The use of economic evaluation in demographic policy-making

Evidence and Policy Summer School - Science, Policy and Demography

International Institute for Applied Systems Analysis (IIASA)Laxenburg, Austria5-7 September 2018

Christian Boehler, PhD, MSc

www.euro.centre.org

boehler@euro.centre.org

Agenda

• Why do we need economic evaluation?

• What is economic evaluation?

• Group discussion

• MAFEIP Web-tool

• MAFEIP case study

• Role play

• Conclusions

• Questions and discussion

Well-functioning markets are regulated through prices• and individuals decide themeselves what to spend their money on

However, rationing through prices may not work if markets fail• Assymetric information (moral hazard, adverse selection)• Externalities (e.g. vaccines)• Consumer rationality and ability to judge• Risks and uncertainty with regard to future demand• Etc.

→ Some markets may therefore require (extensive) regulation→ Some goods and services may even be better provided collectively

Why do we need economic evaluation

Market failures

If we decide to do more of one thing, we have to do less of something else

The 'opportunity cost' is the value of the best alternative use of resources

In demographic policy making, we may have to look at the opportunity cost of activities even across sectors / budgets (such as health, long term care, social services, transport, etc.)

Why do we need economic evaluationOpportunity cost

Why do we need economic evaluation

…making more rational choices between alternative causes of action in situations where markets fail

…improving efficiency through identification of services that provide ‘better value for money’

Economic evaluation may help us…

What is economic evaluation?

The comparative analysis of alternative courses of action in terms of both*...

...their costs

Costintervention – Costcomparator = ∆C

...and consequences

Effectintervention – Effectcomparator = ∆E

*Drummond et al (2005) , Methods for the Economic Evaluation of Healthcare

Programmes (3rd edt), Oxford University Press, Oxford, UK

Definition

What is economic evaluation? Types of economic evaluation

Type ofanalysis

Valuingresources

Valuingoutcomes

Applicationarea

Cost-minimisation

analysis

Monetaryunits

Outcomes assumedidentical between

alternatives

Comparison of interventionsthat only differ in costs

Cost-effectiveness

analysis

Monetaryunits

Single indicator (e.g. blood pressure)

Comparison ofinterventiones which differ in

only one measure of effect

Cost-utility analysis

Monetaryunits

Preference weightedindex (e.g. QALY)

Comparison of anyintervention whose impact

can be measured by thechosen index

Cost-benefitanalysis

Monetaryunits

Monetaryunits

Comparison of anyintervention within and

accross sectors

Drummond et al (2005) , Methods for the Economic Evaluation of Healthcare

Programmes (3rd edt), Oxford University Press, Oxford, UK

What is economic evaluation? Conceptualising a study

Population- Who are the people our intervention aims at?

- Are there any relevant subgroups?

Intervention- How does the intervention work?- What does it intend to achieve?

Comparator(s)- Current practice / usual care?

- Do nothing / placebo?

Outcomes- Identify all significant cost and savings

- Select all appropriate measures of outcome

PICO

What is economic evaluation? A false dychotomy

Trial based economic evaluation

Intervention Control

Baseline

Follow-Up

Model based economic evaluation

*O‘Brian (1996) Economic evaluation of Pharmaceuticals – Frankensteins Monster or Vampire of Trials, Medical Care, 34.12

"pulls together the many needed pieces of information

from multiple sources and then stitches them together

into a (hopefully) cohesive whole" (O'Brien, 1996*)

Feed modelparameters

Complementtrial analysis

Population

Compare

More effective

Less effective

Mo

re c

ostly

comparator

Less c

ostly

Dominated

(more expensive &

worse)

Dominant

(cheaper & better)

?

Better but more

expensive

λ3 = 80.000

λ2 = 20.000

λ1 =10.000

What is economic evaluation? Informing decisions

Group discussion 1

Think of a programme / intervention in your respective area of demographic policy making…

• Which population does it serve?

• How are the needs of that population currently being met?

• What are the expected outcomes of the intervention?

• What are the costs / savings of the intervention?

• Who would incur the cost/savings & effects of the intervention?

• Given the above, what type of economic evaluation would be most suited?

Monitoring and Assessment Framework for the European Innovation Partnership on

Active and Healthy Ageing

The

MAFEIP

Webtool

The MAFEIP project was carried out between 2013 and 2016 at the European Commissions‘ Joint Research Centre, Institute forProspective Technological Studies (DG-JRC-IPTS) in Seville, Spain

• Between 2013 and 2015, DG-JRC/IPTS, in cooperation with DG-CNECT and DG-SANTE, developed a Monitoring and Assessment Framework for the European Innovation Partnership on Active and Healthy Ageing (MAFEIP-project)

• This included the development of a web-based decision support tool for stakeholders of theEIP on AHA, the „MAFEIP-Tool“

• The aim of the MAFEIP-tool is to enable stakeholders performing an early assessment of:

• the cost-effectiveness of an innovation• compared to a suitable alternative • from a healthcare as well as a societal perspective• with a lifetime horizon

The MAFEIP Webtool Context

• Synthesising the best available evidence from multiple sources

• Allowing adaptation to different interventions, populations, care contexts

• Ensuring consistency in methods whilst minimizing duplication

• Allowing early assessment of innovation

• Remote access through web-implementation

• Intuitive user-interface to minimize need for third party support

• User-support strategy with seminars, workshops and tutorials

• „Evolving platform“, with gradually expanding features for learning, performing and adaptinghealth economic evaluation

The MAFEIP Webtool Key requirements

CostHRQoL

CostHRQoL

The MAFEIP Webtool Model

BOEHLER C, DE GRAAF G, STEUTEN L, YANG Y, ABADIE F (2015) Development of a web-based tool for the assessment of health and economic outcomes of the European Innovation Partnership on Active and Healthy Ageing (EIP on AHA). BMC Medical Informatics and Decision Making 15(Suppl 3):S4

2minPhase1

10minPhase2

1-2minPhase3

BP1 BP2BP3BP4BP5 BP6

HRV

Predictive Model(proof of principle)

HRV ΔBP

• A number of indoor falls happen while rising from beds/chairs, sometimes probably caused by postural hypotension

• To which extent is it possible to predict falls due to standing hypotension by using HRV and wearable devices?

* With permission from L. Pecchia, Applied Biomedical Signal Processing and Intelligent eHealth (ABSPIE) Lab, University of Warwick

Published in: G Sannino, P Melillo, S Stranges, G De Pietro, L Pecchia (2015). Short term Heart Rate Variability to predict blood pressure

drops due to standing: a pilot study. BMC Medical Informatics and Decision Making 201515(Suppl 3):S2

MAFEIP case study Early modelling of a falls prediction device*

Expert Opinion:

• Which proportion of falls among elderly at home /

in nursing homes / in the hospital could be

avoided with a device that can predict a sudden

drop in blood pressure based on the ECG of an

individual during the last five minutes before

rising?

Secondary data:

MAFEIP case study Input data

The planned device would be cost

neutral at a RRR of 13.7% (ARR: 4.14%)

Device reaches WTP threshold of 30.000

GBP/QALY at RRR of 5.8%. (ARR: 1.74%)

= Minimum reimbursable effectiveness

Base case: assuming achievable RRR of

15% and cost of device of 130GBP / year

would result in annual cost savings of

149GBP and 0.065 QALYs gained

MAFEIP case study Early stage decision making

0 ≤ λ ≤ 30.000

ICER vs. device effectiveness ICER vs. device cost

Minimum 'reimbursable effectiveness’

(RRR) at λ = 30.000

Maximum reimbursable cost

of intervention at λ = 30.000

λ = 30.000

λ = 0 λ = 0

λ = 30.000

0 ≤ λ ≤ 30.000

MAFEIP case study “Headroom” Analysis

Conclusions

• The EC advocates MAFEIP as the main instrument for assessing innovation within the EIP on AHA https://ec.europa.eu/eip/ageing/mafeip_en

• 15 international use-cases have recently been published (www.mafeip.eu)

• Recent H2020 call awarded 2 million Eur for a consortium to enable large scale uptake of digital innovation for AHA including advocating the use of the MAFEIP webtool (“We4AHA”)

• The current H2020 health program includes four calls where MAFEIP has been explicitly mentioned as the preferred assessment methodology

– SC1-DTH-05-2019: Large scale implementation of digital innovation for health and care in an ageing society

– SC1-DTH-10-2019-2020: Digital health and care services

– SC1-HCC-05-2018: Support to a Digital Health and Care Innovation initiative in the context of Digital Single Market strategy

– DT-TDS-01-2019: Smart and healthy living at home

The MAFEIP Webtool Impact

Role play

Please assign yourself to one of three groups:

• „Policy maker“ (who has to allocate scarce public resources)

• „Developer“ (who wants to bring innovations to market)

• „Scientist“ (who aims at unbiased, valid and robust evaluations)

From each perspective:

• What are the main arguments in favour or against the use of economic evaluation to support demographic policy making?

• What are the pros and cons of using modelling for economic evaluation

• What are the advantages / disadvantages of a generic webtool such as MAFEIP

Briefly collect your arguments in each subgroup and then discuss in the whole group

Conclusions

Economic evaluation can be a powerful tool to support demographic policy making. However, major challenges relate to:

• Comparing interventions that yield different / multiple outcomes

• Informing decisions beyond one specific policy area (affecting different budgets)

• Applying methods of trial based evaluation can be difficult, unethical, or even impossible to implement in some situations

• This hinders building an evidence base for demographic policy making

• Model based evaluations may misguide decision makers, in particular in the absence of methodological standards and critical appraisal

Conclusions

Questions and discussion

• BOEHLER C, ABADIE F (2016) Monitoring and Assessment Framework for the European Innovation Partnership on Active and Healthy Ageing (MAFEIP) – Gap Analysis. European Commission, DG Joint Research Centre, Institute for Prospective Technological Studies (EUR 27936); DOI: 10.2791/733459

• BOEHLER C, DE GRAAF G, STEUTEN L, YANG Y, ABADIE F (2015) Development of a web-based tool for the assessment of health and economic outcomes of the European Innovation Partnership on Active and Healthy Ageing (EIP on AHA). BMC Medical Informatics and Decision Making 15(Suppl 3):S4

• BOEHLER C, ABADIE F (2015) Monitoring and Assessment Framework for the European Innovation Partnership on Active and Healthy Ageing (MAFEIP) - Conceptual description of the Monitoring and Assessment Framework for the EIP on AHA. European Commission, DG Joint Research Centre, Institute for Prospective Technological Studies (EUR 27412); DOI: 10.2791/290381

• BOEHLER C, ABADIE F, SABES FIGUERA R (2014) Monitoring and Assessment Framework for the European Innovation Partnership on Active and Healthy Ageing (MAFEIP) -Second report on outcome indicators. European Commission, DG Joint Research Centre, Institute for Prospective Technological Studies (EUR 27034); DOI: 10.2791/171684

• ABADIE F, BOEHLER C, LLUCH M, SABES FIGUERA R (2014) Monitoring and Assessment Framework for the European Innovation Partnership on Active and Healthy Ageing (MAFEIP) - First report on outcome indicators. European Commission, DG Joint Research Centre, Institute for Prospective Technological Studies (EUR 26826); DOI: 10.2791/12311

• ABADIE F, BOEHLER C, LLUCH M, SABES FIGUERA R, ZAMORA TALAYA MB(2014) Monitoring and Assessment Framework for the European Innovation Partnership on Active and Healthy Ageing (MAFEIP). Second update of the process indicators. European Commission, DG Joint Research Centre, Institute for Prospective Technological Studies (EUR 26827); DOI: 10.2791/12501

More information on MAFEIP: http://is.jrc.ec.europa.eu/pages/TFS/MAFEIP.html

MAFEIP tool: http://mafeip.eu/

Further Questions: Boehler@euro.centre.org

Some relevant literatureAll open access