Journal Club:

Cost Effectiveness Analysis

Paria Wilson, MD
March 27, 2014

Goals:

Understand the importance of cost

effectiveness practice in medicine
Understand how to interpret a decision
tree analysis
Learn about cost, charge, and QALYs
Add a little more to your HSV
knowledge

Why do we care about cost?

Expenditures for health care in the

United States were $2.6 trillion in
2010, representing approximately
18% of the gross domestic product2
Expenditures in UK: 10% of GDP
Expenditures in Germany: 12% of GDP
Expenditures in Canada: 11% of GDP

Why is this topic important?

AAP: fever, irritability, abnormal CSF,

seizures
Manifestations:
SEM- 45%
Disseminated- 25%
Encephalitis- 30%

Morbidity/mortality
Acyclovir should be initiated early for
greatest effect

Food for thought

Do the benefits of our interventions
justify the resources consumed?
Would knowing that the cost of HSV
PCR is minimal change your practice of
ordering it?
How about the cost to society of one
child with severe neurologic outcomes?

How to go about doing a

CEA?

Randomized Control Trial

Not feasible when a rare disease process
Potential long length of hospitalization

Decision Analysis Model

Cost vs Charge

Cost: Quantity of resource used x unit

price
Charge: health care institution vs 3rd
party payer

What does that mean?

QALYs (Quality Adjusted

Life Year): uniform
measurement that combines
changes in length of life with
quality of life
ICER (Incremental Cost
Effectiveness Ratio)3:
difference in costs/difference
in effect
Cost per unit benefit gained by

an experimental intervention
Expressed as dollars per QALY
gained

Treatment
Strategy 1

Treatment
Strategy 2

Cost

Cost1

Cost2

Effectiveness

QALY1

QALY2

Cost1/QALY1

Cost2/QALY2

Costeffectiveness
ratio
(cost per QALY)
Incremental
cost/effectiven
ess ratio (ICER)

(Cost1 Cost2)
(QALY1 QALY2)

Research Question

Determine the relative effectiveness

and costs of available HSV testing and
treatment strategies in febrile
neonates through decision analysis and
cost effective analysis

Did the recommendations consider all

relevant patient groups, management
options, and possible outcomes?

Inclusion Criteria:
Birth to 28 days
Rectal temp 38C
No other signs/symptoms of HSV infection

Workup: septic r/o, 48hr abx

CSF pleocytosis: >20/L WBC
Outcome: 12 month survival, QALY
Prevalence data: Baylor, 2008

Assumptions

Acyclovir therapy improves patient outcomes

No HSV resistance to Acyclovir
Infection in neonates always causes
symptomatic disease
Positive test result: start/continue therapy
Cost of evaluation for bacterial illness similar
across decision strategies
Either survive or have residual neurologic
outcomes
Hospital stay no longer than 48-72 hours

Did the investigators adopt a

sufficiently broad viewpoint?

Costs to:
Patient: Acyclovir therapy, hospitalization,

OT/PT up to 20 years of life

Society: Special education, institutional
care up to 20 yrs of age
Parent: work loss if patient in hospital for
> 6wks, transport to doctors
appointments, copays
Hospital: health care costs, staffing and
overhead fees

Are the results reported separately for

patients whose baseline risk differs?

Does HSV risk differ based on sex, age

or race in this population?
Prevalence of HSV is 0.3% in neonates with

fever and 1.0% in neonates with fever and

pleocytosis

Where costs measured

accurately?

2004 mean life expectancy: 77.8

yrs
Acyclovir: $36/neonate/day
Red Book 2006 estimate

Hospitalization > 2 days: Health

Care Cost and Utilization Project, 2003
Special Education: US Dept of
Education 99-00, Financing healthcare
for disabled children 1988

Did investigators consider the

timing of costs and outcomes?

US Panel on Cost Effectiveness in

Health and Medicine
3% annual discount rate for estimation
of future costs for inflation adjustment

What were the incremental costs

and effects of each strategy?

Do incremental costs and effects

differ between subgroups?

How much does allowances for

uncertainty change the results?

How much does allowances for

uncertainty change the results?

How much does allowances for

uncertainty change the results?

How much does allowances for

uncertainty change the results?

Are the treatment benefits

worth the harms and costs

Benefits: M&M
Harms:
Nephrotoxicity 6%
Neutropenia 21%

Costs: traditionally willingness to pay

has been set at $100,000/QALY

Could patients expect

similar health outcomes?
Yes

Can I expect similar costs in

my setting?
Baylor is comparable in size and services
to our hospital

Final Recommendation
Testing for HSV by PCR and
empirically administering acyclovir
therapy in febrile neonates with CSF
pleocytosis is cost effective

References

1. Martin A, Lassman D, Whittle L et al: Recession

contributes to slowest annual rate of increase in
health spending in five decades. Health Aff
(Millwood) 2011; 30: 11.
2. OECD Health Data 2012: How Does the United
States Compare? Available at
http://www.oecd.org/unitedstates/BriefingNoteUSA20
12.pdf. Accessed February 13, 2013.
3. Schulman KA, Ohishi A, Park J et al: Clinical
economics in clinical trials: the measurement of cost
and outcomes in the assessment of clinical services
through clinical trials. Keio J Med 1999; 48: 1.