Complementary analyses in economic evaluation of health care Colophon Complementary analyses in economic evaluation of health care Marc Koopmanschap Key words: economic evaluation, cost of illness, indirect costs Photography: V. NykJ, AVC, Erasmus University Rotterdam Printer: Pasmans offsetdrukkerij B.V., Den Haag Layout: Angelique Visser Complementary analyses in economic evaluation of health care Complementaire analyses in economische evaluatie van de gezondheidszorg Proefschrift ter verkrijging van de graad van doctor aan de Erasmus Universiteit Rotterdam op gezag van de rector magnificus Prof. dr. P.W.C. Akkermans M. Lit. en volgens besluit van het College van Dekanen. De openbare verdediging zal plaatsvinden op woensdag 15 juni 1994 om 13.45 uur door Marcus Anthonius Koopmanschap geboren te Amsterdam Promotiecommissie Promotores Prof. dr. F.F.H. Rutten Prof. dr. P.J. van der Maas Overige leden Prof. dr. L.J. Gunning-Schepers Prof.dr. R. Leidl 'Doubt is the beginning of wisdom, and complacency the major obstacle to change, so it is essential to keep exposing the inadequacies of the present situation' (Alan Williams. Priorities and research strategy in health economics for the 1990s. Health Economics 1993;2:295-302.) Complementary analyses in economic evaluation of health care Contents 1 Introduction 1 Economic evaluation 1 Level of aggregation 1 Costs to be included 4 Key questions 5 Reading guidance 7 Part I Detailed analysis 2 Economic aspects of cervical cancer screening 11 Summary 11 Introduction 11 Material and methods 12 Results 17 Sensitivity analysis 22 Discussion 23 Conclusions 24 3 Cervical cancer screening: attendance and cost-effectiveness 27 Summary 27 Introduction 27 Methods 28 Results 29 Discussion 40 Conclusions 42 Supplementary co=ent 44 Part II Aggregate analysis 4 Cost of disease in international perspective 47 Su=ary 47 Introduction 47 Methods 48 Results 53 Discussion 62 Complementary analyses in economic evaluation of health care 5 Current and future costs of cancer 65 Sununary 65 Introduction 65 Material and methods 66 Results 70 Discussion 77 Pan III Indirect costs of disease 6 Indirect costs in economic studies: confronting the confusion 81 Sununary 81 Introduction 81 A literature review 83 Some controversies 84 Why and how to include indirect costs 85 Indirect costs and health policy 90 The agenda for futnre research 90 7 Towards a new approach for estimating indirect costs of disease 93 Sununary 93 Introduction 94 The concept of indirect costs 94 Operationalisation 97 Results 101 Discussion 102 Conclusion 103 8 The friction cost method for measuring indirect costs of disease 105 Sununary 105 Introduction 105 The friction cost method 106 Operationalisation of concepts 110 Data and methods for the Netherlands 113 Results 116 Discussion 121 Complementary analyses in economic evaluation oj health care 9 The impact of indirect costs on outcomes of health care programs 125 Summary 125 Introduction 125 Methods 126 Health care programs 128 Results 131 Analysis of impact of indirect costs 134 Discussion 136 10 Conclusions 139 Detailed analysis 139 Aggregate analysis 140 Iodirect costs 141 Literature 145 Summary 157 Samenvatting 161 Appendices 165 Acknowledgements Curriculum vitae Complementary analyses in economic evaluation oj health care Publications Chapters 2-9 are based on the following articles: Ch. 2 Economic aspects of cervical cancer screening. Koopmanschap MA, Lubbe, JThN, Oortmarssen van GJ, Agt van HME, BaUegooijen van M, Habbema IDF. Soc Sci Med 1990; 30: 1081-10871 Ch. 3 Cervical cancer screening: attendance and cost-effectiveness. Koop­ manschap MA, Oortmarssen van GJ, Agt van HME, BaUegooijen van M, Habbema IDF, Lubbe JThN. Int J Cancer 1990; 45: 410-415. 2 Ch. 4 Cost of diseases in international perspective. Koopmanschap MA, Roijen L van, Bonneux L, Bonsel GJ, Rutten FFH, Maas PJ van der. EJPH (in press).' Ch. 5 Current and future costs of cancer. Koopmanschap MA, Roijen L van, Bonneux L, Barendregt JJ. Eur J Cancer 1994; 30A(1): 60-65.' Ch. 6 Indirect costs in economic studies: Confronting the confusion. Koop­ manschap MA and Rutten FFH. PharmacoEcon 1993; 4(6): 446-454." Ch. 7 Towards a new approach for estimating indirect costs of disease. Koopmanschap MA and van Ineveld BM. Soc Sci Med 1992; 34: 1005-1010.' Ch. 8 The friction cost method for measuring indirect costs of disease. Koopmanschap MA, Rutten FFH, Ineveld BM van and Roijen L van. J Health Economics (in press).' Ch. 9 The impact of indirect costs on outcomes of health care programs. Koopmanschap MA and Rutten FFH (submitted). Reproduced with permission of ' Pergamon Press Ltd, 2 Wiley-Liss Division, 3 Oxford University Press, 4 Adis International and 5 Else­ vier Science Publishers. 1 Introduction Econonllcevruuation The steady increase in health care costs and the continuous emergence of new medical technologies have forced policy makers in health care to reconsider the current resource allocation and to become more selective with investing in new health care programs. Economic evaluations can support the decision making process, by providing systematic information on the costs and the consequences for health of investing in alternative health care programs. Needless to say, economic evaluations of health care should be method­ ologically sound, the outcomes should be relevant for health policy and comparable to results of studies concerning other health care programs. With respect to the policy relevance it is important that the aggregation level of the analysis matches the specificity of the policy question: a study of costs and health effects of for example air pollution control will not need to be as detailed as an analysis of the cost-effectiveness of cimetidine versus surgery in peptic ulcer. Economic evaluations may never become entirely comparable, but incomparabilities due to different methodologies can be reduced considerably. This raises two questions: - what is the appropriate level of aggregation in the economic evaluation of health care? - which cost items are to be included in economic evaluations and how should these be measured and valued, in particular the indirect costs of disease? Level of aggregation In economic evaluation, health care is usually analyzed on one of the fOllow­ ing levels of aggregation: - a specific health care intervention or program: 'the detailed level'; - total health care, a specific sector of health care or a disease category: 'the 2 Chapter 1 aggregate level'. Either level of analysis has advantages and limitations. The detailed analysis can provide a thorough and complete overview of the relevant aspects of a specific program. It is the appropriate level of analysis, if the policy decision is to choose among specific programs for a specific patient group. However, focusing on cost-effectiveness of individual programs bears the risk of overlooking interactions with other health care programs (Birch and Gafni, 1992; Drummond et aI., 1993). A specific program may have a favourable balance of costs and health effects, if added to an already existing program which itself is not cost-effective. In case of end stage renal disease, the introduction of kidney transplantation involves cost savings as well as gains in length and quality of life. Candidates for kidney transplantation can only stay alive due to expensive facilities for haemodialysis (Rutten and van Hout, 1991). The decision to adopt the transplantation program should be based on an economic appraisal of the combination of the two medical technologies as compared to the situation without both technologies. A second type of interaction is caused by common risk factors for different diseases. If the treatment of lung cancer would improve, thereby reducing lung cancer mortality, more smokers would stay alive, causing a more than proportional increase in prevalence and costs of cardiovascular disease and chronic lung disease. Another example of interaction is hormone suppletion for perimenopausal women in order to prevent osteoporosis, which may increase the prevalence of breast cancer, which in turn may improve the cost-effectiveness of breast cancer screening (Tosteson et aI., 1990). Hence, the neglect of possible interactions between health care programs may invoke non-optimal resource allocation. Furthermore, health care programs may influence the distribution of health (care). These equity consequences should preferably be considered in the context of all interventions for a specific disease or patient group, instead of being analyzed separately. The detailed type of analysis has a second, more practical limitation. It is simply not feasible to conduct economic evaluations of all existing and new health care programs within a reasonable time-span and research budget. As a consequence, existing health care programs are seldomly analyzed, so we lack information on costs and health effects of a substantial part of health care. It follows that somehow economic evaluation on a more aggregate level is needed to provide a consistent and complete overview of costs and health effects in health care. Such overview could serve as a starting point for more Irrtroduction 3 detailed analysis in specific parts of health care that need closer investigation of costs and health effects. This aggregate approach also has some drawbacks. An estimate of costs and health effects of all interventions related to a certain disease always represents the combination of cost-effective and cost-ineffective programs. Withdrawing resources from specific