Cost-Effectiveness Thresholds: the Past, the Present and the Future

Abstract

Cost-effectiveness (CE) thresholds are being discussed more frequently and there have been many new developments in this area; however, there is a lack of understanding about what thresholds mean and their implications. This paper provides an overview of the CE threshold literature. First, the meaning of a CE threshold and the key assumptions involved (perfect divisibility, marginal increments in budget, etc.) are highlighted using a hypothetical example, and the use of historic/heuristic estimates of the threshold is noted along with their limitations. Recent endeavours to estimate the empirical value of the thresholds, both from the supply side and the demand side, are then presented. The impact on CE thresholds of future directions for the field, such as thresholds across sectors and the incorporation of multiple criteria beyond quality-adjusted life-years as a measure of 'value', are highlighted. Finally, a number of common issues and misconceptions associated with CE thresholds are addressed.

The marginal benefits of healthcare spending in the Netherlands: Estimating cost‐effectiveness thresholds using a translog production function

“…Several studies have estimated thresholds for high-income countries, ranging from €18,000 to €200,000 per QALY (Claxton et al, 2015b;Thokala et al, 2018;Vallejo-Torres et al, 2016;Vallejo-Torres et al, 2017). Literature suggests that willingness-to-pay estimates tend to be higher than supply-side estimates (Vallejo-Torres et al, 2016).…”

“…The Netherlands currently uses a range of reference values for new drugs of between €20,000 and €80,000 (Reckers-Droog, van Exel, & Brouwer, 2018). However, these thresholds have no empirical base and thus may not truly reflect the opportunity costs, risking inefficient reimbursement decisions (Thokala, Ochalek, Leech, & Tong, 2018). In general, a distinction is made between demand-side and supply-side thresholds, with demand-side thresholds reflecting willingness-to-pay and supply-side thresholds reflecting opportunity costs of spending decisions (Himani Pandey, Paulden, & McCabe, 2018).…”

Application of Constrained Optimization Methods in Health Services Research: Report 2 of the ISPOR Optimization Methods Emerging Good Practices Task Force

“…Finally, constrained optimization methods have also been applied to disease diagnosis [21,22], the development of optimal treatment algorithms [23,24], and the optimal design of clinical trials [25]. Health technology assessment using tools from constrained optimization methods is also gaining popularity [26]. We also encourage the readers to refer to the initial ISPOR Optimization Emerging Good Practices Task Force Report, which presented a more comprehensive overview of the different applications for which optimization techniques can be used [1].…”

Reflecting the Health Opportunity Costs of Funding Decisions Within Value Frameworks: Initial Estimates and the Need for Further Research

“…6e8 Instead, researchers have sought to empirically estimate the health effects of increasing/ decreasing expenditure to determine the marginal cost per QALY or DALY. 9 To date, empirical estimates of health opportunity costs of government expenditure based on within-country data are available for only a few countries, including the United Kingdom, Spain, the Netherlands, and Australia. 10e14 Placeholder estimates of health opportunity costs of government expenditure for a wider range of countries are available based on either extrapolating existing estimates or using published elasticities of the effect of expenditure on health.…”