New Framework and Metrics for Economic Evaluation of Medical Technology in the Presence of Heterogeneity and Its Application to the Evaluation of Bariatric Surgery

Thesis (Ph.D.)--University of Washington, 2016-07

Most economic evaluations to date, highlighted by cost-effectiveness analysis (CEA), have primarily focused on informing binary coverage decisions about whether to provide full coverage or no coverage on medical technology. For example, CEAs have followed the notion that if a technology is deemed to be cost-effective, often under the assumption of full uptake, then the technology should be allowed to diffuse in the population. Consequently, most metrics (e.g., cost-effectiveness ratios) used for decision-making have not usually incorporated the extent to which medical technology is used in practice (i.e., technology uptake) and how this extent of use is likely to change over time. (i.e., technology diffusion) From an evaluation perspective, such practice is misleading for two reasons. First, it does not allow for evaluating different policy alternatives on access or implementation that may influence the uptake of the technology. Second, which is the focus of this paper, is that economic evaluations have failed to acknowledge evidence-driven differential uptake across subgroups of patients that can inherently change the overall value of medical technology. The overall goal of this research is to develop a new framework and appropriate metrics for evaluating the realized value of health care technologies through the lens of different policies that are designed to provide access and to implement the use of these technologies in practice. These metrics can be seamlessly used to inform the entire range of policy decisions that are relevant in the context of evaluating the economic value of medical technology. Also, it provides a way to integrate heterogeneity in incremental cost-effectiveness ratios across different subgroups with selective diffusion patterns in the population to express a ratio or an index. This paper highlighted how these metrics vary from a traditional incremental cost-effectiveness ratio. In addition, we expand this framework to the evaluation of bariatric surgery focusing on patient subgroups with a higher body mass index with type 2 diabetes in two folds: 1) how does the publication of major clinical evidence link to the use of bariatric surgery and 2) economic returns of providing greater access to bariatric surgery. Bariatric surgery represents a particular example of an advancing medical technology where understanding these relations is important. Despite strong evidence on clinical effectiveness and cost-effectiveness of bariatric surgery, bariatric surgery has been significantly underutilized, and its trend has been stagnated. To improve utilization of bariatric surgery, understanding the role of clinical evidence and coverage policy on the uptake of bariatric surgery has become an important issue. We believe that this novel framework will be useful not only to evaluate the realized economic value of medical technology but also to estimate the economic value of various decision options. Therefore, we propose that this new framework could substantially improve the decision-making process by producing metrics that are better aligned with the specific policy decisions.