Scribd
Upload
3 views

PL325.Lecture5

Uploaded by

Yang Lei
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
3 views

PL325.Lecture5

Uploaded by

Yang Lei
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 5

What is a QALY

-quality adjust life-year takes into account quantity and quality of life generated by healthcare
interventions
-arithmetic product of life expectancy and measure of quality of the remaining life-years
-resource allocation, commissioners are given an insight into the likely benefits from investing
in new technologies and therapies
-def: a measure of a person’s length of life weighted by a valuation of their health0related
quality of life

-quantity of life: survival or life expectancy


-quality of life: through health utilities, health state on continuum between 0 and 1, some have
negative (0 death)

EQ-5D (five dimensions)


-mobility
-pain/discomfort
-self-care
-anxiety/depression
-usual activities

3 to the power of 5, 243 possible health states since there are 3 levels + 2 levels which are
unconscious and dead

Basic idea of QALY


-amount of time spent in health state is weighted (the GPA of health)
-4 x 0.75 = 3 vs. 4 x 0.5 = 2

Longer survival time with a reduced health-related quality of life and a shorted survival time
with a better health-related quality of life

QALY as a currency
-Cost-utility ratio is the difference between costs of two interventions divided by the difference
in the QALYs they produce
cost of intervention A−cost of intervention B
-
no . of QALYs produced by Intervention A−No. of QALYs produced by Intervention B

-comparing the addition of docetaxel to cisplatin and 5-FU for squamous cell carcinoma (head
and neck cancer) with the use of cisplatin and 5-FU alone produces an additional 2.08 QALYs at
an additional cost of 3,824 per patient which means that it cost 1,832 to generate an additional
QALY, analysis shows that there is 95% probability that docetaxel-based induction therapy
regimen is cost-effective compared with standard induction therapy at a willingness to pay
20,000/QALY
Limitations of QALYs

-While QALYs provide an indication, in terms of quality of life and survival for patients, they are
far from perfect
-single outcome for economic evaluations means important health consequences are excluded
-preventive measures where impact on health outcomes may not occur for many years may be
difficult to quantify using QALYs
-highly dependent on age

Cost-effectiveness analysis 2.0

-Medicare does not consider cost-effectiveness


-affordable care act forbids patient centered outcomes research institute from considering
QALY
-1993 original panel “using a reference case” , update on two reference cases (one based on
societal perspective and one on a health care sector perspective)

Controversy over using QALY


-ensure fair prices and reduce spending
-negotiating the pricing of a drug on the bases of health benefit it provides to patients and
populations, value-based pricing
-QALYs are derived from population outcomes and should be applied to drugs at population
level; not intended for individual patients
-intense lobbying, ACA was amended to include language that prohibited the use of QALYs to
set thresholds for determining coverage or reimbursement of health care
-QALY is often used as a proxy to reject any sort of limit setting or price reductions in the
pharmaceutical market
-nonprofit Institute for Clinical and Economic Review

9 criticisms of QALYs in three categories: criticisms of QALY methods, neutrally applying QALYs
is unfair, and criticism that QALYs fail to be neutral in discriminatory ways

Notes:

The Health Sector Market


Classic Market Health Sector Market
Standard product Product may vary along multiple dimensions
Variations in product quality apparent Quality of product is often unclear
Consumer decides and pays Physicians often decides; consumer is not the
dominant payer
Prices are transparent Prices are complex or completely hidden
Value of product consumer is clear Ultimate value can be high, but need is often
unpredictable, and the connection between
the product and “health” is often not clear
Price is determined by market supply and Price is determined by a combination of
demand regulation, perceived quality, and the impact
of insurance plans

MGH setting up prices relative to health plans, time price


Physicians act as agents for the consumer, determining:
-The services (tests, procedures, treatment, medications), supplied induced demand
-which services the physicians themselves will provide

Conflicts of Interest

Economic concepts
-public goods: goods that everyone consumes collectively (national defence, clean air, police &
fire protection)
-public goods are non-exclusive and inexhaustible
-medical research is considered a public good
-medical care is not considered a public good because: supply is not inexhaustible and

Externalities
-the effects of a transaction on parties outside the transaction
-positive externalities benefit others (vaccines)
-negative externalities harm others (lack of vaccination, second-hand smoke)

Cost-Benefit Analysis
-a tool that helps to make informed decisions about alternative strategies
-quantitatively to replicate the market function of evaluating the benefit against the utility of all
other alternative purchases

CBA vs. cost-effectiveness analysis


-CBA – costs & benefits quantified and valued monetarily
-CEA – only costs quantified monetarily

Costs Benefits
Direct costs of care Requires a common measure
Follow up treatment Reduced health costs
Ancillary costs of care Increased survival time

What value is best


-$50,000 long the standard in the US
-$40,000 per the UK
-$100,000 to cover expensive treatment?

Cost/QALY

MD advice to smoker on cessation $450


Diabetes screening $67,000
Heart Transplant $14,000

Projected ICER?

Methodological issues
-some health consequences may be excluded
-chronic conditions are difficult to assess
-preventive measures are difficult to quantify
-little weight is given to emotional or mental health problems
-little or no assessment of impact on caregivers and family members
-lack of transparency regarding modeling assumptions and methods (based on assumptions and
data, proprietary)

Policy issues:
-disagreement over how much should be paid for a QALY
-whose perspective? Individual vs. organization vs. society
-the price of the comparator versus impact on overall budgets and affordability

Use of CBA & CEA in the US vs. other nations


-NICE, NHS and UK
-US, medicare prohibited to make analysis
-ICER not to be confused with (incremental cost effectiveness), (institute for clinical and
economic review)
-ICER’s aim is to improve medical decision-making by independently evaluating research and
clinical evidence

Disability-adjusted life years (DALY)


-measure of overall disease burden across a population
-calculated as sum of years of life lost (YLL) due to premature mortality plus years lost to
disability (YLD)
-DALY = YLL + YLD
-combines mortality and morbidity

Preventable COVID-related hospitalizations


-over 690,000 covid-19 hospitalizations could have been prevented by vaccination between
June to November 2021
-could have saved $13.8 billion

Management of policy practice (mid-term paper)

Why is medication adherence important, and what is its value to CVS?


Who are key external stakeholders, and what is their interest in making the Pharmacy Advisor
Program a success

You might also like