How to weight cost effectiveness
in appraisal
NVTAG / CVZ course:
The appraisal process, work in progress
22th of April 2009
Jan van Busschbach
Context investigation CVZ
 Cost effectiveness is considered in all new
reimbursement application
 Cost effectiveness is an important aspect in the
appraisal
 How to implement cost effectiveness in appraisal?
1
Two research questions:
1) What is a “good” and what a “bad” cost
effectiveness?


What is the threshold value?
In terms of costs per QALY
2) How does one weight cost effectiveness with other
considerations?
2
What is the threshold value?
 Should there be a threshold value?
 If there was one: what is the point in weighting with other
arguments?
 A threshold provokes strategic behavior
 Is there a normative paradigm (theory), that provides such
threshold?
 The need for a threshold is pragmatic
 It helps to chose between good and bad
 Its value is historical determined
3
Threshold most likely a range
 A range like in England and Scotland
 £ 20.000 - £ 30.000
 But higher values are possible
 As defined by RvZ maximum € 80.000 per QALY
 In de media € 80.000 seem threshold
 But much lower values also possible
4
Cost effectiveness in practice
 Threshold might stand for average cost
effectiveness in practice
 Average cost per QALY
 Meerding et al, 2007
 Cardiovascular diseases: € 2.000 to € 5.000 per QALY
 Oncology: €16.000 tot € 18.000 per QALY
 In practice:
 A range
 Averages cost effectiveness is lower than used in most
debates about the threshold
5
Conclusion research question 1
1. What is a “good” and what a “bad” cost
effectiveness?
 What is the threshold value?
 In terms of costs per QALY



6
There is no empirically or theoretically fixed value
More likely: a range (of thresholds)
Other variables determine good or bad cost
effectiveness
A variable threshold
 Research question 2
 How does one weight cost effectiveness with other
considerations?
 Same question as:
 Is the threshold variable?
 If so: which variables have an influence?
 For instance:
 does disease burden interacts with threshold value?
 CvZ models 2001, RvZ model 2006, 2007
7
Costs per QALY
A variable threshold
The RvZ model: interaction with burden
Burden of Disease
8
Interaction with Burden
 Burden of disease most often discussed
 As candidate to alter decision making
 To weight cost effectiveness
 Know as the equity debate
1) Maximize average population health…

Without looking at burden of disease
2) Focus on the worse of….

Without looking at the average population health
 Interaction is intermediate position in debate
9
Interaction with burden often suggested
10
Methodology issues
 How to measure burden?
 What should be the form of the curve?
Cost per QALY
Burden of disease
11
But we do know…
 The function is continuously ascending
 Burden can be measured
 Next presentation: Elly Stolk
 We can deduct the curve from research
 Population preferences
 The appraisal committee
12
Next to burden….
 Other argument than burden might be also be
relevant
 Examples are rarity (orphan drugs), budget impact,
live style etc.
 Some might increase the threshold, some might
lower it…
13
Increasing or lowering the threshold
 Increasing




Burden
Rarity (orphan drugs)
Relates to much informal care
Risks for others
 Lowering





14
Limited relation to domain of health care
High budget impact
High future medical costs
Unsuitable for insurance because of high incidence
Unsuitable for insurance because of autonomy patient
Increasing threshold, and critics
 Burden
 But lower population health…
 Rarity (orphan drugs)
 Cause of disease becomes more important that burden and
effectiveness…
 Does not make much sense from epidemiology point of view
 Relates to much informal care
 Could be include in the CE-ratio…
 Risks for others
 Could be include in the CE-ratio…
Lowering the threshold, and critics
 Limited relation to domain of health care
 What is the domain of health care...?
 High budget impact
 Focus on costs, not on cost effectiveness
 High future medical costs
 Could be include in the CE-ratio…
 Unsuitable for insurance because of high incidence
 Might cause people to avoid health care
 Unsuitable for insurance because of autonomy patient
 Might cause people to avoid health care
Conclusions



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There does not seem to be a fixed threshold
Many factors might alter threshold
Burden of disease is best described
Decisions of the appraisal committee will reveal trade-off
between cost effectiveness and other arguments