HIV Cost-effectiveness

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Overview
Basic Model Inputs for Cost-Effectiveness Analyses
HIV Prevention Data
The CDC Division of HIV/AIDS Prevention is pleased to provide a basic guide to the costeffectiveness analysis of prevention interventions for HIV infection and AIDS. The purpose of this
guide is to help prevention program staff and planners become more familiar with potential uses of
economic evaluation.
This guide consists of two sections. The first section introduces the basic concept of costeffectiveness analysis. The second section provides the sources of basic model inputs commonly
used in the literature. Significant publications in the field and other related sources are also
provided at the end.

Overview of Cost-Effectiveness
Analysis
What is cost-effectiveness analysis?
Cost-effectiveness analysis (CEA) is a type of economic analysis where both the cost and the
outcome (impact, result, effect, benefit, health gain ) of an intervention are evaluated and then
expressed in the form of a cost-effectiveness ratio. The numerator of the cost-effectiveness (CE)
ratio represents the cost of the intervention associated with one unit of outcome. The
denominator is the unit of outcome. It can be expressed using many types of measures including:
years of life gained, quality-adjusted life years gained (QALYs), new diagnoses, infections averted,
and deaths averted. CEA is usually conducted on interventions that are known to be effective.

The CE ratio is a fraction used to compare the relative costs and outcomes of two or more
interventions. In Example 1, the outcome measure chosen is new HIV diagnoses and the CE ratio
of the programs evaluated is expressed in terms of cost per new HIV diagnosis. The CE ratio of
Program A is $41,667 per new HIV diagnosis. This ratio does not reveal the cost of implementing
the program nor the number of new HIV diagnoses detected by the program. However, when
comparing the CE ratio of Program A to that of Program B, we can say that Program B is more
cost-effective than Program A when CE is measured in terms of cost per new HIV diagnosis,
because at $7,400 per new HIV diagnosis, Program B is less costly for the same outcome.

Example
1

[a] Annual
program cost

[b] Annual number of

new HIV diagnoses
detected by program

CE ratio: Cost per

new HIV diagnosis
([a]/[b])

Program
A

$500,000

12

$41,667 / new HIV

diagnosis

Program
B

$37,000,000

5,000

$7,400 / new HIV

diagnosis

Cost per new HIV diagnosis

HIV interventions, such as screening and partner services, are intended to identify HIV-positive
persons who are unaware of their infection. When evaluating several such programs in CE analysis,
the outcome new HIV diagnoses is often used to enable a comparison across these programs; so
the CE ratio is expressed in terms of cost per new HIV diagnosis.
Cost per infection averted (IA)
HIV prevention interventions such as syringe exchange programs, counseling for at-risk youth or
post-exposure prophylaxis are intended to prevent (avert) infection in HIV-negative persons. Such
programs can be evaluated to determine the number of infections prevented that would have
otherwise occurred had the intervention not been provided. When evaluating several such
programs in CE analysis, the outcome HIV infections averted is often used to enable a
comparison across these programs; so the CE ratio can be expressed in terms of cost per infection
averted.
The lifetime treatment cost of an HIV infection can be used as a conservative threshold value for
the cost of averting one infection. Currently, the lifetime treatment cost of an HIV infection is
estimated at $379,668 (in 2010 dollars), therefore a prevention intervention is deemed cost-saving
if its CE ratio is less than $379,668 per infection averted.
As an outcome, the number of HIV infections averted due to a program can be evaluated using
different mathematical techniques that vary in complexity and the amount of data or number of
assumptions required. Attention should be paid to the timeframe of the intervention effect
considered in the evaluation. For example, if the timeframe is one year, then the cost may have to
be incurred annually in order to continue to avert the HIV infections.

Cost per life year (LY) gained

HIV treatment interventions, including retention in care and treatment adherence, are in part
intended to extend the lives of HIV-positive persons. Such programs can be evaluated to determine
the number of additional life years gained (or saved) that otherwise would have been lost to
premature death. When evaluating these types of programs in CE analysis, the outcome life
years often is used to compare them; so the CE ratio can be expressed in terms of cost per life
year gained.
Cost per quality-adjusted life year (QALY) gained
As an outcome, life years do not reflect any of the positive or negative effects on the quality of life
of the patients receiving an intervention. For example, drug treatment A may provide an additional
2 years of life dominated by hospitalization while drug treatment B may provide an additional 1
year of life without any significant ill effects.
A quality-adjusted life year (QALY) is an outcome measure that considers both the quality and the
quantity of life lived. The QALY is based on the number of years of life added by the intervention.
Each year in perfect health is assigned the value of 1.0. Each year of less-than-perfect health is
assigned a value less than 1.0 down to a value of 0.0 for death. If the extra years would not be
lived in full health, for example if the patient would lose a limb, be blind or suffer from worse
mental health, then the extra life-years may be given a value of less than 1 to account for this.
HIV interventions intended to improve and/or extend the lives of HIV positive persons can be
evaluated to determine the number of additional QALYs gained (or saved) that would have
otherwise been lost. When evaluating several such programs in CE analysis, the CE ratio can be
expressed in terms of cost per QALY gained.
Most outcome measures, including infections averted, life years gained and new HIV diagnoses,
can be translated into QALYs, thereby providing a consistent measure of comparison across many
different types of intervention programs.

Cost-effectiveness thresholds
A cost-effectiveness ratio of $50,000 to $100,000 per QALY gained has been long cited in the
literature as a conservative threshold for a cost-effective intervention. Traditionally, if an
intervention was estimated to cost less than $50,000 to $100,000 per QALY gained, it would be
considered cost-effective. However, recent studies have argued that this benchmark is likely too
low since the threshold has not been reassessed over time. 1 To reflect the advances of modern
health care, Braithwaite et al reevaluated the threshold and estimated the plausible range for a
cost-effectiveness decision rule to be between $109,000 and $297,000 per QALY saved (in 2003
dollars; $143,000-$388,000 in 2010 dollars).2

What does cost-saving mean?

When two or more programs are being compared (intervention vs. comparator), the intervention is
labeled as cost-saving when both the net outcome of the intervention is greater than or equal to
that of the comparator and the cost of the intervention is less than the cost of the comparator. A

program can only be deemed cost-saving when it is compared to an alternative. The alternative is
typically the status quo or the current standard of care.
In Example 2, Program A is both cheaper and more beneficial than the current standard of care
and is therefore a cost-saving alternative. CE ratios cannot be negative.

Example 2

[b] Annual
number of
QALYs gained

[a] Annual
program cost

CE ratio: Cost per

QALY gained ([a]/
[b])

Program A
(intervention)

$750,000

50

$15,000 / QALY
gained

Standard of care
(comparator)

$1,000,000

40

$25,000 / QALY
gained

Difference

$(250,000)

10

Cost-saving

If the costs of Program A and the Standard of care are borne by the same institution, then the
savings will be reaped by that institution. Often, however, the costs of HIV interventions are borne
by many distinct entities, including government, health care systems and individuals, and the
savings are not realized by any single entity. In addition, the savings may occur over many years.

How to interpret a CE ratio?

At $100,000 per QALY (or at higher thresholds), a program may be considered cost-effective.
However, this ratio contains a numerator and a denominator and thus no interpretation can be
made as to the annual cost of this program.

Exampl
e3

[a] Annual
program
cost

[b] Number
of persons
served by
program

[c] Sum of
QALYs
gained by
program

Cost per
person
served
([a]/[b])

Cost per
QALY
gained
([a]/[c])

Program
A

$400,000

4,000

10

$100

$40,000

Program
B

$50,000,000

5,000

1,250

$10,000

$40,000

In Example 3, both programs A and B have the same measure of cost-effectiveness in terms of
cost per QALY gained, however, Program B is more costly to implement than A. Investment in
Program B may nonetheless be justified depending on budgetary constraints and the ability to
implement for the program in the population and setting considered.
If A and B are complementary rather than alternative programs, then they can both be
implemented. Implementing Program A and/or B in a particular population and setting requires an

evaluation of the number of persons that potentially could be served by the intervention and the
resulting overall costs.

Basic Model Inputs for Cost-Effectiveness Analyses

In this section, we list some of the most recent and significant publications that include key input
parameters researchers might use in model-based cost-effectiveness analyses. It is not intended to
provide a comprehensive overview of these topic areasonly to give readers an idea of some key
works in the field.

Cost of HIV treatment

A large fraction of the economic burden of HIV/AIDS is the medical costs of treating persons with
HIV. Medical cost estimates are often based on health care utilization by persons with HIV disease.
The costs associated with health care utilization in each disease stage are summed across all
disease stages from infection to death. The average annual cost of HIV care in the ART era was
estimated to be $19,912 (in 2006 dollars; $23,000 in 2010 dollars). 3 The most recent published
estimate of lifetime HIV treatment costs was $367,134 (in 2009 dollars; $379,668 in 2010
dollars).4

Cost of Testing
Testing in health care settings
Several US-based studies have evaluated the cost-effectiveness of routine opt-out HIV screening in
clinical settings. These settings included emergency departments, primary care settings, urgent
care centers, and STD clinics. The results were generally consistent. The cost per new diagnosis
ranged from $1,900 to $10,000 (in 2010 dollars), and varied by setting and testing implementation
strategy.5-9
Testing in non-health care settings
Non-health care settings, such as jails/prisons, community-based organizations (CBOs), and
outreach venues, are also common places to implement HIV testing programs. Individuals eligible
for testing in those settings could be identified through partner services or social networks. Costeffectiveness studies of these strategies have found the results generally consistent within similar
settings. For example, the cost per new HIV diagnosis associated with CBO-sponsored activities
ranged from $10,334 to $20,413 (2010 dollars).10-11 Variance in the cost per new HIV diagnosis was
more pronounced when evaluating HIV testing programs in jails (from $2,946 per new diagnosis in
Florida jails to $30,392 in Wisconsin jails),12 reflecting the differences in undiagnosed HIV
prevalence among inmates as well as differences in implementation costs.

HIV survival
The use of highly active antiretroviral therapy (HAART) since 1996 has significantly improved
survival for persons infected with HIV. Schackman et al. estimated life expectancy from the time of
infection to be 32.1 years from a large dataset of persons in routine outpatient care in the current
treatment era.4 Using US national HIV surveillance data, another study estimated that average life
expectancy after an HIV diagnosis increased from 10.5 to 22.5 years from 1996 to 2005. 13

HIV survival data have been reported slightly differently in the literature because of various
definitions of timeframe, e.g., time from HIV seroconversion to AIDS, time from seroconversion to
death, and time from HIV diagnoses to death. Survival also varies by gender, age at infection,
mode of infection, and the timing of initiation of antiretroviral therapy.14-17

HIV epidemiology
Recent HIV incidence estimates
CDC published new incidence estimates in 2011 using a refined methodology that allowed for an
updated 2006 incidence estimate (previously 56,300) as well as new estimates for 2007, 2008,
and 2009. These new estimates showed that the annual number of new HIV infections was stable
overall from 2006 through 2009:18

In 2006 there were an estimated

confidence interval: 42,400-54,700)

In 2007 there were an estimated

49,100-62,900)

In 2008 there were an estimated

41,800-53,800)

In 2009 there were an estimated

42,200-54,000)

48,600 new HIV infections in the United States (95%

56,000 new HIV infections (95% confidence interval:
47,800 new HIV infections (95% confidence interval:
48,100 new HIV infections (95% confidence interval:

More HIV surveillance reports can be found in HIV Surveillance Reports.

HIV transmission rate estimates

HIV transmission risk varies by different modes of transmission. The most common transmission
modes include unprotected receptive and insertive anal intercourse, unprotected receptive and
insertive vaginal intercourse, and contaminated needle sharing. The estimates of these and other
per-act or per-partner transmission probabilities can be found in the listed references of systematic
reviews and meta-analyses.19-22

Utility Estimate for HIV/AIDS

Many studies have reported quality-of-life estimates for HIV infection and AIDS. Published
estimates vary by study design and assessment method.23, 24 Tengs et al conducted a meta-analysis
of utility estimates for HIV/AIDS to elicit utilities from patients on a scale ranging from 0.0 for
death to 1.0 for perfect health. The study is commonly cited for reporting a pooled estimate of
utility of 0.70 for AIDS patients, 0.82 for symptomatic HIV patients, and 0.94 for asymptomatic
HIV patients [3].25

HIV Prevention Data

Annual cost of HIV by state
We estimated the annual cost of HIV by state based on the number of new HIV diagnoses in each
state, multiplied by the lifetime treatment cost discounted to the time of infection for each new
case (Table 1). Our cost estimates assume that a diagnosis occurs within the same year as
infection, and thus an individual incurs treatment costs over many years. The states with highest
number of new diagnoses in 2009, and thus the greatest financial burden, were Florida, California,

New York, and Texas. In all, the total lifetime treatment cost for HIV based on new diagnoses in
2009 was estimated to be $16.6 billion.

Table 1: State-Specific Costs from New Diagnoses of HIV Infection in 2009

United States and 5 U.S. dependent areas
State

Nb. of New Diagnosesa

Total Lifetime Treatment Costb

(in million)

Alabama

690

$253

Alaska

21

$8

Arizona

653

$240

Arkansas

214

$79

California

4,886

$1,794

Colorado

391

$144

Connecticut

366

$134

Delaware

168

$62

District of Columbia

713

$262

Florida

5,775

$2,120

Georgia

2,073

$761

Hawaii

70

$26

Idaho

42

$15

Illinois

1,708

$627

Indiana

483

$177

Iowa

125

$46

Kansas

150

$55

Kentucky

361

$133

Louisiana

1,247

$458

Maine

57

$21

Maryland

1,400

$514

Massachusetts

484

$178

Michigan

827

$304

Minnesota

393

$144

Mississippi

559

$205

Missouri

547

$201

Montana

30

$11

Nebraska

105

$39

Nevada

386

$142

New Hampshire

43

$16

New Jersey

1,252

$460

New Mexico

170

$62

New York

4,649

$1,707

North Carolina

1,719

$631

North Dakota

14

$5

Ohio

1,144

$420

Oklahoma

297

$109

Oregon

235

$86

Pennsylvania

1,736

$637

Rhode Island

123

$45

South Carolina

789

$290

South Dakota

23

$8

Tennessee

999

$367

Texas

4,291

$1,575

Utah

125

$46

Vermont

11

$4

Virginia

997

$366

Washington

557

$204

West Virginia

80

$29

Wisconsin

305

$112

Wyoming

19

$7

Subtotal

44,502

$16,338

U.S. dependent areas

American Samoa

$0

Guam

$1

Northern Mariana Islands

$0

Puerto Rico

671

$246

U.S. Virgin Islands

25

$9

Subtotal

700

$257

Total

45,202

$16,595

Note:
a Source: CDC HIV Surveillance Report 2009, Vol 21.
http://www.cdc.gov/hiv/surveillance/resources/reports/2009report/pdf/table19.pdf
Note that the numbers of new diagnoses listed in this table do not adjust for reporting delay, and
thus are likely underestimated.
b Total cost = Nb. of new diagnoses* Lifetime treatment cost per person
Life treatment cost per person=$367,134 (in 2009 dollars)
Source: Schackman BR, Gebo KA, Walensky RP, et al. The lifetime cost of current human immunodeficiency virus care in the United States. Medical Care 2006; 44: 990-997.

Savings from prevention efforts

Farnham et al. (2010) measured the value of HIV prevention efforts in the United States by
comparing the difference between the number of infections that have occurred with the number
that might have occurred in the absence of prevention programs. Combined with estimates of
lifetime treatment costs4 (2009 dollars), the study estimated the medical savings from infections
averted by US prevention programs from 1991-2006 to be $129.9 billion with 361,878 HIV
infections averted.26