TY - JOUR
T1 - Healthcare rationing by proxy
T2 - Cost-effectiveness analysis and the misuse of the $50000 threshold in the US
AU - Bridges, John F.P.
AU - Onukwugha, Eberechukwu
AU - Mullins, C. Daniel
N1 - Funding Information:
The writing of this manuscript was supported by a grant from GlaxoSmithKline. The authors wish to thank Anand Dalal for useful comments and suggestions on the draft version of this paper, as well as Joseph Mole, Wolters Kluwer, for his assistance with editing the manuscript. All opinions expressed are those of the authors and do not reflect the opinions of their institutions or GlaxoSmithKline.
PY - 2010
Y1 - 2010
N2 - The application of cost-effectiveness analysis in healthcare has become commonplace in the US, but the validity of this approach is in jeopardy unless the proverbial $US50000 per QALY benchmark for determining value for money is updated for the 21st century. While the initial aim of this article was to review the arguments for abandoning the $US50000 threshold, it quickly turned to questioning whether we should maintain a fixed threshold at all. Our consideration of the relevance of thresholds was framed by two important historical considerations. First, cost-effectiveness analysis was developed for a resource allocation exercise where a threshold would be determined endogenously by maximizing a fixed budget across all possible interventions and not for piecemeal evaluation where a threshold needs to be set exogenously. Second, the foundations of the $US50000 threshold are highly dubious, so it would be unacceptable merely to adjust for inflation or current clinical practice.Upon consideration of both sides of the argument, we conclude that the arguments for abandoning the concept for maintaining a fixed threshold outweigh those for keeping one. Furthermore, we document a variety of reasons why a threshold needs to vary in the US, including variations across payer, over time, in the true budget impact of interventions and in the measurement of the effectiveness of interventions. We conclude that while a threshold may be needed to interpret the results of a cost-effectiveness analysis, that threshold must vary across payers, populations and even procedures.
AB - The application of cost-effectiveness analysis in healthcare has become commonplace in the US, but the validity of this approach is in jeopardy unless the proverbial $US50000 per QALY benchmark for determining value for money is updated for the 21st century. While the initial aim of this article was to review the arguments for abandoning the $US50000 threshold, it quickly turned to questioning whether we should maintain a fixed threshold at all. Our consideration of the relevance of thresholds was framed by two important historical considerations. First, cost-effectiveness analysis was developed for a resource allocation exercise where a threshold would be determined endogenously by maximizing a fixed budget across all possible interventions and not for piecemeal evaluation where a threshold needs to be set exogenously. Second, the foundations of the $US50000 threshold are highly dubious, so it would be unacceptable merely to adjust for inflation or current clinical practice.Upon consideration of both sides of the argument, we conclude that the arguments for abandoning the concept for maintaining a fixed threshold outweigh those for keeping one. Furthermore, we document a variety of reasons why a threshold needs to vary in the US, including variations across payer, over time, in the true budget impact of interventions and in the measurement of the effectiveness of interventions. We conclude that while a threshold may be needed to interpret the results of a cost-effectiveness analysis, that threshold must vary across payers, populations and even procedures.
UR - http://www.scopus.com/inward/record.url?scp=77149180088&partnerID=8YFLogxK
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U2 - 10.2165/11530650-000000000-00000
DO - 10.2165/11530650-000000000-00000
M3 - Comment/debate
C2 - 20067332
AN - SCOPUS:77149180088
SN - 1170-7690
VL - 28
SP - 175
EP - 184
JO - PharmacoEconomics
JF - PharmacoEconomics
IS - 3
ER -