Table 2.6.1 Open in new tab Types of... | Oxford Academic

Table 2.6.1

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Types of studies and application to palliative care

Type of study	Advantages and disadvantages	Application to palliative care
Clinical outcomes alone	Easy to perform Ignores costs	Traditional way to make decisions, e.g. imatinib mesylate (Gleevec^®) works for chronic myelogenous leukaemia. Find a way to pay for it
Cost alone	Ignores clinical outcomes	Rarely used to make decisions, unless the medical outcomes are similar (cost minimization, below)
Costs and clinical outcomes together
Cost minimization: assumes two strategies are equal; lowest cost strategy is preferred	Easy to do if there are direct comparisons	For instance, if methadone gives equivalent pain relief to sustained-release morphine, then use the less expensive option
Cost-effectiveness: compares two strategies; assigns $ per additional year of life (LY) saved by strategy	Requires a trial that directly compares strategies, and economic analysis alongside that trial. ‘Only accept treatments that gain a year of life for under $100,000/LY	Palliative care usually adds no additional LYs, so rarely applicable. May be most appropriate in chemotherapy or other interventions that prolong life
Cost utility: assigns $ per additional LY saved by strategy, then estimates the quality of that benefit in $/quality-adjusted life year (QALY).	Compares two strategies, with their quality of life comparisons converted to utility, or the value placed on time in a health state, e.g. time spent on chemotherapy = 0.7 compared to a healthy individual whose utility = 1.0	There are few interventions that make a large difference in utility Also, there is rarely one simple yardstick of utility that covers all health states.
Cost–benefit: compares two strategies but converts the clinical benefit to money, e.g. a year of life is worth $100 000	Possible but rarely done due to difficulty in assigning $ value to human life	Would almost certainly be unfavourable to most palliative interventions, as patients rarely work or generate income
Special considerations
Cost avoidance: measure the costs saved by not doing procedures, or by moving from an expensive place of care to a less expensive place	Can be easy to calculate (moving from ICU bed to regular or hospice bed) or difficult (avoided CAT scans, for which there is no financial record)	Hospital-based programmes routinely show cost savings to the health system. Important to know who is avoiding the cost and who may be absorbing the cost. For instance, if palliative care transfers sick patients to hospice, it will save the hospital money but cost the hospice money if the daily costs are above the per diem given to the hospice organization, typically US$150 per day (Passik et al., 2004)
Opportunity cost: the cost of performing one action rather than another. For instance, the opportunity cost of a patient staying in the ICU when appropriate for palliative care end of life is the high cost of that day plus the lost revenue of the ICU day plus the lost opportunity if a potential patient did not get appropriate trauma or ICU care	Harder to calculate	Familiar concept to most CEOs. They may quickly realize that gaining 200 ICU bed days a year by transferring appropriate patients 1 day sooner would generate $1100/day × 200 days, and prevent the hospital from being on Emergency Room diversion.

Type of study	Advantages and disadvantages	Application to palliative care
Clinical outcomes alone	Easy to perform Ignores costs	Traditional way to make decisions, e.g. imatinib mesylate (Gleevec^®) works for chronic myelogenous leukaemia. Find a way to pay for it
Cost alone	Ignores clinical outcomes	Rarely used to make decisions, unless the medical outcomes are similar (cost minimization, below)
Costs and clinical outcomes together
Cost minimization: assumes two strategies are equal; lowest cost strategy is preferred	Easy to do if there are direct comparisons	For instance, if methadone gives equivalent pain relief to sustained-release morphine, then use the less expensive option
Cost-effectiveness: compares two strategies; assigns $ per additional year of life (LY) saved by strategy	Requires a trial that directly compares strategies, and economic analysis alongside that trial. ‘Only accept treatments that gain a year of life for under $100,000/LY	Palliative care usually adds no additional LYs, so rarely applicable. May be most appropriate in chemotherapy or other interventions that prolong life
Cost utility: assigns $ per additional LY saved by strategy, then estimates the quality of that benefit in $/quality-adjusted life year (QALY).	Compares two strategies, with their quality of life comparisons converted to utility, or the value placed on time in a health state, e.g. time spent on chemotherapy = 0.7 compared to a healthy individual whose utility = 1.0	There are few interventions that make a large difference in utility Also, there is rarely one simple yardstick of utility that covers all health states.
Cost–benefit: compares two strategies but converts the clinical benefit to money, e.g. a year of life is worth $100 000	Possible but rarely done due to difficulty in assigning $ value to human life	Would almost certainly be unfavourable to most palliative interventions, as patients rarely work or generate income
Special considerations
Cost avoidance: measure the costs saved by not doing procedures, or by moving from an expensive place of care to a less expensive place	Can be easy to calculate (moving from ICU bed to regular or hospice bed) or difficult (avoided CAT scans, for which there is no financial record)	Hospital-based programmes routinely show cost savings to the health system. Important to know who is avoiding the cost and who may be absorbing the cost. For instance, if palliative care transfers sick patients to hospice, it will save the hospital money but cost the hospice money if the daily costs are above the per diem given to the hospice organization, typically US$150 per day (Passik et al., 2004)
Opportunity cost: the cost of performing one action rather than another. For instance, the opportunity cost of a patient staying in the ICU when appropriate for palliative care end of life is the high cost of that day plus the lost revenue of the ICU day plus the lost opportunity if a potential patient did not get appropriate trauma or ICU care	Harder to calculate	Familiar concept to most CEOs. They may quickly realize that gaining 200 ICU bed days a year by transferring appropriate patients 1 day sooner would generate $1100/day × 200 days, and prevent the hospital from being on Emergency Room diversion.