CCHE Seminar Series: Negative cost-effectiveness ratios: problems, prevalence, and potential solutions

Jeffrey Hoch

UC Davis

Friday January 22, 2020, 10am-12pm, Zoom

Abstract: Often the cost-effectiveness analysis that is conducted alongside clinical trials faces special challenges preventing the proper use of the incremental cost-effectiveness ratio (ICER), the standard cost-effectiveness statistic. This study reviewed papers published in the Journal of Mental Health Policy and Economics reporting the results of cost-effectiveness analysis to determine how often there arose special challenges preventing the proper use of the ICER. The Journal is the official journal of the Section on Mental Health Economics of the World Psychiatric Association.

We conducted a search of the articles published in the Journal of Mental Health Policy and Economics with a PUBMED search. Abstracts were then reviewed to determine whether challenges existed. We found many of the studies featuring the results of trial-based cost-effectiveness analysis encountered challenges preventing the proper use of the ICER. These included non-significant cost or effectiveness results, significant cost-savings and negative ICERs.

It is common for cost-effectiveness analysis to be complicated in trial-based studies by realities of this type of research. Challenges preventing the proper use of the ICER seem likely to continue in mental health as sample sizes are generally small and most studies are underpowered for economic evaluation (inducing a greater likelihood of problems). Researchers should consider the use of alternate cost-effectiveness statistics and alternate methods to help produce estimates and characterize uncertainty when the ICER does not provide proper information.

Professor Jeffrey Hoch received his PhD in health economics from the Johns Hopkins School of Public Health.  He also holds a master’s in economics from Johns Hopkins University and a bachelor of arts degree  in quantitative economics and decision sciences from the University of California at San Diego. He has taught health economics and economic evaluation classes throughout the world.

Professor Hoch created the Centre for exceLlence in Economic Analysis Research (CLEAR) at St. Michael’s Hospital, developed and directed the Pharmacoeconomics Research Unit at Cancer Care Ontario and was the inaugural co-Director of the Canadian Centre for Applied Research in Cancer Control (ARCC). From 2013 – 2015, Professor Hoch developed and led the HTA Primary Area of Study at the Institute for Health Policy, Management and Evaluation.

Currently, Professor Hoch is pursuing research on how to make health economics more useful to decision-makers. Special interests include health services research related to cancer and mental health and other health issues affecting poor and vulnerable populations. Professor Hoch is an award-winning teacher and is the recipient of a Career Scientist Award from the Ontario Ministry of Health and Long-Term Care.