Private health plans and government health insurance programs in the United States base their coverage decisions on evidence criteria, rather than explicit cost-effectiveness criteria. As health spending continues to grow rapidly, however, approaches to coverage policy that ignore costs fail to meet the needs of consumers, employers, health plans, and federal and state governments. I describe the role of evidence-based criteria in formal coverage decision making and contrast the ways that these criteria differ from cost-effectiveness criteria. Finally, I discuss options for incorporating considerations of cost-effectiveness into coverage policy and other aspects of benefit design.

First published in Pharmacoeconomics, Volume 14, pages 27-48, 1998.

Low-molecular-weight heparin preparations are as safe and effective as unfractionated heparin for the treatment of acute deep venous thrombosis. These preparations have been shown to be costeffective for thromboprophylaxis after hip replacement surgery compared with low-dose warfarin or unfractionated heparin (6). We hypothesized that despite their current higher price, low-molecular-weight heparins might also be cost-effective relative to unfractionated heparin for treating established deep venous thrombosis. If therapy with low-molecular-weight heparin resulted in fewer bleeding complications or more effectively prevented thromboembolic recurrences, the costs associated with these events would be reduced.

We developed a decision model to compare the costs and health effects of low-molecular-weight heparins and unfractionated heparin for the treatment of acute deep venous thrombosis. In our base-case analysis, we assumed that all treatment occurred in an inpatient hospital setting. To fully quantify the potential economic impact of low-molecular-weight heparin treatment, we performed a secondary analysis that allowed for the possibility of outpatient treatment with this drug.