Fact Sheet
The Agency for Healthcare Research and Quality has been a leader in advancing the use and science of cost-effectiveness analysis in health care. Almost 10 percent of AHRQ's extramural research grants have included a clinical economic component.
Select for print version (PDF File, 54 KB). PDF Help.
Background / AHRQ's Research Pipeline /
References
Background
Ongoing pressures to control health
care spending have created a surge of
interest in "cost-effective" health care.
The relationship between the cost of
health care and benefits to the public
has come under scrutiny from the
press.
For example, in the July 29,
2001 New York Times, Michael
Weinstein makes the case that use of
some expensive new technologies may
contribute to a rapid increase in health
insurance premiums while providing
little or no benefit to the patient.
The
central purpose of cost-effectiveness
analysis (CEA) is to compare the costs
and the values of different health care
interventions in creating better health
and longer life. Many new medical
devices, procedures, diagnostic tests,
and prescription drugs are expensive;
cost-effectiveness analysis can help to
evaluate whether the improvement in
health care outcomes justifies the expenditures relative to other choices.
This
understanding of the costs and
outcomes of comparative interventions
is essential for public- and private-sector
decisionmakers to make
informed decisions about using health
care resources efficiently.
The Agency for Healthcare Research
and Quality (AHRQ) has been a leader
in advancing the use and the science of
cost-effectiveness analysis in health care.
AHRQ has long supported extramural
research that uses CEAs and advances
the science of clinical economic
evaluation.
Clinical economics is the
application of economics research
methods to decisionmaking about
clinical interventions, such as diagnostic
tests or treatments.
Since the
classic book Cost-Effectiveness
in Health and Medicine (Gold et al., 1996) laid out recommendations for
performing CEAs, AHRQ has acted as
a facilitator for other agencies in
the Federal Government to develop and
use CEAs to advance their own goals. For example, AHRQ has assisted the Food and Drug Administration staff in reviewing and evaluating the state of the science of cost-effectiveness analysis and patient-reported outcomes, methods of interest in evaluating new drugs and devices (FDA, 1997; 1999).
The following summarizes and provides
pipeline for cost-effectiveness in health
care (AHCPR, 1999).
Return to Contents
AHRQ's Research Pipeline
New Knowledge on the Use and
Science of Cost-effectiveness Analysis
One of AHRQ's strategic goals involves special emphasis on clinical
economics, including the conduct and
support of research that promotes the
use of CEA as a framework for
decisionmaking. Since 1985, almost 10
percent of extramural research grants
have included a clinical economic
component, including 74 projects that
contain an explicit cost-effectiveness
analysis.
Examples of CEA research
that AHRQ has funded include:
- A cost-effectiveness analysis of lung
volume reduction surgery in
addition to medical management for
treatment of patients with severe
emphysema.
Principal Investigator: S. Ramsey,
University of Washington. Severe
emphysema is a life-threatening
condition, which severely affects the
patient's physical function and
quality of life. The Centers for
Medicare and Medicaid Services
(CMS) and National Heart, Lung,
and Blood Institute (NHLBI) are
cosponsoring a trial to determine if
lung volume reduction surgery is an
effective therapy for improving
survival and physical function.
AHRQ is funding a parallel study to
determine the cost-effectiveness of
providing this surgery to those with
severe emphysema.
- A cost-effectiveness analysis of
different timing strategies for liver
transplantation for end-stage liver
disease.
Principal Investigator: M. Roberts, University
of Pittsburgh. End-stage liver
disease is a problem of major
proportion in the United States, and
liver transplantation is an effective
but expensive therapy for this
condition. The aim of this proposal
is to use CEA to better understand
the costs, survival, and quality of life
associated with strategies for liver
transplantation at different times in
the course of the disease. Using this
methodology, the researchers will
provide a better understanding of
when to transplant to maximize
health outcomes at reasonable cost
to the health care system.
- Development of a simulation model
of coronary heart disease for use in
health policy.
Principal Investigator: M. Weinstein,
Harvard University. Cardiovascular
disease is the Nation's leading cause
of death. In this study, the
investigators created a
comprehensive model of the
development of and death from
coronary heart disease in the United
States. The investigators projected
costs and health outcomes for
prevention and treatment strategies
for heart disease. Findings from this
research project have resulted in
prominent publications on the cost-effectiveness
of therapies for
treatment of high blood pressure,
high cholesterol, and heart attacks.
Tools and Talent to Advance the Use of
Cost-effectiveness Analysis
AHRQ has
supported the development of
professional expertise and the
methodologic tools necessary to
facilitate the conduct and comparability
of CEAs. Examples of AHRQ's work
in this area include:
- Establishing the Research Initiative
in Clinical Economics (RICE) at
AHRQ.
The RICE, directed by
Joanna Siegel, Sc.D., is tasked with
conducting, supporting, and
facilitating the production of
knowledge that informs the efficient
allocation of health care resources.
Priorities for this initiative include
developing tools to facilitate the
conduct and comparability of
CEAs, supporting research that
promotes CEA use as a framework
for decisionmaking, promoting the
quality and credibility of CEA
research, and advancing the science
of CEA methods.
- Conducting the Medical
Expenditure Panel Survey (MEPS)
Quality of Life Survey.
Health care
interventions not only have impact
on survival, but also on health-related
quality of life; CEAs, therefore, must
be able to account for quality of life
in analyses of health care
interventions, in addition to
accounting for mortality and cost.
The AHRQ-conducted MEPS
Quality of Life Survey asks a
nationally representative sample of
the U.S. population about their
health and how their health impacts
their quality of life.
Results from
this survey will be used to enhance
the methods of accounting for
quality of life in CEAs by providing
a consistently measured set of
quality of life adjustment factors,
which will improve the
comparability of CEAs using these
measures.
- Understanding the cost-effectiveness
of prevention.
Disease prevention
represents an area in which the
impact of costs and health outcomes
is especially important. AHRQ has
participated in a recent project in
collaboration with the Centers for
Disease Control and Prevention
(CDC) that summarized the cost-effectiveness
and overall impact of
over 30 preventive services (Coffield
et al., 2001) recommended by the
AHRQ-supported U.S. Preventive
Services Task Force (USPSTF). In
addition, AHRQ has provided
support to the USPSTF to develop
an approach to reviewing CEAs of
preventive interventions and
incorporating the findings into
preventive care decisionmaking
(Saha et al., 2001).
Translation of CEA Research into
Practice
A priority for AHRQ is
to facilitate the translation of research
findings into practice. The Agency has
an active interest in the use of cost-effectiveness
analyses in decisionmaking
at all levels of the health care system
and how such analyses can be applied
to reducing the gap between what is
known and what is done. Recently
released Program Announcements (PAs)
to elicit new research include:
- Impact of Payment and Organization
on Cost, Quality, and Equity.
Research performed under this PA
will provide a rigorous evidence base
for policymakers and health systems
managers who need to improve
health care delivery through
understanding the impact of
methods of health care organization
and financing systems on costs of
care, quality of care, and patient
outcomes.
- Patient-Centered Care: Customizing
Care To Meet Patients' Needs.
Research performed under this PA is
intended to support the redesign
and evaluation of new care processes
that lead to greater patient
empowerment, improved patient-provider interaction, easier
navigation through health care
systems, and improved access,
quality, and outcomes. This PA
encourages researchers to examine
how innovative approaches to care,
chronic illness management, shared
clinician-patient decisionmaking,
and patient-clinician
communication can improve patient
outcomes at reasonable costs.
Return to Contents
References
Agency for Health Care Policy and
Research. AHCPR Strategic Plan.
December 15, 1998. AHCPR Publication No.
99-R045, 1999.
Coffield AB, Maciosek MV, McGinnis
MM. Priorities among recommended
clinical preventive services. Am J
Preventive Med 2001;21:1-10.
Food and Drug Administration.
Guidance for industry: Providing
clinical evidence of effectiveness for
human drug and biologic products.
Draft, March 13, 1997.
Food and Drug Administration.
Guidance for the use of HRQL to
support medical product claims in
labeling and advertising. Under
development, 1999.
Gold MR, Siegel JE, Russell LB,
et al. Cost-Effectiveness in
Health and Medicine. New York:
Oxford University Press, 1996.
Saha S, Hoerger TJ, Pignone MP,
et al. The art and science of
incorporating cost-effectiveness into
evidence-based recommendations for
clinical preventive services. Am J
Preventive Med 2001;20(supplement
3):36-44.
Weinstein MM. Curbing the High
Cost of Health. New York Times, July
29, 2001.
Return to Contents
AHRQ Publication. No. 01-P023
Current as of August 2001
Internet Citation:
Focus on Cost-Effectiveness Analysis at AHRQ. Fact Sheet. AHRQ Publication No. 01-P023, August 2001. Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/research/costeff.htm
540 Gaither Road Rockville, MD 20850