Bayesian Cost-Effectiveness Analysis of Medical Treatments

Elias Moreno, Francisco Jose Vazquez-Polo, Miguel Angel Negrín-Hernández

• Publisher: Chapman and Hall/CRC
• Year: 2019
• ISBN:
  9781351744362
• Edition: 1
• Topic: Medicine
• Subtopic: Biostatistics

Cost-effectiveness analysis is becoming an increasingly important tool for decision making in the health systems. Cost-Effectiveness of Medical Treatments formulates the cost-effectiveness analysis as a statistical decision problem, identifies the sources of uncertainty of the problem, and gives an overview of the frequentist and Bayesian statistical approaches for decision making. Basic notions on decision theory such as space of decisions, space of nature, utility function of a decision and optimal decisions, are explained in detail using easy to read mathematics.

Features

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• Focuses on cost-effectiveness analysis as a statistical decision problem and applies the well-established optimal statistical decision methodology.

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• Discusses utility functions for cost-effectiveness analysis.

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• Enlarges the class of models typically used in cost-effectiveness analysis with the incorporation of linear models to account for covariates of the patients. This permits the formulation of the group (or subgroup) theory.

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• Provides Bayesian procedures to account for model uncertainty in variable selection for linear models and in clustering for models for heterogeneous data. Model uncertainty in cost-effectiveness analysis has not been considered in the literature.

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• Illustrates examples with real data.

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• In order to facilitate the practical implementation of real datasets, provides the codes in Mathematica for the proposed methodology.

The motivation for the book is to make the achievements in cost-effectiveness analysis accessible to health providers, who need to make optimal decisions, to the practitioners and to the students of health sciences.

Elías Moreno is Professor of Statistics and Operational Research at the University of Granada, Spain, Corresponding Member of the Royal Academy of Sciences of Spain, and elect member of ISI.

Francisco José Vázquez-Polo is Professor of Mathematics and Bayesian Methods at the University of Las Palmas de Gran Canaria, and Head of the Department of Quantitative Methods.

Miguel Ángel Negrín is Senior Lecturer in the Department of Quantitative Methods at the ULPGC. His main research topics are Bayesian methods applied to Health Economics, economic evaluation and cost-effectiveness analysis, meta-analysis and equity in the provision of healthcare services.

1

Health economics evaluation

1.1Introduction

In the field of economics, health economics is one of the areas in which research has recently had an intensive development. In this context, one of the major concerns of researchers is the comparison between medical treatments or technologies. Comparing the effectiveness of different treatments is not enough for medical treatment decision making. If we choose only the effectiveness as the measure of goodness of a treatment, we are accepting an unlimited capacity of resources for health, and the reality is that health resources are limited and effectiveness comes at a price. Weinstein and Stason (1977) stated that for a level of available resources, society must maximize the total aggregate of health benefits. Therefore, it is necessary to search for a methodology for adding the cost to the effectiveness, as well as a relationship between the cost and effectiveness that allows us to compare treatments.

As control over health expenditure has increased over the last thirty years, the term cost–effectiveness has gained in popularity. This increasing focus on cost–effectiveness analysis of new or existing treatments has been led by the development of health technology assessment (HTA) agencies, such as the National Institute for Health and Care Excellence (NICE) in the United Kingdom, which seeks to provide guidelines for health–care providers and decision makers about which treatments should be covered by the National Health Systems.

Most developed countries have developed HTA agencies in recent years to inform policy making. Regional and national HTA agencies offer recommendations on medicines and other health technologies that can be financed or reimbursed by the health system of a state or region. Among their functions we can highlight that of providing relevant information about the safety, efficacy, outcomes, effectiveness, cost and cost–effectiveness, as well as social, legal, ethical, and political impacts of a health–care technology. Recently, they are gaining a strong influence on patient access to new medicines, mainly due to increasing pressure on health budgets (Ciani and Jommi, 2014).

In Europe, since 2008, the European Medicines Agency has been working closely with HTA bodies in different member states, as well as with the European Network for Health Technology Assessment, with the objective of generating relevant data for regulators, HTA bodies, and other interested parties.

In the United States, the federal government has provided financial support for HTA since the early 1970s. The US Office of Technology Assessment, the Medicare Coverage Division with the Centers for Medicare and Medicaid Services, and the Agency for Healthcare Research and Quality are some of the federal institutions that undertake or fund cost or cost–effectiveness analyses of medical technologies and interventions (Luce and Brown, 1995; Sullivan et al., 2009). In other countries, such as Australia or Canada, pharmaceutical companies are required to submit their products to cost–effectiveness analysis (Henry, 1992; Lee and McCarron, 2006; Hayley, 2009). Most of the HTA agencies belong to the International Network of Medical Technology Assessment Agencies, which promotes exchange and collaboration among different evaluation agencies.

The development of this area has aroused the interest of researchers working on the statistical and methodological aspects of the decision making process in the comparison of treatments. The cost–effectiveness analysis research increases every year. To quantify this evolution, it may be helpful to show the number of articles published in MEDLINE,1 the main database of medical literature in the world, from 1980 to 2017 (Figure 1.1). From this figure we observe an exponentially increasing number of publications between those years.

Figure 1.1

Number of references on economic evaluation in MEDLINE from 1980 to 2017.

In this chapter we give a historical summary of the types of economic evaluation of health technologies, data sources, tools for cost–effectiveness analysis, and a brief introduction to the Bayesian approach of cost–effectiveness analysis.

1.2Conventional types of economic evaluation

The economic evaluation of health technologies for their comparison is based on the outcome and cost of the technologies (usually, medical treatments). Depending on how we measure the outcome of the technology, we can find three main types of methodologies for economic evaluation: cost–benefit analysis, cost–effectiveness ana...