title: Rethinking cost-effectiveness in the era of zero healthcare spending growth.
abstract: BACKGROUND
  The global economic crisis imposes severe restrictions on healthcare budgets, limiting the coverage of new interventions, even when they are cost-effective. Our objective was to develop a tool that can assist decision-makers in comparing the impact of medical intervention alternatives on the entire target population, under a pre-specified budget constraint.
  
  
  METHODS
  We illustrated the tool by using a target population of 1,000 patients, and a budget constraint of $1,000,000. We compared two intervention alternatives: the current practice that costs $1,000 and adds 0.5 quality-adjusted-life-years (QALYs) per patient and a new technology that costs 100 % more, and provides 20 % more QALYs per patient. We also developed a formula for defining the maximum premium price for a higher-cost/higher-effectiveness intervention that can justify its adoption under a constrained budget.
  
  
  RESULTS
  Using the new therapy will add 300 QALYs, compared to 500 QALYS when using the lower-cost, lower-effective intervention, despite a favorable incremental cost-effectiveness ratio (ICER) of $10,000. The maximum price for the higher-efficacy therapy that will preserve the target population outcomes is 20 % higher than the lower-cost therapy.
  
  
  CONCLUSIONS
  Although an intervention associated with higher costs and higher efficacy may have an acceptable ICER, it could provide inferior outcomes in the target population under budget constraints, depending on the relative effectiveness and costs of the interventions. The cost premium that can be justified for a higher-efficacy intervention is directly correlated to its effectiveness premium. Using the proposed tool may assist decision-makers in improving overall healthcare outcomes, especially in times of economic downturn.
authors.affiliation: Department of Health Systems Management, Faculty of Health Sciences and The Guilford-Glazer Faculty of Business and Management, Ben-Gurion University of the Negev, Beer-Sheva, Israel. ronen.arbel@gmail.com.|Department of Technology Marketing, Sapir Academic College, M. P. Hof Ashkelon 7919, Sderot, Israel. ronen.arbel@gmail.com.
authors.forename: Ronen
authors.initials: R
authors.lastname: Arbel
authors.affiliation: Department of Health Systems Management, Faculty of Health Sciences and The Guilford-Glazer Faculty of Business and Management, Ben-Gurion University of the Negev, Beer-Sheva, Israel.
authors.forename: Dan
authors.initials: D
authors.lastname: Greenberg
mesh_terms: D017281:Cost of Illness; D003362:Cost-Benefit Analysis; D017048:Health Care Costs / Q000639:trends*; D000069576:Health Equity / Q000592:standards; D006801:Humans; D011634:Public Health / Q000191:economics*; D019057:Quality-Adjusted Life Years