Although cost-effectiveness analysis has a long tradition of supporting healthcare decision-making in Sweden, there are no clear criteria for when an intervention is considered too expensive. In particular, the opportunity cost of healthcare resource use in terms of health forgone has not been investigated empirically. In this work, we therefore seek to estimate the marginal cost of a life year in Sweden’s public healthcare sector using time series and panel data at the national and regional levels, respectively. We find that estimation using time series is unfeasible due to reversed causality. However, through panel instrumental variable estimation we are able to derive a marginal cost per life year of about SEK 370,000 (EUR 39,000). Although this estimate is in line with emerging evidence from other healthcare systems, it is associated with uncertainty, primarily due to the inherent difficulties of causal inference using aggregate observational data. The implications of these difficulties and related methodological issues are discussed. Electronic supplementary material The online version of this article (10.1007/s10198-019-01039-0) contains supplementary material, which is available to authorized users.

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Many health technology assessment committees have an explicit or implicit reference value (often referred to as a ‘threshold’) below which new health technologies or interventions are considered value for money. The basis for these reference values is unclear but one argument is that it should be based on the health opportunity costs of funding decisions. Empirical estimates of the marginal cost per unit of health produced by a healthcare system have been proposed to capture the health opportunity costs of new funding decisions. Based on a systematic search, we identified eight studies that have sought to estimate a reference value through empirical estimation of the marginal cost per unit of health produced by a healthcare system for England, Spain, Australia, The Netherlands, Sweden, South Africa and China. We review these eight studies to provide an overview of the key methodological approaches taken to estimate the marginal cost per unit of health produced by the healthcare system with the aim to help inform future estimates for additional countries. The lead author for each of these papers was invited to contribute to the current paper to ensure all the key methodological issues encountered were appropriately captured. These included consideration of the key variables required and their measurement, accounting for endogeneity of spending to health outcomes, the inclusion of lagged spending, discounting and future costs, the use of analytical weights, level of disease aggregation, expected duration of health gains, and modelling approaches to estimating mortality and morbidity effects of health spending. Subsequent research estimates for additional countries should (1) carefully consider the specific context and data available, (2) clearly and transparently report the assumptions made and include stakeholder perspectives on their appropriateness and acceptability, and (3) assess the sensitivity of the preferred central estimate to these assumptions. Supplementary Information The online version contains supplementary material available at 10.1007/s40273-021-01087-6.

In the past few years, empirical estimates of the marginal cost at which health care produces a quality-adjusted life year (QALY, k) have begun to emerge. In theory, these estimates could be used as cost-effectiveness thresholds by health-maximizing decision makers, but prioritization decisions in practice often include other considerations than just efficiency. Pharmaceutical reimbursement in Sweden is one such example, where the reimbursement authority (TLV) uses a threshold range to give priority to disease severity and rarity. In this paper, we argue that estimates of k should not be used to inform threshold ranges. Instead, they are better used directly in health technology assessment (HTA) to quantify how much health is forgone when a new technology is funded in place of other healthcare services. Using a recent decision made by TLV as a case, we show that an estimate of k for Sweden implies that reimbursement meant forgoing 8.6 QALYs for every QALY that was gained. Reporting cost-effectiveness evidence as QALYs forgone per QALY gained has several advantages: (i) it frames the decision as assigning an equity weight to QALYs gained, which is more transparent about the trade-off between equity and efficiency than determining a monetary cost per QALY threshold, (ii) it makes it less likely that decision makers neglect taking the opportunity cost of reimbursement into account by making it explicit, and (iii) it helps communicate the reason for sometimes denying reimbursement in a way that might be less objectionable to the public than current practice.

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