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Handling Uncertainty in Cost-Effectiveness Analysis: Budget Impact and Risk Aversion
Pedram Sendi1, Klazien Matter-Walstra2, Matthias Schwenkglenks2
1Institute for Clinical Epidemiology, Basel University Hospital, Spitalstrasse 12, 4031 Basel, Switzerland.
Healthcare (Basel, Switzerland)
|November 27, 2021
Summary
New curves, cost-effectiveness affordability curve (CEAFC) and cost-effectiveness risk-aversion curve (CERAC), improve upon the cost-effectiveness acceptability curve (CEAC) for economic evaluations. These methods better capture uncertainty and risk preferences for policy decisions.
Area of Science:
- Health Economics
- Decision Analysis
- Pharmacoeconomics
Background:
- Cost-effectiveness acceptability curves (CEAC) are widely used to present uncertainty in cost-effectiveness analyses.
- Limitations of CEAC include insensitivity to radial shifts and inability to incorporate risk-aversion.
- Existing methods struggle to fully inform decision-makers regarding budget impact and risk preferences.
Purpose of the Study:
- To introduce and evaluate the cost-effectiveness affordability curve (CEAFC) and cost-effectiveness risk-aversion curve (CERAC).
- To demonstrate how CEAFC and CERAC address limitations of the traditional CEAC.
- To illustrate the joint application of CEAC, CEAFC, and CERAC for enhanced decision-making in health economics.
Main Methods:
- Development and theoretical evaluation of CEAFC and CERAC.
- Application of CEAC, CEAFC, and CERAC using a published cost-effectiveness model for advanced breast cancer treatment (palbociclib plus letrozole vs. letrozole alone).
- Comparative analysis of the curves' ability to represent uncertainty and risk.
Main Results:
- CEAFC captures both dimensions of incremental costs and effects on the cost-effectiveness plane, being sensitive to radial shifts.
- CEAFC can estimate the joint probability of an intervention being both affordable and cost-effective, informing budget impact.
- CERAC allows for the incorporation of varying levels of risk-aversion, providing insights for risk-averse decision-makers.
Conclusions:
- CEAFC and CERAC offer significant advantages over traditional CEAC for economic evaluations.
- These novel curves provide a more comprehensive understanding of uncertainty and risk preferences.
- The joint use of CEAC, CEAFC, and CERAC can substantially improve the quality of evidence used for policy and decision-making.
Keywords:
budget impactcost-effectiveness analysiseconomic evaluationhealth care costshealth outcomesrisk-aversionuncertaintyMore Related Videos
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