Country-level cost-effectiveness thresholds: initial estimates and the need for further research

TY - JOUR

T1 - Country-level cost-effectiveness thresholds

T2 - initial estimates and the need for further research

AU - Woods, Bethan Sarah

AU - Revill, Paul

AU - Sculpher, Mark John

AU - Claxton, Karl Philip

N1 - © 2016, International Society for Pharmacoeconomics and Outcomes Research (ISPOR).

PY - 2016/12

Y1 - 2016/12

N2 - Objectives: Cost-effectiveness analysis (CEA) can guide policymakers in resource allocation decisions. CEA assesses whether the health gains offered by an intervention are large enough relative to any additional costs to warrant adoption. Where there are constraints on the healthcare system’s budget or ability to increase expenditures, additional costs imposed by interventions have an ‘opportunity cost’ in terms of the health foregone as other interventions cannot be provided. Cost-effectiveness thresholds (CETs) are typically used to assess whether an intervention is worthwhile and should reflect health opportunity cost. However, CETs used by some decision makers - such as the World Health Organization (WHO) suggested CETs of 1-3 times gross domestic product per capita (GDP pc) - do not. This study estimates CETs based on opportunity cost for a wide range of countries.Methods: We estimate CETs based upon recent empirical estimates of opportunity cost (from the English NHS), estimates of the relationship between country GDP pc and the value of a statistical life, and a series of explicit assumptions. Results: CETs for Malawi (the lowest income country in the world), Cambodia (borderline low/low-middle income), El Salvador (borderline low-middle/upper-middle) and Kazakhstan (borderline high-middle/high) are estimated to be $3-116 (1-51% GDP pc), $44-518 (4-51%), $422-1,967 (11-51%) and $4,485-8,018 (32-59%); respectively.Conclusions: To date opportunity cost-based CETs for low/middle income countries have not been available. Although uncertainty exists in the underlying assumptions, these estimates can provide a useful input to inform resource allocation decisions and suggest that routinely used CETs have been too high.

AB - Objectives: Cost-effectiveness analysis (CEA) can guide policymakers in resource allocation decisions. CEA assesses whether the health gains offered by an intervention are large enough relative to any additional costs to warrant adoption. Where there are constraints on the healthcare system’s budget or ability to increase expenditures, additional costs imposed by interventions have an ‘opportunity cost’ in terms of the health foregone as other interventions cannot be provided. Cost-effectiveness thresholds (CETs) are typically used to assess whether an intervention is worthwhile and should reflect health opportunity cost. However, CETs used by some decision makers - such as the World Health Organization (WHO) suggested CETs of 1-3 times gross domestic product per capita (GDP pc) - do not. This study estimates CETs based on opportunity cost for a wide range of countries.Methods: We estimate CETs based upon recent empirical estimates of opportunity cost (from the English NHS), estimates of the relationship between country GDP pc and the value of a statistical life, and a series of explicit assumptions. Results: CETs for Malawi (the lowest income country in the world), Cambodia (borderline low/low-middle income), El Salvador (borderline low-middle/upper-middle) and Kazakhstan (borderline high-middle/high) are estimated to be $3-116 (1-51% GDP pc), $44-518 (4-51%), $422-1,967 (11-51%) and $4,485-8,018 (32-59%); respectively.Conclusions: To date opportunity cost-based CETs for low/middle income countries have not been available. Although uncertainty exists in the underlying assumptions, these estimates can provide a useful input to inform resource allocation decisions and suggest that routinely used CETs have been too high.

M3 - Article

SN - 1098-3015

VL - 19

SP - 929

EP - 935

JO - Value in Health

JF - Value in Health

IS - 8

ER -