LWBK1006-10 LWW-Govindan-Review November 24, 2011 11:21
Chapter 10•Health Services Research and Economics of Cancer Care 121Answer 10.12. The answer is A.
The various methods of comparing the benefits and costs of medical treat-
ments have subtle but important differences. The most straightforward
analysis, cost minimization, assumes equivalent outcomes, and therefore
the least expensive intervention is preferred. Cost-effectiveness analysis
compares cost with a relevant clinical variable, such as cost per year of
life. These analyses are usually more intuitive but difficult to generalize
across treatment types. Cost-utility analysis is similar but compares cost
with QALYs such that the toxicities of therapies and the quality of life in
the setting of a chronic illness can be weighed along with the benefit. This
method has been adopted by the US Preventive Health Service Panel as
the best way to account for outcomes compared with cost. Cost-benefit
analysis goes one step further by assigning a dollar amount to a QALY, so
that two costs may be compared directly. Because this requires assigning
a monetary value to a person’s life, these analyses are controversial.Answer 10.13. The answer is D.
“Cost-effective” is an imprecise term that is overutilized in the medical
literature and can have many different meanings. Answer A is a cost-
minimization analysis. Answer B is a cost-utility analysis. Answer C is
nominally a “cost-effectivness” analysis, though this terminology has not
been standardized in the medical literature.Answer 10.14. The answer is D.
Although there are multiple methods of estimating cost-effectiveness,
actually implementing these analyses for decision making is problematic.
One example of the application of a cost-benefit analysis is that when
Congress made the decision to fund hemodialysis, the cost was considered
to be approximately $50,000 per QALY. This value subsequently became
an accepted standard for society’s willingness to fund a particular inter-
vention. This principle can be generalized to other countries on the basis
of their annual per capita gross domestic product. Consideration of eco-
nomic factors is further complicated by the fact that the original Medicare
charter actually prohibits such analysis in decisions regarding coverage.
Insurers are rarely inclined to consider cost-effectiveness because they are
unlikely to benefit from long-term improvements in outcomes and are
more concerned with current cost controls. Although cost-effectiveness
analyses can be informative, practical utility of the results have rarely
been realized.