Hostname: page-component-7bb8b95d7b-dvmhs Total loading time: 0 Render date: 2024-09-19T10:36:51.705Z Has data issue: false hasContentIssue false
  • English
  • Français

On value frameworks and opportunity costs in health technology assessment

Published online by Cambridge University Press:  18 September 2019

Neill Booth Open the ORCID record for Neill Booth [Opens in a new window]
Neill Booth*
Affiliation:
Faculty of Social Sciences, Tampere University, Tampere, Finland
*
Author for correspondence: Neill Booth, E-mail: neill.booth@uta.fi
Get access Rights & Permissions [Opens in a new window]

Abstract

Objectives

Proceeding from a basic concept underpinning economic evaluation, opportunity cost, this study aims to explain how different approaches to economics diverge quite dramatically in their ideas of what constitutes appropriate valuation, both in principle and practice. Because the concept of opportunity cost does not inherently specify how valuation should be undertaken or specify how appropriate any economic value framework (EVF) might be, the three main economics-based approaches to providing evidence about value for health technology assessment are described.

Methods

This paper describes how the three main EVFs—namely, the extra-welfarist, welfarist, and classical—are most typically understood, applied, and promoted. It then provides clarification and assessment of related concepts and terminology.

Results

Although EVFs differ, certain underlying characteristics of valuation were identified as fundamental to all approaches to economic evaluation in practice. The study also suggests that some of the rhetoric and terms employed in relation to the extra-welfarist approach are not wholly justified and, further, that only the welfarist approach ensures adherence to welfare-economic principles. Finally, deliberative analysis, especially when connected with a classical economic approach, can serve as a useful supplement to other analytical approaches.

Conclusions

All three approaches to economic evaluation have something to offer assessment processes, but they all display limitations too. Therefore, the author concludes that the language of economic evaluation should be used with sufficient humility to prevent overselling of EVFs, especially with regard to the qualities of evidence they provide for priority setting processes.

Keywords

Costs and cost analysesPriorities, HealthHealthTechnology assessment, Health
Type
Article Commentary
Information
International Journal of Technology Assessment in Health Care , Volume 35 , Issue 5 , 2019 , pp. 367 - 372
Copyright
Copyright © Cambridge University Press 2019 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1.Culyer, AJ (2018) Cost, context, and decisions in health economics and health technology assessment. Int J Technol Assess Health Care 34(5), 434–41.Google Scholar
2.Culyer, AJ, Jönsson, B (ed.) (1986) Public and private health services: complementarities and conflicts. Oxford: Basil Blackwell.Google Scholar
3.Williams, A (1974) The cost-benefit approach. Br Med Bull 30(3), 252–6.Google Scholar
4.Birch, S, Gafni, A (1992) Cost effectiveness/utility analyses. Do current decision rules lead us to where we want to be? J Health Econ 11(3), 279–96.Google Scholar
5.Coast, J (2004) Is economic evaluation in touch with society's health values? BMJ 329(7476), 1233–6.Google Scholar
6.Drummond, M (1980) Principles of economic appraisal in health care. Oxford: Oxford University Press.Google Scholar
7.Drummond, M, Sculpher, M, Claxton, K et al. (2015) Methods for the economic evaluation of health care programmes. 4th ed. Oxford: Oxford University Press.Google Scholar
8.Smith, A (1776) An inquiry into the nature and causes of the wealth of nations. London: Strahan and Cadell; Book I, Chapter VI, 1.Google Scholar
9.Green, DI (1894) Pain-cost and opportunity-cost. Q J Econ 8(2), 218–29.Google Scholar
10.Coase, RH (ed.) (1977) Economic forces at work (A collection of papers by Armen Albert Alchian). Indianapolis: Liberty Press.Google Scholar
11.Buchanan, JM (2008) Opportunity cost. The new Palgrave dictionary of economics. 2nd ed. London: Palgrave Macmillan UK, 1–5.Google Scholar
12.McIntosh, E, Donaldson, C, Ryan, M (1999) Recent advances in the methods of cost-benefit analysis in healthcare. Matching the art to the science. Pharmacoeconomics 15(4), 357–67.Google Scholar
13.Sloan, FA, Hsieh, CR (2017) Health economics. 2nd ed. Cambridge, Massachusetts: MIT Press.Google Scholar
14.Tianviwat, S, Chongsuvivatwong, V, Birch, S (2009) Optimizing the mix of basic dental services for Southern Thai schoolchildren based on resource consumption, service needs and parental preference. Community Dent Oral Epidemiol 37(4), 372–80.Google Scholar
15.Edlin, R, McCabe, C, Hulme, C et al. (2015) Cost effectiveness modelling for health technology assessment: a practical course. London: Adis.Google Scholar
16.Brent, RJ (2014) Cost-benefit analysis and health care evaluations. 2nd edn. Cheltenham: Edward Elgar.Google Scholar
17.Neumann, PJ, Ganiats, TG, Russell, LB et al. (eds.) (2016) Cost-effectiveness in health and medicine. 2nd ed. Oxford: Oxford University Press.Google Scholar
18.Culyer, AJ (2015) Why do/should we do economic evaluation? Value Outcomes Spotlight 1(2), 8–10.Google Scholar
19.Karimi, M, Brazier, J (2016) Health, health-related quality of life, and quality of life: What is the difference? Pharmacoeconomics 34(7), 645–9.Google Scholar
20.Birch, S, Donaldson, C (1987) Applications of cost-benefit analysis to health care: Departures from welfare economic theory. J Health Econ 6(3), 211–25.Google Scholar
21.Sendi, P, Gafni, A, Birch, S (2002) Opportunity costs and uncertainty in the economic evaluation of health care interventions. Health Econ 11(1), 23–31.Google Scholar
22.Birch, S, Gafni, A (2011) The inconvenient economic truth: benefits forgone as an input to economic evaluation and implications for decision-making. In: Rosen, B, Israeli, A, Shortell, S, eds. Improving health and healthcare who is responsible? Who is accountable? Jerusalem, Israel: The Israel National Institute for Health Policy Research, 601–22.Google Scholar
23.Nyborg, K (2014) Project evaluation with democratic decision-making: What does cost–benefit analysis really measure? Ecol Econ 106, 124–31.Google Scholar
24.Shackley, P, Donaldson, C (2000) Willingness to pay for publicly-financed health care: how should we use the numbers? Appl Econ 32(15), 2015–21.Google Scholar
25.Quade, ES (1971) A history of cost-effectiveness. Santa Monica, CA: RAND Corporation.Google Scholar
26.Franklin, B (1842) Memoirs of Benjamin Franklin. New York: Harper & Brothers.Google Scholar
27.Simon, HA (1957) Administrative behavior: a study of decision-making processes in administrative organization. New York: Macmillan.Google Scholar
28.Ilias, G, Joanna, C, Ed, D et al. (2016) Maximizing health or sufficient capability in economic evaluation? A methodological experiment of treatment for drug addiction. Med Decis Making 37(5), 498–511.Google Scholar
29.Daniels, N, van der Wilt, GJ (2016) Health technology assessment, deliberative process, and ethically contested issues. Int J Technol Assess Health Care 32(1–2), 10–5.Google Scholar
30.Claxton, K (1999) The irrelevance of inference: A decision-making approach to the stochastic evaluation of health care technologies. J Health Econ 18(3), 341–64.Google Scholar
31.Paulden, M (2016) Opportunity cost and social values in health care resource allocation. Alberta: University of Alberta.Google Scholar
32.Hurley, J (1998) Chapter 16: Welfarism, extra-welfarism and evaluative economic analysis in the health sector. In: Barer, ML, Getzen, TE, Stoddart, GL, eds. Health, health care and health economics: perspectives on distribution. Chichester: Wiley, pp. 373–95.Google Scholar
33.Mooney, G (1979) Values in health care. In: Lee, K, ed. Economics and health planning. London: Croom Helm, pp. 23–44.Google Scholar
34.Culyer, AJ (2016) Cost-effectiveness thresholds in health care: a bookshelf guide to their meaning and use. Health Econ, Policy Law 11(4), 415–32.Google Scholar
35.Thokala, P, Ochalek, J, Leech, AA, Tong, T (2018) Cost-effectiveness thresholds: the past, the present and the future. Pharmacoeconomics 36(5), 509–22.Google Scholar
36.Claxton, K, Martin, S, Soares, M et al. (2015) Methods for the estimation of the NICE cost effectiveness threshold. Health Technol Assess 19(14), xxix–xxxiv.Google Scholar
37.Birch, S, Gafni, A (2006) The biggest bang for the buck or bigger bucks for the bang: the fallacy of the cost-effectiveness threshold. J Health Serv Res Policy 11, 46–51.Google Scholar
38.Caro, JJ (2009) Pursuing efficiency: a dead end for HTA? Value Health 12, S49.Google Scholar
39.Cleemput, I, Neyt, M, Thiry, N et al. (2011) Using threshold values for cost per quality-adjusted life-year gained in healthcare decisions. Int J Technol Assess Health Care 27(1), 71–6.Google Scholar
40.Birch, S, Gafni, A (2016) Population needs, opportunity costs and economic methods for financial sustainability in health care systems. In: Ethgen, O, Staginnus, U, eds. The future of health economics. London: Routledge, pp. 169–180.Google Scholar
41.Gafni, A (2006) Economic evaluation of health-care programmes: is CEA better than CBA? Environ Resour Econ 34(3), 407–18.Google Scholar
42.Mooney, G (2012) The health of nations: towards a new political economy. London: Zed Books.Google Scholar
43.Vickers, G (1981) Systems analysis: a tool subject or judgment demystified? Policy Sci 14(1), 23.Google Scholar
44.Baltussen, R, Jansen, MPM, Bijlmakers, L et al. (2017) Value assessment frameworks for HTA agencies: the organization of evidence-informed deliberative processes. Value Health 20(2), 256–60.Google Scholar
45.Garrison, LP Jr, Neumann, PJ, Willke, RJ et al. (2018) A health economics approach to US value assessment frameworks—summary and recommendations of the ISPOR special task force report [7]. Value Health 21(2), 161–5.Google Scholar
46.Mauskopf, JA (1998) Prevalence-based economic evaluation. Value Health 1(4), 251–9.Google Scholar
47.Deaton, A, Cartwright, N (2018) Understanding and misunderstanding randomized controlled trials. Soc Sci Med 210, 2–21.Google Scholar
48.Manski, CF (2019) The lure of incredible certitude. Econ Philos, 1–30, https://doi.org/10.1017/S0266267119000105.Google Scholar
49.Oortwijn, W, Sampietro-Colom, L, Habens, F (2017) Developments in value frameworks to inform the allocation of healthcare resources. Int J Technol Assess Health Care 33, 1–7.Google Scholar
50.Schultze, CL (1969) Why benefit-cost analysis? In: Hinrichs, HH, Taylor, GM, eds. Program budgeting and benefit-cost analysis: cases, text and readings. Pacific Palisades: Goodyear Publishing Company, Inc., pp. 1–8.Google Scholar
51.Enthoven, AC (1966) Operations research at the national policy level. In: Tucker, SA, ed. A modern design for defense decision: a McNamara-Hitch-Enthoven anthology. Washington: Industrial College of the Armed Forces, pp. 149–160.Google Scholar
52.Marsh, KD, Sculpher, M, Caro, JJ, Tervonen, T (2018) The use of MCDA in HTA: great potential, but more effort needed. Value Health 21(4), 394–7.Google Scholar
53.Culyer, AJ, Bombard, Y (2012) An equity framework for health technology assessments. Med Decis Making 32(3), 428–41.Google Scholar
54.Williams, B (1981) Conflicts of values. In: Williams, B, ed. Moral luck: philosophical papers 1973–1980. Cambridge: Cambridge University Press, 71–82.Google Scholar
55.European network for Health Technology Assessment (EUnetHTA) project. (2016) HTA core model: version 3.0. Available at http://www.corehta.info/model/HTACoreModel3.0.pdf. Accessed 2018.Google Scholar
56.Sandel, MJ (2013) Market reasoning as moral reasoning: why economists should re-engage with political philosophy. J Econ Perspect 27(4), 121–40.Google Scholar
57.Mooney, G (1998) “Communitarian claims” as an ethical basis for allocating health care resources. Soc Sci Med 47(9), 1171–80.Google Scholar
58.Hitch, CJ, McKean, RN (1960) The economics of defense in the nuclear age. Cambridge, Mass: Harvard University Press.Google Scholar
59.Wildavsky, A (1993) Speaking truth to power: the art and craft of policy analysis. New Brunswick, NJ: Transaction.Google Scholar
60.Mooney, G (2002) Priority setting in mental health services. Appl Health Econ Health Policy 1(2), 65–74.Google Scholar
61.Birch, S (1997) As a matter of fact: evidence-based decision-making unplugged. Health Econ 6(6), 547–59.Google Scholar
62.Stone, DA (2002) Policy paradox: the art of political decision making. New York: W.W. Norton.Google Scholar
63.Brazier, JE, Rowen, D, Lloyd, A, Karimi, M (2019) Future directions in valuing benefits for estimating QALYs: is time up for the EQ-5D? Value Health 22(1), 62–8.Google Scholar
64.Culyer, AJ, Chalkidou, K (2019) Economic evaluation for health investments en route to universal health coverage: cost-benefit analysis or cost-effectiveness analysis? Value Health 22(1), 99–103.Google Scholar
65.Mooney, G, Russell, E, Weir, R (1980) Choices for health care. London: MacMillan, 177 p.Google Scholar
66.O'Donnell, R (2016) Complexities in the examination of opportunity cost. J Econ Educ 47(1), 26–31.Google Scholar
67.Daddario, EQ (1967) House of Representatives Bill 6698. Washington: U.S. Govt. Print. Off., March 7, 1967.Google Scholar
68.Macfie, AL (1949) What kind of experience is economizing? Ethics 60(1), 19–34.Google Scholar
69.Marseille, E, Larson, B, Kazi, DS et al. (2015) Thresholds for the cost-effectiveness of interventions: alternative approaches. Bull World Health Organ 93(2), 118–24.Google Scholar