A Pragmatic Guide to Assessing Real Option Value for Medical Technologies

Economic option value associated with surgical aortic valve replacement using a novel bioprosthetic and a future transcatheter aortic valve-in-valve procedure

INTRODUCTION

Optimal lifetime management of surgical aortic valve replacement (SAVR) patients should account for the expected clinical and economic value of the index procedure as well as the future trajectory of health outcomes. This study estimates the discounted per surgery "total value" (from the time of initial SAVR operation through 25 years post-surgery) and the option value (after reoperation) that mechanical SAVR patients forego by choosing a device that does not allow for valve-in-valve transcatheter aortic valve reoperation (ViV/TAVR).

METHODS

The model adopts a US payer perspective and tracks major health events, anti-coagulant monitoring, maintenance, and expenditures associated with these events following initial SAVR procedures, inclusive of costs before and after a potential reoperation. We compare the expected utilization and expenditures for tissue valve patients and mechanical valve patients over a 25-year period. The model also compares the experience of mechanical SAVR patients after reoperation to a counterfactual group receiving ViV/TAVR to estimate option value. Monte Carlo simulation, sensitivity analyses, scenario analyses, and break-even analyses were conducted to account for variation in inputs.

RESULTS

Novel SAVR treatment for aortic stenosis followed by ViV TAVR for reoperation reduces 25-year payer expenditures relative to mechanical valves by either $34,621 (95% CI: 17,426-52,218), $31,363 (95% CI: $19,871 -$43,399) or $23,303 (95% CI: $16,906-$30,075) depending on the age of initial SAVR operation. During this period, the "option value" share of overall savings ranges from 8-17% and generally is lower for older patients. Reoperation and anti-coagulant monitoring are important drivers of overall savings and option value.

CONCLUSION

The deterministic and simulation models both demonstrate that novel SAVR tissue valves, followed by a ViV/TAVR, result in lower 25-year expected costs than a treatment strategy using mechanical SAVR valves, and option value is a component of these savings.

Does Real Option Value Influence Oncologists' Treatment Recommendations? A Survey of US Oncologists

OBJECTIVES

Survival benefit from anticancer treatments, even if modest, improves a patient's chances of accessing future innovations, thereby creating real option value. There is no empirical evidence on the impact of potential future innovations on oncologists' treatment recommendations.

METHODS

We conducted a national online survey of practicing medical and hematological oncologists. We presented a hypothetical metastatic cancer patient with median survival of 6 months under 4 decision-making scenarios with varying expected efficacy and time to arrival of future innovations. We assessed the likelihood of discussing future innovations with their patients and the likelihood that future innovations would influence their current treatment recommendation, as well as factors associated with these 2 outcomes using multivariate logistic regressions.

RESULTS

A total of 201 oncologists completed the survey. When future innovations were expected to improve survival by 6 months and be available in 6 months, 76% of oncologists were likely or very likely to discuss the innovations with their patients, and 68% reported they would influence their current treatment recommendations. A 1-month increase in the expected survival improvement of future innovation was associated with a 1.17 greater odds (95% CI 1.1-1.25) of reporting likely or very likely to discuss future innovations with their patients, whereas a 1-month increase in the expected time to arrival was associated with a 0.91 lower odds (95% CI 0.88-0.94).

CONCLUSIONS

Given that potential future innovations seem to influence oncologists' treatments recommendations, evidence to inform clinical guidelines and value assessments should consider data on real option value impacts to support informed treatment decision making.

Healthcare Stakeholder Perspectives on a Value Assessment Approach for Duchenne Muscular Dystrophy Therapies

Purpose

Traditional value assessment frameworks are challenged in comprehensively assessing the societal value new therapies bring to individuals with rare, progressive, genetic, fatal, neuromuscular diseases such as Duchenne muscular dystrophy (DMD). The objective of this study was to identify how value assessment frameworks may need to be adapted to measure the value to society of DMD therapies.

Patients and Methods

Three stakeholder groups (6 patient advocates, 4 clinicians, 3 health economists; N = 13) participated in semi-structured interviews around the International Society for Pharmacoeconomics and Outcomes Research's Value Flower, which includes elements to consider within value assessments of healthcare technologies.

Results

All stakeholders agreed that traditional value assessment frameworks based on the quality-adjusted life year (QALY) are narrow and will undervalue new DMD therapies. All stakeholders expressed some level of concern that using the QALY as a key metric of value discriminates against patients with severe progressive diseases and disabilities. Some stakeholders saw value in using the QALY for cross-disease comparisons in resource-constrained environments if the methodology was appropriate. All stakeholders recommended considering additional elements of value in decision-making around new DMD therapies. These elements reflect: economic and humanistic costs incurred by patients, caregivers, and families with Duchenne, such as indirect out-of-pocket costs, lost productivity, and family spillovers; meaningful attributes for individuals with disabilities and high unmet need, such as severity of disease, value of hope, and real option value; and factors that contribute to improvements in population health, such as insurance value, equity, and scientific spillovers.

Conclusion

These findings highlight the need to expand traditional value assessment frameworks and take a holistic approach that incorporates the perspectives of individuals with Duchenne, caregivers, clinicians, and health economists when assessing the societal value of new DMD therapies. Broadening value assessment will prevent restricted or delayed access to therapies for individuals with Duchenne.

Incorporating Real Option Value in Valuing Innovation: A Way Forward

BACKGROUND

Considerable progress has been made in defining and measuring the real option value (ROV) of medical technologies. However, questions remain on how to estimate (1) ROV outside of life-extending oncology interventions; (2) the impact of ROV on costs and cost effectiveness; and (3) potential interactions between ROV and other elements of value.

METHODS

We developed a 'minimal modeling' approach for estimating the size of ROV that does not require constructing a full, formal cost-effectiveness model. We proposed a qualitative approach to assessing the level of uncertainty in the ROV estimate. We examined the potential impact of ROV on the incremental cost-effectiveness ratio as well as on the potential interactions between ROV and other elements of value. Lastly, we developed and presented a 15-item checklist for reporting ROV in value assessment.

RESULTS

The minimal modeling approach uses estimates on the efficacy of current treatment and potential future innovation, as well as success rate and length of new treatment development, and can be applied to all types of ROV across disease areas. ROV may interact with the conventional value, value of hope, productivity effects, and insurance value. The impact of ROV on cost effectiveness can be evaluated via threshold analysis.

CONCLUSION

The minimal modeling approach and the checklist developed in this paper simplifies and standardizes the estimation and reporting of ROV in value assessment. Systematically including and reporting ROV in value assessment will minimize bias and improve transparency, which will help improve the credibility of ROV research and acceptance by stakeholders.

Values Beyond "Health" in Budget-Constrained Healthcare Systems

OBJECTIVES

Most current methods to value healthcare treatments only incorporate measures such as quality-adjusted life-years, combining gains in health-related quality of life and life expectancy in specific ways. Failure of these methods to recognize other dimensions of value has led to calls for methods to include additional values that are associated with the healthcare treatments but not captured directly by quality-adjusted life-years. This article seeks to provide methodologically sound ways to incorporate additional health-related outcomes, focusing on budget-constrained healthcare systems, in which using standard welfare economics methods are often eschewed.

METHODS

The analysis develops standard extra-welfarist approaches to maximizing aggregate health, subject to fixed-budget constraints, using Lagrange multiplier methods. Then, additional valuable health-related outcomes, eg, reduced caregiver burden, real option value, and market- and non-market productivity are introduced. The article also introduces a social welfare function approach to illuminate how disability, disease severity and other equity-related issues can be incorporated into complete welfare measures.

RESULTS

Resulting analysis, fully developed in an Appendix in Supplemental Materials found at https://doi.org/10.1016/j.jval.2024.02.005 and summarized in the main text, show that understanding how average and marginal healthcare costs increase with output and how health augments "additional values" provides ways to assess willingness to pay for them in these fixed-budget situations.

CONCLUSIONS

In budget-constrained healthcare systems, only from actual budget allocations can values both of health itself and "additional values" be inferred. These methods, combined with methodologically sound social welfare functions, demonstrate how to move from "health" to "welfare" in measuring the value of increased healthcare use.

Valuing the Societal Impact of Medicines and Other Health Technologies: A User Guide to Current Best Practices

This study argues that value assessment conducted from a societal perspective should rely on the Generalized Cost-Effectiveness Analysis (GCEA) framework proposed herein. Recently developed value assessment inventories - such as the Second Panel on Cost-Effectiveness's "impact inventory" and International Society of Pharmacoeconomics Outcomes Research (ISPOR) "value flower" - aimed to more comprehensively capture the benefits and costs of new health technologies from a societal perspective. Nevertheless, application of broader value elements in practice has been limited in part because quantifying these elements can be complex, but also because there have been numerous methodological advances since these value inventories have been released (e.g. generalized and risk-adjusted cost effectiveness). To facilitate estimation of treatment value from a societal perspective, this paper provides an updated value inventory - called the GCEA value flower - and a user guide for implementing GCEA for health economics researchers and practitioners. GCEA considers 15 broader value elements across four categories: (i) uncertainty, (ii) dynamics, (iii) beneficiary, and (iv) additional value components. The uncertainty category incorporates patient risk preferences into value assessment. The dynamics category petals account for the evolution of real-world treatment value (e.g. option value) and includes drug pricing trends (e.g. future genericization). The beneficiary category accounts for the fact health technologies can benefit others (e.g. caregivers) and also that society may care to whom health benefits accrue (e.g. equity). Finally, GCEA incorporates additional broader sources of value (e.g. community spillovers, productivity losses). This GCEA user guide aims to facilitate both the estimation of each of these value elements and the incorporation of these values into health technology assessment when conducted from a societal perspective.