Cost equivalence A/Prof Dominic Wilkinson - PowerPoint Presentation

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Cost equivalence

A/Prof Dominic Wilkinson25/2/2016

Director of Medical Ethics

Oxford Uehiro Centre

Dominic.wilkinson@philosophy.ox.ac.uk

@Neonatalethics

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Case 1Jim

https://vimeopro.com/usmedinnov/surgicalprocedures

http://www.atlantamedcenter.com/en-US/ourServices/medicalServices/BloodlessMedicineSurgery/Pages/default.aspx

http://cikooo.com/837/7-things-i-wish-people-understood-about-anxiety/

http://www.sinosourcebio.com/products-d.php?id=51

25/02/16

Cost Equivalence

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Cost Equivalence

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Case 2Julia

25/02/16

Cost Equivalence

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Case 3Jane and Peter

http://www.naturopathiccurrents.com/articles/acupuncture_and_womens_health

25/02/16

Cost Equivalence

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QuestionIn a public health system should adult patients be permitted to choose sub-optimal medical treatments? (If so, when?)

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Cost Equivalence

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OutlineCasesDefining the questionIn favour of the optimalPermitting sub-optimal treatmentCost equivalence – 3 typesApplying cost-equivalence – 3 options

Counter-arguments to cost-equivalenceFurther applicationsInterpersonal cost-equivalenceSupra-optimal treatment

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Cost Equivalence

Definition

Optimum

CE – types

CE – applyingAgainst CEBeyond CE

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Definition

In a

public health system

should adult patients be permitted to choose sub-optimal medical treatments? (If so, when?)

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Cost Equivalence

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Definition of question

In a public health system should

adult

patients be permitted to choose sub-optimal

medical treatments? (If so, when?)

JME 2016

Harm Threshold

Cost Threshold

*children where refusal of treatment is thought acceptable

25/02/16

Cost Equivalence

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Definition of question

In a public health system should adult patients be permitted to choose sub-optimal

medical treatments

? (If so, when?)

http://www.leannehall.com.au/blog/50-conventional-vs-alternative-medicine-does-there-have-to-be-a-winner

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Cost Equivalence

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Definition of question

In a public health system should adult patients be permitted to choose

sub-optimal

medical treatments

? (If so, when?)

Reduced magnitudeIncreased risk

Reduced probability of benefitReduced duration of benefitLess evidenceIncreased cost

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Cost Equivalence

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Optimal Treatment

: Public Health Systems should provide the most effective, available, affordable treatment for a given condition. They should not provide less effective treatments.

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Cost Equivalence

Definition

Optimum

CE – types

CE – applyingAgainst CEBeyond CE

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Pro-optimumDuty of beneficenceCost effectivenessMost cost-effective treatments for a given conditionMost cost-effective treatments overall – to a threshold level

=

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CE

Beyond CE

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A

xemab - $10,000 per treatment – saves 1 QALY

B

oximab - $10,000 per treatment – saves 0.5 QALY

C

liximab - $20,000 per treatment – saves 1.5 QALY

X

Incremental CE = $20,000/QALY

✓

X

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Cost Equivalence

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Why not?

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Cost Equivalence

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Different values

Reduced magnitude

Increased riskReduced probability of benefitReduced duration of benefitLess evidence

Increased cost

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Cost Equivalence

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Sub-optimumValue pluralism

Metaphysical

Epistemological

Value

Political

http://

www.britannica.com

/biography/John-RawlsPluralism ≠ Relativism

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Cost Equivalence

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Variability

Maheshwari Human Reprod Update 2010

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Cost Equivalence

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Sub-optimumAutonomy

Nick Galifianakis http://nickandzuzu.com/2013/08/autonomy/

-

+

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Cost Equivalence

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Sub-optimumLimits to autonomy/value pluralism1. Cost

2. Reasonableness

=

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Cost Equivalence

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Cost equivalenceThe cost-equivalence principle. A Public Health System* should provide reasonable alternative treatments that are cost-equivalent to the currently funded default treatment.

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CEBeyond CE

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Cost equivalence1. Pure cost-equivalence CEIf would be prepared to provide treatment AProvide alternative treatment B if cost ≤ A

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CE

Beyond CE

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Cost Equivalence

A

xemab - $10,000 per treatment – saves 1 QALY

✓

B

oximab - $10,000 per treatment – saves 0.5 QALY

D

axa

mab - $10,000 per treatment – saves 0.02 QALY

✓

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Optimum

Accept

Refuse

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Cost Equivalence

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The cost of cost equivalenceCounterfactual 1. Reluctant acceptanceIf don’t fund B – will accept A

Net costNet QALY

Optimum$10,000+1 QALYCE$10,000

+0.5 QALY

+1

+0.5

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Cost Equivalence

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The cost of cost-equivalenceCounterfactual 2. Refusal (self-funding)If don’t fund B – will decline treatment – funding available for another patient

Net costNet QALY

Optimum$10,000 up to +1 QALYCE$10,000

+0.5 QALY

+0.5

+1?

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CE

Beyond CE

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Cost-equivalence2. Cost effectiveness-equivalence CEEIf would be prepared to provide treatment AProvide alternative treatment B if cost/QALY ≤ A

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CEBeyond CE

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Cost-effectiveness equivalence CEE

Page

28

A

xemab - $10,000 per treatment – saves 1 QALY

B

oximab - $10,000 per treatment – saves 0.5 QALY

C

liximab - $20,000 per treatment – saves 1.5 QALY

X

Incremental CE = $20,000/QALY

✓

✓

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Cost Equivalence

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Refusal

Treatments not currently funded are at or greater than CET

Net cost

Net QALYOptimum$10,000 up to +1 QALY

CE$10,000+0.5 QALY

+1?

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Cost Equivalence

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Country

Threshold value in local currency

Threshold value in Euro

Australia

AUS$42,000–76,000 per life year

24,700–44,700 € per life year

Canada

CAN$20,000–100,000 per QALY

12,700–63,300 € per QALY

England and Wales

£20,000–30,000 per QALY

22,800–34,100 € per QALY

Netherlands

20,000–80,000 € per QALY

20,000–80,000 € per QALY

New Zealand

NZ3,000–15,000 per QALY

1,400–7,200 € per QALY

United States

US$50,000 per QALY

34,400 € per QALY

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Cost Equivalence

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Cost equivalence3. Cost-effectiveness Threshold Equivalence (CETE)If would be prepared to provide treatment AProvide alternative treatment B if cost ≤ A and cost effectiveness ≤ CET

Net costNet QALY

Optimum$10,000 +0.2 QALYCE

$10,000+0.5 QALY

+0.2

+0.5

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CE

Beyond CE

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Cost-effectiveness Threshold equivalence CETE

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32

A

xemab - $10,000 per treatment – saves 1 QALY

B

oximab - $10,000 per treatment – saves 0.5 QALY

C

liximab - $20,000 per treatment – saves 2 QALY

✓

✓

✓

D

axa

mab - $10,000 per treatment – saves 0.02 QALY

X

25/02/16

Cost Equivalence

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Axemab

Boxemab

Cliximab

Daxamab

Cost

10,000

10,000

20,000

10,000

QALY

1

0.5

1.5

0.02

CE

10,000

20,000

13,333

500,000

Optimum

✓

CE

✓

✓

✓

✓

CEE

✓

✓

CETE

✓

✓

✓

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Cost Equivalence

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Applying Cost-equivalence1. BinaryCE/CEE/CETE

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CE

Beyond CE

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Applying CE2. Cost-equivalence through reduced duration/dosage

$731,48/vial

$860/vial

85% dose = $730

CE/CEE/CETE

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CE

Beyond CE

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2. Cost-equivalence through reduced duration/dosage More expensiveCETEIf dose ∝costAnd effect ∝ dose

Any reduction in dose = no change in Cost/QALYMore expensive interventions permitted if (relative to no treatment) Cost/QALY ≤ CET

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Cost Equivalence

Definition

Optimum

CE – types

CE – applyingAgainst CEBeyond CE

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2. Cost equivalence leading to increased duration/dosage?

varenicline

Total cost £16.79

Total cost £163.80

12 weeks

cytisine

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Cost Equivalence

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Applying CE3. Cost-equivalence through price reductionCE

$731.48/vial

$860/vial

If equally effective – price drop needed $130

Negotiation

Top-up

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CE

Beyond CE

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Applying CE3. Cost-equivalence through price reductionCEE/CETE

$731.48/vial

$860/vial

If less effective – maximum cost CB= CEA/CEB * CA

Negotiation

Top-up

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CE

Beyond CE

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Axemab

Boxemab

Cliximab

Daxamab

Cost

10,000

10,000

20,000

10,000

QALY

1

0.5

1.5

0.02

CE

10,000

20,000

13,333

500,000

Optimum

✓

CE

✓

✓

✓

✓

CEE

✓

+3333

✓

+9733

CETE

✓

✓

✓

+9400

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Cost Equivalence

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Why not?

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Cost Equivalence

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CounterargumentsEncouraging suboptimal choices

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CE

Beyond CE

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CounterargumentsTop-up payment

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Cost Equivalence

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Insurer

“Experimental treatment, is where there is minimal or no evidence that it is beneficial.

In these cases we pay the equivalent cost of the established treatment in this country

.

Not very many things are treated as experimental by us, some cancers need unlicensed treatments — we will pay in full if there is enough medical information to support their use.”

http://www.aviva.co.uk/private-health-insurance/our-cancer-pledge.html

http://www.thisismoney.co.uk/money/news/article-3371176/NHS-won-t-pay-60-000-miracle-cancer-drug-insurance-giants-Aviva-Axa-Bupa-Vitality-WPA-will.html

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Cost Equivalence

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Counterarguments1. Co-payments/Top-up

Increased inequality

Levelling down

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CE

Beyond CE

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Counterarguments1. Top-up paymentsIncreased inequalityCross-subsidy

Levelling down

Unjustly increases costs

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Cost Equivalence

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Counterarguments1. Top-up paymentsIncreased inequality(dignity)Cross-subsidy

Huge bills

Levelling down

Unjustly increases costs

Top-up reduces bills

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CE

Beyond CE

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Counterarguments1. Top-up payments

Increased inequality(dignity)Cross-subsidy

Huge billsEffect on drug costs

Levelling down

Unjustly increases costs

Top-up reduces bills

Exaggerated impact?

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CE

Beyond CE

Slide49

Counterarguments1. Top-up paymentsIncreased inequality(dignity)Cross-subsidy

Huge billsEffect on drug costsRoad to privatisation

Levelling down

Unjustly increases costs

Top-up reduces bills

Exaggerated impact?

Slippery slope responses

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CE

Beyond CE

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Even if reject Top-upCEPure cost-effectivenessReduced duration/dosageThird party top-up (Charity? Church?)

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Cost Equivalence

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Counterarguments3. Long term costs

Reduced magnitudeIncreased riskReduced probability of benefitReduced duration of benefitLess evidence

Increased cost

Total costs from increased morbidity

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CE

Beyond CE

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Counterarguments3. Long term costsAssessing equivalence – include all costsDepends on relative cost of alternativeTop-up price should incorporate

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CEBeyond CE

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Counterarguments4. Cost-effectiveness equivalence and reasonableness

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CEBeyond CE

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Reasonable treatments1. Provided by at least some (conventional) health practitionersCE2. Some (scientific) evidence of effectiveness

CEE/CETE

A Public Health System* should provide

reasonable

alternative treatments that are cost-equivalent to the currently funded default treatment.

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CE

Beyond CE

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Applying cost-equivalenceInterpersonal cost-equivalenceCE/CEE/CEE

Reduced magnitudeIncreased riskReduced probability of benefitReduced duration of benefitLess evidence

Increased cost

Treatment A

vs

Treatment BPatient A vs

Patient B

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CE

Beyond CE

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4. Interpersonal cost-equivalenceReduction in price/dose/duration of treatmentEquivalent costEquivalent cost-effectivenessCost effectiveness = CET

CEEMaximum price B = EB/EA * CA

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Cost Equivalence

Definition

Optimum

CE – types

CE – applyingAgainst CEBeyond CE

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<40 – three cycles of IVF

40-42 – one cycle of IVF

http://www.hfea.gov.uk/ivf-success-rate.html

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Cost Equivalence

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Implications of CE for IVF1. Pure CE – provide for all groups2. CEE Option 1: Adjustment to prognosis, not age [Conceptional ageism]Option 2: Allow top-up

Option 3: If price falls – allow cost-equivalent accessOption 4: Allow donor eggs for older women

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Cost Equivalence

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Supra-optimal treatmentReduced duration/dosage

Top-up to cost-equivalence/CEE/CETEIncreased inequality(dignity)

Cross-subsidyHuge billsEffect on drug costs

Road to privatisation

Reduced magnitudeIncreased riskReduced probability of benefit

Reduced duration of benefitLess evidenceIncreased cost

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CE

Beyond CE

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ConclusionsOptimal treatmentValue pluralismCost-equivalence

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Cost Equivalence

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Acknowledgements:

Tara Nair

Julian Savulescu

Wellcome Trust

dominic.wilkinson@philosophy.ox.ac.uk

@NeonatalEthics

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Cost Equivalence

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Counterargument4. Above cost-equivalenceWhat value do we place on different views?Should equivalence threshold be above standard?

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CEBeyond CE

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Case Joseph

http://www.rtmagazine.com/2009/01/alls-quiet-in-the-nicu-infant-rds/

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Cost Equivalence

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SurveyMechanical Turk – 180 general public (US)

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Cost Equivalence

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Cost Equivalence

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Cost*-equivalence - A Public Health System* should provide reasonable alternative treatments that are less than a threshold above the cost-equivalent to the currently funded default treatment.

Where should the threshold be?Should the reason count?

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Cost Equivalence

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Counterarguments4. Supplementation rather than alternative treatmentCE/CEE/CETE – may pay for some/all if alternative, none if supplementalIncentive to forego standard therapy

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Cost Equivalence

Definition

Optimum

CE – types

CE – applying

Against CEBeyond CE

Slide68

Refusal cost-equivalenceTreatments that save money…Refusal may cost moreRefusal equivalenceRefusal cost-equivalence:

Where the cost of no treatment is > cost of optimal treatment A, and a PHS is prepared to absorb the costs of refusal of treatment A, provide alternative treatment B iff CostB is ≤ CostrefusalA

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Cost Equivalence

Definition

Optimum

CE – types

CE – applyingAgainst CEBeyond CE