This chapter will address
the reasons for economic analysis in health care, including health technology assessment (HTA) and reimbursement of treatments
the methods of economic analysis, including the types of studies and the need for modeling, focusing on the main issues for economic evaluation in rheumatic diseases.
The topics will be illustrated with examples from rheumatoid arthritis (RA) and ankylosing spondylitis (AS) because these conditions have been most widely studied. However, the methodologic issues are similar across all rheumatic diseases, and the difference is generally due to the availability of the relevant data.
The chapter will not provide a comprehensive overview of studies performed, nor will we offer a critique of the different approaches chosen, because the amount of studies is large and reviews are available elsewhere, and because such reviews are rapidly outdated in a field as active as rheumatic diseases.
Health Economics, Reimbursement Decisions, Health Technology Assessment
Health economics is the application of the discipline and the methods of economics to the topic “health.” Thus, health care is considered to be no different from any other productive sector of the economy: resources are used and investments are made to produce “health.” Health economics is then concerned with achieving efficiency in the allocation of resources in health care, a sector in which a large part of the expenses are carried by the public budget (around 70%–75% in Europe, Canada, Australia, around 40%–45% in the United States; www.oecd.org ).
Within this frame, economic evaluations of health interventions provide data and estimates of the value for money (cost-effectiveness) of interventions, as part of the information on which decisions can be made. Cost-effectiveness studies thus do not make decisions, nor do they judge the importance and value of the clinical benefit provided by the treatment studied. Rather, they assess the cost in relation to the benefit, and compare the results to other interventions ( Fig. 32-1 ).
The methods of health economics and economic evaluation apply across the world. However, there is great variation in the amount of resources used for health care across countries, owing to general economic factors. Hence, there will be significant variation in access to the newest and most effective treatments. Thus, economic analyses are always country specific, and it impossible to conclude from the results of one study in a given country on the possible situation in another country. The organization of care differs, treatment patterns vary, and the relative and absolute cost of individual resources can be very different.
Today, information about new treatments is widely available. Few patients, for example, with RA ignore the existence of the biologic drugs (e.g., tumor necrosis factor-α [TNF-α] inhibitors). These treatments are highly effective but also come at a high cost. Their price is global (i.e., similar across countries in order to avoid parallel trade), and therefore, economic factors will be a significant source of variations in access to these drugs. Acceptability of their cost will be different in the United States with a per capita spending on health care in 2005 of more than $6000 and Turkey with a spending of around $600 ( www.oecd.org ) ( Fig. 32-2 ).
Within the relationship between patients (consumers), providers (agents) and payers ( Fig. 32-3 ), the latter group is therefore becoming increasingly important. All payers are interested in opportunities to do something at a lower cost to make room for other payments (cost-containment). They are also concerned about the impact on their budget, that is, the cost of a treatment and the estimated number of treatments (budget impact). However, particular public payers such as governments in Europe are also interested in cost-effectiveness, asking the question how a given payment will contribute to outcome in terms of survival, quality of life (QoL), and quality of care (value for money). Thus, payers dictate to some extent what treatments can or cannot be used on their budget and how. This is particularly important in RA, in which—without health insurance, be it public or private—few patients will be able to afford the biologic drugs.
Payers, while still demanding innovative treatments, are no longer impressed by fancy new technology, unless it truly improves the outcomes for patients. One could argue that this is clearly the case for the anti-TNF drugs, yet, many restrictions apply to their usage owing to their cost. Cost effectiveness has thus become an important additional criterion for selecting how to use health care resources most efficiently, using economic evaluation as the tool. These studies will provide data in a structured format, but will not make an explicit decision concerning the value of the benefit nor the acceptability of its cost.
Reimbursement and Health Technology Assessment
Most drugs in RA are used in the outpatient setting and are thus subject to formal decisions regarding inclusion in the public reimbursement system. In a number of countries (e.g., Australia, Canada, Belgium, Finland, Netherlands, Norway, Portugal, and Sweden) there has been a formalized process regarding the use of cost-effectiveness studies in the decision-making process for several years. Countries in Eastern Europe and Asia have recently introduced such requirements. In other countries (e.g., Denmark, France, Italy, Spain, and Switzerland), cost-effectiveness studies are used for pricing and reimbursement decisions, although not as formally. In the United Kingdom and Germany, drugs can be launched immediately after scientific market approval and are theoretically reimbursed. However, drugs are subsequently assessed by health technology assessment (HTA) agencies who recommend when and how to use them. The agency in England and Wales (NICE, www.nice.org ) works with a clearly structured process with a direct link to funding and therefore has perhaps the highest visibility, even beyond borders.
Cost-effectiveness studies have been an integral part of HTA for a long time. HTA is a multidisciplinary process of policy analysis that examines the medical, economic, social, and ethical implications of the incremental value, diffusion, and use of a medical technology in health care. Normally, HTA is based on publicly available information and as such often becomes available only at a time when reimbursement decisions have already been made. The impact will thus be on usage, rather than represent a formal decision on access, and study results will often be available some time after introduction of a new treatment.
HTA agencies are linked in an international network (INATHA), the secretariat of which maintains a database of HTA reports, including both ongoing and reported studies ( www.inatha.org ). Between 1998 and 2006, a total of 85 reports related to RA were published, most of them from 2002 onward. This clearly reflects the need for assessment of the novel but high-priced biologic therapies.
In the field of rheumatology, most reimbursement decisions or HTA recommendations have introduced limitations to the use of the biologic drugs. In general, patients have to show an inadequate response to at least two standard treatments, including methotrexate, before they can be prescribed biologics. Inadequate response is defined as disease activity exceeding a certain level. Treatment can be continued only if a certain response is obtained. These restrictions are triggered by economic considerations due to the cost of the biologics, averaging around Euro 12-15,000 per year. Using expensive treatments in patients who can be treated adequately with less costly treatments is wasteful, as is continuing such treatments when an adequate response is not obtained. According to economic thinking, such funds are better allocated to something else.
One issue with this argument is that it has been shown that early treatment with biologics can often halt joint destruction and may even be able to induce remission. Thus, from a clinical point of view, early treatment is almost a must. However, if early intervention with biologics is generalized, the treated population will increase substantially, putting additional strain on limited resources. One way to deal with this would be a normal market approach, that is, to lower prices in view of the increased volume. Another approach, and the one currently pursued, is better targeting of treatment by improving the time to diagnosis and identifying patients with active disease and a bad prognosis early on.
Formal Guidelines for Economic Evaluation
Guidelines for economic evaluation in countries where these are a formal part of reimbursement decisions are similar from a methodological point of view. This indicates that methods for economic evaluation are well developed, with only a number of methodologic issues still considered a research topic. Differences in these guidelines often relate to these topics. Table 32-1 lists the criteria that are addressed in these guidelines, as well as the topics that can differ.
|Topic||Similar Across Guidelines||Different Across Guidelines||Definition|
|Viewpoint for the analysis||X||Societal versus payer perspective|
|Outcome evidence||X||Systematic literature review versus trial data|
|Choice of comparator||X||Gold standard|
|Patient group||X||Patients likely to receive the treatment, subgroups allowed|
|Form of economic evaluation||X||Cost-utility preferred|
|Measurement and valuation of costs and benefits||X||Opportunity costs and quality-adjusted life years (QALYs) whenever possible|
|Incremental analysis||X||Additional costs for the additional benefit|
|Time horizon||X||Relevant episode versus lifetime|
|Discounting||X||Costs and benefits discounted, discount rate differs (3%–5%)|
|Uncertainty||X||Extensive sensitivity analysis versus probabilistic analysis|
|Modeling||X||All types of models (decision trees, Markov models, discrete event simulation, regression models) accepted|
|Presentation of results||X||All details of the analysis|
Type of Studies, Structure of Economic Evaluation, Methods
We distinguish two basic types of economic analyses in health care: descriptive and evaluative ( Table 32-2 ).
|Type of Analysis||Effectiveness Measure||Use|
|Cost of illness study||None||Description of all costs related to a disease. Policy information and basis for economic evaluation|
|Cost-minimization||Not measured, as it assumes that the effect of the alternatives is identical||Comparison of treatments within the same clinical indication|
|Cost-effectiveness||Unidimensional disease-specific measure (e.g., patients cured, life-years saved, disease-free time)||Comparison of treatments within the same clinical indication|
|Cost utility||Multidimensional outcome measure combining quality of life and life expectancy||Comparison across clinical indications|
|Cost benefit||Health benefit expressed in monetary terms (e.g., willingness to pay by individuals and society for specified benefits)||Comparison across different sectors of the economy|
Cost of illness or burden of illness studies provide information on how much is spent on a given disease. They can be prevalence or incidence based. Prevalence studies will inform about the total amounts spent, and their distribution on different resource types, during a defined time frame (most often a year) and in a defined geographic area (most often a country). Costs can be expressed as average costs for a patient, or total costs for all patients with the disease. A recent study estimated these costs for patients in different countries, using an economic model to impute costs from countries with existing data to countries without data. Table 32-3 shows mean costs per patient and total costs for the estimated prevalence in some selected countries. From these estimates, it also becomes obvious that spending on disease differs between countries with different incomes, illustrating the issue of affordability mentioned above.
|Country or Area||Mean Annual Cost/Patient (£, 2006)|