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Explicit Cost-Effectiveness Thresholds in Health Care: A Kaleidoscope

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Abstract

Although the principles of cost-effectiveness analysis have been adopted by health systems worldwide, a large majority of countries remain reluctant to specify explicit threshold values for cost-effectiveness. Nonetheless, by aiming to benchmark what counts as a reasonable ‘price’ for health gains, the threshold value is a linchpin in the framework of health technology assessment, albeit also a controversial one. The desirability of thresholds depends largely on three claims: their intention to make resource allocation more efficient, their aspiration to make decision-making more transparent and their objective to make healthcare systems more sustainable. In this paper, we draw from various disciplines such as health economics but also psychology, anthropology, sociology, political sciences and ethics to discuss the many facets of these three values, related to the threshold debate. We discuss issues of allocative efficiency, fair decision-making, realpolitik, taboos, institutional justice and the rule of rescue. Based upon these considerations, which together substantiate the precautionary principle, we conclude that the case against thresholds is stronger than the case in favor and that most countries are right to be reluctant to use explicit threshold values.

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Notes

  1. With the latter, we mean official, publicly available thresholds of what constitutes a cost-effective healthcare program (e.g., £30,000/QALY).

  2. The first is that of communal sharing, which divides social life into two groups (members and non-members) that both have different rights and obligations (a binary dichotomy). A typical example is the distinction between family members and non-family members, friends and non-friends, between citizens and non-citizens. Membership means an equal right to the benefits of the group, non-membership leads to no entitlements. The second sphere is that of authority ranking, based on one’s status and location in a social hierarchy (a lexical ordinal ranking of people). A typical example is the superior status of a person like the president or the king, having more authority than others because of their higher place in the hierarchy. The third sphere is that of equality matching where we settle scores between equal partners (allowing to measure). This is the sphere of equals, colleagues or friends inviting one another over for dinner, for example. Within this sphere, a ‘tit-for-tat’ reciprocity between equals dominates (e.g., after a certain amount of time, we’re expected to return a dinner invitation). The fourth sphere is that of market pricing, where a single metric (like money, for instance) makes valuation and comparison of a large number of entities possible (allowing ratios and all kinds of calculations and weighing of costs and benefits) (Fiske & Tetlock, 1997).

  3. An interesting illustration can be found in the ‘Danner Commission’ experiment (Shoemaker & Tetlock, 2012), in which participants were informed about a fictionalized public health program and its recommended reforms in the light of efficient use of public resources. If the reforms were followed, the program could save 200 lives, at a cost of $100 million. If the program continued at the previous year’s budget of $200 million, 400 lives could be saved. In the experiment, the Commission recommended not to continue and instead, to redirect the saving of $100 million to other important public uses. This is a clear example of a policy choice that requires explicit valuation of human life. The researchers investigated people’s response to different explanation strategies. For two groups, the Commission offered a smokescreen strategy that took either a utilitarian form (‘After weighing relevant costs and benefits, the Commission concludes that this is the right thing to do’) or moralistic form (‘Based on its analysis, the Commission concludes that morally this is the right thing to do’). For a third group, the decision grounds were presented transparently (‘The cost of saving the additional 200 lives (at $500,000 per life) is too high given other important priorities’). In the first two groups (where the trade-offs remained implicit), around 72% supported the recommendation. In the third group (with the explicit trade-off), approval went down to 35%.

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Acknowledgements

Previous versions of this paper were presented at the Annual Conference of the European Association of Centers for Medical Ethics (EACME) in Leuven, September 2016, at the international symposium on ‘Violence of Money’ organized by the Institute of Philosophy (University of Leuven) in January 2018, at the international workshop on ‘Ethics and Economics of Health Care’ organized by Tilburg University in March 2018 and at the international Intensive Course on ‘Justice and Priority Setting in Health Care’ in March 2018. We are grateful to all the participants of these meeting, for their inspiring comments on earlier thoughts. Special thanks goes to: Arnold Burms, Roger Burggraeve, Herman De Dijn, Bart Engelen, Dan Hausman, Erik Schokkaert, Paul Schotsmans, Ruud Termeulen, Antoon Vandevelde and Marcel Verweij. Each of them have, in own and various ways, inspired us to tackle this issue from a multidimensional kaleidoscope perspective and convinced us of the significance of doing it this way.

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Luyten, J., Denier, Y. Explicit Cost-Effectiveness Thresholds in Health Care: A Kaleidoscope. Soc Just Res 32, 155–171 (2019). https://doi.org/10.1007/s11211-018-0322-9

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