Headroom Analysis for Early Economic Evaluation: A Systematic Review

The headroom analysis is an early economic evaluation that quantifies the highest price at which an intervention may still be cost effective. Currently, there is no comprehensive review on how it is applied. This study investigated the application of the headroom analysis, specifically (1) how the headroom analysis is framed (2) the analytical approach and sources of evidence used, and (3) how expert judgement is used and reported.

A systematic search was conducted in PubMed, Embase, Web of Science, EconLit, and Google Scholar on 28 April 2022. Studies were eligible if they reported an application of the headroom analysis. Data were presented in tabular form and summarised descriptively.

We identified 42 relevant papers. The headroom analysis was applied to medicines (29%), diagnostic or screening tests (29%), procedures, programmes and systems (21%), medical devices (19%), and a combined test and device (2%). All studies used model-based analyses, with 40% using simple models and 60% using more comprehensive models. Thirty-three percent of the studies assumed perfect effectiveness of the health technology, while 67% adopted realistic assumptions. Ten percent of the studies calculated an effectiveness-seeking headroom instead of a cost-seeking headroom. Expert judgement was used in 71% of the studies; 23 studies (55%) used expert opinion, 6 studies (14%) used expert elicitation, and 1 study (2%) used both.

Because the application of the headroom analysis varies considerably, we recommend its appropriate use and clear reporting of analytical approaches, level of evidence available, and the use of expert judgement.