In this series, you learned why and how to do CEAs. You learned about DALYs and QALYs,
how to present CEA results, the role for sensitivity analyses to quantify uncertainty, and how
to deal with temporal issues.
In this segment, we discuss how to organize a CEA for a research proposal. Specifically,
we'll show you research questions and basic methods for each.
There are different terminologies used to present research plans. In this example, we're
using the research questions approach.
The topic is the cost-effectiveness of a mobile camp for adult male circumcision in rural
Zambia. Notice that we've divided the CEA inquiry into three research questions, focused
on: costs, health effects, and cost-effectiveness.
The first RQ is, What is the cost of delivering adult male circumcision per 100 clients circumcised
in this mobile camp, compared with no circumcision? The second RQ is, How many HIV infections
and disability- adjusted life years, or DALYs would be averted, per hundred individuals
circumcised in this population over 20 years? Again, the comparison is no circumcision.
The third RQ is, What is the incremental cost per DALY averted in the population, versus
no circumcision?
These are the key research questions. We start with cost, which is easiest to understand,
even for non-economists. We then proceed to health effects, which in this instance is
HIV infections and DALYs. Health effects are a little harder to understand, especially
the DALYs. Finally we combine the cost and health effects to arrive at the incremental
cost effectiveness ratio. Assembling the ICER is the most complex, and the last step in
the process.
Next let's think about methods for each of these research questions. Here we have RQ
1, on the cost of delivering circumcision services, in more detail. The brief methods
paragraph in blue is not standard in a grant application, instead it's for our purposes
to understand broadly [1]how we might proceed.
We would probably start by reviewing financial and service records from an operating program.
Typically that's done for a 12- month period, because we're in the habit of financing programs,
making reports, and so on, for fiscal years. We quantify the resources used, and the associated
costs, as well as clients served.
Let me explain the phrase resources used and associated costs. It's really important in
doing cost studies that we not just take the number that shows up at the bottom of the
budget or expenditures page, and say, "Well, we spent 1 million dollars." We need to know
what program inputs go into that cost amount how many circumcision surgical kits, how many
hours of surgeon and nurse time, how much building space, etc. This detail provides
useful information and also validates the cost estimates. Thus, we always specify and
quantify the resources used.
Another reason for this approach is that some resources may not be assigned a cost. Maybe
the surgeons were borrowed from the Ministry of Health, which paid their salaries. The
program budget omits these salaries. Because we're interested in societal cost what it
really costs to do this we want to include the value of all contributed resources. Similarly,
maybe the circumcision kit was donated by an international agency. If we use just the
bottom line dollar number for the budget, we may overlook that. By going through a listing
of personnel, supplies, equipment, and so on, we can be very clear about what resources
are required to implement this program, and make sure we're including all significant
costs.
We quantify clients served because we want to understand the cost per client served,
in this example per surgery completed. We calculate unit cost as total cost divided
by clients served. This is the measure that best characterizes the cost of the intervention.
The second RQ is how many HIV infections and disability-adjusted life years will be averted.
This assessment usually builds on empirically observed effects, such as HIV incidence in
men who receive circumcisions. Studies show that male circumcision reduces HIV incidence
by 50% or so. However, we need to go further analytically. We can build a decision analysis
model. How many total infections are prevented depends on the HIV acquisition risk in a specific
population 50% of a small risk is less than 50% of a large risk. This has to be specified.
To quantify averted infections in the future requires a projection of HIV risk over time.
Translating into DALYs requires assigning a DALY burden to each HIV infection. This
can be calculated, or taken from past studies.
The 3rd RQ asks What is the incremental cost per DALY averted? This is the ICER. The numerator
is net costs program costs adjusted for reductions in medical costs due to averted HIV infections.
The denominator is DALYs averted.
The cost-effectiveness ratio is the most complicated outcome conceptually, since it's a ratio of
two simpler outcomes. However, it's easy to calculate once you know the net costs and
health effects. This RQ will also include the sensitivity analyses.
I hope this has given you a sense of how to conceptualize and approach CEA research questions.
In the next segment, we translate this CEA topic into a decision tree that guides the
analysis.
[1]I have a version that provides more detail, in Word, could include it as another slide
if we want to get into a little more detail.