Book Review


Using Cost-Effectiveness Analysis to Improve Health Care: Opportunities and Barriers by Peter J. Neumann , Oxford, U.K. : Oxford University Press , 2004 . 224 pages; £ 19.99 . ISBN 0-19-517186-1 .

In his recent book, Peter Neumann takes a hard look at the politics and evolution of cost-effectiveness analysis (CEA) in the United States. Dr Neumann poignantly describes the parallel realities that CEA should take on a more significant role in guiding medical practice and informing health policy and that CEA likely will not become the basis for medical decision-making. These opposing truths that CEA can inform rational health-care practices but is perceived as rationing health-care practices are the focus of his book. The text describes in considerable detail the perceived value of CEA by various stakeholders and the reasons that many policy and formulary decision-makers are resistant to fully utilize the scientific evidence that CEA brings to evidence-based medicine.

The broad coverage of topics ranges from efficiency and economic arguments that support CEA to legal and ethical concerns that limit its political usefulness. Peter Neumann's analysis provides fair balance. It does not provide a one-sided view of the story nor does it suggest that opponents of CEA are completely misinformed or misguided. Rather, the chapters explore the source of resistance to CEA in the United States, providing detailed descriptions of observations and lessons learned from the private insurance industry and public payers including Medicare and the State of Oregon—famous for its experiment with cost effectiveness that went awry.

The book is captivating, often reading more like a novel than a textbook. The chapters highlight the relatively short history of CEA applied to pharmaceuticals and other health technologies, describing the barriers as well as the methodological developments and guidances that have assisted in its greater acceptance and use. The author portrays a clear picture of the problems related to implementing CEA more broadly, because of CEA's frequently counterintuitive approach to analysis and reporting of results. Peter Neumann points out the very real potential for bias, misreporting, and misinterpretation of results, especially by medical and policymakers with little formal statistical training. At the same time, the book documents the changes that have occurred over time to support the transparency and interpretability of study findings, none of which seem to address the underlying reality that the United States simply is reluctant to use economic efficiency arguments for deciding which medicines to use. There is a call for more formal education of health professionals regarding the methods of CEA, but a realistic view of the potentially limited impact that CEA training may have on decision-making.

The political support and opposition to CEA are described, with references to interesting twists and reversal of positions by key stakeholders including Medicare, the Food and Drug Administration (FDA), and private insurers. A brief description of the 1997 Food and Drug Administration Modernization Act (FDAMA) and the infamous Section 114 provides some glimpses into the complexity of disseminating CEA information and the debates over what constitutes “competent and reliable scientific evidence.”

There is a logical order to the chapters and appropriate balance between historical details, results from published literature, and informed speculation about where the future of CEA may lie. The cited literature is current and covers a broad array of contemporary issues with references to evidence and opinion from the leading experts in pharmacoeconomics and health technology assessment. The uses and potential misuses of CEA are delineated with reference to potential abuse by both the producers and users of the information. The book provides both warnings against biases in reporting by manufacturers and admonition against using CEA as a smokescreen for cost containment.

The Academy of Managed Care (AMCP) Format for Formulary Submission and specific examples from the field provide evidence of the increasing uptake and impact of the exponentially increasing CEA literature. Nevertheless, the Take-Home Lessons at the conclusion of the book present a rather dismal outlook for CEA in the foreseeable future. “In this climate, there is unlikely to be a groundswell for CEA . . . Politically, it will probably remain easier to impose limits by restricting eligibility rather than services.” Regardless of whether the reader finds this conclusion disheartening or well suited, he will not put the book down without refreshing insight and new fodder for thought.