Schneider Institute for Health Policy Heller Graduate School Brandeis University 1 by Donald S. Shepard, Ph.D. Schneider Institute for Health Policy Heller School, MS 035 Brandeis University Waltham, MA USA Tel: Fax: Web: Monday, Sept. 24: Applications of cost- effectiveness analysis

Schneider Institute for Health Policy Heller Graduate School Brandeis University 2 Practical information Teaching assistant: Administrative assistant: Linda Purrini, Next to library in Heller Cost of packet: $6.00

Schneider Institute for Health Policy Heller Graduate School Brandeis University 3 Cost-effectiveness ratio Numerator: net use of health resources Denominator: net improvement in QALYs

Schneider Institute for Health Policy Heller Graduate School Brandeis University 4 Standard reference case Standard set of assumptions for consistent analyses Comparator is the status quo Uses a discount rate of 3%

Schneider Institute for Health Policy Heller Graduate School Brandeis University 5 Disease burden exercise Illustrate the calculation of PDLLs from exercise on web site

Schneider Institute for Health Policy Heller Graduate School Brandeis University 6 Vaccinations in Ecuador* Sources of data Incremental cost-effectiveness analysis *Shepard, D. et al, "Cost Effectiveness of Routine and Campaign Vaccinations in Ecuador," Bulletin of the World Health Organization 1989; 67:

Schneider Institute for Health Policy Heller Graduate School Brandeis University 7 Cost per dose by facility and type of strategy

Schneider Institute for Health Policy Heller Graduate School Brandeis University 8 Table 2: Costs and cost-effectiveness of vaccination strategies

Schneider Institute for Health Policy Heller Graduate School Brandeis University 9 Fig. 4: Fully vaccinated coverage rates

Schneider Institute for Health Policy Heller Graduate School Brandeis University 10 Fig. 5: Cost-effectiveness of routine and PREMI strategies

Schneider Institute for Health Policy Heller Graduate School Brandeis University 11 Cost per dose, notes

Schneider Institute for Health Policy Heller Graduate School Brandeis University 12 Cancer Exercise 1 Prepared at the Heller School, Updated September, 2001 Please read the following exercise on colon cancer testing and discuss the questions at the bottom of this page. Suppose that the Massachusetts government has set up a program to test for colon cancer in people enrolled in the state Medicaid program, which offers health care to low income people and their families. The test allows doctors to find colon cancer at an early age. So far, the state government has offered the test to people at high-risk for colon cancer and has prevented many of them from dying of colon cancer. Now, the government wants to offer the test to the rest of the people receiving Medicaid, all of whom are at equally low risk for colon cancer.

Schneider Institute for Health Policy Heller Graduate School Brandeis University 13 Cancer Exercise 2* An advisory committee of doctors was formed to help the government to decide which of two tests to offer the low-risk people. Test 1 is inexpensive but does not always detect cancer in the early stages. Test 2 is more expensive but is better at detecting early cancers. The decision is complicated by budget limitations: the government has only a certain amount of money available to pay for the screening tests. After evaluating the costs and benefits of each test, the doctors have reached the following conclusions. * Adapted from Uble, P.A., DeKay, M.L., Baron, J., Asch, D.A. “Cost-Effectiveness Analysis in a setting of Budget Constraints” The New England Journal of Medicine 1996; 334;

Schneider Institute for Health Policy Heller Graduate School Brandeis University 14 Cancer Exercise 3 Test 1: The budget is just large enough to offer Test 1 to all the low-risk people. With this approach, everyone can receive the test, and 1,000 deaths from colon cancer will be prevented. Test 2: The budget is just large enough to offer Test 2 to half of the low-risk people. With this approach, half the people can receive the test and half cannot, and 1,100 deaths from colon cancer will be prevented. The persons eligible for the screening test would be selected randomly according to their security numbers. Please select which of the tests the advisory committee should recommend and provide the reasons for your selection.