evLYG Explained

One concern when using quality adjusted life years (QALY) to measure health gains for cost effectiveness research is that QALYs “undervalue” health gains from life extension for people with serious illness or chronic disability. To see this clearly, take a look at the QALY formula (first formula below) and how it can be decomposed into…

The concordance between comparative effectiveness and cost effectiveness

Both the Inflation Reduction Act and Affordable Care Act contained language that made cost-effectiveness analysis difficult to implement, while allowing for the analysis of comparative effectiveness with respect to the relative health benefits across treatments. This leads to the natural question, how often are would reimbursement decisions based on comparative effectiveness alone be the same…

Challenges in implementing DCEA

In recent years, policymakers and payers have been focused increasingly not only on how new health technologies improve overall health, but also whether they can reduce health disparities. Oftentimes, however, discussions around health disparities are conducted on a qualitative basis with litlted quantitative analysis of tradeoffs between equity and effectiveness. Distributional cost effectiveness analysis (DCEA)…

NICE’s new Severity Adjustment

In the United Kingdom, the National Institute for Health and Care Excellence (NICE) made an update to their health technology evaluations manual in January 2022. Of particular interest, section 6.2 of the manual states that the review committee “will consider the associated absolute and proportional QALY shortfall.”  The committee defined QALY shortfall two ways: Absolute…