Cost-Effectiveness Analysis and Ageism Daniel Eisenberg, PhD Dept of Health Management and Policy School of Public Health University of Michigan AcademyHealth Annual Research Meeting 2006 University of Michigan School of Public Health
Dec 29, 2015
Cost-Effectiveness Analysis and Ageism
Daniel Eisenberg, PhD
Dept of Health Management and PolicySchool of Public HealthUniversity of Michigan
AcademyHealth Annual Research Meeting
2006
University of MichiganSchool of Public Health
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Allez Les Bleus!
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Go Blue!
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Background: Economic Methods for Evaluating Health Interventions
• Cost effectiveness analysis (CEA): $/life-year ($/LY) or $/disability-adjusted-life-year ($/DALY)
• Cost utility analysis (CUA): $/quality-adjusted-life-year ($/QALY)
• In CEA and CUA, the unit of health, whether it’s a LY, DALY, or QALY, is typically weighted the same at all ages (e.g. 1 QALY at age 10 = 1 QALY at age 70)
• Cost benefit analysis (CBA) often uses single “value of a statistical life” for all ages
• Thus, CEA and CUA account for life expectancy whereas CBA typically does not
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Background: Economic Methods (cont’d)
Standard CEA/CUA
CBA w/ single value-of-life
Modified CEA/CUA?
Increasing priority for health of young
Decreasing priority for health of young
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Policy Context
• Debate within federal government about whether agencies should be doing CEA vs CBA vs CUA
• Who gets influenza vaccines first?– Recent article in Science (Emanuel and Wertheimer
2006) critiquing priorities of National Vaccine Advisory Committee (NVAC) and the Advisory Committee on Immunization Policy (ACIP)
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Key Question
• How can we modify cost effectiveness analysis (CEA) methods to reflect more accurately our society's valuation of health improvements by age?
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Synthesis of Related Theoretical and Methodological Literature
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Synthesis of Arguments in Literature on Why CEA Should Be Modified
1. Future health gains should be weighted more to reflect society’s increase in willingness-to-pay over time for health• 1-2 % increase per year
2. Net resource use should be included in costs• Consumption minus productivity (Meltzer)
3. Younger life-years should receive priority for equity reasons• “Fair innings” argument: young have not had their
share of life yet
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Evidence on Argument #1
• Value of health gains rises at least in proportion to income:– Costa, Dora L. and Matthew E. Kahn (2004) J of Risk
and Uncertainty.– Hammitt, James K., Jin-Tan Liu, and Jin-Long Liu
(2004). Harvard Univ. mimeo.– Hall, Robert, and Chad Jones. (2006). Forthcoming in
Quarterly J of Economics.
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Evidence on #2 (Net Resource Use)
• Net resource use (consumption minus productivity) (Meltzer 1997 J of Health Econ):– Positive for children and adolescents– Negative for adults until retirement age– Positive for adults after retirement age
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Evidence on #3
• Equity concern is supported consistently in a variety of survey studies
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Survey Evidence on Valuation of Health by Age
Suppose a choice must be made between two medical programs. The programs cost the same but there is only enough money for one.
• Program A will save 100 lives from diseases that kill 20-year-olds.
• Program B will save 200 lives from diseases that kill 60-year-olds.
Which program would you choose?
Example from Cropper et al (1994). Journal of Risk and Uncertainty 8: 243-265.
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Survey Evidence (cont’d)
• Several studies (from a variety of countries) find that respondents not only place higher values on younger lives, but they do so more so than can be explained by differences in life expectancy
• These preferences are consistent for all age groups of survey respondents
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Translating Survey Evidence Into Modifications for CEA Methods
Age Weights from World Bank Guidelines and Rodriguez & Pinto
2000)
0
0.5
1
1.5
2
age 10 19 28 37 46 55 64 73 82
wei
gh
t
Standard CEA
Age Weights
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Implications for CEA Methods
1. Increasing valuation of health over time -> weight life-years by increasing amount: (1+x)^t
2. Net resource use -> add it to costs
3. Equity concerns -> construct age weights based on survey data on preferences
Does it make sense to do all of these at once?
That depends on interpretation of survey data.
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Example: Re-analysis of Recently Conducted CEAs
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CEAs to be Re-Analyzed
• We selected for re-analysis CEAs that:– Were published within last 10 years– Evaluated interventions for people of ages under 21– Yielded cost-effectiveness ratios between $50,000
and $500,000 per LY (i.e. dubious cost effectiveness)
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Two CEAs Identified for Re-analysis
• Jacobs et al (2003). Regional variation in the cost effectiveness of childhood hepatitis A immunization. Pediatr Infect Dis J 22: 904-14.– Universal immunization in low prevalence states
• Kulasingam, S.L. and E.R. Myers (2003). Potential health and economic impact of adding a human papillomavirus vaccine to screening programs. JAMA 290(6): 781-9.– Vaccine plus screening starting at age 24 versus
vaccine plus screening starting at age 18
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Methods for Re-analyses
We separately applied the following methods:
1) Standard CEA
2) Increasing value of health over time (2% year)
3) Age-weights
4) #2 and #3
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Results: Cost EffectivenessUnder Each Method
Study Units (1)
HepA vac. $/QALY 63,000
HPV vac. $/LY 96,000
(1) Standard CEA (discount rate = 3%)
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Results: Cost EffectivenessUnder Each Method
Study Units (1) (2)
HepA vac. $/QALY 63,000 52,000
HPV vac. $/LY 96,000 46,000
(1) Standard CEA (discount rate = 3%)
(2) Increasing valuation of health effects (2% per year)
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Results: Cost EffectivenessUnder Each Method
Study Units (1) (2) (3)
HepA vac. $/QALY 63,000 52,000 49,000
HPV vac. $/LY 96,000 46,000 72,000
(1) Standard CEA (discount rate = 3%)
(2) Increasing valuation of health effects (2% per year)
(3) Age-weighting by formula in Rodriguez & Pinto (2000) (w/ 3% discounting)
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Results: Cost EffectivenessUnder Each Method
Study Units (1) (2) (3) (4)
HepA vac. $/QALY 63,000 52,000 49,000 39,000
HPV vac. $/LY 96,000 46,000 72,000 37,000
(1) Standard CEA (discount rate = 3%)
(2) Increasing valuation of health effects (2% per year)
(3) Age-weighting by formula in Rodriguez & Pinto (2000) (w/ 3% discounting)
(4) Combination of (2) and (3)
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Conclusion
• Standard CEA methods do not reflect societal preferences related to age
• Modifications grounded in theoretical and empirical evidence lower CE ratios substantially for interventions targeted at young people
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Implications
• CEA practitioners can use adjustments for increasing value of health over time and age weights to reflect these concerns
• Readers of CEAs should bear in mind that the technique, as currently practiced, does not reflect societal preferences with respect to age
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Acknowledgements
• Gary Freed, MD, MPH• R. Jake Jacobs, MPA and co-authors on Jacobs
et al (2003)• Shalini L. Kulasingam, PhD and Evan R. Myers,
MD, MPH• R. Douglas Scott, PhD