostimulators send electrical impulses to the spine. These impulses replace pain also providing pain relief.
Drug pumps deliver pain medication directly to the fluid around the spinal cord, providing pain relief.
Lower back pain
Treatment A
Treatment B
success
success
failure
failure
0.700
0.300
0.900
0.100
1000
1000 +10000
2000
2000 +10000
EXERCISE:WHICH IS THE LESS EXPENSIVE STRATEGY FROM THE PERSPECTIVE OF THE PAYER ?
4000
3000
BUT REMEMBER THE DEFINITION!
THE COMPARATIVE ANALYSIS OF ALTERNATIVE COURSES OF ACTION
IN TERMS OF BOTH THEIR COSTS
AND HEALTH CONSEQUENCES
10 QALY’s
QALY = QUALITY ADJUSTED LIFE YEARS
death 0
perfect 1health
INDEX (‘utility level’)
TIME
0.5
0.6
20 25
0.6 * 25 = 15- 0.5 * 20 = 10
5
2.0
2.5
0.5
MEDICAL NEED: IS A QALY A QALY?
0
1
0
1
0,4
0,2
0,8
0,6
?
E. Nord, person trade off method
3/4 1/4
HOW SHOULD THE INDEX BE MEASURED
QUALITY OF LIFE QUESTIONNAIRES
DIRECT- VISUAL ANALOGUE SCALE (VAS) - STANDARD GAMBLE (SG)- TIME TRADE OFF (TTO)
INDIRECT- EUROQOL 5D (EQ 5D)- SHORTFORM (36) HEALTH SURVEY (SF-36)
PAIN
Mobility1. I have no problems in walking about2. I have some problems in walking about3. I am confined to bed
Self-Care1. I have no problems with self-care2. I have some problems washing or dressing myself3. I am unable to wash or dress myself
Usual activities (e.g. work, study, housework, family or leisure activities)1. I have no problems with performing my actual activities2. I have some problems with performing my actual activities3. I am unable to perform my usual activities
Pain/Discomfort1. I have no pain or discomfort2. I have moderate pain or discomfort3. I have extreme pain or discomfort
Anxiety/Depression1. I am not anxious or depressed2. I am moderately anxious or depressed3. I am extremely anxious or depressed
���
���
���
���
���
�
�
�
�
�
12222
0.5473
EQ-5D
EXERCISE:CALCULATE THE GAIN IN QALY’s
death 0
perfect 1health
INDEX (‘utility level’)
YEARS
0.4
0.8
0.5
52 6
1.9 QALY’S
INCREMENTAL COST-FFECTIVENESS RATIO ?
Cnew – ColdICER =
EFFnew - Effold
Cnew – ColdICUR =
QALYnew - QALYold
new medical technologyless effective
and more costly
A
new medical technologycheaper but less
effective
B
new medical technologymore effective and less costly
C
TOTAL COST
HEALTH EFFECT (QALY)O
D
new medical technologymore effective
but more costly
current medical technology?
EFFECTIVENESS AND COST-EFFECTIVENESS ARE NOT ENOUGH
IT MUST ALSO BE AFFORDABLE
BUDGET IMPACT
GDP BELGIUM 2012 = € 369.0 BILLIONPOPULATION BELGIUM 31-12-2012 = 11.1 MILLION
AVERAGE GDP PER CAPITA = +/- € 30,000
http://www.nbb.be/belgostat/DataAccesLinker?Lang=E&Dom=2&Table=30
THE LIMITS OF « AFFORDABILITY »
At risk for CHD
No prevention
Prevention
No MI
MI
0.700
0.300
0.800
0.200
EXERCISE:WHAT IS THE INCREMENTAL COST-EFFECTIVENESS RATIO OF PREVENTION ?
30008.8 QALY
60009.2 QALY
No MI
MI
10 QALY
€ 0
6 QALY
€ 10000
10 QALY
€ 4000
6 QALY
€ 14000
€ 7500/QALY
ARR = 10% ABSOLUTE RISK REDUCTIONNNT = 10 NUMBER NEEDED TO TREAT
TAKE-HOME EXERCISE
Carotid stenosis is a narrowing of the carotid arteries, the two major arteries that carry oxygen-rich blood from the heart tothe brain. Carotid stenosis is caused by a buildup of plaque inside the artery wall that reduces blood flow to the brain and is amajor risk factor for stroke. There are different types of treatments:
• No medical treatment (by being physically active)• Medical management following a medication regimen such as taking:
• platelet aggregation inhibitor medication (aspirin)• cholesterol-lowering medication (statins)• antihypertensive medication (ACE inhibitors)
•Minimally invasive vascular surgery: carotid stenting + adjuvant drug therapy
Surgery does not always the most optimal outcome, only 89% of patient gain significant health benefit from operation, healthstatus of additional 10.5% remains unchanged compared to their health status before the surgery. Surgery is not risk-free andthereby 0.5% of patients die during the surgery.
TAKE-HOME EXERCISE
1. WHICH TREATMENT FOR CAROTID STENOSIS IS THE MORE COST-EFFECTIVE COMPARED TO THE NO MEDICAL
TREATMENT: THE MEDICAL MANAGEMENT OR THE MINIMALLY INVASIVE VASCULAR SURGERY CONSIDERING
FOLLOWING DATA?
2. WOULD YOU RECOMMEND THE BELGIAN NATIONAL INSTITUTE FOR HEALTH AND DISABILITY INSURANCE
(NIHDI) TO REIMBURSE THE MINIMALLY INVASIVE VASCULAR SURGERY?
Expected life years:
• no medical treatment 5 years
• medical mangement 9 years
• successful surgery 15 years
• unsuccessful surgery 9 years
Utility weights
Average utility weight for each life year until death
• no medical treatment 0.5
• medical management 0.6
• successful surgery 0.7
• unsuccessful surgery 0.6
Cost
• no medical treatment 0 €/year
• medical management 650 €/year
• surgery + carotid stent 7.450 €
• adjuvant drug therapy to carotid stenting 200 €/year
• unsuccessful surgery 650 €/year
Discounting
• discounting rate 0%
successful surgery = cost surgery + total cost adjuvant drug therapyunsuccessful surgery = cost surgery + carotid stent + total cost medical managementpatient died = cost surgery + carotid stent
probability total cost life years utility
no medical treatment 100% 0 € 5 0.5
medical management 100% 5.850 € 9 0.6
carotid stenting + adjuvant
drug therapy
successful
89% 10.450 € 15 0.7
carotid stenting + adjuvant
drug therapy
unsuccessful
10.5% 13.300 € 9 0.6
carotid stenting + adjuvant
drug therapy
patient died
0.5% 7.450 €
total cost QALY ICER = ∆cost/∆QALY
no medical treatment 0 € 2.5
medical management 5.850 € 5.4 2.017 €/QALY
carotid stenting + adjuvant
drug therapy10.734 € 9.9 1.448 €/QALY
ANSWER
1. Carotid stenting + adjuvant drug therapy is more cost-effective than medical management as treatment for carotid
artery stenosis.
1. Yes
The World Health Organization WHO states that the limit for being prepared to pay should be related to the wealth of
a country.
Following this rationale, a result expressed in cost per QALY which is lower than the level of the Gross Domestic
Product per person would be called cost-effective.
GDP BELGIUM 2012 = 369 BILLION €
POPULATION BELGIUM 31-12-2012 = 11,1 MILLION
AVERAGE GDP PER CAPITA = +/- 30.000 €
Thus in this hypothetical example the Belgian national payer SHOULD be in favor of reimbursing the carotid stenting
+ adjuvant drug therapy because the ICER is far below the 30.000 €/QALY.
ANSWER
THE VALIDITY OF HEALTH ECONOMIC MODELS
SENSITIVITY ANALYSESAssessment of robustness
The extent to which results of the model are sensitive to changes in input data
ONE-WAY SENSITIVITY ANALYSISTWO-WAY SENSITIVITY ANALYSIS
TORNADO DIAGRAM
PROBABILISTIC SENSITIVITY ANALYSISOR MONTE CARLO ANALYSIS
TIME HORIZON
GUIDELINE
THE TIME HORIZON SHOULD BE CHOSEN IN ORDER TO CAPTURE
ALL RELEVANT COSTS AND OUTCOMES
THE MARKOV MODEL
HEALTHY SICK
DEAD
0.1
0.20.01
TRANSITION PROBABILITY
EXERCISE:CALCULATE THE NUMBER OF PEOPLE IN EACH CONDITION AFTER THREE YEARS
At the start After 1 year After 2 years After 3 years
Healthy 1000 890 792 705
Sick 0 100 169 214
Dead 0 10 39 81
Total 1000 1000 1000 1000
THE MARKOV MODEL
HEALTHY SICK
DEAD
0.05
0.20.01
HOW TO CALCULATE AMARKOV MODEL?
LIKE A DECISION TREE (REPEATED)
EXERCISE:CALCULATE THE NUMBER OF PEOPLE IN EACH CONDITION AFTER THREE YEARS
At the start After 1 year After 2 years After 3 years
Healthy 1000 ? ? ?
Sick 0 ? ? ?
Dead 0 ? ? ?
Total 1000 1000 1000 1000
EXERCISE:CALCULATE THE NUMBER OF PEOPLE IN EACH CONDITION AFTER THREE YEARS
At the start After 1 year After 2 years After 3 years
Healthy 1000 940 884 831
Sick 0 50 87 114
Dead 0 10 29 56
Total 1000 1000 1000 1000
TIME PREFERENCE?
ONE PREFERS TO POSTPONE PAYMENTS
ONE PREFERS TO RECEIVE A PAYMENT YESTERDAY RATHER THAN TODAY
FUTURE AMOUNTSHAVE TO BE RECALCULATED TO
THEIR ACTUAL VALUE=
DISCOUNTING
DISCOUNTING FUTURE AMOUNTS
EXERCISE:CALCULATE THE NET COST OF A PROJECT OVER 5 YEARS
YEAR 0 1 2 3 4 TOTAL
savings 500 500 1000 2000 6000 10000
0.03
0.05
=B$2/(1+$A3)^B$1
? ? ? ? ? ?
? ? ? ? ? ?
x (1+i) y
=C$2/(1+$A3)^C$1
=D$2/(1+$A3)^D$1
=E$2/(1+$A3)^E$1
=F$2/(1+$A3)^F$1
=B$2/(1+$A4)^B$1
=C$2/(1+$A4)^C$1
=D$2/(1+$A4)^D$1
=E$2/(1+$A4)^E$1
=F$2/(1+$A4)^F$1
∑
∑
DISCOUNTING FUTURE AMOUNTS
EXERCISE:CALCULATE THE NET COST OF A PROJECT OVER 5 YEARS
YEAR 0 1 2 3 4 TOTAL
savings 500 500 1000 2000 6000 10000
0.03 500 485.4 942.6 1830.3 5330.9 9089.2
0.05 500 476.2 907.0 1727.7 4936.2 8547.1
GUIDELINES FORHEALTH ECONOMIC EVALUATIONS
1. Medical problem and the target population must be clearlyexplained
2. Comparative therapies to described3. Perspective of the evaluation must be clearly stated4. Design of the study5. Calculating the costs6. Calculating health effects7. Time horizon8. Uncertainty analysis9. Discounting future amounts10. Conclusions
HOSPITAL STAY MEDICAL FEESMEDICAL
TECHNOLOGIESPHARMACEUTICALS
…
INTRAMUROS EXTRAMUROS
INNOVATION BUDGET – CONDITIONAL REIMBURSEMENT « COVERAGE UPON EVIDENCE »
A PLEA FOR A « TRANSVERSAL APPROACH » IN HEALTHCAREA POTENTIAL LEVERAGE FOR THE FINANCING OF
NEW INDICATIONS BY NOVEL MEDICAL TECHNOLOGIES
BIO HANS HELLINCKX
• Bachelor clinical chemistry (CTL-BME)• Master biomedical sciences (health sciences - administration health care and hospital
management) (VUB)• Master after Master in business administration (2y) (VUB) • Master after Master in health care data management (1y) (UA-RUG-VUB)• Postgraduate health economics (HUB-UGent)• Certificat interuniversitaire en économie de la santé (UCL-ULB-ULg)• Life sciences and biomedical technology (UGent)• Quality management in a biomedical, biotechnical and pharmaceutical environment (KU Leuven)
• Staff member financial and medical director UZ Brussel• Project manager public pharmacies (700) KAVA• Product and marketing manager Benelux IVD Menarini Diagnostics Benelux• Advisor medical consumables UNAMEC
Advisor medical equipment and systems UNAMECAdvisor health economics, financing and reimbursement UNAMEC
Guest lecturer Health Economics and Medical Technologies KU Leuven, UGent, UCL-ULB-Ulg(Biomedical Engineering)Member of the Board “MedTech Flanders vzw”
++32 (0)473/292.592 - [email protected]