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Methodology & Assumptions

Value Assessment Methodology

Methodology & Assumptions

Overview

This value assessment tool uses a comprehensive methodology to evaluate healthcare products and services across four key dimensions: clinical effectiveness, cost-effectiveness, operational impact, and patient experience. The methodology is designed to align with evaluation criteria used by NICE (National Institute for Health and Care Excellence) and Value Analysis Committees (VACs).

Formulas

ROI Calculation

Total Value = Financial Savings + Clinical Value + Operational Value + Patient Value

Where:

  • Financial Savings = Staff Time Savings + Consumable Savings + Length of Stay Savings + Efficacy-based Savings
  • Clinical Value = (Relative Risk Reduction × £500 × 2) + (Sensitivity Gain × £500 × 1.5) × Patients per Year
  • Operational Value = Time Saved per Procedure × Staff Hourly Rate × Patients per Year
  • Patient Value = (PROM Gain × 0.3 × £3000) + (PROM Gain × £200) × Patients per Year

Clinical Effectiveness

Relative Risk Reduction (RRR) = (Control Event Rate - Intervention Event Rate) / Control Event Rate

Sensitivity Gain = New Sensitivity - Baseline Sensitivity

Financial Impact

Annual Staff Time Savings = Hours Saved per Week × 52 weeks × Staff Hourly Rate

Length of Stay Savings = Days Reduced × Bed Day Cost × Patients per Year

Avoided Transfusion Savings = Transfusion Reduction Rate × Patients per Year × £500

Avoided OR Return Savings = OR Return Reduction Rate × Patients per Year × £2000

Assumptions

Clinical Assumptions

  • Base clinical value per patient: £500
  • Relative risk reduction weighted 2x for clinical value calculation
  • Sensitivity gain weighted 1.5x for clinical value calculation
  • Clinical benefits maintain consistency over the product lifespan

Financial Assumptions

  • Staff hourly rates include overhead costs (salary + benefits + indirect costs)
  • Bed day costs represent full economic cost including nursing, facilities, and overhead
  • Transfusion cost: £500 per avoided transfusion (including blood products, staff time, and monitoring)
  • OR return cost: £2000 per avoided return (including theatre time, staff, and consumables)
  • Discount rate: Not applied (conservative approach for 5-year assessments)

Operational Assumptions

  • Time savings are sustainable and do not require additional resources
  • Setup failure rates remain constant over product lifespan
  • Training costs are one-time investments in year 1
  • Integration complexity does not significantly impact ongoing operations

Patient Experience Assumptions

  • PROM improvements translate to 30% reduction in readmission risk
  • Readmission cost: £3000 per avoided readmission
  • Patient satisfaction value: £200 per unit of PROM improvement
  • NPS improvements correlate with reduced complaints and improved reputation

Combining Templates

Template Merging Process

When multiple cost templates are selected, the system automatically merges their values using the following process:

  1. Field Collection: All field values from selected templates are collected
  2. Conflict Detection: Fields with different values across templates are identified as conflicts
  3. Automatic Resolution: Fields with identical values across all templates are automatically merged
  4. Manual Resolution: Conflicts require user selection of preferred values

Conflict Resolution Rules

  • Priority Order: When conflicts arise, templates are processed in selection order
  • Default Selection: The first template's value is used as the default for conflicts
  • User Override: Users can manually select which template's value to use for each conflict
  • Value Validation: All resolved values are validated against field constraints

Template Combination Benefits

  • Comprehensive Coverage: Combine specialized templates for different aspects (e.g., PPH + NICU)
  • Scenario Modeling: Mix conservative and optimistic templates for sensitivity analysis
  • Evidence Aggregation: Leverage evidence links from multiple template sources
  • Customization: Start with template baseline and adjust specific fields

Best Practices

  • Related Templates: Combine templates addressing different aspects of the same clinical pathway
  • Evidence Consistency: Ensure evidence quality is consistent across combined templates
  • Validation: Review merged values for clinical and economic plausibility
  • Documentation: Record rationale for conflict resolution decisions

Evidence Rules

Evidence Requirements

Fields marked with "must supply evidence" require supporting documentation before export:

  • Clinical metrics: Peer-reviewed studies, clinical trial data, or systematic reviews
  • Financial metrics: Health economic studies, budget impact analyses, or real-world cost data
  • Operational metrics: Time-and-motion studies, workflow analyses, or implementation reports
  • Patient metrics: Patient-reported outcome studies, satisfaction surveys, or quality of life assessments

Evidence Quality Hierarchy

  1. Randomized Controlled Trials (RCTs) - Highest quality
  2. Systematic Reviews and Meta-analyses - High quality
  3. Observational Studies - Moderate quality
  4. Case Studies and Case Series - Lower quality
  5. Expert Opinion - Lowest quality

Evidence Validation

  • Evidence must be relevant to the specific product and clinical indication
  • Studies should include appropriate sample sizes and follow-up periods
  • Conflicts of interest should be declared and considered
  • Evidence should be recent (preferably within 5 years)

Glossary

NICE: National Institute for Health and Care Excellence - UK body that provides evidence-based guidance on health technologies.

VAC: Value Analysis Committee - Hospital committee that evaluates new products and services for procurement decisions.

PROM: Patient-Reported Outcome Measure - Standardized questionnaire completed by patients to assess their health status.

NPS: Net Promoter Score - Metric measuring patient likelihood to recommend the service to others.

RRR: Relative Risk Reduction - Proportional reduction in risk between intervention and control groups.

Sensitivity: True positive rate - Proportion of actual positives correctly identified by a diagnostic test.

Specificity: True negative rate - Proportion of actual negatives correctly identified by a diagnostic test.

QALY: Quality-Adjusted Life Year - Measure combining length and quality of life.

ICER: Incremental Cost-Effectiveness Ratio - Additional cost per additional unit of health outcome.

Version

Version: 1.0
Last Updated: January 2025
Next Review: July 2025

This methodology is regularly reviewed and updated to reflect current best practices in health technology assessment and value-based procurement.