Cost-effectiveness analysis needed to compare healthcare intervention efficacy

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The economic effects of healthcare interventions should be used in decision making, but only if their use is transparent and their effect on health outcomes are also considered, according to an early-release position paper from the American College of Physicians published online May 15 in the Annals of Internal Medicine.

After reviewing comparative effectiveness efforts domestically and internationally, the American College of Physicians has concluded that the United States expends insufficient funds to develop comparative effectiveness data; that no coordination or prioritization of current efforts exists in either the public or private sector to produce comparative effectiveness information; and that the absence of readily available comparative effectiveness information interferes with the ability of physicians and their patients to make effective, informed treatment choices.

Cost-effectiveness analysis (CEA) compares the incremental or marginal economic cost per unit of healthcare gained among different interventions for the same condition without attempting to monetize the healthcare gain. A cost-effectiveness analysis provides a single ratio, the incremental cost-effectiveness ratio that reflects the difference in the costs of interventions (in U.S. dollars) divided by the difference in their health effectiveness or clinical outcomes.

Based on the results of investigations, principal paper authors Neil Kirschner, PhD, Stephen G. Pauker, MD, and Joseph W. Stubbs, MD, made the following recommendations to produce cost-effectiveness data for healthcare.

  • A national comparative effectiveness entity should be established and charged with systematically developing both comparative clinical and cost-effectiveness evidence for competing clinical management strategies.

  • The national comparative effectiveness entity should convene a panel of stakeholders and experts in CEA and charge the panel with updating and expanding on the recommendations of the 1993 Panel on Cost-effectiveness and Health and developing procedures to ensure that the proposed entity produces high quality cost-effectiveness information.
  • The panel should develop recommendations and model procedures to be used by stakeholders as they consider cost-effectiveness information in coverage, purchasing, and pricing decisions. These recommendations should recognize that CEA is only one tool to be used in coverage and pricing decisions; it cannot be the sole basis for making resource allocation decisions.
  • The panel should consider how physicians should use cost-effectiveness in the context of the physician–patient relationship to reflect the need for patient care to be patient-centered, considering the individual's characteristics and preferences, and should take into account the opinions of the treating physician as the patient's advocate. However, it must also recognize the limited nature of healthcare resources available to society (the Medical Commons).
  • The panel should develop recommendations for educating both the general public and the medical profession and for promoting discussion on the use of comparative clinical and cost-effectiveness information to meet the needs of the individual and to help ensure the equitable distribution of finite healthcare resources throughout society.
  • All healthcare payers including Medicare, other government programs, private sector entities and the individual healthcare consumer should consider both comparative clinical effectiveness and cost-effectiveness information explicitly in their evaluation of clinical interventions.
  • Cost should never be used as the sole criterion for evaluating a clinical intervention. Any consideration of cost must be explicit and transparent and must be accompanied by the explicit, transparent consideration of the comparative effectiveness of the intervention.

“Given the as-yet uncontrolled explosion of healthcare costs, the de facto rationing produced by having 47 million uninsured patients denied access to healthcare, and the limited resources of our society, the time has come for patients, physicians, insurers, and healthcare policymakers to explicitly and transparently factor the comparative effectiveness, comparative cost and cost-effectiveness of both new and existing healthcare interventions into their decisions,” the authors wrote.

“The United States should establish a trusted, independent, adequately funded national entity to develop and disseminate evidence on