Taking account of future technology in cost effectiveness analysis

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Abstract
Introduction Cost effectiveness analysis provides a tool for evaluating allocation of resources by characterising different healthcare interventions in terms of the extra cost per added unit of health benefit (box 1).1 Such analyses are being used increasingly to set national and international health priorities. The UK's National Institute for Clinical Excellence, for example, is charged with guiding decisions on use of new and existing technologies in the NHS, based in part on cost effectiveness considerations.2 3 In recent years innovation in healthcare technology has occurred at an unprecedented pace for some problems, with new options rapidly supplanting existing interventions.4 We explore how cost effectiveness analysis could be extended to reflect evolving technologies, and how accounting explicitly for future treatment prospects might affect a typical analysis, using treatment for hepatitis C virus (HCV) infection as an example. Box 1: Cost effectiveness analysis The basic principle of a cost effectiveness analysis is that all consequences of decisions should be identified, measured, and valued. Cost effectiveness analysis provides a formal framework for comparing the relation between the health and economic consequences of different healthcare interventions. The results are summarised as an incremental cost effectiveness ratio. In this ratio, the net change in health outcomes associated with a particular strategy (compared with an alternative) is included in the denominator, typically expressed as quality adjusted life years (QALYs), and the net change in costs or resource use with a particular strategy (compared with an alternative) is included in the numerator. The incremental cost effectiveness ratio for a strategy is calculated in reference to the next most effective option, excluding strategies that are dominated (those with higher costs and lower benefits than other options) or weakly dominated (those with higher incremental cost-effectiveness ratios than more effective options).5 Interventions having incremental ratios of $50 000 (£27 500, €40 000) or $100 000 per QALY in the United States, or £30 000 (€44 000, $55 000) per QALY in the United Kingdom, are usually regarded as cost effective.6 Footnotes Technical details of the model and references w1-12 are on bmj.com Contributors and sources JAS has worked extensively in the areas of priority setting, disease modelling, and health outcomes measurement, with a particular focus on global health. MCW is an expert on methods for cost-effectiveness analysis in health care and was co-chair of the US Panel on Cost-Effectiveness in Health and Medicine. SJG is an expert in disease modelling, cost effectiveness analysis, and technology evaluation, with an emphasis on viral infections and women's health. This article was motivated by the authors' previous work on evaluating the cost effectiveness of HCV treatment options. JAS conceived the study and is guarantor. JAS, MCW and SJG contributed to the analysis and writing. All authors approved the final version. Competing interests None declared.