Cost-Effectiveness Analysis 101: What we need to do to demonstrate cost-effectiveness for CTO-PCI David J. Cohen, M.D., M.Sc. Director of Cardiovascular Research Saint Luke’s Mid America Heart Institute Professor of Medicine, University of Missouri-Kansas City CRT 2015

Disclosures Grant Support/Drugs Grant Support/Devices Daiichi-Sankyo - Eli Lilly Astra-Zeneca - Merck Grant Support/Devices Edwards Lifesciences - Abbott Vascular Medtronic - Boston Scientific Biomet - Covidien Consulting/Advisory Boards Medtronic - Astra-Zeneca Eli Lilly DJC: 2/15

Basic Concepts in Economic Evaluation of Medical Technologies

Cost-Effective  Cost-Saving Principles of Cost-Effectiveness Cost-Effective  Cost-Saving

Cost-Saving  Cost-Effective Less Effective More Effective _ ??? More $ ??? + Less $

Cost-Effectiveness Analysis Goal Allocate health investments/expenditures so as to maximize the aggregate health benefits to society, subject to the constraint of a fixed health care budget General Approach Costs and net health benefits measured in natural units Costs-- dollars Health Benefits-- lives saved, life-years gained, complications prevented C/E ratio = DCost/DEffectiveness

CE ratio: the numerator Direct costs: costs associated with the labor, equipment, and supplies necessary to provide clinical strategy Indirect costs (“overhead”): rent, depreciation, maintenance, etc. Induced costs: downstream costs incurred or avoided due to an up-front clinical strategy Productivity costs: patient/family time spent on receiving/providing informal care

CE ratio: the denominator LE = Area Between Two Survival Curves Ideally: quality adjusted

Cost-Effectiveness Analysis Cost-Effectiveness Ratio = DC / DE Decision Rule (Theoretical) Calculate C/E ratio for each program to be evaluated Rank programs in order of increasing C/E ratio Select programs for funding in order of C/E ratios (lowest to highest), until health care budget is exhausted

Measurement of Net Health Benefits Quality-Adjusted Life Year (QALY)-- metric for combining quality and duration of life into a single measure of health effectiveness CABG Good Health Quality-adjusted life expectancy = (1.0 x 3 yrs) + (0.7 x 3 yrs) + (0.9 x 5 yrs) + (0.3 x 1 yrs) = 9.9 QALYs Mild Angina Stroke Severe Angina

“Low value” Thousands per “Intermediate value” QALY “High value” Anderson JL et al. JACC doi: 10.1016/j.jacc.2014.03.016

Treatments are not cost-effective unless they are effective Principles of Cost-Effectiveness Treatments are not cost-effective unless they are effective

What is the analytic perspective ? Key Issues for Understanding the Cost-Effectiveness of CTO-PCI What is the analytic perspective ? Implications Hospital perspective analysis should compare the variable cost of CTO PCI vs. actual reimbursement (“contribution margin” Societal Perspective need to consider the long term costs, cost offsets, and overall health benefits (survival, QOL) compared with the next best alternative

Are there late cost offsets ? Key Issues for Understanding the Cost-Effectiveness of CTO-PCI Are there late cost offsets ? Implications Although the up-front cost of CTO-PCI is substantial, much of this cost could be recouped if untreated pts require costly medications (e.g., ranolazine) or procedures (e.g., CABG, TMR, EECP, etc) If this occurs, the true “cost” of CTO-PCI could be much lower than the initial pricetag

Is there a true survival benefit ? Key Issues for Understanding the Cost-Effectiveness of CTO-PCI Is there a true survival benefit ? Implications Since survival differences continue to accrue over patient’s lifetime, even small a small survival benefit can translate into highly cost- effective therapies

Is there a QOL benefit compared with best medical therapy? Key Issues for Understanding the Cost-Effectiveness of CTO-PCI Is there a QOL benefit compared with best medical therapy? Implications If the benefits are substantial an durable, QOL benefits can translate into d QALYs, even without improved survival Understanding the durability of benefit will be critical to determining the cost- effectiveness of CTO-PCI

Impact of Duration of QOL Benefit on Cost-Effectiveness of CTO PCI Assumptions Initial cost of CTO-PCI = $15,000 Cost offset = $5000 (similar to CABG in SYNTAX) Gain in utility = 0.1 (similar to PCI in SYNTAX) Implications: In order for CTO PCI to be considered “high value”, QOL benefit must last for at least 4 years Duration of Benefit (years)

Economics of CTO-PCI Summary (1) Economic considerations are increasingly important in the evaluation of cardiovascular devices and procedures From the hospital’s perspective, the “value” of CTO PCI is determined by its contribution margin– the balance between variable cost and reimbursement– at least in the current FFS environment Given increased reimbursement for complex PCI in the current environment, this goal appears to be attainable

Economics of CTO-PCI Summary From a societal perspective, CTO-PCI has the potential to be a highly cost-effective intervention as well, but only if we can demonstrate meaningful downstream cost offsets, improved survival, or clinically meaningful and durable health status benefits The critical role of improved QOL in defining the benefit of CTO-PCI emphasizes the importance of proper patient selection to optimize cost-effectiveness