What is the Role for CostEffectiveness in the New
Comparative Effectiveness
Landscape?
Hemal Shah, PharmD
E
Executive
i Director
Di
Health Economics and Outcomes Research
Role of Cost-Effectiveness in the
Healthcare Value Equation
 The primary focus of comparative effectiveness research (CER) is to
provide patients and providers with evidence-based information on
treatment options to enhance the quality of healthcare for patients.
 Information on the cost and value of novel treatments plays an important
role in health care decision-making
assessed, cost and value may be considered
 After clinical outcomes are assessed
at regional or local levels where payers and other decision makers can
more accurately incorporate variations in health technology acquisition
costs as they consider appropriate benefit designs
National CER effort should focus on clinical outcomes; cost may be
more appropriately considered at the local level
Challenges of Cost-Effectiveness
Analysis (CEA)
 No widely accepted standards for
generating, interpreting, and applying
cost-effectiveness to healthcare
decisions
 Wide variation in costs and utilization
of healthcare services and
technologies (by region and payer)
 Different measures of value based on
• Population profile
• Healthcare
H lth
iinfrastructure
f t t
• Payment incentives
value by
 Varying definitions of “value”
• Subpopulation
• Disease state
• Individual patient preferences
A “one-size-fits-all”
measure of value and
cost-effectiveness
will
ill nott be
b practical
ti l
Varying Stakeholder Perspectives on
CEA
Objective for Healthcare System
Assessment of Cost and Value
Employers
Healthy and productive workforce
Net benefits include measures of
productivity
Providers
Improved evidence on what
interventions work better and for
whom
Economic analyses incorporate
reimbursements (what insurers
pay to health care providers for a
given service)
Patients/
C
Consumers
“Best” possible treatments (i.e.,
new innovations)
Economic analyses incorporate
charges (what patients pay for a
given service)
Payers
y
To reduce overall health spending
for their covered lives while
delivering high quality of care
Economic analyses utilize billed
amounts (what health care
providers actually invoice to
provide a given service)
Barriers to Adoption
Even with a standardized methodology for conducting CEA, concerns
abo t inconsistent or harmf
about
harmfull application ma
may pre
prevent
ent widespread
idespread
adoption
 Factors considered in benefit design vary among health plans
• No universal criteria for evaluating quality of clinical and cost effectiveness evidence
• Customer demands, as well as evidence, influence coverage and reimbursement
decisions
• Fragmented healthcare infrastructure impacts extent to which plans can successfully
implement quality improvement programs such as value-based purchasing
 Society resists attempts to “ration” healthcare
Payer Consideration of Cost
Narrow view of cost overlooks factors that can significantly impact
the direction and magnitude
g
of CEA findings
g
 Regional variation in cost of healthcare services and technology acquisition
 Indirect costs, e.g. lost productivity, ability to function, and quality of life
 Variables outside of the treatment itself
itself, e.g.
e g patient preferences,
preferences setting,
setting environment
Payers should adopt an integrative and adaptable approach to
support
pp
the ultimate goal
g
of value-based p
purchasing
g
 Conduct CEA on a regional or local level
 Avoid applying CEA findings uniformly across all patients in coverage and
reimbursement decisions
 Explore new, more expansive methods to determine the comparative net benefit of a
healthcare technology
 Allow providers to tailor appropriate course of treatment for each patient based on
individual preferences and clinical circumstances
Cost-effectiveness
C
t ff ti
is
i partt off the
th coverage and
d reimbursement
i b
t
equation, but is one factor among many
Key Considerations for Effective
Generation and Application of CEA
1
Lack of standards for the generation, interpretation, and application of
CEA must be addressed before implementation
22
CEA should primarily be done at the local level to capture regional
differences
3
CEA must include non-medical and indirect cost considerations, such as
l
lost
productivity,
d i i ability
bili to ffunction,
i
and
d quality
li off lif
life
4
CEA research generators should come together to decide on mutually
agreeable
bl standards
t d d ffor conducting
d ti CEA
Summary
 The focus of CER is to enhance the quality of healthcare for patients
 CEA can inform health care decisions, but may be more appropriate at
the local level
 Current environment introduces several barriers to the application of
CEA at the national level
30/06/2010
8