Second Panel on Cost-Effectiveness in Health and Medicine

In a special communication published September 13, 2016 in the Journal of the American Medical Association, the Second Panel on Cost Effectiveness in Health and Medicine updated 20-year-old guidelines and recommendations. The updates build on the original work of the 1996 Panel on Cost-Effectiveness in Health and Medicine, originally convened by the U.S. Public Health Service. They are intended to guide decision-makers in using new methods for analyzing evidence, reporting standardized results, incorporating both health care system and societal perspectives, and weighing ethical issues in the use of cost-effectiveness analysis. (Read the news release.)

Gillian Sanders-Schmidler, PhD

The panel was led by co-chairs Gillian D. Sanders-Schmidler, PhD, Professor in the Duke Department of Medicine and a member of both the Duke Clinical Research Institute and the Duke-Margolis Center for Health Policy, and Peter J. Neumann, SciD, director of the Center for the Evaluation of Value and Risk in Health at the Institute for Clinical Research and Health Policy Studies at Tufts Medical Center. Neumann is also a professor of medicine at Tufts.

“Cost-effectiveness analysis can help inform decisions about how to apply new or existing medical tests, therapies and prevention techniques so that decision-makers use health care resources wisely,” said Sanders. “As health care costs continue to rise at unsustainable rates, these recommendations provide a framework for comparing the relative value of different health care interventions and help decision-makers across the spectrum from policymakers to patients sort through alternatives and decide what tests and treatments make sense.”

“During the 20 years since the original panel’s report, the field of cost-effectiveness analysis has advanced in important ways and the need to deliver health care efficiently has only grown,” said Neumann. “Updating the guidelines provides an opportunity to reflect on the evolution of cost-effectiveness analysis and to provide guidance for the next generation of practitioners and consumers.”

Primarily funded by grants from the Robert Wood Johnson Foundation and the Bill & Melinda Gates Foundation, the panel recommends several key changes to the guidelines, including:

  • Broadening the scope of the Reference Cases, a standard set of methodology that should be followed to ensure quality analysis by creating comparable measurements.
  • Measuring health effects in terms of quality-adjusted life years, a measure that includes both the quality and quantity of a person’s life.
  • Including both costs reimbursed by third-party payers and those paid for out-of-pocket by patients in health care sector analyses.
  • Using an “Impact Inventory” that lists the health and non-health effects of a health care intervention to ensure that all consequences are considered, including those to patients, caregivers, social services and others outside the health care sector. This tool also allows analysts to look at categories of impacts that may be most important to stakeholders.
  • A reporting checklist and guidelines for transparency that includes assumptions in any analysis and the disclosure of potential conflicts of interest.

The panel also included Anirban Basu (University of Washington), Dan W. Brock (Harvard Medical School), David Feeny (McMaster University), Murray Krahn (University of Toronto), Karen M. Kuntz (University of Minnesota), David O. Meltzer (University of Chicago), Douglas K. Owens (VA Palo Alto Health Care System and Stanford University), Lisa A. Prosser (University of Michigan), Joshua A. Salomon (Harvard T.H. Chan School of Public Health), Mark J. Sculpher (University of York, UK), Thomas A. Trikalinos (Brown University), Louise B. Russell (Rutgers University), Joanna E. Siegel and Theodore G. Ganiats (University of California -- San Diego School of Medicine).

The panel recommendations were presented at a full-day conference at the National Academy of Medicine on December 7, 2016.

Review the Conference Slides

Watch the Conference Video

Read the Commentary in the New England Journal of Medicine