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Cost-effectiveness and evidence evaluation as criteria for coverage policy
1Veterans Affairs Palo Alto Health Care System, USA. garber@stanford.edu
Health Affairs (Project Hope)
|September 29, 2004
Summary
US health insurance coverage decisions rely on evidence, not cost-effectiveness. Ignoring costs hinders meeting stakeholder needs amid rising healthcare spending. This analysis explores incorporating cost-effectiveness into coverage policy.
Area of Science:
- Health economics
- Health policy analysis
- Evidence-based medicine
Background:
- US health insurance coverage decisions by private plans and government programs primarily use evidence criteria, not explicit cost-effectiveness.
- Rapidly increasing healthcare spending necessitates a re-evaluation of coverage policies that disregard costs.
- Current approaches fail to adequately address the needs of consumers, employers, and government entities.
Purpose of the Study:
- To examine the role of evidence-based criteria in formal health insurance coverage decision-making.
- To contrast evidence-based criteria with cost-effectiveness criteria.
- To explore options for integrating cost-effectiveness considerations into coverage policy and benefit design.
Main Methods:
- Literature review and analysis of current health insurance coverage decision-making processes.
- Comparative analysis of evidence-based versus cost-effectiveness criteria.
- Discussion of policy and benefit design options.
Main Results:
- Coverage decisions in the US predominantly utilize evidence criteria, often overlooking cost-effectiveness.
- A significant gap exists between current practices and the need to incorporate economic evaluations.
- Various strategies can be employed to integrate cost-effectiveness into health benefit design.
Conclusions:
- Current US health insurance coverage policies need to evolve beyond evidence-based criteria to include cost-effectiveness.
- Integrating cost-effectiveness analysis is crucial for sustainable healthcare spending and meeting stakeholder needs.
- Policy and benefit design discussions should actively explore incorporating economic value into coverage decisions.
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