Discounting the Recommendations of the Second Panel on Cost-Effectiveness in Health and Medicine

A systematic review on the appropriate discounting rates for the economic evaluation of gene therapies: whether a specific approach is justified to tackle the challenges?

OBJECTIVES

Discounting the cost and effect for health intervention is a controversial topic over the last two decades. In particular, the cost-effectiveness of gene therapies is especially sensitive to the discount rate because of the substantial delay between the upfront cost incurred and long-lasing clinical benefits received. This study aims to investigate the influence of employing alternative discount rates on the incremental cost-effectiveness ratio (ICER) of gene therapies.

METHODS

A systematic review was conducted to include health economic evaluations of gene therapies that were published until April 2023.

RESULTS

Sensitivity or scenario analysis indicated that discount rate represented one of the most influential factors for the ICERs of gene therapies. Discount rate for cost and benefit was positively correlated with the cost-effectiveness of gene therapies, that is, a lower discount rate significantly improves the ICERs. The alternative discount rate employed in some cases could be powerful to alter the conclusion on whether gene therapies are cost-effective and acceptable for reimbursement.

CONCLUSIONS

Although discount rate will have substantial influence on the ICERs of gene therapies, there lacks solid evidence to justify a different discounting rule for gene therapies. However, it is proposed that the discount rate in the reference case should be updated to reflect the real-time preference, which in turn will affect the ICERs and reimbursement of gene therapies more profoundly than conventional therapies.

It Is Time to Reconsider the 3% Discount Rate

OBJECTIVES

Health technology assessment (HTA) guidance often recommends a 3% real annual discount rate, the appropriateness of which has received limited attention. This article seeks to identify an appropriate rate for high-income countries because it can influence projected cost-effectiveness and hence resource allocation recommendations.

METHODS

The author conducted 2 Pubmed.gov searches. The first sought articles on the theory for selecting a rate. The second sought HTA guidance documents.

RESULTS

The first search yielded 21 articles describing 2 approaches. The "Ramsey Equation" sums contributions by 4 factors: pure time preference, catastrophic risk, wealth effect, and macroeconomic risk. The first 3 factors increase the discount rate because they indicate future impacts are less important, whereas the last, suggesting greater future need, decreases the discount rate. A fifth factor-project-specific risk-increases the discount rate but does not appear in the Ramsey Equation. Market interest rates represent a second approach for identifying a discount rate because they represent competing investment returns and hence opportunity costs. The second search identified HTA guidelines for 32 high-income countries. Twenty-two provide no explicit rationale for their recommended rates, 8 appeal to market interest rates, 3 to consistency, and 3 to Ramsey Equation factors.

CONCLUSIONS

Declining consumption growth and real interest rates imply HTA guidance should reduce recommended discount rates to 1.5 to 2+%. This change will improve projected cost-effectiveness for therapies with long-term benefits and increase the impact of accounting for long-term drug price dynamics, including reduced prices attending loss of market exclusivity.

Platelet-Rich Plasma Versus Corticosteroid Injections for the Treatment of Mild-to-Moderate Carpal Tunnel Syndrome: A Markov Cost-Effectiveness Decision Analysis

BACKGROUND

Platelet-rich plasma (PRP) or corticosteroid injections may be used to conservatively treat mild-to-moderate carpal tunnel syndrome (CTS). We evaluated the cost-effectiveness of PRP injections versus corticosteroid injections for the treatment of mild-to-moderate CTS.

METHODS

Markov modeling was used to analyze the base-case 45-year-old patient with mild-to-moderate CTS, unresponsive to conservative treatments, never previously treated with an injection or surgery, treated with a single injection of PRP, or methylprednisolone/triamcinolone 40 mg/mL. Transition probabilities were derived from level-I/II studies, utility values from the Tufts University Cost-Effectiveness Analysis Registry reported using visual analog scale (VAS), Boston Carpal Tunnel Questionnaire Symptom severity (BCTQ-S), and Boston Carpal Tunnel Questionnaire Functional status (BCTQ-F), and costs from Medicare, published studies, and industry. Analyses were performed from healthcare/societal perspectives. Outcomes were incremental cost-effectiveness ratios (ICER) and net monetary benefits (NMB). Willingness-to-pay thresholds were $50 000 and $100 000. Deterministic/probabilistic sensitivity analyses were performed.

RESULTS

From a healthcare perspective, compared to PRP injections, the ICER for corticosteroid injections measured by VAS: -$13.52/quality-adjusted-life-years (QALY), BCTQ-S: -$11.88/QALY, and BCTQ-F: -$16.04/QALY. PRP versus corticosteroid injections provided a NMB measured by VAS: $428 941.12 versus $375 788.21, BCTQ-S: $417 115.09 versus $356 614.18, and BCTQ-F: $421 706.44 versus $376 908.45. From a societal perspective, compared to PRP injections, the ICER for corticosteroid injections measured by VAS: -$1024.40/QALY, BCTQ-S: -$899.95/QALY, and BCTQ-F: -$1215.51/QALY. PRP versus corticosteroid injections provided a NMB measured by VAS: $428 171.63 versus $373 944.39, BCTQ-S: $416 345.61 versus $354 770.36, and BCTQ-F: $420 936.95 versus $375 064.63.

CONCLUSIONS

PRP injections were more cost-effective than methylprednisolone/triamcinolone injections from healthcare and societal perspectives for mild-to-moderate CTS.

A comprehensive review of official discount rates in guidelines of health economic evaluations over time: the trends and roots

BACKGROUND

The question of discounting in health economics is anything but settled, so much so that a section of the Health Technology Assessment (HTA) guidelines is devoted to it.

OBJECTIVE

This study aimed to review the trend of the value of the official discount rates (DRs) of costs and health outcomes and their roots worldwide.

METHODS

Four methods were combined to identify official DRs over time globally. These methods included a systematic review of the HTA/pharmacoeconomic/health economic evaluation guidelines, a review of methodological documents or guidelines accessible on the websites of HTA organizations, and two separated reviews of the websites of the International Society for Pharmacoeconomics and Outcomes Research (ISPOR) and the Guide to Health Economic Analysis and Research (GEAR).

RESULTS

Our systematic search eventually yielded 339 documents from the literature, 35 links from the website of the HTA organizations, 51 documents from the website of the ISPOR, and 29 documents from the website of the GEAR. These documents referred to 48 countries over 30 years and 43 transnational guidelines over 43 years. DRs of 3% and 5% had the most frequent value. Among them, 38 countries always used an equal DR of costs and health outcomes. We categorized the rationales for selecting DRs into eight groups for the national documents and six groups for the transnational documents.

CONCLUSION

The comparability approach was the most frequent rationale for choosing the DR in national and transnational guidelines. The value of DR of costs and health outcomes ranged from zero to 10% over the years, but the most common values were 3% and 5%, mainly arising from the comparability approach chosen. Several transnational guidelines have suggested a specific DR without taking into account countries' economic conditions. It is useful to establish a specific guideline for calculating and updating the DR of the health sector in each country.

Trends in Author-Reported Cost-Effectiveness Thresholds in the United States from 1995 to 2018: Implications for Discount Rates

Background

Decisions based on cost-effectiveness analyses (CEAs) using equal discount rates for health and cost outcomes are consistent with using a constant cost-effectiveness threshold over time. We sought to analyze trends in author-reported cost per quality-adjusted life-year (QALY) thresholds from CEAs published for the US setting over 24 y to retrospectively assess whether the recommended equal discount rates for costs and health were consistent with trends in the CEA literature.

Methods

We used the Tufts CEA Registry to assess whether author-reported cost-effectiveness thresholds changed in CEAs published for the US setting between 1995 and 2018 and back-calculated the implied discount rate for health based on these trends for inflation-adjusted cost-effectiveness thresholds and an annual discount rate for costs of 3%.

Results

We found 1995 CEAs published for the US setting and found that average nominal and inflation-adjusted cost-effectiveness thresholds increased over that time period. The discount rate for health would need to equal 2.43% to 2.48% (depending on the subset of CEAs analyzed) to be consistent with the observed trends in inflation-adjusted author-reported cost-effectiveness thresholds. We also found that restricting our analysis to currency years between 1995 and 2014 would result in a back-calculated discount rate for health of 2.99% to 3.28%.

Conclusions

We found that CEA researchers have implicitly assumed that inflation-adjusted cost-effectiveness thresholds in the United States have been increasing over time (1995–2018), which is inconsistent with the recommended and prevailing choice of equal discount rates for health and cost outcomes. Our results are sensitive to the cutoff year used in the analysis.

Highlights

We show visually and through equations that the recommended and prevailing practice of using equal discount rates for cost and health outcomes in cost-effectiveness analyses (CEAs) logically implies a constant inflation-adjusted cost-effectiveness threshold over time. Using data from the Tufts CEA Registry, we found that author-reported cost-effectiveness thresholds used in CEAs published for the US setting with currency years between 1995 and 2018 increased over time (both with and without adjustment for inflation). Assuming an annual discount rate for costs equal to 3%, the discount rate for health would need to equal approximately 2.5% to preserve consistency across decisions taken at different dates given the observed trends in inflation-adjusted author-reported cost-effectiveness thresholds. This finding depends on the cutoff year used in the analysis (data from currency years 1995–2014 would support use of equal discount rates, whereas data after 2014 would suggest a sharper trend toward increasing cost-effectiveness thresholds).

Platelet-rich plasma vs. corticosteroid injections for the treatment of recalcitrant lateral epicondylitis: a cost-effectiveness Markov decision analysis

BACKGROUND

Both platelet-rich plasma (PRP) and corticosteroid injections may be used to treat lateral epicondylitis. We evaluated the cost-effectiveness of PRP injections vs. corticosteroid injections for the treatment of recalcitrant lateral epicondylitis.

METHODS

Markov modeling was used to analyze the base-case 45-year-old patient with recalcitrant lateral epicondylitis, unresponsive to conservative measures, treated with a single injection of PRP or triamcinolone 40 mg/mL. Transition probabilities were derived from randomized controlled trials, quality-of-life (QOL) values from the Tufts University Cost-Effectiveness Analysis Registry reported using Disabilities of the Arm, Shoulder, and Hand (DASH) scores, and costs from institution financial records. Analyses were performed from health care and societal perspectives. Outcomes were incremental cost-effectiveness ratios (ICERs), reported as US dollars / quality-adjusted life-year (USDs/QALY) and net monetary benefit (NMB) to represent the values of an intervention in monetary terms. Willingness-to-pay thresholds were set at $50,000 and $100,000. Deterministic and probabilistic sensitivity analyses were performed over 10,000 iterations.

RESULTS

Both PRP and triamcinolone 40-mg/mL injections were considered cost-effective interventions from a health care and societal perspective below the WTP threshold of $50,000. From a health care perspective, PRP injections were dominant compared with triamcinolone 40-mg/mL injections, with an ICER of -$5846.97/QALY. PRP injections provided an NMB of $217,863.98, whereas triamcinolone 40 mg/mL provided an NMB of $197,534.18. From a societal perspective, PRP injections were dominant compared to triamcinolone 40-mg/mL injections, with an ICER of -$9392.33/QALY. PRP injections provided an NMB of $214,820.16, whereas triamcinolone 40 mg/mL provided an NMB of $193,199.75.

CONCLUSIONS

Both PRP and triamcinolone 40-mg/mL injections provided cost-effective treatments from health care and societal perspectives. Overall, PRP injections were the dominant treatment, with the greatest NMB for recalcitrant lateral epicondylitis over the time horizon of 5 years.

Limitations of standard cost-effectiveness methods for health technology assessment of treatments for rare, chronic diseases: a case study of treatment for cystic fibrosis

OBJECTIVES

Cost-effectiveness analysis (CEA) is useful to assess the value of health care interventions based on clinical effectiveness and costs. However, standard CEA methods make important assumptions that may significantly increase the incremental cost-effectiveness ratio (ICER) for lifelong treatments for rare, chronic diseases. We used the cost-effectiveness of elexacaftor/tezacaftor/ivacaftor and ivacaftor (ELX/TEZ/IVA) for the treatment of cystic fibrosis as a case study to explore how alternative assumptions for (1) discounting, (2) utility measures, (3) disease management costs, and (4) static drug pricing impact cost-effectiveness outcomes.

MATERIALS AND METHODS

Cost-effectiveness of ELX/TEZ/IVA was evaluated using base-case inputs and assumptions reflecting standard CEA methods and was then compared with cost-effectiveness estimates obtained with alternate assumptions: (1) applying a lower discount rate to health benefits (1.5%) than costs (3%); (2) including a treatment-specific utility increment; (3) excluding disease management costs incurred during the period of extended survival attributable to ELX/TEZ/IVA treatment; and (4) decreasing the price of ELX/TEZ/IVA following loss of exclusivity.

RESULTS

Modifying assumptions for these four factors together reduced the ICER by 75% from the base case, with the largest reduction (45%) occurring when the price trajectory was modified to allow for generic entry. Differential discounting, use of a treatment-specific utility increment, and exclusion of additional disease management costs each individually reduced the ICER by 36%, 14%, and 10%, respectively, from the base case.

CONCLUSIONS

This study illustrates the impact that modifications to standard CEA methods may have on measures of cost-effectiveness for rare, chronic diseases.

A cost-benefit analysis framework for preventive health interventions to aid decision-making in Australian governments

Background

Australian governments are increasingly mandating the use of cost–benefit analysis (CBA) to inform the efficient allocation of government resources. CBA is likely to be useful when evaluating preventive health interventions that are often cross-sectoral in nature and require Cabinet approval prior to implementation. This study outlines a CBA framework for the evaluation of preventive health interventions that balances the need for consistency with other agency guidelines whilst adhering to guidelines and conventions for health economic evaluations.

Methods

We analysed CBA and other evaluation guidance documents published by Australian federal and New South Wales (NSW) government departments. Data extraction compared the recommendations made by different agencies and the impact on the analysis of preventive health interventions. The framework specifies a reference case and sensitivity analyses based on the following considerations: (1) applied economic evaluation theory; (2) consistency between CBA across different government departments; (3) the ease of moving from a CBA to a more conventional cost-effectiveness/cost-utility analysis framework often used for health interventions; (4) the practicalities of application; and (5) the needs of end users being both Cabinet decision-makers and health policy-makers.

Results

Nine documents provided CBA or relevant economic evaluation guidance. There were differences in terminology and areas of agreement and disagreement between the guidelines. Disagreement between guidelines involved (1) the community included in the societal perspective; (2) the number of options that should be appraised in ex ante analyses; (3) the appropriate time horizon for interventions with longer economic lives; (4) the theoretical basis and value of the discount rate; (5) parameter values for variables such as the value of a statistical life; and (6) the summary measure for decision-making.

Conclusions

This paper addresses some of the methodological challenges that have hindered the use of CBA in prevention by outlining a framework that is consistent with treasury department guidelines whilst considering the unique features of prevention policies. The effective use and implementation of a preventive health CBA framework is likely to require considerable investment of time and resources from state and federal government departments of health and treasury but has the potential to improve decision-making related to preventive health policies and programmes.

Supplementary Information

The online version contains supplementary material available at 10.1186/s12961-021-00796-w.

Cost-Effectiveness Analysis of Direct Oral Anticoagulants Versus Vitamin K Antagonists for Venous Thromboembolism in China

Background: The drug therapy of venous thromboembolism (VTE) presents a significant economic burden to the health-care system in low- and middle-income countries. To understand which anticoagulation therapy is most cost-effective for clinical decision-making , the cost-effectiveness of apixaban (API) versus rivaroxaban (RIV), dabigatran (DAB), and low molecular weight heparin (LMWH), followed by vitamin K antagonist (VKA), in the treatment of VTE in China was assessed. Methods: To access the quality-adjusted life-years (QALYs) and incremental cost-effectiveness ratios (ICERs), a long-term cost-effectiveness analysis was constructed using a Markov model with 5 health states. The Markov model was developed using patient data collected from the Xijing Hospital from January 1, 2016 to January 1, 2021. The time horizon was set at 30 years, and a 6-month cycle length was used in the model. Costs and ICERs were reported in 2020 U.S. dollars. One-way sensitivity analysis and probabilistic sensitivity analysis (PSA) were used to test the uncertainties. A Chinese health-care system perspective was used. Results: In the base case, the data of 231 VTE patients were calculated in the base case analysis retrospectively. The RIV group resulted in a mean VTE attributable to 95% effective treatment. API, DAB, and VKA have a negative ICER (-187017.543, -284,674.922, and -9,283.339, respectively) and were absolutely dominated. The Markov model results confirmed this observation. The ICER of the API and RIV was negative (-216176.977), which belongs to the absolute inferiority scheme, and the ICER value of the DAB and VKA versus RIV was positive (110,577.872 and 836,846.343). Since the ICER of DAB and VKA exceeds the threshold, RIV therapy was likely to be the best choice for the treatment of VTE within the acceptable threshold range. The results of the sensitivity analysis revealed that the model output varied mostly with the cost in the DAB on-treatment therapy. In a probabilistic sensitivity analysis of 1,000 patients for 30 years, RIV has 100% probability of being cost-effective compared with other regimens when the WTP is $10973 per QALY. When WTP exceeded $148,000, DAB was more cost-effective than RIV. Conclusions: Compared with LMWH + VKA and API, the results proved that RIV may be the most cost-effective treatment for VTE patients in China. Our findings could be helpful for physicians in clinical decision-making to select the appropriate treatment option for VTE.

Are Discount Rates Too High? Population Health and Intergenerational Equity

Increasing attention is being paid to policy decisions in which shorter-term benefits may be eclipsed by longer-term harms, such as environmental damage. Health policy decisions have largely been spared this scrutiny, even though they too may contribute to longer-term harms. Any healthy population or society must sustain itself through reproduction, and therefore, transgenerational outcomes should be of intrinsic importance from a societal perspective. Yet, the discount rates typically employed in cost-effectiveness analyses have the effect of minimizing the importance of transgenerational health outcomes. We argue that, because cost-effectiveness analysis is based on foundational axioms of decision theory, it should value transgenerational outcomes consistently with those axioms, which require discount rates substantially lower than 3%. We discuss why such lower rates may not violate the Cretin-Keeler paradox.

A Review of Methodological Considerations for Economic Evaluations of Gene Therapies and Their Application in Literature

OBJECTIVES

To identify methodological considerations discussed in literature addressing economic evaluations (EEs) of gene therapies (GTs). Additionally, we assessed if these considerations are applied in published GT EEs to increase understanding and explore impact.

METHODS

First a peer-reviewed literature review was performed to identify research addressing methodological considerations of GT EEs until August 2019. Identified considerations were grouped in themes using thematic content analysis. A second literature search was conducted in which we identified published evaluations. The EE quality of reporting was assessed using Consolidated Health Economic Evaluation Reporting Standards.

RESULTS

The first literature search yielded 13 articles discussing methodological considerations. The second search provided 12 EEs. Considerations identified were payment models, definition of perspectives, addressing uncertainty, data extrapolation, discount rates, novel value elements, and use of indirect and surrogate endpoints. All EEs scored satisfactory to good according to Consolidated Health Economic Evaluation Reporting Standards. Regarding methodological application, we found 1 methodological element (payment models) was applied in 2 base cases. Scenarios explored alternative perspectives, survival assumptions, and extrapolation methods in 10 EEs.

CONCLUSIONS

Although EE quality of reporting was considered good, their informativeness for health technology assessment and decision makers seemed limited owing to many uncertainties. We suggest accepted EE methods can broadly be applied to GTs, but few elements may need adjustment. Further research and multi-stakeholder consensus is needed to determine appropriateness and application of individual methodological considerations. For now, we recommend including scenario analyses to explore impact of methodological choices and (clinical) uncertainties. This study contributes to better understanding of perceived appropriate evaluation of GTs and informs best modeling practices.

A welfare-theoretic model consistent with the practice of cost-effectiveness analysis and its implications

I look at three debates in the health economics literature in the context of cost-effectiveness analysis (CEA): 1) inclusion of future costs, 2) discounting, and 3) consistency with a welfare-economic perspective. These debates thus far have been studied in isolation leading to confusion and lingering questions. I look at these three debates holistically and present a welfare theoretic model that is consistent with the practice of CEA and can help inform all of these three debates. It shows rationales for the recommendations of the Second Panel and clarifies some nuanced implications for the practice of CEA when taking a societal perspective in the context of distributional CEA and multi-sectorial budgets.

Differential discounting in the economic evaluation of healthcare programs

Background

The question of appropriate discount rates in health economic evaluations has been a point of continuous scientific debate. Today, it is widely accepted that, under certain conditions regarding the social objective of the healthcare decision maker and the fixity of the budget for healthcare, a lower discount rate for health gains than for costs is justified if the consumption value of health is increasing over time. To date, however, there is neither empirical evidence nor a strong theoretical a priori supporting this assumption. Given this lack of evidence, we offer an additional approach to check the appropriateness of differential discounting.

Methods

Our approach is based on a two-goods extension of Ramsey's optimal growth model which allows accounting for changing relative values of goods explicitly. Assuming a constant elasticity of substitution (CES) utility function, the growth rate of the consumption value of health depends on three variables: the growth rate of consumption, the growth rate of health, and the income elasticity of the willingness to pay for health. Based on a review of the empirical literature on the monetary value of health, we apply the approach to obtain an empirical value of the growth rate of the consumption value of health in Germany.

Results

The empirical literature suggests that the income elasticity of the willingness to pay for health is probably not larger but rather smaller than 1 and probably not smaller but rather larger than 0.2. Combining this finding with reasonable values of the annual growth rates in consumption (1.5-1.6%) and health (0.1%) suggests, for Germany, an annual growth rate of the consumption value of health between 0.3 and 1.5%.

Conclusion

In the light of a two-goods extension of Ramsey's optimal growth model, the available empirical evidence makes the case for a growing consumption value of health. Therefore, the current German practice of applying the same discount rate to costs and health gains introduces a systematic bias against healthcare technologies with upfront costs and long-term health effects. Differential discounting with a lower rate for health effects appears to be a more appropriate discounting model.

Erectile dysfunction management after failed phosphodiesterase-5-inhibitor trial: a cost-effectiveness analysis

BACKGROUND

To evaluate the cost-effectiveness of alternate erectile dysfunction (ED) management options after failed first line phosphodiesterase-5-inhibitors (PDE5-I).

METHODS

An empiric, repetitive decision tree analysis model was constructed using literature review and expert clinical judgement. This assessed the expected costs and quality adjusted life years (QALYs) of decision alternatives over a 10-year period. The model incorporated interventions including alternate PDE5-Is, intracorporal injections (ICI) with alprostadil or trimix (alprostadil, phentolamine, and papaverine), and inflatable penile prosthesis placement (IPP) and included respective risks of failure, subsequent interventions, and other complications (including priapism risk). Average model QALY estimates obtained from the literature were as follows: ED =0.56, successful alternate PDE5-I =0.70, successful ICI =0.70, and successful IPP =0.78. Cost data were calculated from a high-volume academic center and published manufacturer data.

RESULTS

Over the 10-year period, IPP placement was the most cost-effective management option per preserved QALY (QALY =7.82, cost =$22,009/10 years) as compared to ICI alprostadil (QALY =8.51, cost =$62,890/10 years), ICI trimix (QALY =8.47, cost =$48,617/10 years) and alternate PDE5-I (QALY =7.73, $52,883/10 years).

CONCLUSIONS

Using expert opinion and published utility, cost, and complication data in a decision analysis, we demonstrated that IPP placement is the most cost-effective ED intervention following failed initial PDE5-I over a 10-year period as compared to alternate treatment options. Such cost-effectiveness outcomes may be used in ED management counseling.

Economic evaluation of lipid lowering with PCSK9 inhibitors in patients with familial hypercholesterolemia: Methodological aspects

BACKGROUND AND AIMS

Proprotein convertase subtilisin/kexin type 9 (PCSK9) inhibitors have proved to reduce low density lipoprotein cholesterol levels in numerous clinical trials. In two large clinical trials, PCSK9 inhibitor treatment reduced the risk of cardiovascular disease. Our aim was to explore the impact of varying assumptions about clinical effectiveness on health and economic outcomes for patients with familial hypercholesterolemia.

METHODS

We used a previously published and validated Norwegian model for cardiovascular disease. The model was updated with recent data from the world's second largest registry of patients with genetically confirmed familial hypercholesterolemia. We performed analyses for 24 different subgroups of patients based on age, gender, statin tolerance and previous history of cardiovascular disease.

RESULTS

In 1 out of 24 subgroups, PCSK9 inhibitors were cost-effective when effectiveness was modelled using direct relative efficacy as reported in the FOURIER trial. When using assumptions, as suggested in a recent consensus statement from the European Atherosclerosis Society, 14 subgroups were cost-effective.

CONCLUSIONS

Cost-effectiveness of PCSK9 inhibitors depends highly on assumptions regarding effectiveness. Basing assumptions only on randomised controlled trials, and not taking into account varying effects based on baseline cholesterol level, results in much fewer groups being cost-effective.

Discounting in Economic Evaluations

Appropriate discounting rules in economic evaluations have received considerable attention in the literature and in national guidelines for economic evaluations. Rightfully so, as discounting can be quite influential on the outcomes of economic evaluations. The most prominent controversies regarding discounting involve the basis for and height of the discount rate, whether costs and effects should be discounted at the same rate, and whether discount rates should decline or stay constant over time. Moreover, the choice for discount rules depends on the decision context one adopts as the most relevant. In this article, we review these issues and debates, and describe and discuss the current discounting recommendations of the countries publishing their national guidelines. We finish the article by proposing a research agenda.

Cost-Effectiveness of Capping Freeways for Use as Parks: The New York Cross-Bronx Expressway Case Study

OBJECTIVES

To examine health benefits and cost-effectiveness of implementing a freeway deck park to increase urban green space.

METHODS

Using the Cross-Bronx Expressway in New York City as a case study, we explored the cost-effectiveness of implementing deck parks. We built a microsimulation model that included increased exercise, fewer accidents, and less pollution as well as the cost of implementation and maintenance of the park. We estimated both the quality-adjusted life years gained and the societal costs for 2017.

RESULTS

Implementation of a deck park over sunken parts of Cross-Bronx Expressway appeared to save both lives and money. Savings were realized for 84% of Monte Carlo simulations.

CONCLUSIONS

In a rapidly urbanizing world, reclaiming green space through deck parks can bring health benefits alongside economic savings over the long term. Public Health Implications. Policymakers are seeking ways to create cross-sectorial synergies that might improve both quality of urban life and health. However, such projects are very expensive, and there is little information on their return of investment. Our analysis showed that deck parks produce exceptional value when implemented over below-grade sections of road.

The Cost-Effectiveness of Lowering Permissible Noise Levels Around U.S. Airports

Aircraft noise increases the risk of cardiovascular diseases and mental illness. The allowable limit for sound in the vicinity of an airport is 65 decibels (dB) averaged over a 24-h ‘day and night’ period (DNL) in the United States. We evaluate the trade-off between the cost and the health benefits of changing the regulatory DNL level from 65 dB to 55 dB using a Markov model. The study used LaGuardia Airport (LGA) as a case study. In compliance with 55 dB allowable limit of aircraft noise, sound insulation would be required for residential homes within the 55 dB to 65 dB DNL. A Markov model was built to assess the cost-effectiveness of installing sound insulation. One-way sensitivity analyses and Monte Carlo simulation were conducted to test uncertainty of the model. The incremental cost-effectiveness ratio of installing sound insulation for residents exposed to airplane noise from LGA was $11,163/QALY gained (95% credible interval: cost-saving and life-saving to $93,054/QALY gained). Changing the regulatory standard for noise exposure around airports from 65 dB to 55 dB comes at a very good value.

Effect of battery longevity on costs and health outcomes associated with cardiac implantable electronic devices: a Markov model-based Monte Carlo simulation

Introduction

The effects of device and patient characteristics on health and economic outcomes in patients with cardiac implantable electronic devices (CIEDs) are unclear. Modeling can estimate costs and outcomes for patients with CIEDs under a variety of scenarios, varying battery longevity, comorbidities, and care settings. The objective of this analysis was to compare changes in patient outcomes and payer costs attributable to increases in battery life of implantable cardiac defibrillators (ICDs) and cardiac resynchronization therapy defibrillators (CRT-D).

Methods and results

We developed a Monte Carlo Markov model simulation to follow patients through primary implant, postoperative maintenance, generator replacement, and revision states. Patients were simulated in 3-month increments for 15 years or until death. Key variables included Charlson Comorbidity Index, CIED type, legacy versus extended battery longevity, mortality rates (procedure and all-cause), infection and non-infectious complication rates, and care settings. Costs included procedure-related (facility and professional), maintenance, and infections and non-infectious complications, all derived from Medicare data (2004–2014, 5% sample). Outcomes included counts of battery replacements, revisions, infections and non-infectious complications, and discounted (3%) costs and life years. An increase in battery longevity in ICDs yielded reductions in numbers of revisions (by 23%), battery changes (by 44%), infections (by 23%), non-infectious complications (by 10%), and total costs per patient (by 9%). Analogous reductions for CRT-Ds were 23% (revisions), 32% (battery changes), 22% (infections), 8% (complications), and 10% (costs).

Conclusion

Based on modeling results, as battery longevity increases, patients experience fewer adverse outcomes and healthcare costs are reduced. Understanding the magnitude of the cost benefit of extended battery life can inform budgeting and planning decisions by healthcare providers and insurers.

Electronic supplementary material

The online version of this article (10.1007/s10840-017-0289-8) contains supplementary material, which is available to authorized users.

Cost-effectiveness of neighbourhood slow zones in New York City

BACKGROUND

Neighbourhood slow zones (NSZs) are areas that attempt to slow traffic via speed limits coupled with other measures (eg, speed humps). They appear to reduce traffic crashes and encourage active transportation. We evaluate the cost-effectiveness of NSZs in New York City (NYC), which implemented them in 2011.

METHODS

We examined the effectiveness of NSZs in NYC using data from the city's Department of Transportation in an interrupted time series analysis. We then conducted a cost-effectiveness analysis using a Markov model. One-way sensitivity analyses and Monte Carlo analyses were conducted to test error in the model.

RESULTS

After 2011, road casualties in NYC fell by 8.74% (95% CI 1.02% to 16.47%) in the NSZs but increased by 0.31% (95% CI -3.64% to 4.27%) in the control neighbourhoods. Because injury costs outweigh intervention costs, NSZs resulted in a net savings of US$15 (95% credible interval: US$2 to US$43) and a gain of 0.002 of a quality-adjusted life year (QALY, 95% credible interval: 0.001 to 0.006) over the lifetime of the average NSZ resident relative to no intervention. Based on the results of Monte Carlo analyses, there was a 97.7% chance that the NSZs fall under US$50 000 per QALY gained.

CONCLUSION

While additional causal models are needed, NSZs appeared to be an effective and cost-effective means of reducing road casualties. Our models also suggest that NSZs may save more money than they cost.

Valuing health for oneself versus one's child or elderly parent

The aim of this study was to determine if adults value health states or are willing to accept risk differently for themselves than for their children or elderly parents. Participants (701) were asked to rate four hypothetical health states for themselves using both the standard gamble and time trade-off methodologies. They then did the same assessments for a real or hypothetical child as well as an elderly parent. Participants were willing to take more risk or trade more years of life to avoid bilateral vision loss and mental impairment for themselves than they were for their children and elderly parents.