8.3 Interpreting and presenting results

Cost-effectiveness analysis is crucial for evaluating interventions in healthcare and public policy. It uses ratios and net present values to compare costs and outcomes, helping decision-makers allocate resources efficiently.

Interpreting results involves comparing to benchmarks, assessing dominance, and conducting sensitivity analyses. Effective communication through visuals and clear writing is key to informing policy decisions and balancing efficiency with ethical considerations.

Cost-Effectiveness Ratios and Net Present Values

Measuring Cost-Effectiveness

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• Cost-effectiveness ratios (CERs) quantify cost per unit of outcome achieved by an intervention (typically cost per quality-adjusted life year (QALY) gained)
• Incremental cost-effectiveness ratio (ICER) compares difference in costs between two interventions relative to difference in effectiveness
  • Calculated as: $(Cost_A - Cost_B) / (Effect_A - Effect_B)$
• Net present value (NPV) calculates present value of all future cash flows over entire life of investment or project
  • Incorporates time value of money concept using discount rate to adjust future costs/benefits
  • Positive NPV indicates financially viable project

Interpreting Cost-Effectiveness Results

• Compare CERs and NPVs to predetermined thresholds or benchmarks
  • Willingness-to-pay thresholds for ICERs (e.g. $50,000 per QALY)
  • Positive NPV for cost-benefit analyses
• Evaluate dominance and extended dominance
  • Dominant intervention less costly and more effective than alternatives
  • Extended dominance occurs when combination of other options more efficient
• Consider opportunity costs of resource allocation decisions
• Assess uncertainty through sensitivity analyses (covered in next section)

Sensitivity Analysis of Cost-Effectiveness Results

Types of Sensitivity Analyses

• One-way sensitivity analysis varies single parameter while holding others constant
  • Identifies parameters with greatest impact on results
  • Often visualized using tornado diagrams
• Probabilistic sensitivity analysis (PSA) uses Monte Carlo simulation
  • Simultaneously varies multiple parameters based on probability distributions
  • Generates confidence intervals and scatter plots of results
• Scenario analysis examines impact of different combinations of assumptions
  • Tests "best case" and "worst case" scenarios
  • Evaluates alternative policy or implementation approaches
• Threshold analysis determines parameter value that changes overall conclusion
  • Identifies "tipping points" for key variables
  • Informs focus of future research or data collection efforts

Visualizing Sensitivity Analysis Results

• Tornado diagrams display results of one-way sensitivity analyses
  • Horizontal bars show range of outcomes for each varied parameter
  • Parameters ordered by magnitude of impact on results
• Cost-effectiveness acceptability curves (CEACs) show probability of cost-effectiveness
  • X-axis willingness-to-pay threshold, Y-axis probability
  • Useful for communicating uncertainty to decision-makers
• Scatter plots of PSA results on cost-effectiveness plane
  • Visualizes joint distribution of incremental costs and effects
  • Quadrants indicate dominance or trade-offs between alternatives

Communicating Cost-Effectiveness Analysis Results

Visual Presentation Techniques

• Incremental cost-effectiveness planes graph costs vs. effects
  • Quadrants indicate dominance or trade-offs between interventions
  • Confidence ellipses show uncertainty in estimates
• Cost-effectiveness acceptability curves (CEACs) display probability of cost-effectiveness
  • X-axis willingness-to-pay threshold, Y-axis probability of being cost-effective
  • Multiple curves can compare different interventions
• Tornado diagrams summarize one-way sensitivity analyses
  • Horizontal bars show range of outcomes for varied parameters
  • Helps identify most influential factors on results
• Infographics and dashboards convey complex information to non-technical audiences
  • Use icons, color-coding, and simplified graphics
  • Focus on key takeaways and policy implications

Effective Written Communication

• Clear executive summaries highlight key findings and implications
  • Concise overview of methods, results, and recommendations
  • Tailored to decision-maker needs and time constraints
• Detailed tables present numerical results
  • Base case analyses and sensitivity analyses
  • Clearly labeled with units and definitions
• Transparent reporting of methods, assumptions, and limitations
  • Builds credibility and facilitates informed decision-making
  • Acknowledges areas of uncertainty or potential bias
• Technical appendices provide additional details for interested readers
  • Full model specifications and data sources
  • Supplementary analyses and scenario results

Implications of Cost-Effectiveness Analysis for Policy

Informing Resource Allocation Decisions

• Quantitative evidence guides healthcare and public policy spending
• Enables comparison of interventions across diverse areas (healthcare, education, infrastructure)
• Supports setting priorities and justifying funding decisions
  • Identify "best buys" or most efficient use of limited resources
  • Highlight interventions with greatest potential impact
• Incorporates opportunity cost concept in decision-making
  • Resources allocated to one intervention unavailable for alternatives
  • Encourages consideration of forgone benefits

Balancing Efficiency and Other Considerations

• Ethical considerations complement economic efficiency
  • Equity and fairness in resource distribution
  • Prioritizing vulnerable populations or rare diseases
• Generalizability of results across contexts
  • Consider demographic, geographic, or health system differences
  • Adapt findings to local circumstances when applying to policy
• Acknowledge limitations of analyses in policy discussions
  • Uncertainty in long-term outcomes or hard-to-monetize benefits
  • Potential for unintended consequences or implementation challenges
• Integrate cost-effectiveness with other forms of evidence
  • Clinical effectiveness, budget impact, feasibility
  • Stakeholder perspectives and public values