IDEAS home Printed from https://ideas.repec.org/a/wly/hlthec/v28y2019i1p87-100.html
   My bibliography  Save this article

A cost‐effectiveness threshold based on the marginal returns of cardiovascular hospital spending

Author

Listed:
  • Pieter van Baal
  • Meg Perry‐Duxbury
  • Pieter Bakx
  • Matthijs Versteegh
  • Eddy van Doorslaer
  • Werner Brouwer

Abstract

Traditionally, threshold levels of cost‐effectiveness have been derived from willingness‐to‐pay studies, indicating the consumption value of health (v‐thresholds). However, it has been argued that v‐thresholds need to be supplemented by so‐called k‐thresholds, which are based on the marginal returns to health care. The objective of this research is to estimate a k‐threshold based on the marginal returns to cardiovascular disease (CVD) hospital care in the Netherlands. To estimate a k‐threshold for hospital care on CVD, we proceed in two steps: First, we estimate the impact of hospital spending on mortality using a Bayesian regression modelling framework, using data on CVD mortality and CVD hospital spending by age and gender for the period 1994–2010. Second, we use life tables in combination with quality of life data to convert these estimates into a k‐threshold expressed in euros per quality‐adjusted life year gained. Our base case estimate resulted in an estimate of 41,000 per quality‐adjusted life year gained. In our sensitivity analyses, we illustrated how the incorporation of prior evidence into the estimation pushes estimates downwards. We conclude that our base case estimate of the k‐threshold may serve as a benchmark value for decision making in the Netherlands as well as for future research regarding k‐thresholds.

Suggested Citation

  • Pieter van Baal & Meg Perry‐Duxbury & Pieter Bakx & Matthijs Versteegh & Eddy van Doorslaer & Werner Brouwer, 2019. "A cost‐effectiveness threshold based on the marginal returns of cardiovascular hospital spending," Health Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 87-100, January.
  • Handle: RePEc:wly:hlthec:v:28:y:2019:i:1:p:87-100
    DOI: 10.1002/hec.3831
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/hec.3831
    Download Restriction: no

    File URL: https://libkey.io/10.1002/hec.3831?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Parida Wubulihasimu & Werner Brouwer & Pieter van Baal, 2016. "The Impact of Hospital Payment Schemes on Healthcare and Mortality: Evidence from Hospital Payment Reforms in OECD Countries," Health Economics, John Wiley & Sons, Ltd., vol. 25(8), pages 1005-1019, August.
    2. Cutler, David M., 2007. "The lifetime costs and benefits of medical technology," Journal of Health Economics, Elsevier, vol. 26(6), pages 1081-1100, December.
    3. Albert Wong & Pieter H. M. van Baal & Hendriek C. Boshuizen & Johan J. Polder, 2011. "Exploring the influence of proximity to death on disease‐specific hospital expenditures: a carpaccio of red herrings," Health Economics, John Wiley & Sons, Ltd., vol. 20(4), pages 379-400, April.
    4. Karl Claxton & Mark Sculpher & Stephen Palmer & Anthony J Culyer, 2015. "Causes For Concern: Is Nice Failing To Uphold Its Responsibilities To All Nhs Patients?," Health Economics, John Wiley & Sons, Ltd., vol. 24(1), pages 1-7, January.
    5. van Baal, Pieter H. & Wong, Albert, 2012. "Time to death and the forecasting of macro-level health care expenditures: Some further considerations," Journal of Health Economics, Elsevier, vol. 31(6), pages 876-887.
    6. Cutler, David, 2007. "The Lifetime Costs and Benefits of Medical Technology," Scholarly Articles 2643640, Harvard University Department of Economics.
    7. Gallet, Craig A. & Doucouliagos, Hristos, 2017. "The impact of healthcare spending on health outcomes: A meta-regression analysis," Social Science & Medicine, Elsevier, vol. 179(C), pages 9-17.
    8. Karl Claxton & Simon Walker & Steven Palmer & Mark Sculpher, 2010. "Appropriate Perspectives for Health Care Decisions," Working Papers 054cherp, Centre for Health Economics, University of York.
    9. Pieter van Baal & David Meltzer & Werner Brouwer, 2016. "Future Costs, Fixed Healthcare Budgets, and the Decision Rules of Cost‐Effectiveness Analysis," Health Economics, John Wiley & Sons, Ltd., vol. 25(2), pages 237-248, February.
    10. Karl Claxton & Mike Paulden & Hugh Gravelle & Werner Brouwer & Anthony J. Culyer, 2011. "Discounting and decision making in the economic evaluation of health‐care technologies," Health Economics, John Wiley & Sons, Ltd., vol. 20(1), pages 2-15, January.
    11. Linda Ryen & Mikael Svensson, 2015. "The Willingness to Pay for a Quality Adjusted Life Year: A Review of the Empirical Literature," Health Economics, John Wiley & Sons, Ltd., vol. 24(10), pages 1289-1301, October.
    12. Matthijs Versteegh & Saskia Knies & Werner Brouwer, 2016. "From Good to Better: New Dutch Guidelines for Economic Evaluations in Healthcare," PharmacoEconomics, Springer, vol. 34(11), pages 1071-1074, November.
    13. Karl Claxton & Steve Martin & Marta Soares & Nigel Rice & Eldon Spackman & Sebastian Hinde & Nancy Devlin & Peter C Smith & Mark Sculpher, 2013. "Methods for the estimation of the NICE cost effectiveness threshold," Working Papers 081cherp, Centre for Health Economics, University of York.
    14. Beth Woods & Paul Revill & Mark Sculpher & Karl Claxton, 2015. "Country-level cost-effectiveness thresholds: initial estimates and the need for further research," Working Papers 109cherp, Centre for Health Economics, University of York.
    15. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
    16. Heijink, Richard & Noethen, Manuela & Renaud, Thomas & Koopmanschap, Marc & Polder, Johan, 2008. "Cost of illness: An international comparison: Australia, Canada, France, Germany and The Netherlands," Health Policy, Elsevier, vol. 88(1), pages 49-61, October.
    17. Wubulihasimu, Parida & Gheorghe, Maria & Slobbe, Lany & Polder, Johan & van Baal, Pieter, 2015. "Trends in Dutch hospital spending by age and disease 1994–2010," Health Policy, Elsevier, vol. 119(3), pages 316-323.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Opportunity costs, marginal productivity, and cost-effectiveness thresholds: what are they and how are they related?
      by Rita Faria, Jessica Ochalek, jameslomas88 in The Academic Health Economists' Blog on 2020-09-23 06:00:00

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Claxton, Karl & Asaria, Miqdad & Chansa, Collins & Jamison, Julian & Lomas, James & Ochalek, Jessica & Paulden, Mike, 2019. "Accounting for timing when assessing health-related policies," LSE Research Online Documents on Economics 100038, London School of Economics and Political Science, LSE Library.
    2. Claxton, Karl & Asaria, Miqdad & Chansa, Collins & Jamison, Julian & Lomas, James & Ochalek, Jessica & Paulden, Mike, 2019. "Accounting for Timing when Assessing Health-Related Policies," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 10(S1), pages 73-105, April.
    3. Hareth Al-Janabi & Job van Exel & Werner Brouwer & Joanna Coast, 2016. "A Framework for Including Family Health Spillovers in Economic Evaluation," Medical Decision Making, , vol. 36(2), pages 176-186, February.
    4. Jessica Ochalek & Karl Claxton & Paul Revill & Mark Sculpher & Alexandra Rollinger, 2016. "Supporting the development of an essential health package: principles and initial assessment for Malawi," Working Papers 136cherp, Centre for Health Economics, University of York.
    5. Friedrich Breyer & Normann Lorenz, 2021. "The “red herring” after 20 years: ageing and health care expenditures," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(5), pages 661-667, July.
    6. Beth Woods & Paul Revill & Mark Sculpher & Karl Claxton, 2015. "Country-level cost-effectiveness thresholds: initial estimates and the need for further research," Working Papers 109cherp, Centre for Health Economics, University of York.
    7. Peter J. Neumann & David D. Kim & Thomas A. Trikalinos & Mark J. Sculpher & Joshua A. Salomon & Lisa A. Prosser & Douglas K. Owens & David O. Meltzer & Karen M. Kuntz & Murray Krahn & David Feeny & An, 2018. "Future Directions for Cost-effectiveness Analyses in Health and Medicine," Medical Decision Making, , vol. 38(7), pages 767-777, October.
    8. Hentschker, Corinna & Wübker, Ansgar, 2020. "Quasi-experimental evidence on the effectiveness of heart attack treatment in Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 1-15.
    9. Niek Stadhouders & Xander Koolman & Christel van Dijk & Patrick Jeurissen & Eddy Adang, 2019. "The marginal benefits of healthcare spending in the Netherlands: Estimating cost‐effectiveness thresholds using a translog production function," Health Economics, John Wiley & Sons, Ltd., vol. 28(11), pages 1331-1344, November.
    10. Pieter van Baal & David Meltzer & Werner Brouwer, 2016. "Future Costs, Fixed Healthcare Budgets, and the Decision Rules of Cost‐Effectiveness Analysis," Health Economics, John Wiley & Sons, Ltd., vol. 25(2), pages 237-248, February.
    11. Wubulihasimu, Parida & Gheorghe, Maria & Slobbe, Lany & Polder, Johan & van Baal, Pieter, 2015. "Trends in Dutch hospital spending by age and disease 1994–2010," Health Policy, Elsevier, vol. 119(3), pages 316-323.
    12. van Baal, Pieter & Morton, Alec & Severens, Johan L., 2018. "Health care input constraints and cost effectiveness analysis decision rules," Social Science & Medicine, Elsevier, vol. 200(C), pages 59-64.
    13. Helen Weatherly & Rita Faria & Bernard Van den Berg & Mark Sculpher & Peter O’Neill & Kay Nolan & Julie Glanville & Jaana Isojarvi & Erin Baragula & Mary Edwards, 2017. "Scoping review on social care economic evaluation methods," Working Papers 150cherp, Centre for Health Economics, University of York.
    14. Margaret Oppenheimer & Helen LaVan & William Martin, 2015. "A Framework for Understanding Ethical and Efficiency Issues in Pharmaceutical Intellectual Property Litigation," Journal of Business Ethics, Springer, vol. 132(3), pages 505-524, December.
    15. Moreno Gigi & van Eijndhoven Emma & Benner Jennifer & Sullivan Jeffrey, 2017. "The Long-Term Impact of Price Controls in Medicare Part D," Forum for Health Economics & Policy, De Gruyter, vol. 20(2), pages 1-56, December.
    16. Kuhn, Michael & Frankovic, Ivan & Wrzaczek, Stefan, 2017. "Medical Progress, Demand for Health Care, and Economic Performance," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168249, Verein für Socialpolitik / German Economic Association.
    17. Li, Jing, 2014. "The influence of state policy and proximity to medical services on health outcomes," Journal of Urban Economics, Elsevier, vol. 80(C), pages 97-109.
    18. Paul Revill & Simon Walker & Valentina Cambiano & Andrew Phillips & Mark J Sculpher, 2018. "Reflecting the real value of health care resources in modelling and cost-effectiveness studies—The example of viral load informed differentiated care," PLOS ONE, Public Library of Science, vol. 13(1), pages 1-13, January.
    19. Dokow, Elad & Luque, Jaime, 2019. "Provision of local public goods in mixed income communities," Journal of Housing Economics, Elsevier, vol. 45(C), pages 1-1.
    20. Friedrich Breyer & Normann Lorenz & Thomas Niebel, 2015. "Health care expenditures and longevity: is there a Eubie Blake effect?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(1), pages 95-112, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:28:y:2019:i:1:p:87-100. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/5749 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/5749 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.