DECISION RULES FOR VALUE-BASED REIMBURSEMENT: MOVING ON FROM NET HEALTH BENEFIT

Late-breaking abstract for 2016 CADTH Symposium

Mike Paulden¹, James O’Mahony², Christopher McCabe¹,

1. Department of Emergency Medicine, University of Alberta, Canada

2. Trinity College Dublin, Ireland

Purpose: Net health benefit (NHB) and net monetary benefit (NMB) are alternatives to using incremental cost-effectiveness ratios (ICERs) in the economic evaluation of health technologies. Conventionally, NHB and NMB are regarded as equivalent, and the cost-effectiveness threshold (λ) is used to assign weights to health gains and losses when specifying NMB. We demonstrate important differences between these measures, and argue that NMB is preferred when making value-based reimbursement decisions. We further show that using λ to assign weights when specifying NMB is theoretically flawed.

Method(s): We consider the circumstances in which NHB and NMB are equivalent. We then build upon the foundations of the ‘social decision making’ (SDM) perspective to allow for a theoretical consideration of the weights that ought to be assigned when specifying NMB.

Result(s): We demonstrate that NHB and NMB are not equivalent if λ changes over time or is uncertain. Given this non-equivalence, decision makers must decide which measure to use. For value-based reimbursement decisions, NMB is preferred because it allows for differential weights to be assigned to health outcomes where desired. Under a SDM perspective, these weights ought to be informed by society’s valuation of health in each time period. Since, in future periods, these valuations may differ from those implied by λ, using λ to determine these weights is theoretically flawed.

Conclusion(s):   Our findings have important implications for value-based reimbursement decisions. It is time to move on from using NHB and instead adopt a measure of NMB that appropriately reflects society’s valuation of health.