Many medical treatments have high initial costs but are considered worthwhile expenses because of the benefits, both direct (improved health and quality of life) and indirect (decreased healthcare spending from avoidance of complications). For treatments such as kidney dialysis, cardiac pacemakers, and organ transplantation, we as a society are willing to pay for treatments with high costs as long as they provide substantial benefits. Cost-effectiveness analysis is a common technique to weigh costs and effectiveness and evaluate whether a treatment that might be expensive has impacts that are large enough to justify the costs, so to speak.
Cost-effectiveness analysis allows comparison of different types of treatments by using a measure of effectiveness called quality-adjusted life-years (QALYs), combining additional years of life (decreased mortality) with increased quality of life (avoiding health complications or motor vehicle crashes, for example). The cost per QALY measures the cost that is associated with each additional year of life with perfect health. This is not the same as adding another year of life, as it incorporates not only the additional years of life and the quality of those additional years. For example, if a treatment allows someone to live 5 years longer but at a very poor quality of life (0.10 on the scale), the improvement would be less than 1 QALY (5 years x 0.10 = 0.5 QALY). For cost-effectiveness, the cost of the treatment is then divided by the change in QALYs to give the cost per 1 QALY gained.
Sleep Apnea Treatment and Cost Effectiveness
We are fortunate that continuous positive airway pressure (CPAP) is relatively inexpensive, as it can be extremely beneficial for patients who wear it and sleep comfortably with it. However, we know that many patients do not tolerate or benefit from CPAP. These patients should consider alternative treatments, including surgery or oral appliances. These are generally covered by medical insurance in the United States because they are supported by research studies demonstrating benefits that balance the costs.
Inspire Medical’s Upper Airway Stimulation therapy has initial costs that are higher than most other treatments for obstructive sleep apnea. As happens with many new treatments—especially those with high initial costs—it is important to compare costs and effectiveness to see how it compares to other well-accepted treatments. The May 2015 issue of the medical journal SLEEP includes a cost-effectiveness analysis of Upper Airway Stimulation on which I am an author.
How was the study of Upper Airway Stimulation costs done?
This study was designed to provide a general estimate of the costs and effectiveness of Upper Airway Stimulation. We used established cost-effectiveness analysis methods. Direct healthcare costs (costs paid by medical insurance) were almost $43,000; these were the Medicare payment amounts for healthcare costs like the surgical implantation procedure and additional sleep studies and office visits, minus the cost savings for reducing potential sleep apnea complications (heart attack, stroke, and motor vehicle crashes). To be conservative, we did not include financial benefits that may be seen with sleep apnea treatment, such as improved worker productivity, that can occur with sleep apnea treatment.
The effectiveness evaluation was based on the STAR Trial publication, in which 66% of patients receiving the device achieved a dramatic improvement or resolution of their sleep apnea. The trial data were used to estimate the reduction in adverse outcomes (mortality, heart attack, stroke, and motor vehicle crashes), based on published studies of other sleep apnea treatments. These outcomes were combined to show that Upper Airway Stimulation provides 1.09 QALYs over a person’s lifetime.
What is the cost effectiveness of Upper Airway Stimulation?
Combining costs and effectiveness, the study showed that the lifetime incremental cost-effectiveness ratio for Upper Airway Stimulation was about $40,000 per QALY. Cost-effectiveness analyses are never entirely precise, so we used two common approaches to account for uncertainty in certain parts of the model: sensitivity analysis and Markov estimation. Again, to be conservative, we used a wide range (±30%) in the estimates for the cost components and a wider range for the effectiveness estimates. Incorporating the variation did not markedly change the conclusions; 70% of the cost-effectiveness ratio estimates were below $50,000 per QALY, and 95% of estimates were below $100,000 per QALY. Therefore, the results show that Upper Airway Stimulation has favorable cost-effectiveness, as the generally-accepted threshold for medical treatments has been considered to be $50,000-100,000 per QALY, although some have argued that $100,000-150,000 is more appropriate.
This study has limitations, like any research. Dr. Edward Weaver from the University of Washington and Dr. Jonathan Skirko from the University of Colorado wrote an editorial in the same issue, pointing out some of these. I have known Ed for many years as a mentor, colleague, and friend, and I have always welcomed (and continue to welcome) challenging opinions. In fact, many of their concerns were included in our paper. They felt our study translated data on changes in the apnea-hypopnea index in a certain group of patients to health outcomes (such as heart attack and stroke) that were not measured directly. We certainly made best efforts and used published studies that make these same translations for other sleep apnea treatments. Our approach is common to those adopted by similar studies of other medical devices in all areas of medicine. In my opinion, the most important limitation regarding this study is that the effectiveness data come from a single study and use data from 12 months to project results over 10 years. While a perfect world would include multiple studies tracking thousands of patients over decades, we will likely never have these studies. Instead, we accounted for uncertainty in multiple ways and relied on previous research showing that the benefits of Upper Airway Stimulation are maintained at 18 months for those who respond initially. Data from 2 years after Upper Airway Stimulation system implantation will be presented at the upcoming SLEEP meeting in June 2015, and I look forward to seeing them.
The bottom line
Nobody should think that Upper Airway Stimulation has a precise cost-effectiveness ratio of $40,000 per QALY. Instead, this study showed that Upper Airway Stimulation has a cost-effectiveness ratio that is well within the range used to cover many medical interventions, even those with high initial costs. For appropriate patients, this is an exciting treatment option with favorable cost-effectiveness.
Disclosure: I treat patients with obstructive sleep apnea with the Upper Airway Stimulation system. However, I do not own any part of the company and do not receive any royalties from sales of their devices. I have been paid for my work assisting Inspire’s preparation for their 2014 presentation to the United States Food and Drug Administration and the development of the cost-effectiveness model discussed above (but not the performance of the cost-effectiveness analysis or writing of the paper).