Cost-effectiveness thresholds or how broad public health coverage can be II
Economist and candidate for a Master's in Economics
Health Economics Area Director
In our previous post, we briefly explained the foundation and use of cost-effectiveness thresholds in decision-making for the incorporation and reimbursement of health technologies in order to maximize the health outcomes of the population in a jurisdiction. However, different interpretations of the cost effectiveness thresholds (CEUs) are possible, all equivalent, that illustrate different perspectives to address these types of decisions, which we explain in this post and marinate with some of the philosophy behind the CEUs.
In the previous blog we showed that a new healthcare technology that is both more expensive and clinically more effective compared to its relevant comparators is considered cost-effective if its incremental cost-effectiveness ratio (RICE) is less than the cost-effectiveness threshold. (UCE = or ) (RICE <UCE or, what is the same, AC / BC <u ), from an approach in which health costs are transformed into health benefits and the benefits obtained with the new technology in one sector of the health system more than offset the benefits that it displaces in other sectors. Another approach, opposite and equivalent to the previous one when evaluating the cost-effectiveness of a new technology, consists of transforming health benefits into health costs on the basis that, from the threshold, it is possible to determine what additional health resources would be required. they would need to obtain the same benefits that would be obtained with the new technology in other sectors of the health system different from the one that it impacts.
Put another way, once the cost-effectiveness threshold has been estimated (either explicitly or implicitly), it can be used in two ways, to evaluate the convenience or not of including a technology in public assurance. Suppose that Actualix and Novum are two drugs for the treatment of longi taedia. Actualix is the standard treatment while Novum is a promising new technology and that a) the RICE of Novum versus Actualix is AC / AB = $20,000 USD / 2 QALY and b) the or= $20,000 / QALY, that is, the opportunity cost of increasing health resources by $20,000 USD for the introduction of a technology to public health insurance is equivalent to displacing the benefit of a QALY associated with some other technology in the health system. Given this data, we can rewrite the previous paragraph as:
1. Given the UCE, it is possible to transform the incremental health benefits of a new technology into its equivalent healthcare costs, so that they can be compared with the incremental costs of that new technology. That is, go from AC / AB <u to AE . u <AC or, by means of a simple mathematical transformation, arrive at AB - AC / u>0: the net increase in health benefits in the health system must be positive to admit a new technology within public insurance; 2AVAC - (US$20.000 / US$ 20.000 / QALY) = 2 QALY - 1 QALY> 0.
2. Given the UCE, it is possible to transform the incremental health costs of a new technology into its equivalent health benefits, so that they can be compared with the incremental benefits that it promises. That is, go from AC / AB <u to AC / u <AB or, by means of a simple mathematical transformation, arrive at or. AB - AC> 0: the net increase in monetary benefits in the health system must be positive to admit a new technology within public insurance; (US$20.000 / AVAC) x2AVAC - US$20.000 = US$40.000 - US$20.000> 0.
Thus, the CE thresholds can be read from two conceptual perspectives according to which it should reflect either the monetary valuation that a society makes of health gains or the opportunity cost resulting from the disinvestment required to adopt a new technology. In any case, based on those rules of social decision are established about the conditions under which it is acceptable to assume certain costs given the obtaining of certain health benefits.
To read this updated information, we invite you to visit this entry: Colombia, the first middle-income country to have its own Cost-effectiveness Threshold estimate