Evaluating Medical Innovation: The Societal View

In a recent OHE Briefing, five leading European experts in health economics provide a comprehensive international review of changes in health economic evaluation and the reasons for them. The authors express concern that the basis for health care decision making today has evolved away from the societal perspective of cost benefit analysis to the payer perspective of cost-effectiveness analysis.

In a recent OHE Briefing, five leading European experts in health economics provide a comprehensive international review of changes in health economic evaluation and the reasons for them.  The authors express concern that the basis for health care decision making today has evolved away from the societal perspective of cost benefit analysis to the payer perspective of cost-effectiveness analysis.  Most voluntary and mandatory guidelines for evaluating medical innovation now encourage or require this narrower, budget-based payer perspective.  As a result, they argue, decisions often are suboptimal, for both health care and economies as a whole.

Health economic evaluations should take full account of the societal costs of informal care, loss of production, and mortality costs. Arguments for and against inclusion of these factors are reviewed in the Briefing and case studies are provided for Alzheimer’s disease and multiple sclerosis.  The authors acknowledge that including a broader range of factors in evaluations in some cases requires the development or improvement of methodologies; entails more work and input of resources; and inevitably introduces some uncertainty.  In the words of Ezra Mishan, however, they believe it is ‘better to be vaguely right than precisely wrong’.

The authors conclude that ‘A social perspective for economic evaluation should be the standard approach adopted by health technology assessment and reimbursement organizations worldwide’.  This will both produce more health with the available resources and provide important information on the optimal social level of spending on health care.

Download Johannesson, M., Jönsson, B., Jönsson, L., Kobelt, G. and Zethraeus, N. (2009) Why should economic evaluations of medical innovations have a societal perspective? OHE Briefing. (51). London: Office of Health Economics.