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Issue V
APPLICATION OF HEALTHCARE INTERVENTION ECONOMIC EVALUATIONS IN HEALTHCARE DECISION-MAKING
Goal
Identify key issues in the application of health care intervention economic evaluations in health care decision-making.
Specific Objectives
- Identify and prioritize the key issues associated with using healthcare economic intervention in healthcare
decision making
- Identify a plan of action to resolve these issues
- Recommend next steps
- Suggest courses for degree programs
- Recommend next steps
Co-chairs
- Jon Clouse RPh MS, Vice President, Applied HealthCare Informatics, United HealthCare Corp.
- Jean Paul Gagnon PhD, Director, Health Economics Policy, Hoechst Marion Roussel
Panelists
- Greg Boyer PhD, Senior Head of Global Health Outcomes, Glaxo Wellcome Inc.
- Diana Brixner RPh PhD, Vice President, Novartis Pharmaceuticals
- Carolyn Clancy MD, Director, Center for Primary Care Research, Agency for Healthcare Policy and Research
- Gregory de Lissovoy PhD, MEDTAP Group
- Louis Morris PhD, Senior VP at PRR Inc
- Peter Neumann ScD, Assistant Professor, Harvard School of Public Health
- Ann Robinow, Executive Director of Care Systems & Finance for Buyers Healthcare Action Group
- Sean Sullivan PhD, Associate Professor, University of Washington, Seattle
Background and Context
The last twelve to fifteen years has witnessed the rapid growth of health economics and outcomes research. This
growth has been largely propelled by competitive pressures within the healthcare industry which created a need
among healthcare decision-makers for methods that would allow them to contrast and compare the costs and consequences
of healthcare intervention. Pharmaceutical product selection has become a key area for use of economic studies.
Formulary decision-makers using the results of economic studies and models can be categorized into three groups:
1) Healthcare decision-makers in practice settings use health economic and outcomes information in drug selection
for formularies. There are currently over 8,000 hospital and managed care organizations in the United States that
frequently make drug-selecting decisions for formulary inclusion.
2) Policy makers within state and federal agencies are required to assist in evaluating prescription drug
coverage decisions for various programs, or use health economic information to construct policy.
3) Development managers within the pharmaceutical industry who have a growing need to increase the return
on investment in research and development.
In current market dynamics, drug choice decisions are made or driven by various stakeholders including pharmacy
and therapeutics (P&T) committees of hospitals and health plans, drug purchasers for large employers or buying
groups, government bodies, practicing physicians, retail pharmacists, insurance companies, pharmacy benefit
management companies and patients. Drug choice decisions are made most often on the basis of clinical efficacy and safety
information, without knowledge of the impact on total cost to a healthcare system. Groups making these decisions generally
have little background in the issues of health economics and outcomes research.
Currently, health economic information is often delivered to decision-makers through the pharmaceutical industry or
their representatives (i.e. consultants, research organizations and academia) in support of a particular drug therapy or
specific drug choices. There is not much consistency in how this information is offered, since each company and each
researcher may present a different view of the research and the results. As a result, health economic studies are viewed
skeptically and as of limited applicability in the process of drug choice decision-making. Although this has improved recently,
surveys of decision-makers and comments by practitioners on the value and relevance of health economic information and
reports do not yet indicate a compelling demand from decision-makers for economic and outcome evaluative information
(Slogan 477; Grabowski 389; Drummond 249; Luce 398; IMS 490).
Problem Statement
Information about the impact of new therapies on costs within a healthcare system should be essential for making
better healthcare decisions. However, the relevance of health economic information to decision-makers has not been
demonstrated. There is little user-friendliness in the health economic data supplied by industry consultants. Moreover, there is
a lack of consistency of approach and format that would facilitate comparison of pharmaceuticals under review.
Finally, much of the information presented lacks the transparency necessary for the user to determine the appropriateness
of methods or the soundness of assumptions.
Issues
A fundamental disconnect exists between 1) the way decisions are made by healthcare decision makers, 2) type
of information presented to healthcare decision makers and 3) the type of information required by health economic
and outcomes researchers. Specific issues include:
- Evaluative criteria perspective.
Evaluative criteria (e.g., efficacy, safety, cost, quality of life) are often weighed differently by potential users of
health economic research data for decision-making purposes such as formulary committees, providers, health plan
managers, patients or employers.
- Language and definitional barriers
Language and definitional barriers hinder effective communication between potential users and producers of the
information may exist.
- Lack of treatment comparisons
There is little data on direct product or treatment comparisons that are of greatest interest to potential users.
- Lack of communication
Little dialogue exists between the potential users and the producers of information on what is relevant and what
information can be generated by health economic research.
- Lack of understanding
Potential users of health economic research data may be hesitant to include health economic information in their
decision-making process because it is different from their established clinical orientation.
- Conflicting study design
To conduct studies which provide health economic information that meets users' needs, certain research designs
for health economic and outcomes research studies may conflict with clinical design, causing regulatory and liability
concerns.
- Research Funding
Some sources of research funding may present a barrier to the credibility and application of study results.
- Societal perspective vs. individual perspective
A conflict may exist between recommendations based on population data and the care of individual patients.
- Lack of quality criteria
When health economic research data is used in the decision-making process, there is no recognized approach for
measuring the quality of the decision or the net result.
- Lack of experts
There are few skilled opinion leaders or other resources from which potential users can seek advice and assistance.
- Segregation of organizational finances and health outcome decisions
Decision-maker organizations segregate budgetary decisions for pharmaceuticals from those related to other
medical technologies and services.
1. Evaluative Criteria Perspective
Decision-makers often weigh evaluative criteria differently. One barrier to the use of health economic studies is
that multiple decision-makers weigh criteria differently. For example, patients may place a different importance on
certain quality-of-life attributes of a product than the physicians prescribing it or the managed care decision-makers
providing access to the product in their plan. Even within categories of decision-makers, variability in the weight placed on
attributes exists. Taking this a step further, decisions that are optimal from society's perspective may be unacceptable from
the perspective of an individual plan or patient. As a result, health economic studies that attempt to construct a single
metric may encounter resistance from decision-makers. The Panel on Cost-Effectiveness in Health and Medicine
(Weinstein 113) has recommended conducting "reference case" cost-effectiveness analysis from the societal perspective as a way
of enhancing comparability across studies as well as from other perspectives which are relevant to the decision at hand.
2. Language and Definitional Barriers
Language and definitional barriers exist that prevent the effective communication between users and suppliers of
health economic information. Scientific jargon may hinder effective communication between the producer and the end-user
of health economic information. A major problem is in definition of terms. For example, 'cost-effectiveness analysis' has
been confused by some as meaning only 'cost-saving' or 'cost-reducing' whereas in practice, the term describes the
jointly-determined relationship between outcomes of competing therapies measured in terms of effectiveness and the
costs required to achieve that level of effectiveness. Cost-savings is only one possible result. Other terms such as
cost-utility, quality-adjusted survival, healthy-year equivalents, Gompertz functions, bootstrap, and time preference hold very
little meaning to the practicing physician, the pharmacist or the health plan manager. Thus, when economic and outcomes
data or models are provided to clinically-oriented individuals for the purpose of formulary consideration, some or most of
the message may be lost simply because of these language barriers.
Researchers in the field of health economics may propagate some confusion by coining terms in an attempt to
clarify methods to peers that generates confusion for those outside the field. This nomenclature distances the field, the
publications, and the potential application of results from the user. If it is to be useful, there is a need for education of the user
to better understand this information. There is an even greater need on the part of the information producers to
provide economic and outcomes messages that are clear, precise, relevant, and containing no unnecessary jargon.
3. Lack of Treatment Comparisons
Available information fails to provide data on direct product or treatment comparisons that are of greatest interest
to potential users. Head to head comparisons of performance in multiple dimensions, not just cost of the product, of
competing drugs is information critical to committees making formulary decisions. For this type of user, comparison of one drug
to another may be of primary concern; to other users, such as practicing physicians and patients, these comparisons
must look at alternatives beyond drug choices. Physicians are making treatment decisions with increasing input from
patients. These decisions are not limited to drug choices. They include no treatment, non-pharmaceutical alternatives such as
diet changes, therapy or surgery, and other treatment options such as homeopathic remedies.
4. Little Dialogue
Little dialogue exists between users and suppliers of health economic information on what is relevant and what can
be generated. A multitude of guidelines to health economic research, some of which give conflicting guidance, exist in the
US and elsewhere. Healthcare decision-makers, or their consultants, may choose any of these guidelines.
Inconsistent decision-making within or between organizations may result. In addition, within the timeframe of current decision
making, many of these guidelines are too complex and time consuming to be a realistic part of decision-making for either the
user or the supplier of the information. The Pharmaceutical industry has provided information in response to a global
request for economic data to support healthcare decisions. However the information is not being used or used appropriately.
This behavior indicates a need for clarification by the decision-maker about specifically what information is needed and by
the research what information can be provided. Conversely, suppliers of information have not been proactive in seeking
to assist users in making decisions. For example, market research data developed for internal product decisions could
be very helpful to healthcare decision-makers.
5. Lack of Understanding
Potential users of health economic and outcomes research data may be hesitant to include health economic information
in their decision-making process because it is different from their established clinical orientation. Decisions regarding use
of and coverage for pharmaceuticals are usually placed with committees of clinically trained professionals, such as
physicians, pharmacists, and nurses whose training focuses their attention on pharmacological and therapeutic aspects
of treatments. They usually have little background to support the incorporation of different types of valuing schemes, such
as health economic research, into their decisions.
Additionally, federal drug approval regulations require that manufacturers generate evidence of product efficacy and
safety through the use of specified research methods. Decision-making bodies have readily adopted the use of efficacy
and safety data into their deliberations since it coincides with the clinical aspects of their training. Incorporating
information from outside a well-developed decision-making paradigm is difficult. When the existing paradigm is complex, the
implications for incorrect decisions are significant. Decision-makers may not feel comfortable with changes to an
established process.
6. Conflicting Study Design
Regulatory and liability concerns may conflict with certain research designs for health economic and outcomes
research studies that meet decision-maker needs. An often-noted problem in developing information for formulary decisions is
the timing of drug approvals and the need for comparative information. Drug companies have the responsibility of
gathering data to support drug approvals. However, companies also want to provide useful outcomes information about their
products at the time of product launch, when formularies make initial purchase decisions. Formularies often request
comparative information derived from studies in populations and settings with similar characteristics to the purchasing group.
One solution for this dual set of interests would be for drug companies to perform phase III studies that could be used
for both regulatory and marketing purposes. Often humanistic and resource utilization data may be gathered as "add-ons"
to existing protocols. However, certain regulatory requirements may make it difficult to create valid designs for
outcome studies. For example, safety concerns may make it necessary for protocol planners to include physician visits,
physical examinations, and laboratory tests at more frequent intervals than would be utilized in routine practice. These
planned visits and tests may make it impossible to assess whether study drugs variably caused unscheduled and extra
physician visits. Similarly, patient management concerns at managed care organizations may make it difficult to plan valid
Clinical studies. They may have policies that prohibit the use of placebos, random assignment of patients to treatment, or
other design features essential to the conduct of a clinical trial. Managed care organizations may also be unwilling to
fund certain data collection costs, or their accounting system may require them to charge all of the costs necessary to
treat patients enrolled in the trial, even costs not related to the trial, to the funding agent.
7. Research Funding
The source of research funding may present a barrier to the credibility and application of study results. Many
health economic studies are currently funded by the pharmaceutical industry, either directly or indirectly through persons
contracted to do such research such as consultants, research organizations or academia. This has led to serious concerns
by potential users of the information that it is biased towards the sponsoring company's product and therefore lacks
credibility.
In light of the fact that decision-makers at managed care organizations have complained about the lack of
independence of health economic research studies, it is curious that they have not funded more studies themselves. Only rarely
have some plans paid for studies, directly or indirectly, by sponsoring research conducted by independent groups or
consultants. This may reflect their lack of familiarity with health economic research techniques or it may be that plans
cannot capture for themselves the full return on investment when sponsoring the information.
8. Societal Perspective vs. Individual Perspective
A conflict exists between recommendations based on population data and care of individual patients. By definition,
health economic analysis is population based. Decisions about drug alternatives using health economic data inherently
consider optimization of resource use relative to outcomes across populations. These decisions are made using the values of
the decision makers applied to larger groups, which may not coincide with the values of individual patients or
physicians, especially when the economic issues considered do not directly apply to them. Patients are generally unmoved by
physician or health plan explanations that their drug- or treatment-of-choice is not available to them because it is not
"cost effective".
This debate about optimization of health for populations versus individuals is far from resolution in the US. Without
an agreed-upon values framework that will stand up to scrutiny by all users, decision-makers will continue to struggle
to defend decisions, not just drug choice, that are in any way driven by a trade-off between population health costs
against individual outcomes.
9. Lack of Quality Criteria
There is no measurement system to validate decisions. Health economic research is designed to inform choices
among alternative medical technologies. In the most complex situation, a study may find that a certain relatively costly
new therapeutic product offers more "value" to the adopting organization than the current less expensive therapy. "Value"
may be defined using an abstract metric such as quality-adjusted life years.
Once an organization has adopted a new technology, some implications of the decision may be readily visible.
For example, pharmacy expenditures may have increased. But whether or not "value" has also increased may not be
so readily discernible. While the potential consumers of health economic research, such as managed care
organizations, have in place mechanisms to track resource utilization (cost) they generally lack comparable procedures for
quantifying outcomes of care (effect).
10. Lack of Experts
There is an inadequate availability of opinion leaders to turn to for assistance. For the end-users of health
economic analysis, interpretation of a study can represent a formidable task. Methods and findings are typically described using
the jargon that characterizes any specialized field. Analytic methodology may be complex, and is becoming more so
as researchers adopt techniques such as calculation of confidence intervals around cost-effectiveness ratios.
The availability of published checklists to evaluate the quality of a study can facilitate review by persons with
somewhat limited expertise. However, a study that appears to conform to recognized standards may still be seriously flawed. In
part, this is due to the widespread dissemination of guidelines for health economic research. These guidelines are
effectively creating templates for study presentation.
Many end-users lack internal expertise to assess the validity and reliability of health economic studies. In such a
situation it would be natural to seek outside advice; however, this is not easy to locate. End-users may not be aware of
mentors, individuals or organizations such as academic groups or consultants, that could offer guidance, and there is no
formal mechanism for identifying such expertise or referring end-users to potential advisors.
11. Segregation of Organizational Finances and Health Outcomes Decisions
Decision-maker organizations segregate budgetary decisions for pharmaceuticals from those related to other
medical technologies and services. Managed care organizations and hospitals most often have separate budgets managed
by separate departments for pharmaceuticals versus other medical technologies and services. This separation
places downward pressure on both budgets separately, and creates difficulty for efforts that attempt to assess the
budgetary impact of individual pharmaceutical therapies on the entire medical cost budget. This silo effect is a significant
impediment to better utilization of pharmacoeconomic and outcomes information in decision-making.
Recommendations and Next Steps
For the following recommendations to become a reality, a central organizer must be recruited to coordinate the
improvement of the application of healthcare intervention economic evaluations in healthcare decision-making. The
International Society for Pharmacoeconomic and Outcomes Research (ISPOR), as a recognized leading international organization
in the field of health economics, is proposed as the critical link to implementing these recommendations.
- To determine the information needs of the community, ISPOR-sponsored focus groups be created to provide a
forum for dialogue between potential users, producers, and regulators of information. Researchers and suppliers of
health economic data must actively engage with decision-makers to determine the key health economic evaluative criteria
for decision-making purposes and formulate ways to supply the information consistently. Because decisions are
seldom made using a single variable, determining a set of variables which researchers can supply will move the
discipline toward greater relevance. A multivariable approach will allow the decision-makers flexibility to focus on
evaluative criteria germane to their population while providing researchers the opportunity to highlight key criteria on which
a product excels or falls short. To establish the needed relevance, cooperation among users and researchers,
both industry and academic is essential.
- ISPOR develops a set of simple criteria for evaluation of these studies, agreed upon by consensus of all
parties involved and designed to recognize different types of perspectives and research design so that specified
research questions and business needs are met. ISPOR should also seek to bolster the objectivity, reliability, and credibility
of the health economic studies through various mechanisms, including working with sponsors, researchers and
journal editors, to adopt protocols that will establish the independence of research and statements for the disclosure
of funding sources.
- A training initiative for decision-makers in using health economic research information for decision-making can
be offered through ISPOR. Educational programs in the area of health economic analyses should be created for
clinically trained decision-makers. The focus may be directed towards how health economic information can be
incorporated into existing decision-making paradigms and the added value that health economic data can provide in
decision-making. A consortium of managed care and other purchasing organizations, academic researchers and one or
more health economic research organizations should be formed to execute this recommendation. Funding to support
the effort should come from pharmaceutical industry, government, and to the extent possible from managed care
and other purchasing organizations that wish to participate. The project should be conducted over a two-year
education period with a two-year follow-up evaluation. The education program itself should continue until the results of the
two-year evaluation are completed.
Suggested criteria for project evaluation could include:
- interviews with decision-makers regarding changes in their decision analysis process;
- impressions as to how the decisions have been changed; and
- longer term analysis of the impact on health care resource allocation and on patient health within the
participating health care systems.
- A standard reporting format to allow flexible weighting of factors based on individual decision-making
preferences should be developed by ISPOR in collaboration with potential users and producers of information. It is suggested
that presentation of the results of health economic analyses be modified to show the various components of
effectiveness measures, service utilization measures and costs. This way clinically oriented decision-makers can observe
similarities of information between what they currently use and that used in health economic analyses. A standard
approach to providing clinical, economic and outcomes data to decision-makers should be developed to minimize use of
technical jargon and effectively communicate the necessary data and results. Coincident with an effort to train the
user community in language and methodology of economic evaluation and outcomes research (as in recommendation
2), this would reduce the language gap between the producer and consumer of healthcare economic information.
- ISPOR form a committee that would produce a standard format for Data Element Shells (DES). DES would be in
the form of desegregated data from cost-consequence or cost-effectiveness analyses. For each outcome of
interest, reference to the data source could be made to allow reviewers to discern the degree of scientific support for each
data element. The information presented would be based upon feedback from managed care organization
purchasing agents about the types of information needed to make purchasing decisions (as in recommendation 1). This type
of cost-consequence information would be provided in addition to full cost-effectiveness analyses. It would
permit purchasers to understand the effects of drugs that are being considered on the outcomes of greatest relevance to
the individual groups. Drug companies would be free to present additional information on outcomes. Managed
care organizations could easily compare the results of several competing CEAs with the use of a standardized
format. Areas where data was not available would be evident. ISPOR, in collaboration with potential users and producers
of information, could be responsible for creation and updating of a DES form. The ISPOR committee would decide
on the level of specificity of the DES, perhaps either a general format for all drugs or a specific format for individual
drug classes.
- ISPOR should support an information clearinghouse of available thought-leaders and experts in the field. This
should include development and maintenance of an Internet WEB site with links to expert's homepages and e-mail
addresses. ISPOR as an organization brings together many of the researchers qualified to evaluate health
economic research and interpret findings. ISPOR could develop rosters of persons qualified to review studies, similar to
editorial boards for journals, where the reviewers would agree to participate in reviewing documents or addressing queries
to promote a better understanding of the field of health care economics.
Summary
Applying the knowledge provided by health economic studies to health care decisions at all levels can only be an asset
to healthcare systems. To achieve this, it is paramount that the information needs of potential users of health economics
be determined, that training is provided to facilitate better use of this information, and the results of health economic
studies be presented in an easily interpreted and comparable way. Allowing users of this information access to experts in the
field when additional support is needed will ensure that the information is not dismissed because it is not understood. A
relevant association such as ISPOR has been proposed as a facilitator, bringing representatives of drug companies,
managed care organizations and regulatory agencies together to discuss areas of compromise, which will allow
performance of more efficient and useful studies. ISPOR should also participate in the design and funding of educational programs
and in the development of standardized data reporting formats.
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