Abstract

The authors introduce economic evaluation with particular attention to cost-effectiveness analysis. They begin by establishing why health care decisions should be guided by economics. They then explore different types of economic evaluations. To illustrate how to conduct and evaluate a cost-effectiveness analysis, a hypothetical study about the treatment of posttraumatic stress disorder with psychotherapy versus pharmacotherapy is considered. The authors conclude with recommendations for increasing the strength and relevance of economic evaluations.

We investigated the determinants of inpatient rehabilitation costs in the Department of Veterans Affairs (VA) and examined the relationship between length of stay (LOS) and discharge costs using data from VA and community rehabilitation hospitals. We estimated regression models to identify patient characteristics associated with specialized inpatient rehabilitation costs. VA data included 3,535 patients discharged from 63 facilities in fiscal year 2001. We compared VA costs to community rehabilitation hospitals using a sample from the Uniform Data System for Medical Rehabilitation of 190,112 patients discharged in 1999 from 697 facilities. LOS was a strong predictor of cost for VA and non-VA hospitals. Functional status, measured by Functional Independence Measure (FIM) scores at admission, was statistically significant but added little explanatory value after controlling for LOS. Although FIM scores were associated with LOS, FIM scores accounted for little variance in cost after controlling for LOS. These results are most applicable to researchers conducting cost-effectiveness analyses.

Background
Multidrug-resistant tuberculosis (MDR-TB) is an important global health problem, and a
control strategy known as DOTS-Plus has existed since 1999. However, evidence regarding the feasibility, effectiveness, cost, and cost-effectiveness of DOTS-Plus is still limited.

Methodology/Principal Findings
We evaluated the feasibility, effectiveness, cost, and cost-effectiveness of a DOTS-Plus pilot project established at Makati Medical Center in Manila, the Philippines, in 1999. Patients with MDR-TB are treated with regimens, including first- and second-line drugs, tailored to their drug susceptibility pattern (i.e., individualised treatment). We considered the cohort enrolled between April 1999 and March 2002. During this three-year period, 118 patients were enrolled in the project; 117 were considered in the analysis. Seventy-one patients (61%) were cured, 12 (10%) failed treatment, 18 (15%) died, and 16 (14%) defaulted. The average cost per patient treated was US$3,355 from the perspective of the health system, of which US$1,557 was for drugs, and US$837 from the perspective of patients. The mean cost per disability-adjusted life year (DALY) gained by the DOTS-Plus project was US$242 (range US$85 to US$426).

Conclusions
Treatment of patients with MDR-TB using the DOTS-Plus strategy and individualised drug
regimens can be feasible, comparatively effective, and cost-effective in low- and middle-income countries.

A critical question in planning a response to bioterrorism is how antibiotics and medical supplies should be stockpiled and dispensed. The objective of this work was to evaluate the costs and benefits of alternative strategies for maintaining and dispensing local and regional inventories of antibiotics and medical supplies for responses to anthrax bioterrorism. We modeled the regional and local supply chain for antibiotics and medical supplies as well as local dispensing capacity. We found that mortality was highly dependent on the local dispensing capacity, the number of individuals requiring prophylaxis, adherence to prophylactic antibiotics, and delays in attack detection. For an attack exposing 250,000 people and requiring the prophylaxis of 5 million people, expected mortality fell from 243,000 to 145,000 as the dispensing capacity increased from 14,000 to 420,000 individuals per day. At low dispensing capacities (14,000 individuals per day), nearly all exposed individuals died, regardless of the rate of adherence to prophylaxis, delays in attack detection, or availability of local inventories. No benefit was achieved by doubling local inventories at low dispensing capacities; however, at higher dispensing capacities, the cost-effectiveness of doubling local inventories fell from $100,000 to $20,000/life year gained as the annual probability of an attack increased from 0.0002 to 0.001. We conclude that because of the reportedly rapid availability of regional inventories, the critical determinant of mortality following anthrax bioterrorism is local dispensing capacity. Bioterrorism preparedness efforts directed at improving local dispensing capacity are required before benefits can be reaped from enhancing local inventories.

Several factors are changing the landscape of cervical cancer control, including a better understanding of the natural history of human papillomavirus (HPV), reliable assays for detecting high-risk HPV infections, and a soon to be available HPV-16/18 vaccine. There are important differences in the relevant policy questions for different settings. By synthesizing and integrating the best available data, the use of modeling in a decision analytic framework can identify those factors most likely to influence outcomes, can guide the design of future clinical studies and operational research, can provide insight into the cost-effectiveness of different strategies, and can assist in early decision-making when considered with criteria such as equity, public preferences, and political and cultural constraints

BACKGROUND: Cost-effectiveness analyses (CEAs) can provide useful information to policymakers concerned with the broad allocation of resources as well as to local decision makers choosing between different options for reducing the burden from a single disease. For the latter, it is important to use country-specific data when possible and to represent cost differences between countries that might make one strategy more or less attractive than another strategy locally. As part of a CEA of cervical cancer screening in five developing countries, we supplemented limited primary cost data by developing other estimation techniques for direct medical and non-medical costs associated with alternative screening approaches using one of three initial screening tests: simple visual screening, HPV DNA testing, and cervical cytology. Here, we report estimation methods and results for three cost areas in which data were lacking. METHODS: To supplement direct medical costs, including staff, supplies, and equipment depreciation using country-specific data, we used alternative techniques to quantify cervical cytology and HPV DNA laboratory sample processing costs. We used a detailed quantity and price approach whose face validity was compared to an adaptation of a US laboratory estimation methodology. This methodology was also used to project annual sample processing capacities for each laboratory type. The cost of sample transport from the clinic to the laboratory was estimated using spatial models. A plausible range of the cost of patient time spent seeking and receiving screening was estimated using only formal sector employment and wages as well as using both formal and informal sector participation and country-specific minimum wages. Data sources included primary data from country-specific studies, international databases, international prices, and expert opinion. Costs were standardized to year 2000 international dollars using inflation adjustment and purchasing power parity. RESULTS: Cervical cytology laboratory processing costs were I$1.57-3.37 using the quantity and price method compared to I$1.58-3.02 from the face validation method. HPV DNA processing costs were I$6.07-6.59. Rural laboratory transport costs for cytology were I$0.12-0.64 and I$0.14-0.74 for HPV DNA laboratories. Under assumptions of lower resource efficiency, these estimates increased to I$0.42-0.83 and I$0.54-1.06. Estimates of the value of an hour of patient time using only formal sector participation were I$0.07-4.16, increasing to I$0.30-4.80 when informal and unpaid labor was also included. The value of patient time for traveling, waiting, and attending a screening visit was I$0.68-17.74. With the total cost of screening for cytology and HPV DNA testing ranging from I$4.85-40.54 and I$11.30-48.77 respectively, the cost of the laboratory transport, processing, and patient time accounted for 26-66% and 33-65% of the total costs. From a payer perspective, laboratory transport and processing accounted for 18-48% and 25-60% of total direct medical costs of I$4.11-19.96 and I$10.57-28.18 respectively. CONCLUSION: Cost estimates of laboratory processing, sample transport, and patient time account for a significant proportion of total cervical cancer screening costs in five developing countries and provide important inputs for CEAs of alternative screening modalities.

Background: Teriparatide is a promising new agent for the treatment of osteoporosis.

Methods: The objective of this study was to evaluate the cost-effectiveness of teriparatide-based strategies compared with alendronate sodium for the first-line treatment of high-risk osteoporotic women. We developed a microsimulation with a societal perspective. Key data sources include the Study of Osteoporotic Fractures, the Fracture Intervention Trial, and the Fracture Prevention Trial. We evaluated postmenopausal white women with low bone density and prevalent vertebral fracture. The interventions were usual care (UC) (calcium or vitamin D supplementation) compared with 3 strategies: 5 years of alendronate therapy, 2 years of teriparatide therapy, and 2 years of teriparatide therapy followed by 5 years of alendronate therapy (sequential teriparatide/alendronate). The main outcome measure was cost per quality-adjusted life-year (QALY).

Results: For the base-case analysis, the cost of alendronate treatment was $11 600 per QALY compared with UC. The cost of sequential teriparatide/alendronate therapy was $156 500 per QALY compared with alendronate. Teriparatide treatment alone was more expensive and produced a smaller increase in QALYs than alendronate. For sensitivity analysis, teriparatide alone was less cost-effective than alendronate even if its efficacy lasted 15 years after treatment cessation. Sequential teriparatide/alendronate therapy was less cost-effective than alendronate even if fractures were eliminated during the alendronate phase, although its cost-effectiveness was less than $50 000 per QALY if the price of teriparatide decreased 60%, if used in elderly women with T scores of -4.0 or less, or if 6 months of teriparatide therapy had comparable efficacy to 2 years of treatment.

Conclusions: Alendronate compares favorably to interventions accepted as cost-effective. Therapy with teriparatide alone is more expensive and produces a smaller increase in QALYs than therapy with alendronate. Sequential teriparatide/alendronate therapy appear expensive but could become more cost-effective with reductions in teriparatide price, with restriction to use in exceptionally high-risk women, or if short courses of treatment have comparable efficacy to that observed in clinical trials.