One of the common ingredients in all attempts to slow escalating health care costs is to control the utilization of services that provide little or uncertain benefit. To reform existing delivery systems, the organization, provision, and financing of health care need to be evaluated critically. Successful reform requires that more rational methods be used to determine which services to provide. The preferences of physicians, patients, and payers of care do not appear optimal from a societal perspective in choosing health care services. While reducing the use of interventions of little or unknown benefit should save money, a policy to restrict the use of medical services may lead to an unwanted result: the underutilization of interventions of proven clinical benefit. Through the determination of the value—by rigorous assessment of both costs and benefits of available alternatives—in a context sensitive to the unique cultural, political, and economic characteristics of individual nations, the health of the population should be improved and growth of health expenditures constrained. This is the first step in health care reform.

Perspectives in an economic analysis of medical technology reflect who makes decisions about the use of or payment for medical resources. Commonly used perspectives include those of providers, insurers, the individual, and society. Perspective is a critical determinant of study design, affecting the time horizon, types of resources considered, and economic cost measures assigned to those resources. Individuals involved in technology assessment for either research or policy-making purposes should be aware of the complexities of defining costs from different perspectives.

The literature on economic evaluation of Pharmaceuticals is growing rapidly. Although there have been substantial methodologic advances, there remain serious problems and pitfalls. This presentation focuses on three aspects, i.e., use (and abuse) of evaluation studies, methodologic problems, and the quality of published studies.

In the last two decades a number of health status index models have been developed for assessing the value of health outcomes in terms of quality-adjusted life years. The models can be tested by comparing their implications with direct observations of how societies think resources should be distributed across patient groups. This paper reviews empirical evidence of this kind from various countries and summarizes the evidence in three rules of thumb for selecting values for health states. Nine different models are judged relative to these rules of thumb. Eight of the models underestimate the strength of social preferences for treating the severely ill before the less severely ill. The ninth has a strong bias against states associated with emotional distress. As a consequence, none of the models can be seen as sufficient stand-alone instruments for valuing health outcomes. Instead, the models may be seen as complementary and adjustable parts of a tool kit that should also include the rules of thumb suggested in this paper.

Health technology assessment as a formalized set of activities has a relatively short history. At its current stage of development, it is clear that it has global dimensions and impact. In this paper we review the history of health technology assessment, its development as a form of health services research, and its “institutionalization.” We then identify the reasons for its internationalization, review current international initiatives, and propose actions to be taken to improve cooperation among countries.

Economic evaluations of Pharmaceuticals are increasingly being conducted in conjunction with randomized phase III clinical trials to meet the demand for pharmacoeconomic data when new products are launched. While the need for such data is often global, the trials in which relevant information may be collected are often conducted in only one or a limited number of countries. A critical issue is how data from pivotal clinical trials in one setting can serve as the basis for pharmacoeconomic evaluations in others. We address this issue and report on four economic evaluations that we undertook in conjunction with a recent U.S. phase III clinical trial of recombinant human deoxyribonuclease (rhDNase), which is used to improve pulmonary function in patients with cystic fibrosis (CF). The objective of these evaluations was to estimate the potential impact of rhDNase therapy in France, Germany, Italy, and the United Kingdom on the direct costs of medical care for the treatment of respiratory tract infections (RTIs) in patients with CF. Analyses of economic impact were undertaken

New models for determining the cost of care and length of stay in the neonatal intensive care unit (NICU) were developed using financial and clinical data from 588 admissions to our NICU. The model for determining costs explained 71% of the variability in total hospital costs. Models such as the ones developed in this study can be used to compare costs in different institutions, determine temporal trends in costs, and examine the financial impact of using new technologies. Such models can also be useful components of a rational prospective pricing system for the NICU.

The anticipated demographic changes with an increasing number of elderly force us to plan and use health care resources more efficiently. In this study we have used the components of a case-mix measure for nursing homes; the Resource Utilization Groups (RUG-II), to predict length of stay (LOS) and outcome in geriatric institutions. We have shown that the RUG categories and an activities of daily living (ADL) index differ significantly in both respects, but that other variables might be of more clinical value when establishing a prospective payment system, based on LOS in geriatric institutions.

A cost-effectiveness analysis is part of the U.K. ECMO Trial. In preparation for this analysis, existing evidence on the costs and effectiveness of neonatal ECMO was evaluated. ECMO appears to be more costly but may be more or less effective than conventional treatment. No case can be made for introducing ECMO before trial results are available.

We examined staffing levels, acquisition of medical technologies, and utilization of those technologies in private and government teaching hospitals in Japan. Adjusting for size and case mix, we found that government hospitals acquire more technology, use that technology less, and employ a more highly skilled staff than do private hospitals.

Despite the perception of many people that lasers represent the cutting edge of high-technology medicine, this form of medical technology has been subject to relatively little rigorous evaluation. This dearth of research relates particularly to economic evaluation, where there have been few attempts to justify the high cost of laser equipment. This paper details an economic evaluation of the use of laser technology as a secondary adjunct to angioplasty to treat peripheral arterial occlusions. Using data from a range of sources, including a published randomized trial, a cost-utility model is developed to estimate the costs and benefits of the laser, relative to standard angioplasty. The best available data indicate a cost-effective role for the laser, but important areas of uncertainty exist, including the laser's secondary recanalization rate, which has been estimated on the basis of limited numbers of patients. This uncertainty suggests that further research is required before widespread diffusion of the laser for use in this clinical context.

Agreement between two expert panels in assessing gain in life expectancy and quality of life from unselected stays in a department of internal medicine was investigated. Weighted kappa statistics of 0.45 for gain in life expectancy and 0.63 for gain in quality of life were found.

To increase access to care for cataract patients in Sweden, it was decided, starting in 1992, that all cataract patients listed for surgery and with priority should have their cataract extraction performed within three months. To evaluate the effect of this waiting time guarantee, a National Cataract Register (NCR) was initiated in late 1991. In 1992, 81% of all cataract extractions performed in Sweden were reported to the NCR; in 1993 this figure was 92%. Reasons for this high participation ratio are discussed. In 1993, 74.4% (range between different clinics, 40–99%) of the patients with priority had their operation performed within three months. Great variation in visual acuity and age was found in patients with priority among the different surgical units.

For risk assessment and control of the failing Björk-Shiley convexo-concave heart valve, we present a life cycle-based complex system model and a risk intensity assessment model, allowing consistent analysis of this complex medical problem and identification of all pertinent aspects of product-related risks to patients.

In the last several years, the development of an effective breast cancer screening procedure has increased the possibility of the early detection of this cancer. We investigated the cost-effectiveness of a breast cancer screening program to screen 100,000 women 50–64 years of age in Catalonia (Spain). The cost-effectiveness ratio was measured in terms of the cost per cancer detected comparing program costs to the estimated number of cancers detected. We assumed a participation rate, sensitivity, and specificity of 70%, 92%, and 94%, respectively, and that 0.36 breast cancers could be detected per 100 women screened. We estimated a total cost of $2.1 million with $1.4 million for the mammographic stage and $0.7 million for the detection of the true positive mammographic results. The cost per woman screened was $30. We estimated that 252 cases of breast cancer could be detected with the program. The cost-effectiveness ratio obtained in this study was $8,424 per cancer detected. Sensitivity analysis has shown that cost-effectiveness results are sensitive to the variations in the following variables: specificity, cancer detection rate, and screening costs. In planning preventive programs, breast cancer screening should be considered one of the priorities.

To examine the validity of the additive quality-adjusted lite year model used to evaluate a multiphase health state, data from a pilot study of mammography were used to determine whether the values assigned to a multiphase postmastectomy health state could be estimated from a combination of the independently rated constituent health state values. The results suggest that they cannot.

We designed a scoring system to rank acute care hospital projects and allocate resources between them. The evaluation tool assessed projects on an ordinal scale; the criteria scored were medical interest, feasibility, interest for teaching and research, and compatibility with the hospital's strategy. Clinical and technical projects were ranked separately. In 1994, 25 new projects, representing a total cost of $1.4 million, were reviewed by two independent reviewers. The scores ranged from 30 to 18 over 36. Projects presented by clinical departments scored higher than projects presented by medicotechnical departments.

The use of peripheral blood progenitor cell transplant as rescue therapy after high-dose chemotherapy and autologous bone marrow transplant significantly decreases transfusion, laboratory, room, and total charges. An improvement in clinical indicators also points toward decreased patient morbidity. Additional cost reductions may be realized by greater utilization of outpatient care, thereby further reducing room and total charges.