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New cost-effectiveness guidelines enhance evidence-based health care

An independent panel of medical experts has updated 20-year-old guidelines for evaluating cost-effectiveness in health and medicine, in an effort to help everyone from policymakers to patients make more informed decisions about tests and treatments.

Released in a special communication in the Journal of the American Medical Association, the panelists spent more than three years building on the work of the 1996 Panel on Cost-Effectiveness in Health and Medicine, originally convened by the U.S. Public Health Service. They developed recommendations by consensus.

The new recommendations are intended to guide decision-makers in using new methods for analyzing evidence, reporting standardized results, incorporating both health-care system and societal perspectives, as well as weighing ethical issues in the use of cost-effectiveness analysis (CEA).

“Some people question the use of economic analyses in health care, but cost-effective analysis is a way to ensure that we are proving high-value care,” said Stanford Health Policy’s Douglas K. Owens, a professor of medicine and senior investigator of the VA Palo Alto Heath Care System, who sat on the panel.

“If we do interventions without understanding their value, we may well spend money on something that may not really be worth it,” said Owens. “Cost effectiveness analysis is one approach to understanding how we can help control health-care costs and provide high-value health care.”

The panel was led by co-chairs Gillian D. Sanders, Professor in the Department of Medicine and a member of both the Duke Clinical Research Institute and the Duke-Margolis Center for Health Policy, and Peter J. Neumann, Director, Center for the Evaluation of Value and Risk in Health at the Institute for Clinical Research and Health Policy Studies at Tufts Medical Center and Professor of Medicine at Tufts University.

Sanders said CEA could help inform decisions about how to apply new or existing medical tests, therapies, and prevention techniques so that decision-makers use health-care resources wisely.

“As health-care costs continue to rise at unsustainable rates, these recommendations provide a framework for comparing the relative value of different health-care interventions, and help decision-makers across the spectrum from policymakers to patients sort through alternatives and decide what tests and treatments make sense,” she said.

Neumann noted that in the 20 years since the original panel’s report, the field of cost-effectiveness analysis has advanced, as has the need to deliver health-care efficiently.

“Updating the guidelines provides an opportunity to reflect on the evolution of cost-effectiveness analysis and to provide guidance for the next generation of practitioners and consumers,” he said.

Primarily funded by grants from the Robert Wood Johnson Foundation and the Bill & Melinda Gates Foundation, the panel recommends several key changes to the guidelines, while confirming other principles from the first panel, including:

  1. Broadening the scope and number of reference cases in a cost analysis, which describe standard methodology that should be followed to ensure quality analysis by creating comparable measurements. The panel is recommending that all CEAs should not report two reference cases: one based on a health-care sector perspective and another based on a societal perspective.
  2. Using an “impact inventory” that lists the health and non-health effects of a health-care intervention to ensure that all consequences are considered, including those to patients, caregivers, social services and others outside the health-care sector. This tool also allows analysts to look at categories of impacts that may be most important to stakeholders.
  3. Measuring health effects in terms of quality adjusted life years, a common measure used by health researchers that includes both the quality and quantity of life lived.
  4. Including both costs reimbursed by third-party payers and those paid for out-of-pocket by patients in health-care sector analyses.
  5. Including a reporting checklist and guidelines for transparency that includes assumptions in any analysis and the disclosure of potential conflicts of interest.

The complete report of the so-called Second Panel will be published in October.

The panelists noted that the field of CEA has emerged dramatically since the last guidelines 20 years ago. For example, the Advisory Committee for Immunization Practices, which establishes national immunization policy recommendations on behalf of the Centers for Disease Control and Prevention, now uses CEA in its calculations.

“The need to deliver health-care efficiently and the importance of using analytic techniques to understand clinical and economic consequences of strategies to improve health, have only increased,” the Second Panel authors wrote in the JAMA paper.

Health-care spending in the United States comprised 13 percent of GDP in 1995; today it approaches 18 percent. And the total national health expenditures have tripled during that period, jumping to more than $3 trillion in 2014, according to the Kaiser Family Foundation.

“The goal of the Second Panel is to promote the continued evolution of CEA and its use to support judicious, efficient, and fair decisions regarding the use of health-care resources,” the experts wrote in the JAMA article.