Headroom analysis in early evaluation of diagnostic technologies not expected to result in QALY gain: The case of complex paediatric neurology

The headroom method was introduced for the very early evaluation of the potential value of new technologies. It allows for establishing a ceiling price for technologies to still be cost-effective by combining the maximum effect a technology might yield, the maximum willingness-to-pay (WTP) for this effect, and potential downstream expenses and savings. Although the headroom method is QALY-based, not all innovations are expected to result in QALY gain. This paper explores the feasibility and usefulness of the headroom method in the evaluation of technologies that are unlikely to result in QALY gain. This will be illustrated with the diagnostic trajectory of complex paediatric neurology (CPN). Our headroom analysis showed a large room for improvement in the current diagnostic trajectory of CPN in terms of diagnostic yield. Combining this with a maximum WTP value for an additional diagnosis and the potential downstream expenses and savings, resulted in a total headroom of €14,088. This indicates that a new technology in this particular diagnostic trajectory, might be cost-effective as long as its costs do not exceed €14,088. The headroom method seems a useful tool in the very early evaluation of medical technologies, also in cases when an immediate QALY gain is unlikely. It allows for allocating health care resources to those technologies that are most promising. It should be kept in mind however, that the headroom assumes an optimistic scenario, and for that reason cannot guarantee future cost-effectiveness. It might be most useful for ruling out those technologies that are unlikely to be cost-effective.