Example Cost Effective Analysis

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Example Cost Effective Analysis

• Presented by
• Cheryl Dewood and
• Carol Warren-Blakemore

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CEA Ratio

• C/E Ratio
• C Cost
• E Desirable outcomes
• Represents the dollar cost of health care
  intervention per unit of outcome.

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CEA Process

1. Identify Relevant Alternatives
2. Determine Perspective
3. Calculate total effectiveness for each
   alternative
4. Calculate total cost for each alternative
5. Rank programs/interventions in order of
   effectiveness
6. Calculate incremental costs and effectiveness
7. Calculate Incremental C/E Ratios
8. Perform Sensitivity Analysis

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Hypothetical Example
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Hypothetical Example

• Disease X
• standard tx costs 10,000/person/year

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Hypothetical Example

• Disease X
• standard tx costs 10,000/person/year
• New treatment for Disease X
• 30 cure rate
• 40 of patients improve, reducing cost of
  treatment to 5,000/person/year
• 30 of patients develop resistance to standard
  tx, increasing cost of tx to 12,000/person/year

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100 patients choose new tx

• With no new tx, 10-year cost for 100 people is
  10,000,000.
• With new tx
• cost for 30 cured 0
• cost for 40 improved 2,000,000
• cost for 30 resistant 3,600,000
• Total 10-year cost new tx 5,600,000

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CEA Example

• Cost-effective study done under naturalistic
  practice conditions (non-academically affiliated,
  organized care setting) that includes choice of
  treatment by patients and clinicians such that
  practice-initiated interventions interventions
  are evaluated for cost-effectiveness. In addition
  they examined impacts on patients employment
  because of strong interest among purchasers.

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CEA Example

• Cost-effectiveness of Practice-Initiated Quality
  Improvement for Depression Results of a
  Randomized Controlled Trial
• Objective To determine cost-effectiveness of 2
  quality improvement (QI) interventions designed
  to improve treatment of depression in primary
  care and impact patient employment.
• Perspective Societal
• Design Group-level randomized controlled trial
  conducted 6/96 to 7/99.
• Setting 46 primary care clinics in 6 MCOs

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CEA Example

• Interventions Matched practices were randomly
  assigned to provide
• Usual care to 443 patients,
• Given 1 of 2 QI interventions
• Offer training to practice leaders and nurses, OR
• Give enhanced educational assessment resources,
• Given 1 of 2 treatment methods
• Nurses for medication follow-up (QI-meds), OR
• Trained local psychotherapist (QI-therapy).

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CEA Example

• Main Outcome Measures
• Total healthcare costs
• Costs per quality-adjusted life-year (QALY)
• Days with depression burden
• Employment over 24 months compared between usual
  care, and
• Employment over 24 months compared between the 2
  interventions.

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CEA Example

• Results
• Relative to usual care, average health care costs
  increased 11 in QI-meds and 13 in QI-therapy
• Estimated costs per QALY gained were between 15
  and 36 for QI-meds and 9 and 21 for QI-therapy
• Patients had 25 and 47 fewer days with depression
  burden
• Patients were employed 17.9 and 20.9 more days
  during the study period.

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CEA Example

• Conclusions Societal cost-effectiveness of
  practice-initiated QI efforts for depression is
  comparable with that of accepted medical
  interventions. The intervention effects on
  employment may be of interest to employers and
  other stakeholders.

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              Table. Average Costs and Outcomes
per Patient of Quality Improvement (QI)
Interventions Relative to Usual Care Over 24
Months
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References

• Russell, LB et al. "The role of
  cost-effectiveness analysis in health and
  medicine." JAMA 2761172, 1996.
• Schoenbaum, M. et al. Cost-effectiveness of
  Practice-Initiated Quality Improvement for
  Depression Results of a Randomized Controlled
  Trial. JAMA. 20012861325-1330.
• Weinstein, MC et al. "Recommendation of the Panel
  on Cost-Effectiveness in Health and Medicine."
  JAMA 2761253, 1996.