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Cost equivalence  A/Prof Dominic Wilkinson  25/2/2016 Director of Medical Ethics Oxford Uehiro

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Presentation on theme: "Cost equivalence  A/Prof Dominic Wilkinson  25/2/2016 Director of Medical Ethics Oxford Uehiro"— Presentation transcript:

1 Cost equivalence  A/Prof Dominic Wilkinson  25/2/2016 Director of Medical Ethics Oxford Uehiro Centre Dominic.wilkinson@philosophy.ox.ac.uk @Neonatalethics

2 Case 1 Jim https://vimeopro.com/usmedinnov/surgicalprocedures http://www.atlantamedcenter.com/en- US/ourServices/medicalServices/BloodlessMedicineSurgery/ Pages/default.aspx http://cikooo.com/837/7-things-i-wish-people-understood-about-anxiety/ http://www.sinosourcebio.com/products-d.php?id=51 25/02/16 Cost Equivalence

3 25/02/16 Cost Equivalence

4 Case 2  Julia 25/02/16 Cost Equivalence

5 Case 3  Jane and Peter http://www.naturopathiccurrents.com/articles/acupuncture_and_womens_health 25/02/16 Cost Equivalence

6 Question  In a public health system should adult patients be permitted to choose sub-optimal medical treatments? (If so, when?) 25/02/16 Cost Equivalence

7 Outline  Cases  Defining the question  In favour of the optimal  Permitting sub-optimal treatment  Cost equivalence – 3 types  Applying cost-equivalence – 3 options  Counter-arguments to cost-equivalence  Further applications  Interpersonal cost-equivalence  Supra-optimal treatment 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

8 Definition  In a public health system should adult patients be permitted to choose sub-optimal medical treatments? (If so, when?) 25/02/16 Cost Equivalence

9 Definition of question  In a public health system should adult patients be permitted to choose sub-optimal medical treatments? (If so, when?) JME 2016 Harm Threshold Cost Threshold *children where refusal of treatment is thought acceptable 25/02/16 Cost Equivalence

10 Definition of question  In a public health system should adult patients be permitted to choose sub-optimal medical treatments? (If so, when?) http://www.leannehall.com.au/blog/50-conventional-vs-alternative-medicine-does-there-have-to-be-a-winner 25/02/16 Cost Equivalence

11 Definition of question  In a public health system should adult patients be permitted to choose sub-optimal medical treatments? (If so, when?) Reduced magnitude Increased risk Reduced probability of benefit Reduced duration of benefit Less evidence Increased cost 25/02/16 Cost Equivalence

12 Optimal Treatment: Public Health Systems should provide the most effective, available, affordable treatment for a given condition. They should not provide less effective treatments. 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

13 Pro-optimum  Duty of beneficence  Cost effectiveness  Most cost-effective treatments for a given condition  Most cost-effective treatments overall – to a threshold level = 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

14 Axemab - $10,000 per treatment – saves 1 QALY Boximab - $10,000 per treatment – saves 0.5 QALY Cliximab - $20,000 per treatment – saves 1.5 QALY X Incremental CE = $20,000/QALY ✓ X 25/02/16 Cost Equivalence

15 Why not? 25/02/16 Cost Equivalence

16 Different values Reduced magnitude Increased risk Reduced probability of benefit Reduced duration of benefit Less evidence Increased cost 25/02/16 Cost Equivalence

17 Sub-optimum  Value pluralism  Metaphysical  Epistemological  Value  Political http://www.britannica.com/biography/John-Rawls Pluralism ≠ Relativism 25/02/16 Cost Equivalence

18 Variability Maheshwari Human Reprod Update 2010 25/02/16 Cost Equivalence

19 Sub-optimum  Autonomy Nick Galifianakis http://nickandzuzu.com/2013/08/autonomy/ - + 25/02/16 Cost Equivalence

20 Sub-optimum  Limits to autonomy/value pluralism  1. Cost  2. Reasonableness = 25/02/16 Cost Equivalence

21 Cost equivalence  The cost-equivalence principle. A Public Health System* should provide reasonable alternative treatments that are cost- equivalent to the currently funded default treatment. 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

22 Cost equivalence  1. Pure cost-equivalence CE If would be prepared to provide treatment A Provide alternative treatment B if cost ≤ A 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

23 25/02/16 Cost Equivalence Axemab - $10,000 per treatment – saves 1 QALY ✓ Boximab - $10,000 per treatment – saves 0.5 QALY Daxamab - $10,000 per treatment – saves 0.02 QALY ✓

24 Optimum Accept Refuse 25/02/16 Cost Equivalence

25 The cost of cost equivalence  Counterfactual 1. Reluctant acceptance  If don’t fund B – will accept A Net costNet QALY Optimum$10,000+1 QALY CE$10,000+0.5 QALY +1 +0.5 25/02/16 Cost Equivalence

26 The cost of cost-equivalence  Counterfactual 2. Refusal (self-funding)  If don’t fund B – will decline treatment – funding available for another patient Net costNet QALY Optimum$10,000 up to +1 QALY CE$10,000+0.5 QALY +0.5 +1? 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

27 Cost-equivalence  2. Cost effectiveness-equivalence CEE If would be prepared to provide treatment A Provide alternative treatment B if cost/QALY ≤ A 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

28 Cost-effectiveness equivalence CEE Page 28 Axemab - $10,000 per treatment – saves 1 QALY Boximab - $10,000 per treatment – saves 0.5 QALY Cliximab - $20,000 per treatment – saves 1.5 QALY X Incremental CE = $20,000/QALY ✓ ✓ 25/02/16 Cost Equivalence

29 Refusal  Treatments not currently funded are at or greater than CET Net costNet QALY Optimum$10,000 up to +1 QALY CE$10,000+0.5 QALY +1? 25/02/16 Cost Equivalence

30 CountryThreshold value in local currencyThreshold value in Euro AustraliaAUS$42,000–76,000 per life year24,700–44,700 € per life year CanadaCAN$20,000–100,000 per QALY12,700–63,300 € per QALY England and Wales£20,000–30,000 per QALY22,800–34,100 € per QALY Netherlands20,000–80,000 € per QALY New ZealandNZ3,000–15,000 per QALY1,400–7,200 € per QALY United StatesUS$50,000 per QALY34,400 € per QALY 25/02/16 Cost Equivalence

31 Cost equivalence 3. Cost-effectiveness Threshold Equivalence (CETE) If would be prepared to provide treatment A Provide alternative treatment B if cost ≤ A and cost effectiveness ≤ CET Net costNet QALY Optimum$10,000 +0.2 QALY CE$10,000+0.5 QALY +0.2 +0.5 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

32 Cost-effectiveness Threshold equivalence CETE Page 32 Axemab - $10,000 per treatment – saves 1 QALY Boximab - $10,000 per treatment – saves 0.5 QALY Cliximab - $20,000 per treatment – saves 2 QALY ✓ ✓ ✓ Daxamab - $10,000 per treatment – saves 0.02 QALY X 25/02/16 Cost Equivalence

33 AxemabBoxemabCliximabDaxamab Cost10,000 20,00010,000 QALY10.51.50.02 CE10,00020,00013,333500,000 Optimum ✓ CE ✓✓✓✓ CEE ✓✓ CETE ✓✓✓ 25/02/16 Cost Equivalence

34 Applying Cost-equivalence  1. Binary  CE/CEE/CETE 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

35 Applying CE  2. Cost-equivalence through reduced duration/dosage $731,48/vial$860/vial 85% dose = $730 CE/CEE/CETE 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

36  2. Cost-equivalence through reduced duration/dosage  More expensive  CETE  If dose ∝ cost  And effect ∝ dose  Any reduction in dose = no change in Cost/QALY More expensive interventions permitted if (relative to no treatment) Cost/QALY ≤ CET 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

37  2. Cost equivalence leading to increased duration/dosage? varenicline Total cost £16.79 Total cost £163.80 12 weeks cytisine 25/02/16 Cost Equivalence

38 Applying CE  3. Cost-equivalence through price reduction  CE $731.48/vial$860/vial If equally effective – price drop needed $130 Negotiation Top-up 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

39 Applying CE  3. Cost-equivalence through price reduction  CEE/CETE $731.48/vial$860/vial If less effective – maximum cost CB= CEA/CEB * CA Negotiation Top-up 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

40 AxemabBoxemabCliximabDaxamab Cost10,000 20,00010,000 QALY10.51.50.02 CE10,00020,00013,333500,000 Optimum ✓ CE ✓✓✓✓ CEE ✓ +3333 ✓ +9733 CETE ✓✓✓ +9400 25/02/16 Cost Equivalence

41 Why not? 25/02/16 Cost Equivalence

42 Counterarguments Encouraging suboptimal choices 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

43 Counterarguments Top-up payment 25/02/16 Cost Equivalence

44 Insurer “Experimental treatment, is where there is minimal or no evidence that it is beneficial. In these cases we pay the equivalent cost of the established treatment in this country. Not very many things are treated as experimental by us, some cancers need unlicensed treatments — we will pay in full if there is enough medical information to support their use.” http://www.aviva.co.uk/private-health-insurance/our-cancer-pledge.html http://www.thisismoney.co.uk/money/news/article-3371176/NHS-won-t-pay-60-000-miracle-cancer- drug-insurance-giants-Aviva-Axa-Bupa-Vitality-WPA-will.html 25/02/16 Cost Equivalence

45 Counterarguments  1. Co-payments/Top-up  Increased inequality  Levelling down 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

46 Counterarguments  1. Top-up payments  Increased inequality  Cross-subsidy  Levelling down  Unjustly increases costs 25/02/16 Cost Equivalence

47 Counterarguments  1. Top-up payments  Increased inequality  (dignity)  Cross-subsidy  Huge bills  Levelling down  Unjustly increases costs  Top-up reduces bills 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

48 Counterarguments  1. Top-up payments  Increased inequality  (dignity)  Cross-subsidy  Huge bills  Effect on drug costs  Levelling down  Unjustly increases costs  Top-up reduces bills  Exaggerated impact? 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

49 Counterarguments  1. Top-up payments  Increased inequality  (dignity)  Cross-subsidy  Huge bills  Effect on drug costs  Road to privatisation  Levelling down  Unjustly increases costs  Top-up reduces bills  Exaggerated impact?  Slippery slope responses 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

50  Even if reject Top-up  CE  Pure cost-effectiveness  Reduced duration/dosage  Third party top-up (Charity? Church?) 25/02/16 Cost Equivalence

51 Counterarguments  3. Long term costs Reduced magnitude Increased risk Reduced probability of benefit Reduced duration of benefit Less evidence Increased cost Total costs from increased morbidity 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

52 Counterarguments  3. Long term costs  Assessing equivalence – include all costs  Depends on relative cost of alternative  Top-up price should incorporate 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

53 Counterarguments  4. Cost-effectiveness equivalence and reasonableness 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

54 Reasonable treatments  1. Provided by at least some (conventional) health practitioners  CE  2. Some (scientific) evidence of effectiveness  CEE/CETE A Public Health System* should provide reasonable alternative treatments that are cost-equivalent to the currently funded default treatment. 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

55 Applying cost-equivalence  Interpersonal cost-equivalence  CE/CEE/CEE Reduced magnitude Increased risk Reduced probability of benefit Reduced duration of benefit Less evidence Increased cost Treatment A vs Treatment B Patient A vs Patient B 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

56  4. Interpersonal cost-equivalence  Reduction in price/dose/duration of treatment  Equivalent cost  Equivalent cost-effectiveness  Cost effectiveness = CET  CEE  Maximum price B = E B /E A * C A 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

57 <40 – three cycles of IVF 40-42 – one cycle of IVF http://www.hfea.gov.uk/ivf-success-rate.html 25/02/16 Cost Equivalence

58 Implications of CE for IVF  1. Pure CE – provide for all groups  2. CEE  Option 1: Adjustment to prognosis, not age [Conceptional ageism]  Option 2: Allow top-up  Option 3: If price falls – allow cost-equivalent access  Option 4: Allow donor eggs for older women 25/02/16 Cost Equivalence

59 Supra-optimal treatment  Reduced duration/dosage  Top-up to cost- equivalence/CEE/CETE  Increased inequality  (dignity)  Cross-subsidy  Huge bills  Effect on drug costs  Road to privatisation Reduced magnitude Increased risk Reduced probability of benefit Reduced duration of benefit Less evidence Increased cost 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

60 Conclusions  Optimal treatment  Value pluralism  Cost-equivalence 25/02/16 Cost Equivalence

61 Acknowledgements: – Tara Nair – Julian Savulescu – Wellcome Trust dominic.wilkinson@philosophy.ox.ac.uk @NeonatalEthics 25/02/16 Cost Equivalence

62 Counterargument  4. Above cost-equivalence  What value do we place on different views?  Should equivalence threshold be above standard? 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

63 Case Joseph http://www.rtmagazine.com/2009/01/alls-quiet-in-the-nicu-infant-rds/ 25/02/16 Cost Equivalence

64 Survey  Mechanical Turk – 180 general public (US) 25/02/16 Cost Equivalence

65 25/02/16 Cost Equivalence

66  Cost*-equivalence - A Public Health System* should provide reasonable alternative treatments that are less than a threshold above the cost-equivalent to the currently funded default treatment.  Where should the threshold be?  Should the reason count? 25/02/16 Cost Equivalence

67 Counterarguments  4. Supplementation rather than alternative treatment  CE/CEE/CETE – may pay for some/all if alternative, none if supplemental  Incentive to forego standard therapy 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

68 Refusal cost-equivalence  Treatments that save money…  Refusal may cost more  Refusal equivalence  Refusal cost-equivalence: Where the cost of no treatment is > cost of optimal treatment A, and a PHS is prepared to absorb the costs of refusal of treatment A, provide alternative treatment B iff Cost B is ≤ Cost refusalA 25/02/16 Cost Equivalence Definition Optimum CE – types CE – applying Against CE Beyond CE

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