Joseph Schaafsma

We carried out an economic evaluation of the northernmost five sites of the British Columbia telehealth network. The videoconferencing network links health-care facilities in 12 communities with Vancouver, for clinical consultations, administrative meetings and educational sessions. The economic evaluation was based on the netcost criterion (i.e. cost of telehealth minus travel costs avoided). Cost and utilization data were obtained from client interviews and log data compiled between September 2001 and January 2003. The results showed that the subnetwork of five sites was not only cost reducing, but also cost-effective. Travel costs for administrative meetings were reduced by $724,457/annum and were greater than the annual fixed and variable costs of all the telehealth sessions ($553,740). A sensitivity analysis was conducted on six parameters: amortization period, opportunity cost of capital, operating cost of a telehealth session (by type of session), number of telehealth sessions, travel time and the opportunity cost of travel time. The study suggests that the cost-effectiveness of telehealth to remote areas will increase over time as the cost of equipment continues to fall, as network connections become cheaper and as utilization rates rise.

The purpose of this paper is to argue that systematic data heterogeneity exists when the objective of pharmacotherapy is improved health-related quality of life (HR-QOL), and that the pharmacotherapy’s cost effectiveness will vary inversely with the patient’s baseline HR-QOL (BHR-QOL), the patient’s HR-QOL just prior to treatment. It is argued that when improved HR-QOL is the primary objective of a pharmacotherapy, the magnitude of the HR-QOL response to treatment may be negatively correlated with BHR-QOL and that the net cost of the pharmacotherapy may be positively correlated with BHR-QOL. It is also argued that the value placed on a given increment in HR-QOL declines as BHR-QOL rises. The case for sample stratification by BHR-QOL, and for conducting costeffectiveness analysis (CEA) at the stratum level, is illustrated with numerical examples using hypothetical data and the incremental net monetary benefit (INMB) criterion. Sensitivity analysis is used to explore the response of the INMB at the stratum level to different degrees of data heterogeneity across the BHR-QOL strata. This paper demonstrates that because of cumulative effects, even relatively minor data heterogeneity related to BHR-QOL results in substantial differences in the cost effectiveness of treatments across BHR-QOL strata. CEA stratified by BHR-QOL enables a more efficient and equitable allocation of public healthcare funding than standard cost-effectiveness screening of pharmaceutical drugs based on full-sample averages.