Cost-Effectiveness Analysis in Randomised Controlled Trials

Reza Amiri

Introduction

  • Cost-effectiveness analysis (CEA) in healthcare
  • Importance in decision-making
  • Integration with randomised controlled trials (RCTs)

Randomised Controlled Trials

  • Gold standard for evaluating interventions
  • Key features:
    • Randomisation
    • Control group
    • Blinding (when possible)

Randomised Controlled Trials (cont’d)

  • Measure efficacy/effectiveness
    • Efficacy: capacity for producing a desired result or effect/effectiveness.
    • Effectiveness: adequate to accomplish a purpose; producing the intended or expected result.

Cost-Effectiveness Analysis (CEA) or Cost-Utility Analysis (CUA)

  • Compares costs and health outcomes of interventions
  • Measures:
    • Costs, e.g., direct and/or indirect
    • Outcomes, e.g., life-year gained, avoided unintended pregnancy, quality-adjusted life years (QALYs)
  • Result: Incremental cost-effectiveness ratio (ICER) or incremental cost-utility ration (ICUR)

Integrating CEA with RCTs

  • Advantages:
    • Reduced bias
    • Concurrent data collection
    • Timely results
  • Challenges/limitations:
    • Sample size considerations
    • Generalisability
    • Time horizon

Steps in Conducting CEA alongside RCT

  1. Define the research question/objective
  2. Choose comparator(s)
  3. Determine perspective (e.g., societal, healthcare payer, etc.)
  4. Identify costs and outcomes
  5. Collect data during the trial
  6. Analyse and interpret results

Measuring Costs

  • Direct medical costs:
    • Intervention costs
    • Healthcare utilisation
  • Direct non-medical costs:
    • Patient transportation
    • Caregiver time
  • Indirect costs:
    • Productivity losses

Measuring Outcomes

  • Clinical endpoints
  • Patient-reported outcomes
  • Quality of life measures
  • Conversion to QALYs
    • Example: EQ-5D-3L, EQ-5D-5L, SF-6D questionnaire

Analysis and Interpretation

  • Calculate ICER: \(ICER = \frac{\text{Cost}_A - \text{Cost}_B}{\text{Effect}_A - \text{Effect}_B}\)
  • Willingness-to-pay (WTP) threshold
  • Sensitivity analysis
  • Cost-effectiveness plane (Figure 1)

Analysis and Interpretation (cont’d)

Figure 1: Cost-effectiveness plane (Bozic et al (2003). JBJS, 85(1), 129-142.)

Example: Technology-Enhanced Group-baded (TEG) Rehabilitation Therapy

  • WTP threshold: $50,000 per QALY
  • Standard treatment: Cost = $1000, QALYs = 0.049
  • New treatment: Cost = $1150, QALYs = 0.050

Example (cont’d)

  • Stata do-file that produces utility weights for Australia using EQ-5D-5L based on a DCE (Norman, 2023).
    • Data should be in 5 columns mo, sc, ua, pd, ad; otherwise, replace names with columns in your data set.
gen modec = .
replace modec = 0 if mo==1
replace modec = ‐0.039 if mo==2
replace modec = ‐0.067 if mo==3
replace modec = ‐0.237 if mo==4
replace modec = ‐0.242 if mo==5

gen scdec = .
replace scdec = 0 if sc==1
replace scdec = ‐0.030 if sc==2
replace scdec = ‐0.058 if sc==3
replace scdec = ‐0.213 if sc==4
replace scdec = ‐0.221 if sc==5

gen uadec = .
replace uadec = 0 if ua==1
replace uadec = 0 if ua==2
replace uadec = ‐0.055 if ua==3
replace uadec = ‐0.162 if ua==4
replace uadec = ‐0.162 if ua==5

gen pddec = .
relace pddec = 0 if pd==1
replace pddec = ‐0.044 if pd==2
replace pddec = ‐0.081 if pd==3
replace pddec = ‐0.276 if pd==4
replace pddec = ‐0.285 if pd==5

gen addec = .
replace addec = 0 if ad==1
replace addec = ‐0.032 if ad==2
replace addec = ‐0.066 if ad==3
replace addec = ‐0.238 if ad==4
replace addec = ‐0.238 if ad==5

gen n5dec = 0
replace n5dec = ‐0.153 if mo==5 | sc==5 | ua==5 | pd==5 | ad==5

gen eq5d5lscore = 1 + modec + scdec + uadec + pddec + addec + n5dec
replace eq5d5lscore = . if mo==. | sc==. | ua==. | pd==. | ad==.

Calculate QALY

  • What is QALY?
    • A Quality-Adjusted Life Year (QALY) is a measure used in health economics to assess the value of medical interventions.
    • It combines both the length of life and the quality of life into a single figure.
  • How to calculate QALYs?
    • Preference-based measures (e.g., EQ-5D) or valuation techniques (e.g., time-trade-off, standard gamble, visual analogue scale)
    • Area under the curve method (Mathews et al. 1990)

Calculate QALY (cont’d)

  • Utility value: represents the quality of life, ranging from 0 (death) to 1 (perfect health). Utility Elicitation Calculator
    • Time-trade-off (TTO): Choosing between ill health for a specific time or perfect health with a shorter life expectancy.
    • Standard gamble (SG): Choosing between ill health or a medical intervention that could restore perfect health or kill them.
    • Visual analog scale (VAS): Rating ill health on a scale from 0 to 100, where 0 represents death and 100 represents perfect health.
  • Time in health states: amount of time people live in various health states.
  • Calculation: Multiply the utility value by the time spent in a health state.

QALY

Figure 2: Possible lifecourses (Source: Utility Elicitation, p. 292.)

AUC

  • Treatment group: 1.981 {[0.5(0.189 + 0.620)6 + 0.5(0.620 + 0.883]6)/ 12}
  • Control group: 0.998 {[0.5(0.189 + 0.516)6 + 0.5(0.516 + 0.656)6]/ 12}

Figure 3: QALYs for two treatments (Source: Measuring and Valuing Health Benefits for Economic Evaluation, p. 268

Cost-Effectiveness Analysis (back to the example!)

Figure 4: Cost-Effectiveness of TEG vs routine care

Example (cont’d)

  • Net Monetary Benefit (NMB):
    • NMB = (WTP threshold × Effectiveness) - Cost
wtp <- 50000

eff_new <- 0.05
cost_new <- 1150

eff_old <- 0.049
cost_old <- 1000

standard_nmb <- (wtp * eff_old) - cost_old

new_nmb <- (wtp * eff_new) - cost_new
Routine care NMB: 1450 
TEG rehabilitation NMB: 1350 
INMB: -100 
ICER: 150000

Thank you!