Making Cost Effectiveness Analyses more useful: Budget Impact Curves Christopher McCabe PhD Endowed Research Chair in Emergency Medicine Research University.

Making Cost Effectiveness Analyses more useful: Budget Impact Curves

Christopher McCabe PhDEndowed Research Chair in Emergency

Medicine ResearchUniversity of Alberta

Acknowledgements

Funded by Genome Canada, Canadian Institutes for Health Research, Alberta Innovates Health Solutions, Capital Health Research Chair Endowment, UK National Institute for Health Research.

Co-authors: Klemens Wallner

Overview

• The evolution of outputs from Cost Effectiveness Analysis (CEA)

• Synthesis and aggregation in CEA• Meeting decision makers information needs• Introducing Budget Impact Curves (BICs)• An illustrative application of Budget Impact

Curves in a Risk Sharing Scheme• Budget Impact Curves: moving HTA towards

procurement

The evolution of outputs from CEA

Incremental Cost Effectiveness Ratios

Incremental Cost Effectiveness Plane

Confidence intervals in the cost effectiveness plane

Cost Effectiveness Acceptability Curves

Net Monetary and Net Health Benefit

The evolution of outputs from CEAExpected Value of Perfect Information

Expected Value of Partial Perfect Information

Expected Value of Sample Information

Expected Net Benefit of Sampling

Expected Net Present Value of Sample Information

Net Benefit Probability Maps

Increasingly sophisticated characterisation of the aggregate effect of introducing a new technology.

Maybe its time for something different.

Synthesis and aggregation

Cost effectiveness models “…synthesize evidence on health consequences and costs from many different sources including data from clinical trials, observational studies, insurance claims databases, case registries, public health statistics and preference surveys….(in) a logical mathematical framework that permits the integration of facts and values …link these data to outcomes that are of interest to decision makers”

Weinstein et al ViH 2003.

Synthesising evidence

“An ICER of £16,487 for concurrent treatment versus no trastuzumab.” Hall et al PharmacoEconomics 2011

Meeting Decision Makers Information Needs

• There are (at least) as many decision makers as there are budget holders.

• Most technologies impact on multiple budgets– CEA’s obsession with describing the aggregate

impact implicitly assumes there is only one budget• What if CEA gave budget specific information?

Introducing Budget Impact Curves• Budget Impact Curves (CICs) report the expected impact of a new

technology on specific budgets by capturing disaggregate cost information that is used in the calculation of the conventional aggregate CEA outputs.

• With time on the horizontal axis and cost on the vertical axis, BICs plot the expected incremental cost for specific budgets – such as the hospital budget or the pharmacy budget, over the time horizon of the model.

• Probability contours are used to plot the uncertainty in the budget impact estimates.

• BICs can be used to plot either the per-period or the cumulative budget impact.

• Budget holders can use the information provided to monitor actual budget impact against predictions, to help assess whether the promised value is actually being delivered.

Budget Impact Curve

An illustrative model

Cost ParametersParameter Stochastic Random Dist Param 1 Param 2

Chronic, silent disease total 29.03$ Chronic, silent disease Primary Care 14.35$ 0.426 LogNormal 2.71 0.23

Chronic, silent disease Pharmacy 14.67$ 0.846 LogNormal 2.54 0.14Chronic, silent disease Hospitalisation 0.00$ 0.230 LogNormal -4.95 0.83

Chronic, active disease total 96.29$ Chronic, active disease primary care 27.58$ 0.995 LogNormal 2.71 0.23

Chronic, active disease Pharmacy 30.19$ 0.699 LogNormal 3.37 0.07Chronic, active disease hospitalisation 38.52$ 0.407 LogNormal 3.67 0.09

Complications Total Costs 469.63$ Complications Primary Care 12.63$ 0.232 Gamma 17.73 0.87

Complications Pharmacy Costs 31.16$ 0.840 Gamma 227.01 0.13Complications Hospitalisation 425.85$ 0.905 Gamma 358.26 1.11

c_TxA 38.00$ fixedc_TxB 400.00$ fixed

ICER = $50,094 per QALY

Budget Impact Curve: Primary Care

Budget Impact Curve: Hospitals

Tolerance range

Contract review point

Price reduction

ICER = $18,125 per QALY

Moving HTA towards procurement

• Reimbursement assumes successful implementation• Procurement is key mechanism for effective

implementation• Standard HTA dossiers provide little if any useful

information to support procurement• Budget Impact Curves use information collected for

conventional cost effectiveness analyses to help budget holders

• BICs might be a first girder in the bridge between system level reimbursement and provider level procurement

http://www.edmontonsun.com/2015/03/19/hicks-on-biz-groat-bridge-debacle-is-fascinating-but-trivial

Thank you