comparative effectiveness and cost-effectiveness arenas within five years, and hopefully set a number of standards to better allow the comparability of cost-utility analyses [31]. It is likely that this institute will resemble NICE55 (National Institute for Health and Clinical Excellence) in the UK, an entity formed in 1999 to assess comparative effectiveness and cost-effectiveness.

Cost-Effectiveness Standards

An intervention is typically thought to be costeffective in the USA if its costs <$100,000/QALY [59], and very cost-effective if it costs <$50,000/ QALY [60, 61]. Nonetheless, there is no formal body that sets cost-effectiveness standards in the United States. World Health Organization standards suggest interventions costing <1× GDP per capita (~2010 US $47,000/QALY) are very costeffective and those costing <3× GDP per capita (~2010 US $141,000/QALY) are cost-effective [62]. NICE in the UK typically considers interventions cost-effective if they cost <£20,000/ QALY, on occasion, going as high as £30,000/ QALY [54]. NICE recommends to the National Health Service whether interventions are costeffective or not, and thus whether they should be covered for payment or not. A summary of costeffectiveness standards is shown in Table 10.7.

Pearl

Interventions associated with a cost-utility ratio <$50,000/QALY are generally considered to be very cost-effective in the USA, while those associated with a costutility <$100,000/QALY are thought to be cost-effective.

Pearl

NICE (National Institute for Health and Clinical Excellence) in the UK evaluates healthcare interventions to ascertain if they are cost-effective and should be recommended to the National Health Service for coverage.

Discounting

Both costs and value outcomes (QALYs gained) are discounted [23] using net present value (NPV) analysis to account for the time value of money and of good health. Essentially, a dollar now is worth more than a dollar in 20 years since that dollar now can be invested to yield more dollars over time. Good health now can also be viewed to create more dollars and other resources that can be invested for a greater yield over time.

Value-Based Medicine®

Value-Based Medicine® is the practice of medicine based upon the value (improvement in quality of life and/or length of life) conferred by healthcare interventions [23]. It utilizes cost-utility analysis with standardized input parameters and outcomes to allow comparisons of all interventions within and across medical specialties, no matter how disparate [14–23, 63].

Standardization

Unfortunately, most of the cost-utility studies in the current literature are not comparable since they use different utilities, diverse utility

respondents, unlike cost perspectives, different costs and cost bases, and so forth [23]. ValueBased Medicine® cost-utility analyses use the standards listed in Table 10.5, therefore permitting comparisons of virtually all cost-utility ratios.

Pearl

Most cost-utility analyses in the current literature are not comparable due to different inputs: type of utility analysis, utility respondents, costs, costs basis, discounting, year of publication, and so forth.

Pearl

Value-Based Medicine® cost-utility ratios use standardized inputs and outcomes, and are therefore generally comparable.

Patient Respondents

Value-Based Medicine® cost-utility analyses specifically use patient utilities, since community and expert (physician) surrogate respondent utilities often differ considerably from those of patients. With regard to AMD, physicians who treated the disease underestimated its diminution upon quality of life compared to patients with the condition by a range of 96–750% (Table 10.8) [14, 15, 20]. The authors herein adamantly believe that, while more difficult to acquire than utilities from the general community or professionals, utilities obtained from patients who have experienced a health state firsthand should be the criterion (gold standard).

Pearl

Utilities from patients who have experienced a health state can differ dramatically from those of physicians and other respondents. Patient utilities are the criterion for Value-Based Medicine® costutility analysis.

Cost Perspective

The third party insurer cost perspective includes only those costs the insurer has to pay, or the direct medical costs. The societal cost perspective includes third party insurer costs, as well as direct nonmedical costs, such as caregiver costs, shelter costs, and travel costs, and indirect costs, such as loss of employment and disability payments avoided. Both the third party insurer and societal cost perspectives performed together allow for much great comparability of cost-utility analyses.

The third party insurer cost perspective and societal cost perspective are often very different and not comparable. A cost-utility analysis is therefore more complete if it offers outcomes utilizing both cost perspectives. Generally, the societal cost perspective results in a more favorable cost-utility ratio compared to the third party insurer cost perspective. One note of caution, however, is the fact that societal costs are not as standardized or as available as direct medical costs [23].

A summary of Value-Based Medicine® comparative effectiveness value gains and cost-utility ratios for AMD interventions is shown in Table 10.9. Because of the standardization of the input variables, Value-Based Medicine® costutility analyses are typically comparable.