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Trends in Author-Reported Cost-Effectiveness Thresholds in the United States from 1995 to 2018: Implications for Discount Rates

Author

Listed:
  • Ankur Pandya

    (Department of Health Policy and Management, Harvard T.H. Chan School of Public Health, Boston, MA, USA
    Center for Health Decision Science, Harvard T.H. Chan School of Public Health, Boston, MA, USA)

  • Mike Paulden

    (School of Public Health, University of Alberta, Edmonton, Canada)

  • Jinyi Zhu

    (Center for Health Decision Science, Harvard T.H. Chan School of Public Health, Boston, MA, USA)

  • Tara A. Lavelle

    (Center for the Evaluation of Value and Risk in Health, Institute for Clinical Research and Health Policy Studies, Tufts University School of Medicine, Boston, MA, USA)

  • James Hammitt

    (Department of Health Policy and Management, Harvard T.H. Chan School of Public Health, Boston, MA, USA
    Center for Health Decision Science, Harvard T.H. Chan School of Public Health, Boston, MA, USA
    Toulouse School of Economics, University of Toulouse-Capitole, Toulouse, France)

Abstract

Background Decisions based on cost-effectiveness analyses (CEAs) using equal discount rates for health and cost outcomes are consistent with using a constant cost-effectiveness threshold over time. We sought to analyze trends in author-reported cost per quality-adjusted life-year (QALY) thresholds from CEAs published for the US setting over 24 y to retrospectively assess whether the recommended equal discount rates for costs and health were consistent with trends in the CEA literature. Methods We used the Tufts CEA Registry to assess whether author-reported cost-effectiveness thresholds changed in CEAs published for the US setting between 1995 and 2018 and back-calculated the implied discount rate for health based on these trends for inflation-adjusted cost-effectiveness thresholds and an annual discount rate for costs of 3%. Results We found 1995 CEAs published for the US setting and found that average nominal and inflation-adjusted cost-effectiveness thresholds increased over that time period. The discount rate for health would need to equal 2.43% to 2.48% (depending on the subset of CEAs analyzed) to be consistent with the observed trends in inflation-adjusted author-reported cost-effectiveness thresholds. We also found that restricting our analysis to currency years between 1995 and 2014 would result in a back-calculated discount rate for health of 2.99% to 3.28%. Conclusions We found that CEA researchers have implicitly assumed that inflation-adjusted cost-effectiveness thresholds in the United States have been increasing over time (1995–2018), which is inconsistent with the recommended and prevailing choice of equal discount rates for health and cost outcomes. Our results are sensitive to the cutoff year used in the analysis. Highlights We show visually and through equations that the recommended and prevailing practice of using equal discount rates for cost and health outcomes in cost-effectiveness analyses (CEAs) logically implies a constant inflation-adjusted cost-effectiveness threshold over time. Using data from the Tufts CEA Registry, we found that author-reported cost-effectiveness thresholds used in CEAs published for the US setting with currency years between 1995 and 2018 increased over time (both with and without adjustment for inflation). Assuming an annual discount rate for costs equal to 3%, the discount rate for health would need to equal approximately 2.5% to preserve consistency across decisions taken at different dates given the observed trends in inflation-adjusted author-reported cost-effectiveness thresholds. This finding depends on the cutoff year used in the analysis (data from currency years 1995–2014 would support use of equal discount rates, whereas data after 2014 would suggest a sharper trend toward increasing cost-effectiveness thresholds).

Suggested Citation

  • Ankur Pandya & Mike Paulden & Jinyi Zhu & Tara A. Lavelle & James Hammitt, 2022. "Trends in Author-Reported Cost-Effectiveness Thresholds in the United States from 1995 to 2018: Implications for Discount Rates," Medical Decision Making, , vol. 42(7), pages 885-892, October.
    • Handle: RePEc:sae:medema:v:42:y:2022:i:7:p:885-892
    DOI: 10.1177/0272989X221097106
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    References listed on IDEAS

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