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Did health economics fail us during the COVID-19 pandemic?

By HTA Quarterly

By: Jo Watts-James, MBA; Kim Joline Schmidt, MSc; Kimberly Westrich, MA; Ken O’Day, PhD, MPA 

This article appears in Fall 2022 edition of HTA Quarterly. Subscribe to receive new issues.

Are the measures taken to manage COVID-19 cost-effective? Should this question even be raised when lives are at stake? In reality, budgets are finite and cost-benefit decisions are taken by healthcare policy makers every day to prioritize resources. So, did health economics step up to the plate during the COVID-19 pandemic?

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The COVID-19 pandemic presented itself as a balancing act between public health and the economy with countries having to choose whether to prioritize public health with greater economic disruption or to limit economic disruption at the cost of lives.

Given the apparent balancing act between public health and economics, it is only natural to think that the discipline of health economics (HE) would be at the forefront in helping to inform and craft the pandemic response as the discipline of HE is focused on healthcare decision making in the face of economic constraints, often under conditions of considerable uncertainty. As the director of research and chief economist for the Nuffield Trust in the UK, John Appleby says, “Questions are being voiced about the cost-effectiveness of the measures being used to tackle the disease. In short: are the costs worth the benefits? This may seem an outrageous question. Surely, we must do all we can to minimize mortality and morbidity from COVID-19? But the cost-benefit question is one that all health systems face every day.” As it turns out, HE has been notably absent from the decision-making process as commented on by various economists. Why is this? The reasons are institutional, methodological, and political.

HE professor at Leibniz University Hannover, J-Matthias Graf von der Schulenburg states, “Since the beginning of the pandemic, many experts have been heard by decision makers and have spoken out publicly: virologists, epidemiologists, intensive care physicians to name a few. Economists were rather quiet. Detailed analysis of the general consequences of the pandemic on the economy and on public finances were hardly ever presented, nor were the costs and benefits of specific measures systematically examined or publicly debated.”

UK health economist Ana Duarte adds, “It is less clear whether models to support decision making have sought to integrate COVID-19 epidemiology with a consideration of broader health, well-being, and economic implications.”

First, and most importantly, from an institutional perspective health technology assessment (HTA) is standard practice in many countries, but assessment of pandemic policies is beyond the remit and methods of HTA bodies. As the table below shows, some have assessed specific treatments or vaccines, but none looked at broader issues around non-pharmaceutical interventions (NPIs) and the overall pandemic response since it is not part of their remit. To date, none have done a cost-effectiveness assessment of vaccines and only the Institute for Clinical and Economic Review (ICER) has done a cost-effectiveness analysis of treatments (Table 1).

Table 1. HTA assessments of COVID-19 interventionsHTA assessments of COVID-19 interventions

Methodologically, practitioners of HE are well-versed in the importance of quantifying uncertainty in parameter estimates and through scenario and sensitivity analyses. However, when it comes to the COVID-19 response, there are significant impediments including the difficulty of developing realistic and valid societal-level models in the face of the massive uncertainty around many of the key inputs. Early in the pandemic, key clinical parameters were unknown. After a few years of the pandemic, there is now data overload, but despite the increase in information, the sands continue to shift—eg, due to COVID-19 mutations, there have been at least 5 variants of concern so far according to the World Health Organization (WHO). As a result, the vaccine clinical trials were done on variants that have now been superseded, so it is unsurprising that ICER caveats its 2022 report with “the COVID-19 landscape has been evolving so rapidly that currently available data cannot be expected to have evaluated the safety and effectiveness of these drugs in the real-world US population as of the date of this report,” and lists a number of key uncertainties including the “rapid evolution of SARS-CoV-2 leading to variants with different morbidity and mortality impacts.”

As stated by Appleby et al, “The ugly question is whether the value of the benefits is more or less than the (opportunity) costs of the interventions. Opportunity costs will also include mortality and morbidity from conditions other than COVID-19 because of reduced use of health services and delays in treatment of other illnesses arising from the [National Health Service (NHS)] prioritising resources on COVID-19.” However, data in this area is immature and not yet incorporated into models that we reviewed.

When comparing the COVID-19 period to non-COVID-19 periods, a global systematic review by Pauline Kiss found a decrease in acute coronary syndrome admissions ranging between 40% and 50% and a decrease in stroke admissions of between 12% and 40%. In the UK, a datasets study by Camille Maringe estimated the impact of delays in diagnosis on cancer survival outcomes in major tumour types (Table 2). An additional 3,291 to 3,621 deaths within 5 years, and 59,204 to 63,229 life-years lost were estimated.

Table 2. The impact of the COVID-19 pandemic on cancer outcomes due to delays in diagnosisThe impact of the COVID-19 pandemic on cancer outcomes due to delays in diagnosis

In the UK, two studies attempted to measure the cost-effectiveness of NPIs and vaccines, respectively; however, the results had incredibly wide ranges. Health economist Marcus Keogh-Brown modelled the cost of lockdown in the UK and found that COVID-19 would impose a direct health-related economic burden of £39.6 billion on the UK economy, but the total cost to the economy was £308 billion, increasing to £668 billion depending on the length of lockdown. Costs were attributable to labor lost from working parents during school closures and to business closures, so the variation is largely due to uncertainty on the length of these NPIs. Frank Sandman, another health economist, conducted a study on cost-effectiveness of vaccination and found the financial benefit ranged from £1.1 billion to £334.7 billion. This range was driven by uncertainty on how long immunity from vaccination lasts and by how much vaccination rates reduce transmission, but as Graf von der Schulenburg says, “Such rough estimates are more likely to create confusion than to increase trust in the contributions of health economists.”

As for a valid model, the ICER cost-effectiveness analysis of remdesivir attracted criticism, including that of Jagpreet Chhatwal a US health economist, as it did not include a societal perspective despite ICER’s value framework recognising societal benefits when they are substantial. However, were they to attempt to incorporate the societal benefits, what should be included and how would this be quantified?

Raising questions about the cost-effectiveness of the measures being used to tackle COVID-19 inevitably leads to political implications. Any cost-benefit analysis of optimal policy towards COVID-19 requires some assumption about the value of human life. At the start of the pandemic, total benefits of US suppression policies were estimated by economist James Broughel at between $632.5 billion and $765 billion during the first wave of COVID-19 compared with costs of between $214.2 billion and $331.5 billion, indicating that the net benefits of suppression policies to slow the spread of COVID-19 were positive and may be substantial. In a UK study, economist Robert Rowthorn looked at the relationship between value of life and length of lockdown restrictions in the UK and attempted to calculate the optimal lockdown length. According to this analysis, the optimal lockdown lasted for 5.3 weeks, but in practice the lockdown lasted approximately 10 weeks, and estimated costs exceeded the value of life figures routinely used by the UK government. Rowthorn comments that, “The original motivation for the lockdown was a fear that the health system would be overwhelmed if the disease were to get out of hand. However, this does not explain why the lockdown continued for such a long time. The explanation may be inertia or excessive caution. Or it may be that the government (and the public) values the lives of potential COVID-19 victims far more highly than those of certain other types of victims.” Furthermore this analysis assumed that the scale of social distancing is determined by government fiat alone, but in reality, as people became aware of the risks involved, there was a degree of voluntary social distancing and the study states, “As a result, the more apocalyptic predictions of what would happen without draconian intervention may be wide of the mark.” Ultimately, whether COVID-19 interventions are deemed cost-effective will depend on the costs that are deemed acceptable by the public, policymakers, and politicians.

In conclusion, the HE methods have been developed to answer focused questions about the value of new treatments through evidence generation, evidence synthesis, and value to support the allocation of healthcare resources and reimbursement decision making within a healthcare system. HE methods have not been developed to make society-wide decisions about policies involving personal liberty and freedom that affect public health outcomes, health system overload, the viability of economic sectors and industries, and national gross domestic product. Attempting to quantify and weigh all of these outcomes is well beyond the methodological capabilities of HE as it is currently practiced. Thus, the “failure” of HE/HTA is understandable and not necessarily a failure. Going forward there is a role for HE to do what HE does best and evaluate where to focus limited healthcare resources for COVID-19 vs other therapy areas.


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