Threshold values in health economic evaluations and decision-making

Internal Review: Ingrid Zechmeister-Koss
Duration: March to September 2024
Language: English (with German summary)
Publication: HTA Project Report No. 163: https://eprints.aihta.at/1549/

Background: 
In many countries, Health Technology Assessment (HTA) is integral to reimbursement decisions and funding recommendations for healthcare interventions [1, 2]. In addition to effectiveness assessment and analysis of other (e.g., ethical, organisational, social) aspects, health economic evaluation (HEE) is a pillar of textbook HTA. Still, "textbook-like" HEE is not necessarily conducted in every country using HTAs for decision-making. HEE, such as cost-effectiveness analyses (CEA), aim to inform decision-makers of the optimal allocation of resources in the healthcare system or, in simple terms, whether an intervention is worth its costs [3, 4]. HEE's explanatory power regarding efficiency is only given if the output magnitude, i.e. the additional costs per additional unit of health effect when comparing two interventions[1], is compared with a reference value – the incremental cost-effectiveness (ICER) threshold[2]. While HEE combined with ICER thresholds can support decisions, applying HEEs as a policy tool has several limitations because of the weaknesses of the ICERs and the associated threshold. Firstly, no universal ICER threshold exists. There are several methods for deriving threshold values [5-8]. However, each approach has its methodological limitations. Very few jurisdictions define an explicit threshold [1, 4, 9]. Even jurisdictions that apply explicit thresholds, such as the National Health Service (NHS) in the United Kingdom, use a threshold range for its funding decisions [10].

In addition to the non-existence of universal threshold values, the ICER threshold value is based on several strong methodological assumptions resting on neo-classical (extra-)welfarist theory. An HEE only gives information on the optimal use of resources in an economic sense, meaning whether resources are used efficiently under a politically fixed budget. Health maximisation is not the only aim of decision- and policy-makers, and efficient use of resources is not necessarily the same as getting the highest value for money, "being worthwhile", or affordability [11]. Decision- and policy-makers also consider values such as equity, equal access to healthcare services, or public preferences in their political decisions. These values – so-called modifiers – are commonly not explicitly covered within a standard HEE and the ICER threshold. Hence, some countries use qualitative modifiers or extend their HEE with specific quantitative or qualitative modifiers [1]. These modifiers relevant to decision-making vary across healthcare systems. They can potentially include the severity of illness (disease burden, disease category, end-of-life related), rarity of the disease (orphan disease), equity and equality of healthcare access, or availability of alternatives [1]. Even though explicit thresholds guarantee transparency and some consistency in the decision-making process, the ICERs and associated threshold's weaknesses need consideration when being used as a policy-making tool.

Therefore, in some countries, HEE is not included in the decision-making process, as these countries seemingly do not place as much emphasis on efficient resource allocation. Some countries use HEEs but do or do not have explicit thresholds, and others also employ modifiers in the decision-making process [1]. In Austria, HEE plays a minor role in reimbursement decisions and an ICER threshold has not yet been defined or discussed [12]. However, against the backdrop of challenges in achieving a sustainable public health system and introducing thresholds in many European countries, it is crucial to understand the principle of thresholds in the context of the Austrian healthcare system and analyse the benefits and limitations of thresholds in Austria.

Objectives:
The project aims to explain the theoretical foundations, purpose, and implications of ICER threshold values used in HEE. A critical review of important health economic concepts for decision-making and a discussion of the implications are required to achieve these goals.

Moreover, the project aims to provide an overview of the countries that use HEE with associated ICER thresholds as part of reimbursement decisions and funding recommendations. In the project, we will identify values and further factors (modifiers) used instead of or in addition to explicit ICER thresholds in HEEs in HTAs and the decision-making process. We will identify the underlying methods, values and rationales that determine the differences in thresholds and modifiers across countries and health systems.

In a final step, we put the findings into the context of the Austrian healthcare system, aiming to improve understanding of what the implementation of a threshold would mean in the decision-making processes.

Non-objectives:
The report does not provide an assessment of the Austrian legal framework concerning HEE and the consequences of applying ICER thresholds or other decision factors (modifiers) in the decision-making process in the form of a legal report.

Research questions:
The report addresses the following research questions (RQ):

RQ1: What are the theoretical foundations and implications of ICER thresholds and their relevance for the decision-making process?

RQ2: What are possible methods to define thresholds and their advantages and limitations?

RQ3: Which countries employ ICER thresholds in their HEE, and which other factors play an essential role in HEE in HTAs and decision-making? What is the impact of thresholds (e.g., transparency of processes, access to treatment, prices, health equality)?

RQ4: What would the introduction of a threshold mean for the context of the Austrian healthcare system (e.g., laws and existing decision-making processes that would be affected by the application of thresholds in Austria)?

Methods:

RQ1: Theoretical foundations, purpose, and implications of ICER thresholds and modifiers in HEE and HTAs:

• Overview of basic concepts, definitions, the applied methodology and its critical reflection in HEE based on the relevant literature (textbooks and method papers). The relevant literature is identified on the authors' knowledge and supported by a snowballing strategy.
• Critical discussion on the methodology and logic of HEE and implications for decision-making.

RQ2: Methods to define thresholds:

• Literature review on methods and classification according to categories identified alongside the analysis process.

RQ3: Overview of countries using HEE with thresholds and/or modifiers:

• Identification of countries using HEE with thresholds and/or modifiers and relevant information on thresholds based on the following sources:
  • ISPOR Overview of pharmacoeconomic guidelines (https://www.ispor.org/heor-resources/more-heor-resources/pharmacoeconomic-guidelines/pe-guideline-detail).
  • Existing reports on international cost-effectiveness threshold  [1, 9].
  • Consultation of experts of the respective identified country in case of insufficient or missing information.
• Tabulation of identified countries, their ICER thresholds and modifiers.
• Narrative synthesis and analysis of gathered information.

RQ4: Critical factors for implementing thresholds in Austria:

• Structured hand search for decision-relevant documents such as legal texts or system descriptions.
• Contrasting the findings from RQ1-3 with the Austrian system context information (identifying pros and cons and implementation requirements).

PICo analysis:

Abbreviations: HEE…Health economic evaluation, ICER…incremental cost-effectiveness ratio, PICo…Problem, Interests, Context

Internal and external reviewers ensure the quality of the report.

References:

[1]          Kyann Z. and Martina G. International Cost-Effectiveness Thresholds and Modifiers for HTA Decision Making. Office of Health Economics, 2020 May. Available from: https://ideas.repec.org/p/ohe/conres/002271.html.

[2]          García-Mochón L., Espín Balbino J., Olry de Labry Lima A., Caro Martinez A., Martin Ruiz E. and Pérez Velasco R. HTA and decision-making processes in Central, Eastern and South Eastern Europe: Results from a survey. Health Policy. 2019;123(2):182-190. Epub 20170331. DOI: 10.1016/j.healthpol.2017.03.010.

[3]          Drummond M. F., Sculpher M. J., Claxton K., Stoddart G. L. and Torrance G. W. Methods for the Economic Evaluation of Health Care Programmes. Oxford: Oxford University Press; 2015.

[4]          Cleemput I., Neyt M., Thiry N., De Laet C. and Leys M. Using threshold values for cost per quality-adjusted life-year gained in healthcare decisions. Int J Technol Assess Health Care. 2011;27(1):71-76. Epub 20110125. DOI: 10.1017/S0266462310001194.

[5]          Santos A. S., Guerra-Junior A. A., Godman B., Morton A. and Ruas C. M. Cost-effectiveness thresholds: methods for setting and examples from around the world. Expert Rev Pharmacoecon Outcomes Res. 2018;18(3):277-288. Epub 20180227. DOI: 10.1080/14737167.2018.1443810.

[6]          Pichon-Riviere A., Drummond M., Palacios A., Garcia-Marti S. and Augustovski F. Determining the efficiency path to universal health coverage: cost-effectiveness thresholds for 174 countries based on growth in life expectancy and health expenditures. The Lancet Global Health. 2023;11(6):e833-e842. DOI: 10.1016/S2214-109X(23)00162-6.

[7]          Institut für Qualität und Wirtschaftlichkeit im Gesundheitswesen (IQWiG). Allgemeine Methoden Version 7.0. 2023  [cited 21/02/2024]. Available from: https://www.iqwig.de/methoden/allgemeine-methoden_version-7-0.pdf.

[8]          Sampson C., Zamora B., Watson S., Cairns J., Chalkidou K., Cubi-Molla P., et al. Supply-Side Cost-Effectiveness Thresholds: Questions for Evidence-Based Policy. Applied Health Economics and Health Policy. 2022;20(5):651-667. DOI: 10.1007/s40258-022-00730-3.

[9]          Cleemput I., Neyt M., Thiry N., De Laet C. and Leys M. Threshold values for cost-effectiveness in health care. Health Technology Assessment (HTA). Brussels: Belgian Health Care Knowledge Centre (KCE), 2008.

[10]        McCabe C., Claxton K. and Culyer A. J. The NICE Cost-Effectiveness Threshold. PharmacoEconomics. 2008;26(9):733-744. DOI: 10.2165/00019053-200826090-00004.

[11]        Pearson S. D. The ICER Value Framework: Integrating Cost Effectiveness and Affordability in the Assessment of Health Care Value. Value in Health. 2018;21(3):258-265. DOI: 10.1016/j.jval.2017.12.017.

[12]        Zechmeister-Koss I., Stanak M. and Wolf S. The status of health economic evaluation within decision making in Austria. Wien Med Wochenschr. 2019;169(11-12):271-283. Epub 20190312. Stand der gesundheitsökonomischen Evaluation bei der Entscheidungsfindung in Österreich. DOI: 10.1007/s10354-019-0689-8.