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Cost-Effectiveness Analysis 2.0


Peter Neumann, ScD, Professor of Medicine and Investigator at ICRHPS, Tufts Medical CenterThe United States spends far more of its national income on health care than other countries. But, in their 2017 New England Journal of Medicine article, Peter J. Neumann, ScD, and Gillian D. Sanders argue that it’s possible to get better health results from the dollars currently being spent by encouraging physicians and patients to choose medical services more wisely. One way to help these groups make health care decisions is by better promoting the use of cost effective analyses. “Cost-effectiveness analyses reveal the trade-offs involved in choosing among alternative interventions, with the goal of obtaining the most health possible for the available resources. Such analyses help define and illuminate the potential health benefits lost when the best alternative is not selected,” wrote Neumann and Sanders.

Cost-effectiveness analysis is a tool used by researchers for wide range of topics. For example it’s been used to measure and communicate the value of new drugs and inventions. The Advisory Committee for Immunization Practices has used these analyses in their deliberations. “In 2014, the American College of Cardiology and the American Heart Association released guidance for developers of clinical practice guidelines emphasizing the importance of ‘value’ considerations in such guidelines and have chosen to highlight ranges of cost-per-QALY thresholds as complements to traditional grading methods based on the strength of clinical evidence,” said Neumann and Sanders.

Some organizations such as the Medicare program have chosen not to consider cost-effectiveness in making health care decisions, such as whether to cover and pay for new therapies. “Reasons for opposition to cost effectiveness analysis are multifaceted and reflect mistrust of the underlying methods or the motives of the parties conducting the analyses, or a desire on the part of many Americans to deny or downplay the underlying problem of resource scarcity in health care,” explained Neumann and Sanders.

The Second Panel on Cost-Effectiveness in Health and Medicine, co-chaired by Neumann and Sanders, recommended recently that cost-effectiveness analyses include two reference cases, “one based on a societal perspective and one on a health care sector perspective.” “Our panel’s report devotes considerable attention to ethical issues, such as distributive concerns (who receives health benefits), that we believe are important” wrote Neumann and Sanders. In the past the original leadership panel asked for a single reference case which was to assume a societal perspective reflecting the viewpoint of a decision maker, to be used in incorporating a set of standard practices. Cost-Effectiveness Analysis is a tool that can be used by the United States to provide the best available health care programs and interventions without sacrificing some other important goods, services, or programs. Neumann and Sanders state that, “If we don’t explicitly consider the health benefits and costs of alternative health investments, we fail to draw on important information about whether those resources can be put to better uses than the ones under consideration.”