Australian experience in the use of economic evaluation to inform policy on medical technologies

This paper considers the role of economic evaluation of health care technologies in Australia and its relationship to policy and program decisions. Economid evaluation in relation to policy has been best developed in relation to drug subsidy decisions under the Pharmaceutical Benefits Scheme. A key to this successful use of economic analysis has been the availability of a well developed framework for evaluation, linked to legislative provisions and clearly defined responsibilities withihn a government program. This application of cost-effectiveness analysis to decisions taken by the Pharmaceutical Benefits Advisory Committee is still evolving. At this stage, those responsible for the economic evaluations are increasingly having to confront the issue of the limits of such analysis in the practical policy formulation process. Considerations other than economic analysis may have major influence on some decisions. Several case studies are presented to illustrate these points. Australian experience with evaluation of non-pharmaceutical health technologies is mixed. Health technology assessment has been undertaken in Australia for a number os years, providing advice to policy areas, administrators and users of technologies. In a number of assessments, resource allocation was considered in some detail, although this did not always include economic analysis. Generally these assessments have been framed as advisory documents providing input to policy and program areas that have a more diffuse legislative and administrative framework than that applying to evaluation of drug listing applications under the Pharmaceuticla Benefits Scheme. Case studies are presented on the assessment of organ transplantation programs, breast and cervical cancer screening, magnetic resonance imaging, shockwave lithotripsy and related technologies and cardiac pacemakers. Some general points that emerge are the importance of factors other than economic evaluation in the decision making process, and the need to make policy and administrative decisions on the basis of limited data. It seems likely that policy on health technologies will continue to be influenced by a range of technical, political and societal factors, as well as by economic apraisal.