Economic Evaluation

Direct Costs: These include costs directly associated with the medical device, such as:

• Acquisition Costs: The purchase price of the device.
• Operation and Maintenance Costs: Costs for operating, maintaining, and servicing the device.
• Training Costs: Costs for training healthcare providers to use the device.
• Implementation Costs: Costs related to integrating the device into clinical practice.

Indirect Costs: These include broader economic impacts, such as:

• Productivity Losses: Costs associated with patients’ inability to work due to illness.
• Transportation Costs: Costs for patients travelling to receive treatment.
• Caregiver Costs: Costs for informal care provided by family members or friends.

Clinical Outcomes: Benefits are often measured in terms of clinical outcomes, such as:

• Effectiveness: Improvement in health outcomes due to the device
• Quality of Life: Impact on patients’ quality of life, often measured using tools like QALYs (Quality-Adjusted Life Years).

Economic Outcomes: Benefits can also include economic impacts, such as:

• Cost Savings: Reduction in other healthcare costs due to the use of the device.
• Productivity Gains: Improvements in patients’ ability to return to work or perform daily activities.

Cost-Effectiveness Analysis (CEA):

• Compares the costs and health outcomes of the device to alternatives.
• Results are often expressed as an incremental cost-effectiveness ratio (ICER), which is the difference in cost between two interventions divided by the difference in their effectiveness.

Methods of analysing cost-effectiveness set a monetary value for health and life based on willingness to pay ⁴. All costs are expressed as monetary value, but effectiveness is expressed as physical value. The aim is to maximise effectiveness for a given cost (or, conversely, minimise the cost of achieving a given level of effectiveness).

Each country sets its value, usually defined as a quality-adjusted life year (QALY), and a cost-effective intervention is worth the extra investment for the expected degree of health gain. Cost-effectiveness analyses are widely used to inform health priority setting in LMICs. However, there is growing recognition that cost-effectiveness should not be the sole criterion and that a broader set of criteria is required to inform policy choices 5. This is particularly important for digital health interventions that involve complex networks of stakeholders, and the mechanisms by which they achieve health outcomes are less evident.

Cost-Utility Analysis (CUA):

• Similar to CEA but incorporates quality-adjusted life years (QALYs) as the measure of benefit.
• Helps to compare interventions with different types of health outcomes by converting them into a common unit (QALYs).

This method considers the quality of life and the length of life gained from an intervention measured in QALYs or disability-adjusted life years (DALYs). These measures are more comprehensive than CEA methods, enabling the capture of well-being and resource use across the health system.

Cost-Benefit Analysis (CBA):

• Compares the costs and benefits of the device in monetary terms.
• Benefits and costs are both expressed in monetary units, allowing for a direct comparison.
• Results are often expressed as a benefit-cost ratio (BCR) or net present value (NPV).

All benefits and costs (QALY, disability days avoided, life years gained) are expressed as monetary value, and new interventions are compared to existing practice. Decisions are based on the option that produces the greatest net present value (NPV). In theory, any intervention with a positive NPV is beneficial.

• Clinical Investigations
• Clinical Evaluation
• Performance Evaluations for IVDs
• Usability Engineering
• Environmental Impact
• Organisational Impact
• Health Technology Assessment (HTA)

• Hutton J. Economic Evaluation of Medical Technologies. International Journal of Technology Assessment in Health Care. 1986;2:43 - 52.

• Seifan A, Shemer J. Economic evaluation of medical technologies. The Israel Medical Association journal : IMAJ. 2005;7(2):67-70.

• Halminen O, Chen A, Tenhunen H, Lillrank P. Demonstrating the value of digital health: Guidance on contextual evidence gathering for companies in different stages of maturity. Health Services Management Research. 2021;34(1):13-20.

• Cartwright WS. Methods for the economic evaluation of health care programmes, second edition. By Michael F. Drummond, Bernie O’Brien, Greg L. Stoddart, George W. Torrance. Oxford: Oxford University Press, 1997. The Journal of Mental Health Policy and Economics. 1999;2(1)

• Baltussen R, Mitton C, Danis M, Williams I, Gold M. Global Developments in Priority Setting in Health. International journal of health policy and management. 2017;6(3):127-8.

510(k) Clearance: A premarket submission made to the U.S. Food and Drug Administration (FDA) to demonstrate that the device to be marketed is as safe and effective, that is, substantially equivalent, to a legally marketed device that is not subject to PMA (Premarket Approval).

Acceptance Criteria: The predefined standards and specifications that a device must meet during testing and evaluation to be deemed suitable for its intended use and to comply with regulatory requirements.

Benefit-Risk Analysis: The comparison of a medical device’s benefits to its associated risks, often used in regulatory decision-making.

CE Marking: A certification mark that indicates conformity with health, safety, and environmental protection standards for products sold within the European Economic Area (EEA).

Clinical Context: The specific medical conditions, patient populations, and healthcare settings in which a device is intended to be used, influencing its design, functionality, and regulatory requirements.

Clinical Evaluation: A methodologically sound ongoing procedure to collect, appraise, and analyse clinical data about a medical device and to verify its safety and performance, including its clinical benefits. Also see Clinical Investigation.

Clinical Evaluation Plan (CEP): A structured document outlining the methodology and objectives for assessing the clinical performance and safety of a medical device or intervention.

Clinical Evaluation Report (CER): A comprehensive document that systematically analyses clinical data pertaining to a medical device to establish its safety and performance per regulatory requirements.

Clinical Investigation: Any systematic investigation or study in or on one or more human subjects undertaken to assess the safety or performance of a medical device.

Compliance: Adherence to regulations, standards, and guidelines set forth by regulatory authorities.

Conformity Assessment: A process used to determine whether a product, service, system, or entity meets specified standards, regulations, or requirements.

Endpoint: The measurable result at the end of a study, including types such as:

• Clinical Endpoint: A precisely defined and measurable outcome used to determine the effect of an intervention.

• Performance Endpoint: A measure of how well the medical device achieves its intended purpose.

• Primary Endpoint: The main result that is measured at the end of a study to see if the treatment worked (e.g., the change in a clinical measurement from baseline to the end of the study).

• Safety Endpoint: A measure of the frequency and severity of adverse events experienced by participants during a clinical trial.

Equivalency: Demonstrating that a new device is as safe and effective as an already marketed device by comparing its technical and functional characteristics.

Ethics Committee (Institutional Review Board - IRB): An independent group that reviews and monitors the ethical aspects of a clinical trial.

Good Clinical Practice (GCP): An international quality standard provided by the International Conference on Harmonisation (ICH) for the conduct of clinical trials involving human subjects.

Health Technology Assessment (HTA): A systematic evaluation of the properties, effects, and impacts of health technology, such as medical interventions, pharmaceuticals or medical devices, to inform healthcare decision-making.

Indication of Use: A concise statement specifying the medical conditions or purposes for which the medical device is intended to be used, as approved by regulatory authorities.

Informed Consent: The process through which a participant voluntarily confirms their willingness to participate in a study after being informed of all study aspects relevant to their decision to participate.

Instructions for Use (IFU): The document provided by the manufacturer that includes essential information on a medical device’s intended purpose, proper handling, operation, maintenance, and safety precautions for users.

Intended purpose: The use for which a medical device is intended according to the information provided by the manufacturer on the labelling, in the instructions for use (IFU), or in promotional materials. This may also be referred to as the Intended Use in some jurisdictions. Also see Indication of Use.

International Medical Device Regulators Forum (IMDRF): A global regulatory collaboration focused on harmonising medical device regulations to facilitate patient access to safe and effective devices. This organisation was formerly the Global Harmonization Task Force (GHTF).

Investigator: An individual who conducts a clinical investigation and is responsible for ensuring the study’s integrity and participants’ welfare. Also see Clinical Investigation.

Investigational Device Exemption (IDE): An exemption that allows a medical device to be used in a clinical study to collect safety and effectiveness data, typically required before a device can be marketed.

in vitro Diagnostics (IVD): Medical tests conducted on samples taken from the human body, such as blood or tissue, to detect diseases, conditions, or infections outside the body.

Labelling: The label on a medical device and all descriptive and informational literature associated with the device. Also see Instructions for Use (IFU)

Manufacturer: A legal entity that designs, produces, assembles, or labels a medical device with the intention of placing it on the market.

Mode of Action: The means by which a device achieves its intended therapeutic or diagnostic effect.

Notified Body (NB): An organisation designated by a country authority to assess the conformity of certain products before being placed on the market, ensuring they meet applicable regulatory requirements and standards.

Payer: An entity or organisation, such as an insurance company or government agency, responsible for reimbursing or funding healthcare expenses related to using health technologies.

Post-Market Surveillance (PMS): The proactive collection and review of experiences and data related to a device after it has been released onto the market to ensure continued safety and performance.

Predicate Device: An existing on-market device that provides a basis for comparison or reference in demonstrating substantial equivalence for regulatory purposes.

Real World Evidence: Clinical evidence regarding the use and potential benefits or risks of a medical product derived from real-world data (RWD) sources outside traditional clinical trials.

Regulation: The rules, laws, standards, and requirements set by regulatory authorities to ensure the safety, efficacy, and quality of devices intended for medical use.

Regulatory Authority: An official body overseeing and enforcing laws, regulations, and standards within a specific industry or sector to ensure compliance and protect public interests. Also known as a Regulatory Authority. Also see Competent Authority and Notified Body.

Regulatory Submission: The formal process of submitting documentation and data to regulatory authorities for review and approval to market or sell the device within a specific jurisdiction.

Reimbursement: The process of receiving payment from insurers, government health programs, or healthcare facilities for the use of medical devices in patient care.

Risk Management (RM): The systematic application of management policies, procedures, and practices to the tasks of analysing, evaluating, controlling, and monitoring risk.

Risk Management File (RMF): A compilation of all documents and records generated during the risk management process.

Safety: The condition of being protected from or unlikely to cause danger, risk, or injury.

Standard: A document that provides guidance, requirements, or specifications established by regulatory bodies, industry organisations, or international consensus groups.

State-of-the-art (SotA): The current knowledge or good practice acceptable in the medical devices industry.

Study Protocol: A document that describes the objectives, design, methodology, statistical considerations, and organisation of a clinical study.

Systematic Review: A structured and comprehensive synthesis of research studies that aims to identify, select, assess, and summarise the findings of all relevant individual studies on a particular topic.

Technical Documentation: All documents that demonstrate the design, manufacture, and performance of the device, essential for ensuring compliance with regulatory requirements. This is also known as the Technical File.

Traceability: The ability to verify an item’s history, location, or application by means of documented recorded identification.

Usability Engineering: The process of designing medical devices to ensure they are safe, effective, and easy to use by intended users under specified conditions.

User: Any individual who operates or interacts with a medical device, including healthcare professionals, patients, and caregivers.

Vigilance: The systematic process of monitoring, evaluating, and responding to safety issues and adverse events related to medical devices to ensure ongoing safety and compliance with regulatory standards.