Recommendations of the Panel on Cost-Effectiveness in Health and Medicine
Abstract
OBJECTIVE: To develop consensus-based recommendations for the conduct of cost-effectiveness analysis (CEA). This article, the second in a 3-part series, describes the basis for recommendations constituting the reference case analysis, the set of practices developed to guide CEAs that inform societal resource allocation decisions, and the content of these recommendations. PARTICIPANTS: The Panel on Cost-Effectiveness in Health and Medicine, a nonfederal panel with expertise in CEA, clinical medicine, ethics, and health outcomes measurement, was convened by the US Public Health Service (PHS). EVIDENCE: The panel reviewed the theoretical foundations of CEA, current practices, and alternative methods used in analyses. Recommendations were developed on the basis of theory where possible, but tempered by ethical and pragmatic considerations, as well as the needs of users. CONSENSUS PROCESS: The panel developed recommendations through 2 1/2 years of discussions. Comments on preliminary drafts prepared by panel working groups were solicited from federal government methodologists, health agency officials, and academic methodologists. CONCLUSIONS: The panel's methodological recommendations address (1) components belonging in the numerator and denominator of a cost-effectiveness (C/E) ratio; (2) measuring resource use in the numerator of a C/E ratio; (3) valuing health consequences in the denominator of a C/E ratio; (4) estimating effectiveness of interventions; (5) incorporating time preference and discounting; and (6) handling uncertainty. Recommendations are subject to the ¿rule of reason,¿ balancing the burden engendered by a practice with its importance to a study. If researchers follow a standard set of methods in CEA, the quality and comparability of studies, and their ultimate utility, can be much improved.
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“The QALY is a standard metric that is recommended for cost-effectiveness analysis by the National Institute for Health and Clinical Excellence (NICE) and the US Panel on Cost-Effectiveness in Health and Medicine [2, 3].”
MethodLegislating against Use of Cost-Effectiveness Information
Neumann, P. J., & Weinstein, M. C. (2010) · New England Journal of Medicine · doi:10.1056/nejmp1007168 · Cited by 250 · see citing works
Self-citationDecision Making in Health and Medicine: Integrating Evidence and Values
Hunink, M. G. M., Weinstein, M. C., Wittenberg, E., Drummond, M. F., Pliskin, J. S., Wong, J. B., & Glasziou, P. P. (2014) · doi:10.1017/cbo9781139506779 · Cited by 425 · see citing works
Self-citationCost-effectiveness of donepezil in the treatment of mild or moderate Alzheimer’s disease
Neumann, P. J., Hermann, R. C., Kuntz, K. M., Araki, S. S., Duff, S. B., Leon, J., Berenbaum, P. A., Goldman, P. A., Williams, L. W., & Weinstein, M. C. (1999) · Neurology · doi:10.1212/wnl.52.6.1138 · Cited by 245 · see citing works
Self-citationA systematic review of the cost and cost‐effectiveness studies of proton radiotherapy
Verma, V., Mishra, M. V., & Mehta, M. P. (2016) · Cancer · doi:10.1002/cncr.29882 · Cited by 242 · see citing works
“It has been postulated by the Panel for CostEffectiveness in Health and Medicine that these conditions as well as others are necessary for high-quality and reliable CE analyses.(60) Other discussion points set forth include the necessary inclusion of quality-of-life data (of which there are very little for PBT to date…”
BackgroundReporting Standards for Clinical Evaluation of New Peripheral Arterial Revascularization Devices
Sacks, D., Marinelli, D. L., Martin, L. G., & Spies, J. B. (2003) · Journal of Vascular and Interventional Radiology · doi:10.1097/01.rvi.0000094613.61428.a9 · Cited by 240 · see citing works
Use of Genotypic Resistance Testing To Guide HIV Therapy: Clinical Impact and Cost-Effectiveness
Weinstein, M. C., Goldie, S. J., Losina, E., Cohen, C. J., Baxter, J. D., Zhang, H., Kimmel, A. D., & Freedberg, K. A. (2001) · Annals of Internal Medicine · doi:10.7326/0003-4819-134-6-200103200-00008 · Cited by 235 · see citing works
“Simulation modeling is one way to use available data to estimate the long-term health consequences and costs of clinical interventions, which may then be used to inform resource allocation (12, 13).”
MethodResultSelf-citationOn discount rates for economic evaluations in global health
Haacker, M., Hallett, T. B., & Atun, R. A. (2019) · Health Policy and Planning · doi:10.1093/heapol/czz127 · Cited by 234 · see citing works
Cost Effectiveness of Lung-Volume–Reduction Surgery for Patients with Severe Emphysema
National Emphysema Treatment Trial Research Group (2003) · New England Journal of Medicine · doi:10.1056/nejmsa030448 · Cited by 234 · see citing works
Raynauld, J., Torrance, G. W., Band, P. A., Goldsmith, C. H., Tugwell, P., Walker, V., Schultz, M., & Bellamy, N. (2002) · Osteoarthritis and Cartilage · doi:10.1053/joca.2002.0798 · Cited by 233 · see citing works
Gould, M. K., Dembitzer, A. D., Sanders, G. D., & Garber, A. M. (1999) · Annals of Internal Medicine · doi:10.7326/0003-4819-130-10-199905180-00002 · Cited by 233 · see citing works
“To reflect individual patient preferences for having material goods sooner rather than later, we discounted all costs and health effects at an annual rate of 3% (9).”
Background“Just give me a number!” Practical values for the social discount rate
Moore, M. A., Boardman, A. E., Vining, A. R., Weimer, D. L., & Greenberg, D. H. (2004) · Journal of Policy Analysis and Management · doi:10.1002/pam.20047 · Cited by 229 · see citing works
Medicare and Cost-Effectiveness Analysis
Neumann, P. J., Rosen, A. B., & Weinstein, M. C. (2005) · New England Journal of Medicine · doi:10.1056/nejmsb050564 · Cited by 225 · see citing works
Self-citationCost-effectiveness of drotrecogin alfa (activated) in the treatment of severe sepsis*
Angus, D. C., Linde‐Zwirble, W. T., Clermont, G., BALL, D. E., Basson, B. R., Ely, E. W., Laterre, P., Vincent, J., Bernard, G. R., & van Hout, B. (2003) · Critical Care Medicine · doi:10.1097/00003246-200301000-00001 · Cited by 225 · see citing works
Clinical and Educational Telepsychiatry Applications: A Review
Hilty, D. M., Marks, S. L., Urness, D., Yellowlees, P., & Nesbitt, T. S. (2004) · The Canadian Journal of Psychiatry · doi:10.1177/070674370404900103 · Cited by 224 · see citing works
“Several detailed guidelines have been recently published (10,11,83–85), as have recommendations for costeffectiveness (86) and cost–benefit (73) evaluations.”
BackgroundMenzies, N. A., Cohen, T., Lin, H.-H., Murray, M. B., & Salomon, J. A. (2012) · PLoS Medicine · doi:10.1371/journal.pmed.1001347 · Cited by 222 · see citing works
“Costs and health benefits were discounted at an annual rate of 3% [68,69].”
BackgroundThe Cost Effectiveness of Implantable Cardioverter-Defibrillators
Zwanziger, J., Hall, W. J., Dick, A. W., Zhao, H., Mushlin, A. I., Hahn, R., Wang, H., Andrews, M. L., Mooney, C., Wang, H., et al. (2006) · Journal of the American College of Cardiology · doi:10.1016/j.jacc.2006.03.032 · Cited by 221 · see citing works
Demythologizing the high costs of pharmaceutical research
Light, D. W., & Warburton, R. (2011) · BioSocieties · doi:10.1057/biosoc.2010.40 · Cited by 213 · see citing works
“…used a rate of return (11 per cent compounded annually), which is much higher than the 3 per cent called for by US government guidelines (United States Office of Management and Budget, 2003) and the US Panel on CostEffectiveness in Health and Medicine (Russell et al, 1996; Weinstein et al, 1996).”
BackgroundImproving Decision Analyses: Parent Preferences (Utility Values) for Pediatric Health Outcomes
Carroll, A. E., & Downs, S. M. (2009) · The Journal of Pediatrics · doi:10.1016/j.jpeds.2009.01.040 · Cited by 210 · see citing works
Yabroff, K. R., Mariotto, A. B., Tangka, F. K. L., Zhao, J., Islami, F., Sung, H., Sherman, R., Henley, S. J., Jemal, A., & Ward, E. (2021) · JNCI Journal of the National Cancer Institute · doi:10.1093/jnci/djab192 · Cited by 210 · see citing works
“Academic health economists have long recommended that patient time costs be included in cost-effectiveness analyses (19,20), but few studies have included them, in part, because these data are not routinely available.”
Global Epidemiology of Mental Disorders: What Are We Missing?
Baxter, A. J., Patton, G. C., Scott, K. M., Degenhardt, L. J., & Whiteford, H. (2013) · PLoS ONE · doi:10.1371/journal.pone.0065514 · Cited by 209 · see citing works
“Birth cohort studies from New Zealand [42,43] and Finland [44] have provided incidence and remission data for common mental disorders.”
BackgroundThe Value of Trauma Center Care
MacKenzie, E. J., Weir, S., Rivara, F. P., Jurkovich, G. J., Nathens, A. B., Wang, W., Scharfstein, D. O., & Salkever, D. S. (2010) · The Journal of Trauma: Injury, Infection, and Critical Care · doi:10.1097/ta.0b013e3181e03a21 · Cited by 208 · see citing works
The Quality of Reporting in Published Cost-Utility Analyses, 1976–1997
Neumann, P. J., Stone, P. W., Chapman, R. H., Sandberg, E. A., & Bell, C. M. (2000) · Annals of Internal Medicine · doi:10.7326/0003-4819-132-12-200006200-00007 · Cited by 208 · see citing works
“Although standards for conducting and reporting cost-effectiveness analyses have been proposed as a way of improving consistency and clarity (4, 14), adherence to recommended protocols has generally been lacking (8, 11, 15).”
BackgroundSiebert, U., Sroczynski, G., Rossol, S., Wasem, J., Ravens-Sieberer, U., Kurth, B. M., Manns, M. P., McHutchison, J. G., & Wong, J. B. (2003) · Gut · doi:10.1136/gut.52.3.425 · Cited by 208 · see citing works
Cuzick, Sasieni, P. D., Davies, Adams, Normand, C. E. M., Frater, van Ballegooijen, & van den Akker (1999) · Health Technology Assessment · doi:10.3310/hta3140 · Cited by 204 · see citing works
“In their recommendations, the Panel on Cost-effectiveness in Health and Medicine advocate the use of QALYs for valuing the health consequences of a health intervention, to include also the negative side-effects of the intervention (Weinstein et al., 1996).”
BackgroundEdmunds, W. J., Brisson, M., & Rose, J. D. (2001) · Vaccine · doi:10.1016/s0264-410x(01)00044-5 · Cited by 195 · see citing works
Lifetime health and economic benefits of weight loss among obese persons.
Oster, G., Thompson, D., Edelsberg, J., Bird, A. P., & Colditz, G. A. (1999) · American Journal of Public Health · doi:10.2105/ajph.89.10.1536 · Cited by 193 · see citing works
The economics of febrile neutropenia: implications for the use of colony-stimulating factors
Lyman, G. H., Kuderer, N. M., Greene, J. N., & Balducci, L. (1998) · European Journal of Cancer · doi:10.1016/s0959-8049(98)00222-6 · Cited by 192 · see citing works
Fisman, D. N., Reilly, D. T., Karchmer, A. W., & Goldie, S. J. (2001) · Clinical Infectious Diseases · doi:10.1086/318502 · Cited by 191 · see citing works
Cheung, K., Roman, S. A., Wang, T. S., Walker, H. D., & Sosa, J. A. (2008) · The Journal of Clinical Endocrinology & Metabolism · doi:10.1210/jc.2007-2496 · Cited by 191 · see citing works
“Future costs incurred were calculated using a discount rate of 3% (29).”
MethodThe costs and effectiveness of four HIV counseling and testing strategies in Uganda
Menzies, N., Abang, B., Wanyenze, R. K., Nuwaha, F., Mugisha, B., Coutinho, A., Bunnell, R. E., Mermin, J., & Blandford, J. M. (2009) · AIDS · doi:10.1097/qad.0b013e328321e40b · Cited by 189 · see citing works
“Buildings and utilities costs were estimated from the equivalent building rental cost, and the costs of other investments (equipment, vehicles, training) were annuitized over the expected useful life with a 3% discount rate [26].”
BackgroundDecision Making in Medicine and Health Care
Kaplan, R. M., & Frosch, D. L. (2004) · Annual Review of Clinical Psychology · doi:10.1146/annurev.clinpsy.1.102803.144118 · Cited by 186 · see citing works
Association of Low Socioeconomic Status With Premature Coronary Heart Disease in US Adults
Hamad, R., Penko, J. M., Kazi, D. S., Coxson, P. G., Guzman, D., Wei, P. C., Mason, A., Wang, E. A., Goldman, L., Fiscella, K. A., et al. (2020) · JAMA Cardiology · doi:10.1001/jamacardio.2020.1458 · Cited by 187 · see citing works
Economic evaluation of spinal cord stimulation for chronic reflex sympathetic dystrophy
Kemler, M. A., & Furnee, C. A. (2002) · Neurology · doi:10.1212/01.wnl.0000028686.74056.e3 · Cited by 183 · see citing works
Continuing Screening Mammography in Women Aged 70 to 79 Years
Kerlikowske, K. M., Salzmann, P., Phillips, K. A., Cauley, J. A., & Cummings, S. (1999) · JAMA · doi:10.1001/jama.282.22.2156 · Cited by 182 · see citing works
- Authors
- Weinstein, M. C.
- Affiliations
- Harvard University (US)
- Corresponding author
- Weinstein, Milton C.
- Venue
- JAMA: The Journal of the American Medical Association
- Publisher
- American Medical Association (AMA)
- Published
- 1996-10-16
- Volume
- 276
- Issue
- 15
- Pages
- 1253
- ISSN
- 0002-9955 (ISSN-L)
- 0098-7484
- OpenAlex
- W2043951092
- Cited by
- 2,455
- References
- 20
- Citations by year
- 2026: 21 · 2025: 30 · 2024: 39 · 2023: 38 · 2022: 59 · 2021: 74 · 2020: 70 · 2019: 76 · 2018: 75 · 2017: 120 · 2016: 130 · 2015: 134 · 2014: 131 · 2013: 113 · 2012: 94
- FWCI
- 185.61
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- JAMA (publishedVersion)
- PubMed (publishedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Health Systems, Economic Evaluations, Quality of Life
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic and Environmental Valuation
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Pharmaceutical Economics and Policy
- Keywords
- cost-effectiveness analysis, methodological recommendations, resource allocation, health outcome measurement, resource use measurement, time preference, discounting, uncertainty analysis, rule of reason, healthcare decision-making
- MeSH terms
- Cost-Benefit Analysis, Health Services Research, Outcome and Process Assessment, Health Care, United States, Health Care Rationing, Quality-Adjusted Life Years
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