The efficiency frontier approach to economic evaluation of health-care interventions

Abstract

Background: IQWiG commissioned an international panel of experts to develop methods for the assessment of the relation of benefits to costs in the German statutory health-care system.

Proposed methods: The panel recommended that IQWiG inform German decision makers of the net costs and value of additional benefits of an intervention in the context of relevant other interventions in that indication. To facilitate guidance regarding maximum reimbursement, this information is presented in an efficiency plot with costs on the horizontal axis and value of benefits on the vertical. The efficiency frontier links the interventions that are not dominated and provides guidance. A technology that places on the frontier or to the left is reasonably efficient, while one falling to the right requires further justification for reimbursement at that price. This information does not automatically give the maximum reimbursement, as other considerations may be relevant. Given that the estimates are for a specific indication, they do not address priority setting across the health-care system.

Conclusion: This approach informs decision makers about efficiency of interventions, conforms to the mandate and is consistent with basic economic principles. Empirical testing of its feasibility and usefulness is required.