Cost-effectiveness incremental benefits

Cities of developing countries experiencing rapid growth would benefit from scalability, i.e., potential for cost effective incremental clustering of power plants as their power demand grows ... 

Hansen, W. J., Orth, K. D., and Robinson, R. K., 1998, Cost Effectiveness and Incremental Cost Analyses Alternative to Benefit-Cost Analysis for Environmental Projects Practice Periodical of Hazardous, Toxic and Radioactive Waste Management, January, pp. 8-12. 

Question eight addresses another extremely important area in economic analysis - that is, whether the analysis is incremental. For an analysis to be a truly meaningful comparison it is necessary to examine the additional costs that one drug or therapy imposes over another, compared with the additional effects or benefits it delivers. As with the issue of choice of the comparator drug, most economic guidelines worldwide stipulate that an economic analysis must be incremental. 

Our results on benefits can be used with estimates of costs to calculate the incremental cost-effectiveness ratio (ICER). The ICER, which could be interpreted as cost per life year gained resulting from introduction of new drugs in this group of studies, provides a standard metric with which to compare the productivity of health care across different types of products and different countries. Thus, the calculation of ICER provides useful information for improving the efficiency of resource allocation in a country. In addition, international comparison of ICERs for the same product provides useful information for better understanding performance of health care systems in different countries. 

The underlying premise of pharmacoeconomic analyses is that fiscal resources are scarce and that there is a need to make decisions based on the relative value of different interventions in creating better health and/or longer life. There are five main analytical techniques used to evaluate the incremental value of products. These are cost-consequence analysis (CCA) cost-effectiveness analysis (CEA) cost-benefit analysis (CBA) cost-minimisation analysis (CMA) and cost-utility analysis (CUA). Although the identification and valuation of the cost component (numerator) of these analyses are similar, it is the identification and valuation of the consequences (denominator) that truly differentiate these analytic techniques. A brief description of each of these techniques follows. 

Grover SA, Coupal L, Paquet S, Zowall H. Cost-effectiveness of 3-hydroxy-3-methylglutaryl-coenzyme A reductase inhibitors in the secondary prevention of cardiovascular disease Forecasting the incremental benefits of preventing coronary and cerebrovascular events. Arch Intern Med 1999 159 593-600. 

A recent pharmacoeconomic analysis to examine the clinical benefits and cost-effectiveness of newer treatments for chronic HCV infection evaluated the incremental cost-effectiveness of using peginterferon-a2b plus ribavirin compared to IFN-a2b plus ribavirin, and monotherapy regimens of both interferons. The incremental cost per quality-adjusted fife year (QALY) saved for combination therapy with peginterferon-a2b compared to standard therapy was 36,000 and 55,000 for men and women with HCV genotype 1, respectively. A QALY is defined as a patient s desire for a year of fife at... 

The results of this analysis can be used for policy and planning purposes to show the incremental benefit of AP over and above the contribution of SP. This analysis has fully exploited published data to measure the likely contribution of AP and SP in Italy between the 1970s and 1990s. The cross-sectional and longitudinal surveys have provided a valid base to produce a method that can help policy makers to advocate the extra benefits of AP. Even if this natural experiment cannot produce the same evidence as a randomized community trial, the causal inference between the increase in urinary iodine and the decline in goiter with and without AP is clear, and the incremental cost-effectiveness of AP can be estimated. 

In addition to the risk reduction benefits, the costs of risk mitigation options need to be evaluated. Due to the uncertainties associated with semi-quantitative and quantitative risk analysis results, a relative risk comparison, as compared to absolute measures of risk and benefits, is recommended. To conduct this type of relative comparison, incremental risk analysis can be used to evaluate the cost effectiveness of risk mitigation options, or determine the optimal combination of risk mitigation options. Figure 7.4 illustrates example results of this type of analysis, and uses the options from the F-N curve in Figure 7.3 as the basis for comparison. 

The key questions by the assessor are about an added benefit and about the medical value. In the Netherlands, the medical value is assessed unofficially by means of the Dunnings Funnel, which evaluates the candidates by defined criteria, e.g. necessity, effectiveness, safety, cost-effectiveness commonly calculated as incremental cost-effectiveness ratio (ICER), and social arguments such as budget impact or own responsibility [42]. The societies willingness to pay for an additional quality-adjusted life year gained (QALY) is as follows [43 5] ... 

Before the era of primary implantation, ICD therapy generally used to fit in the cost-effective range of 20,000- 40,000 (136,210-213). MushUn assessed incremental cost-effectiveness of ICD implant in the MADIT trial (214). After 4 years, ICD implants were associated with an incremental benefit of 0.8 years. Based on this survival benefit, the authors estimated that ICD cost was 22,800 for the 181 patients who received a transvenous device. The cost per life year saved for ICDs in the AVID trial was > 114,917. The reason for this extraordinarily high cost is, in part due to the short-term follow-up, and the short (2.9-month) survival advantage for the ICD group despite a 37% reduction in mortality. 

In SCD-HeFT, the lifetime cost effectiveness and cost utility ratios were estimated at 38 389/LYS and 41 530/quaUty adjusted LYS. A further analysis showed a cost-effectiveness ratio of 29 872/LYS for New York Heart Association Functional Class II but no incremental benefit for Functional Class III heart failure (216). Prophylactic use of single-lead, shock-only ICD seems attractive economically in patients with stable, moderately symptomatic heart failure and an ejection fraction < 0.35. 

Arrange the programmes in order of effectiveness and calculate the incremental cost-benefit ratios (Table 8.1). 

Incremental costs represent the additional cost that a service or treatment alternative imposes over another compared with the additional effect, benefit, or outcome it provides. As medical interventions become increasingly intense, costs generally increase. However, the additional outcome gained per additional dollar spent generally decreases. At some point of increasing expenditures, there may be no additional benefits or even a reduction in outcome. Thus incremental costs are the extra costs required to purchase an additional unit of effect and provide another way to assess the pharmacoeconomic impact of a service or treatment option on a population. 

Often cfinical effectiveness is gained at an increased cost. Is the increased benefit worth the increased cost Incremental CEA may be nsed to determine the additional cost and effectiveness gained when one treatment alternative is compared with the next best treatment alternative. Thns, instead of comparing the ACERs of each treatment alternative, the additional cost that a treatment alternative imposes over another treatment is compared with the additional effect, benefit, or outcome it provides. The ICER can be snmmarized as follows ... 

The evaluation results in Table 20.1 show large benefits of these improvement ideas based on the ISBL level. If decisions for project selection were made at this ISBL level, these options could be selected for implementation due to large benefits compared with relatively low capital costs. To avoid the bad investment decisions and determine the true benefits for these ideas, the effects on incremental steam, power, BFW, and fuel balances are assessed in detail as follows. 

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