Developing Cost-Effectiveness Thresholds to support Universal Health Coverage

By Y-Ling Chi Jan. 23, 2019

“Can we afford Universal Health Coverage (UHC)? Yes, as long as we get our economics right!” was the take home message from a workshop co-hosted by iDSI last month, which set out to deliberate the use of cost-effectiveness thresholds in low and middle-income countries as they progress towards UHC.

The workshop saw participants discuss current gaps surrounding the research and policy applications of cost-effectiveness thresholds (CET) to support UHC; bringing together experts and technical staff from Ministries of Health, treasury and academia working on thresholds and priority-setting from institutions across the world, including iDSI, CGD, University of York, University of Bergen and the Health Intervention and Technology Assessment Program.

iDSI Board Chair Professor Tony Culyer chaired the event, held at the Rockefeller Foundation Bellagio Center, reminding participants that “spending resources efficiently and ensuring that maximum health is produced with scarce resources is a moral imperative.”

CETs are used to inform the decision to introduce or exclude a drug, intervention or medical technology from public coverage. In other words, CETs can be used to identify interventions that are good ‘value for money’ for a country. Without an appropriately set threshold, arbitrary adoption decisions may fail to consider opportunity costs of choosing one intervention over another, resulting in the loss of health and lives, and jeopardizing the sustainability of UHC. A threshold set at 1-3 times GDP per capita was previously used as a benchmark, however, several experts are now discouraging from this practice, including experts at the World Health Organization, where the rule originated. This has created a vacuum that may prove dangerous, especially as countries move toward UHC and are now making decisions that will set the path for investments in the coming decades. Against this backdrop, the workshop participants congregated to discuss ‘what next?’ after GDP-based thresholds via presentations, group work and open discussion sessions.

On the first day participants discussed definitions of CETs, the pitfalls associated with the lack of CETs and what happens when CETs are not chosen well. Professor Karl Claxton presented the Cancer Drug Fund (CDF) in the United Kingdom, through which £851 million was spent between 2013 and 2016. Subsequent reviews found that the CDF produced very little gains to patients. Professor Claxton’s team also estimated that the CDF even resulted in large losses in health within the NHS more broadly, due to health displacement.

Representatives from China, India, Indonesia and Zambia were invited to contribute their perspectives and in-country experiences of CET. Dr Zhao presented innovative work on the use of league tables and CETs in the definition of the National Essential Medicines List in China. Dr Kaluba from Zambia, a country at the beginning of its journey towards UHC, was interested in the use of a CET to support the definition of country’s health benefits package. At the end of day one, the discussion was extended to bilateral and multilateral partners. A representative from The Bill & Melinda Gates Foundation presented their approach to resource allocation decisions in the health sector.

Professor Alec Morton opened day two with a presentation of the different concepts and methods for setting CETs, including the willingness to pay method; the precedent method; and the opportunity cost method. Waranya Rattanavipapong showcased Thailand’s journey in developing and using a CET, being one of the only countries in the world using an explicit CET. Thailand’s experience showed that beyond methods for setting CETs, there is a need to strengthen the decision-making process around coverage decisions; and to build a deliberative and consultative system to ensure that CETs are best used. Thailand’s system also considers budget impact, alongside CETs. The consultations about Imiglucerase for treatment of Gaucher disease type 1 best illustrates how these two pieces of information are brought together: the drug was not considered cost-effective, but the decision to cover it was taken because of the severity of the disease and the low number of patients in need of the drug in a given year (and as a result, the low budget impact). Dr Ijeoma Edoka, followed by Dr Mardiati Nadjib and Dr Noemi Kreif, also presented their work on estimating a CET in South Africa and Indonesia using an opportunity cost approach. Both groups shared their experience and discussed challenges relating to data availability, empirical approach to health spending elasticity estimation and causality. In the afternoon, the participants were split into four different groups for group work around the following topics: problem statement, use of CETs at the country level, guidelines for researchers/academics working on CET research or more broadly cost-effectiveness analyses and use of CETs by global donors.

The final day started with presentations from Dr Yot Teerawattananon and Dr Mark Blecher on the use of CETs to strengthen the case for UHC and a treasury perspective. Dr Blecher emphasised that treasuries have to grapple with the use of scarce resources. As a result, value-for-money is a key concept to their work and they might be supportive of the CET. The workshop concluded with open discussions about the group work, as well as the definition of next steps. Participants expressed interest in the Center for Health Economics’ approach to estimating opportunity costs as a basis for the threshold. It was suggested that opportunity costs be reported in economic evaluations; and that iDSI could consider an extension of its existing Reference Case to include a section on opportunity costs. Moreover, discussions about the use of CETs by global development partners sparked interest in present participants. All participants agreed a position paper about the use of CETs, as well as the commissioning of more specific technical outputs (e.g. on global partners) would be progressive steps forward to illustrate the impact of the workshop.

All materials from the event, including proposal, agenda, presentations and participant biographies are available for download.