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2 Cost Utility Analysis

This document discusses cost-utility analysis (CUA), which is a type of economic analysis that assesses healthcare interventions based on their cost per quality-adjusted life year (QALY). It defines key terms like QALY and outlines when CUA is and is not appropriate to use. It also demonstrates how to calculate QALYs using different methods to obtain quality/utility weights, like literature reviews, health professional judgments, and direct patient assessments. The document notes limitations of CUA and criteria for evaluating CUA studies.

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262 views29 pages

2 Cost Utility Analysis

This document discusses cost-utility analysis (CUA), which is a type of economic analysis that assesses healthcare interventions based on their cost per quality-adjusted life year (QALY). It defines key terms like QALY and outlines when CUA is and is not appropriate to use. It also demonstrates how to calculate QALYs using different methods to obtain quality/utility weights, like literature reviews, health professional judgments, and direct patient assessments. The document notes limitations of CUA and criteria for evaluating CUA studies.

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Pharmacoeconomics & Health Outcomes

Cost-Utility Analysis (CUA)

Leon E. Cosler, R.Ph., Ph.D.


Associate Professor of Pharmacoeconomics
Albany College of Pharmacy
Road Map

1. Define CUA, QALY, and other “utilities”


2. Identify when CUA should be used
3. Compares sources of obtaining utility info.
4. Demonstrate how to calculate QALY
5. Discuss the strengths / limitations of CUA
7. Discuss literature criteria for CUA analysis
Where’s he getting this?
• Text Chapter 6
CUA versus CEA
Cost - Utility Cost-Effectiveness
Analysis Analysis

Costs: $$$$ $$$$


Benefits: “QALY” “Units”
Ex: $70,000 $70,000
QALY* life saved

final outcomes only


Quality Adjusted Life Year (QALYs)

• integrates costs and outcomes within


“utility analysis” framework

- “quality” x “quantity” (i.e. years)

• “Utilities” = Patient preferences

• Ratio = Costs
QALY
(Quality Adjusted Life Year)
Cost-Utility Analysis

Several types of denominators can be used:

1. QALY (Quality adjusted life year) *


2. HYE (Health Year Equivalents)
3. TWiST (“time without symptoms”)
4. “well-years gained”
5. “functional years”
6. Quality adjusted life expectancy
When is a CUA appropriate ?

1. When “quality” of life is important


• As the primary outcome

2. Treatments affect mortality and morbidity


3. When diverse treatments can achieve a
common basis (i.e. outcome)
4. When studying projects where CUA used
previously
When is a CUA not appropriate ?

1. When only intermediate outcomes available

2. When the alternatives are equally effective

3. When “quality” isn’t measured separately

4. When its just too darn’ expensive...


MATH ...
How do I calculate a QALY?
QALY =
# of years [time] x [proportion “Q”]

“Q” is the “quality” adjustment or utility

Ex: “Perfect” health: Q = 1.0 Death: Q = 0.0


Ex: 20 years of perfect health
QALY = 20 yrs x 1.0 (healthy) = 20 QALYs

Ex: 20 years of a chronic illness


QALY = 20 yrs x 0.5 (est. “Q”) = 10 QALYs
How do I calculate a “Q” ?

3 methods currently employed to get a value:


1. From the literature...
2. Health professionals judgements
3. Direct measurement from patients
a. Category (case) rating scales
b. Standard Gamble *
c. Time trade off *
d. Magnitude estimation
e. Person trade off
From the literature
Duration Health State Mean Daily Standard
Health State Error
Utility [Q]

Reference state: perfect health 1.00

3 months home confinement for TB 0.68 0.020


3 months hospital dialysis 0.62 0.023
3 months depression 0.44 0.024

8 years home dialysis 0.65 0.018


8 years hospital dialysis 0.56 0.019
8 years mastectomy for breast cancer 0.48 0.044

Life home dialysis 0.40 0.031


Life hosptial dialysis 0.32 0.028

Reference state: dead 0.0

J. Chronic Dis 1978; 31:697-704


Category (Case) Rating Scale

1. Give patients a detailed case


2. Ask them to rate case health between:

0 10
death perfect health
Standard Gamble

Give patients a case with a choice:


1. live with some condition less than healthy

- or -

2. “gamble” on a new treatment that contains

a risk of death
Standard Gamble

Probability (p) Perfect Health

Choice B

Probability (1-p) Death

Choice A
Health State i
Standard Gamble Scenario
• You have a debilitating heart condition. You can’t work.
You can’t walk up 1 flight of stairs without being out of
breath. You are always fatigued, and this loss of function
has made you depressed.

• Your cardiologist tells you that a new experimental


procedure can restore you to complete, perfect health.

• However the procedure is risky.

• There is ______ % risk of death with the new procedure.

• Would you risk having this procedure?


Standard Gamble

• utility of state i = Q = p

Probability (p) Perfect Health

Choice B

Probability (1-p) Death

Choice A
Health State i
Time Trade Off Scenario
• You have a debilitating heart condition. You can’t work.
You can’t walk up 1 flight of stairs without being out of
breath. You are always fatigued, and this loss of function
has made you depressed.

• Your cardiologist tells you that a new experimental


procedure can restore you to complete, perfect health.

• However the procedure will shorten your life.

• Experts predict you can live 10 more years in your current


condition. How many years would you be willing
to give up, to live in perfect health?
Time trade off

Perfect Health 1.0 Alternative # 2

Health State hi Alternative # 1

Death = 0 Death
x t
Time trade off

- utility of state i = Q = x / t

Perfect Health 1.0 Alternative # 2

Health State hi Alternative # 1

Death = 0 Death
x t
Magnitude Estimation

1. Patients given a “reference case”


2. Then given other related situations
- Ask patients to compare to the reference
case

• Example
• Situation 1: 2x as desirable as base case
• Situation 2: ½ as desirable as base case
Multi-Attribute Rating Scales

• Will discuss more in quality of life chapter


• We frequently measure separate attributes
of Quality of Life
- Mobility
- Physical Activity
- Social Activity
- Symptoms
• Examples
- QWB; HUI; EQ-5D; SF-36
Multi-Attribute Rating Scales
League Tables

• Prioritized list of ICERs / ICURs

• Designed to be used for allocation of $$$

• Controversial!

• Oregon Medicaid example


Limitations & Weaknesses
• Utility values vary a lot

• Different methods = different QALYs

• Estimating “utilities” may not be linear


• may under-estimate the value of treatments
• Is 0.2 -> 0.3 the same as 0.7 -> 0.8 ?

• There are other measures besides QALYs


• less popular, more complex
Cost-Utility Analysis

• When reviewing a CUA study:


- Describe the “utilities” in layman’s terms
- Report the source of the weights used
- Explain the results in layman’s terms
- “Transparency”
- Sensitivity Analysis
Health Economics 2000 Paper

• A thorough meta-analysis of CEA / CUA

• CEA: <$50,000 per life saved


- this is an arbitrary standard
- many controversial exceptions

• CUA: wide variation in QALY estimates


- $24,777 to $161,305 / QALY
- depends on the method of estimation!
https://research.tufts-nemc.org/cear/default.aspx
That’s all for today… !

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