Value Based Health Care in the UK: NICE, VBP and the Cost-effectiveness Threshold. Eldon Spackman, MA, PhD

Transcription

1 Value Based Health Care in the UK: NICE, VBP and the Cost-effectiveness Threshold Eldon Spackman, MA, PhD

2 Background to NICE NICE s current position on the threshold Two concepts of the threshold Why the threshold matters Alternative approaches to estimating the threshold Next steps, VBP Outline

3 NICE The National Institute for Health and Clinical Excellence (NICE) is the independent organisation responsible for providing national guidance on the promotion of good health and the prevention and treatment of ill health in England and Wales

4 Introducing NICE NICE remit: ensure equal access and high quality care Centre for Health Technology Evaluation Recommendations on the use of new and existing treatments Based on the value of treatments and the uncertainty of value Guides to the single/multiple technology appraisal process

5 2009, currently being updated NICE Methods Guidelines QALY central to outcome measurement The nature of NICE s decisions Consistency between appraisals Consistency within appraisals Reference case is prescriptive and generic No intention to thwart methods development of innovative techniques Reference case standardisation

6 NICE Process Single technology assessment Submitted by manufacturers Estimate QALYs gained and costs Over time (often patient s life time) For each alternative treatment For each patient group Reviewed by evidence review group Considered by committee Comments from public Multiple technology assessment

7 Decisions Below a most plausible ICER of 20,000 per QALY gained, the decision to recommend the use of a technology is normally based on the cost-effectiveness estimate and the acceptability of a technology as an effective use of NHS resources. Above a most plausible ICER of 20,000 per QALY gained, judgements about the acceptability of the technology as an effective use of NHS resources will specifically take account of the following factors. The degree of certainty around the ICER... Whether there are strong reasons to indicate that the assessment of the change in HRQL has been inadequately captured... The innovative nature of the technology...

8 More Decisions Above a most plausible ICER of 30,000 per QALY gained, the Committee will need to identify an increasingly stronger case for supporting the technology as an effective use of NHS resources, with regard to the factors listed above. Source: National Institute for Health and Clinical Excellence (NICE). Guide to the Methods of Technology Appraisal. London: NICE; 2008.

9 Caveats Value compared to Threshold End of Life Life expectancy of 24 months Extends life for more than 3 months Small population Restoring and sustaining health treatment effects are both substantial in restoring health and sustained over a very long period (normally at least 30 years), the Committee should apply a rate of 1.5% for health effects and 3.5% for costs

10 The cost-effectiveness threshold The uncomfortable truth is that NICE s threshold has no basis in either theory or evidence Source: Appleby BMJ Significant debate concerning the basis of the current threshold What should the threshold represent? Should NICE be responsible for setting and defending the threshold?

11 The value of a QALY Budget constrained systems Freely funded systems Opportunity cost value of a QALY (k) What health is forgone as new (more costly) technologies displace existing services? Consumption value of a QALY (v) What value do individuals place on health in terms of their consumption of other good and services?

12 Opportunity costs New technologies -Health gain -Additional Cost Budget constrained health care system Displaced services -Health forgone -Resources released

13 Health Health gained forgone c k h c h Health Consumption forgone forgone Costs fall on both c h k c v c v h c Questions of fact and value? When costs displace health ( c h ) ch cc h 0 v v. h ch 0 k v k 0 0 v v. h ch cc 0 k Fact : k = how much health displaced by increased NHS costs? Value: v = how much consumption for health? v. h c c 0

14 When are the two approaches needed? Opportunity cost value Consumption value Should this technology be funded from our limited health service budget? Should this technology be funded from our limited budget considering its impact the wider economy? Should this technology be funded based on increasing taxation/insurance contributions? How big should our budget be?

15 Consumption value of health Inferred by individuals decisions (e.g. in the labour market) Contingent valuation methods Conjoint valuation methods What is the appropriate basis of valuation: Own health Others health

16 The importance of K Cost Threshold 30,000 per QALY Price = P 3 60,000 Threshold 20,000 per QALY Threshold 10,000 per QALY Price = P 2 40,000 20,000 per QALY Price = P 1 20, Health gained Net Health Benefit 2/3 QALY Net Health Benefit -2 QALY

17 What is k? Budget Current NHS Efficient NHS B1 Average productivity would overestimate health effect of B (i.e., H1/B1 < k 1 ) k 1 k 1 Underestimate health effect of B (i.e., k 1 is too high) H1 Health

18 Infer a threshold from past decisions Estimating k Find out what gets displaced and estimate its value Estimate the relationship between changes in expenditure and outcomes

19 Inference from past decisions Lacks transparency and accountability May have no link with real opportunity costs As other criteria are used in decisions, threshold is not revealed Decisions reflect (informal) weighting of QALYs gained NICE may consider technologies for high priority patients

20 Studying local decisions Opportunity costs fall on local decision makers Can we estimate the threshold by measuring: What is displaced locally by new technologies? The value (cost per QALY gained) of what is displaced? Few data collected routinely on displaced services Major research activity needing frequent review Poor data on cost effectiveness of services How relevant to NICE s decision?

21 Estimating relationship between expenditure and outcomes Variations in expenditure and outcomes within programmes Reflects what actually happens in the NHS Estimates the marginal productivity (on average) across the NHS Earlier work using programme budgeting data has provided initial estimates

22 Relationship between expenditure and outcomes Martin et al (2008, 2009) Variations in expenditure and outcomes within 5 programmes Cancer Circulation Respiratory Gastro-int Diabetes 04/05 per LY per QALY 13,137 ( 19,070) 7,979 ( 11,960) 05/06 per LY 13,931 8,426 7,397 18,999 26,453 Need to estimate: How changes in overall expenditure gets allocated across all the programmes (n=23) How changes in mortality might translate into QALYs gained How it changes with scale of expenditure and over time (panel data) Completion June

23 ΔB, variation in overall expenditure How can we estimate it? Expenditure equations, elasticity of programme expenditure (%ΔE/%ΔB) E Programme 1 E Programme 2 E Programme.. E Programme 23 ICD.. ICD.. ICD.. ICD.. ICD.. ICD.. ICD.. ICD.. ICD.. ICD.. ICD.. ICD.. Outcome equations, elasticity of outcome (%ΔM/%ΔE) Residual Mortality Mortality Mortality? ICD.. ICD.. ICD.. ICD.. ICD.. ICD.. ICD.. ICD.. ICD.. Prior or scenarios Life years gained Life years gained Life years gained QALYs gained QALYs gained QALYs gained k

24 Illustrative results 2006 expenditure and mortality data for (2MFFs) Share of change in total expenditure Cost per life year gained Big 4 PBCs 14.93% 12,824 Cost per QALY gained (proportion of patients in ICD) 8,773 Cost per QALY gained (contribution to variance in PBC expenditure) 9, PBCs (with mortality) 29.12% 23,924 13,621 14,904 All 23 PBCs * 100% 27,039 15,395 16,844 *Assumes same health effects per as the 11 PBCs with outcome data for the remaining 11 PBCs.

25 Summary of k Threshold critical to assess cost-effectiveness Fixed budget Constraints on growth in health expenditure Need estimate of k what ever view of social value Advantages of explicit basis for threshold Transparent and accountable Appropriate signals of value for investments to meet future health needs

26 DH Objectives Value Based Pricing Determine prices which reflect the true societal value, and takes account of wider economic benefits of treatments beyond direct health gains Change incentives for R&D on treatments that make significant advance in clinical performance

27 Current Decision Cost 50,000 Price = 30,000 Threshold 20,000 per QALY 40,000 Price = 20,000 25,000 Price = 5, Health gained

28 VBP Decision Cost Threshold 20,000 per QALY 40,000 Price = 20,000 20,000 Price = Health gained

29 Value Based Pricing NICE will no longer reject Onus will be on the manufacturer No under/over pricing Difficult decisions for committee Wider Social Benefits What is the difference? Change the basket of goods to reflect social preference Less QALY benefit

30 VBP the Truth The effects of the policy depend entirely on the system design, and the mechanism used to calculate value-based prices neither of which are yet known.