Cost-Benefit Analysis

AI Impact Classification:

The center classifies AI impact into three major dimensions (Tier A, B, C), and adopts different cost-benefit analysis methods and techniques based on the impact dimension.

"Taiwan Health Technology Value Index":

• The center has proposed the "Taiwan Health Technology Value Index," which includes life, medical, and social benefits to reflect the multiple dimensions of innovative AI technology impact.
• Through quantitative methods, the benefits and total value of each dimension are estimated to supplement the limitations of traditional CEA methods.
• Social value of benefits:

Economic Analysis Models:

• Different economic analysis models are adopted according to AI technology impact classification.
• For example, for Tier C AI technology, decision tree models or Markov models may be used to evaluate their long-term benefits and costs.

Cost-Benefit Assessment Measurements:

• Including Incremental Cost-Effectiveness Ratio (ICER), Incremental Net Monetary Benefit (INMB), and Incremental Net Health Benefit (INHB).

Uncertainty in Cost-Benefit Estimation:

• Deterministic (DSA) and Probabilistic (PSA) sensitivity analyses are conducted for parameter uncertainty to estimate the probability of cost-effectiveness.
• For target populations with high heterogeneity, Markov microsimulation models or tolerance interval estimation are used.
• For economic evaluation methods, different economic analysis models are cross-compared for result consistency.

Health Insurance Payment Decision Risk:

• The Expected Value of Perfect Information (EVPI) is estimated to evaluate the opportunity cost of incorrect decisions due to uncertainty, as a reference for the degree of risk impact.

Health Insurance Payment Recommendations:

• For AI technologies that are cost-effective, risk and opportunity costs are provided to recommend risk-adjusted health insurance pricing.
• For AI technologies that are not cost-effective, scenario analysis is used to predict the cost-benefit balance point and estimate the value price that meets cost-effectiveness as a reference for price negotiation or conditional payment.
• Based on the results of budget impact analysis, the affordability of insurance finances and the feasibility of subsequent Price-Volume Agreements (PVA) and other Managed Entry Agreements (MEA) risk-sharing agreements are evaluated.