Health Economics & Outcomes Research (HEOR) Module

Parthenon's HEOR module provides a comprehensive health economics engine for cost-effectiveness analysis, budget impact modeling, value-based contracting, and care gap identification. Built on top of the OMOP CDM, it connects real-world clinical evidence directly to economic evaluation, enabling payer-provider negotiations, formulary decisions, and health technology assessments grounded in your own patient data.

Module Architecture

OMOP CDM Data  -->  Cohort Definitions  -->  HEOR Analysis  -->  Scenarios  -->  Economic Results
                          |                       |                                    |
                   Target Cohort            Cost Parameters                    ICER / NMB / ROI
                   Comparator Cohort        Utility Values                    Tornado Diagrams
                                            Resource Use                     Budget Impact
                                                                                   |
                                                                          Value-Based Contracts
                                                                          Rebate Simulation

Analysis Types

The HEOR module supports five analysis types covering the major health economics evaluation frameworks:

Type	Code	Description	Key Output
Cost-Effectiveness Analysis	cea	Compares costs and health outcomes of interventions	Incremental Cost-Effectiveness Ratio (ICER)
Cost-Benefit Analysis	cba	Monetizes health outcomes for direct comparison	Net Monetary Benefit (NMB)
Cost-Utility Analysis	cua	Uses quality-adjusted life years (QALYs) as the outcome measure	Cost per QALY gained
Budget Impact Analysis	budget_impact	Projects financial impact of adopting a new therapy	Year 1, 3, and 5 budget impact
Return on Investment	roi	Evaluates investment return for health programs	ROI percentage, payback period

Creating an Analysis

Step 1: Define the Analysis

1. Navigate to HEOR from the main navigation.
2. Click New Analysis.
3. Configure the analysis parameters:

Field	Required	Description
Name	Yes	Descriptive analysis name
Analysis Type	Yes	CEA, CBA, CUA, Budget Impact, or ROI
Description	No	Detailed description of the analysis question
Perspective	No	Economic perspective: payer, societal, provider, or patient
Time Horizon	No	Evaluation period: 1 year, 5 years, 10 years, or lifetime
Discount Rate	No	Annual discount rate for future costs/outcomes (default: 3%, range: 0-20%)
Currency	No	Currency code (default: USD)
Data Source	No	OMOP source for real-world cost data
Target Cohort	No	Parthenon cohort definition for the intervention group
Comparator Cohort	No	Parthenon cohort definition for the comparator group

OMOP CDM integration

When a data source and cohorts are linked, the HEOR engine can pull real-world cost data from the OMOP cost table and clinical outcomes from the CDM tables, grounding your economic model in actual patient data rather than literature estimates alone.

Step 2: Define Scenarios

Each analysis contains one or more scenarios representing different modeling assumptions:

Field	Description
Name	Scenario label (e.g., "Base Case", "Optimistic", "Conservative")
Scenario Type	intervention -- the new therapy; comparator -- current standard of care; sensitivity -- parameter variation
Description	Explanation of scenario assumptions
Parameter Overrides	JSON object overriding base-case parameter values
Is Base Case	Boolean flag (only one scenario can be the base case)
Sort Order	Display ordering

Base case convention

Always create at least two scenarios: an intervention base case and a comparator base case. Sensitivity scenarios vary individual parameters around the base case to test robustness.

Step 3: Define Cost Parameters

Add cost and utility parameters to your analysis:

Field	Required	Description
Parameter Name	Yes	Descriptive name (e.g., "Osimertinib annual cost")
Parameter Type	Yes	Category (see table below)
Value	Yes	Numeric value
Unit	No	Unit of measurement (USD, QALY, per patient, etc.)
Lower Bound	No	Low end for sensitivity analysis
Upper Bound	No	High end for sensitivity analysis
Distribution	No	Statistical distribution: normal, gamma, beta, log_normal, uniform
OMOP Concept ID	No	Link to OMOP concept for data-driven parameters
Source Reference	No	Literature citation or data source

Parameter Types

Type	Code	Description	Examples
Drug Cost	drug_cost	Acquisition cost of medications	Annual drug cost, per-dose cost
Administration Cost	admin_cost	Cost of administering the therapy	Infusion center, nurse time
Hospitalization	hospitalization	Inpatient stay costs	ICU day, general ward day
ER Visit	er_visit	Emergency department costs	Per-visit ER cost
QALY Weight	qaly_weight	Quality-adjusted life year weights	Health state utility
Utility Value	utility_value	Health state utility values (0-1)	Progression-free, post-progression
Resource Use	resource_use	Healthcare resource utilization	Physician visits/year, lab tests/year
Avoided Cost	avoided_cost	Costs prevented by the intervention	Avoided hospitalizations
Program Cost	program_cost	Implementation and program costs	Screening program cost, training

Step 4: Run the Analysis

1. Ensure at least one scenario is defined.
2. Click Run Analysis on the analysis detail page.
3. The HeorEconomicsService computes results for each scenario.
4. Status transitions: draft -> running -> completed (or failed).

Understanding Results

Result Fields

Each scenario produces a result record with:

Field	Description
Total Cost	Aggregate cost for this scenario
Total QALYs	Quality-adjusted life years gained
Total Life Years	Unadjusted life years
Incremental Cost	Cost difference vs. comparator
Incremental QALYs	QALY difference vs. comparator
ICER	Incremental cost-effectiveness ratio (cost per QALY gained)
Net Monetary Benefit	NMB at the willingness-to-pay threshold
Willingness-to-Pay Threshold	WTP used for NMB calculation
ROI Percent	Return on investment percentage (for ROI analyses)
Payback Period	Months until investment is recovered (for ROI analyses)
Budget Impact (Year 1/3/5)	Projected budget impact (for budget impact analyses)
Cohort Size	Number of patients in the analysis

Tornado Diagram

For sensitivity analyses, results include tornado data showing how each parameter affects the ICER:

Field	Description
Parameter	Name of the varied parameter
Base Value	Parameter's base-case value
Low/High Value	Tested lower and upper bound
Low/High ICER	Resulting ICER at each bound
Range	ICER range (measures parameter sensitivity)

The tornado diagram ranks parameters by their impact on the ICER, helping identify which inputs most affect the economic conclusion. Parameters at the top of the tornado have the greatest influence and warrant the most scrutiny in data sourcing.

Interpreting ICER

• ICER below WTP threshold -- the intervention is cost-effective
• ICER above WTP threshold -- the intervention is not cost-effective at this price
• Negative ICER (cost-saving) -- the intervention saves money while improving outcomes (dominant strategy)
• Common WTP thresholds: $50,000/QALY (conservative), $100,000/QALY (moderate), $150,000/QALY (generous)

Value-Based Contracts

The HEOR module includes a value-based contracting system for outcomes-linked pricing agreements between payers and manufacturers:

Contract Types

Type	Code	Description
Outcomes-Based	outcomes_based	Rebates tied to real-world outcome achievement
Amortized	amortized	Payment spread over time, linked to continued benefit
Warranty	warranty	Manufacturer guarantees outcomes; refund if not achieved

Creating a Contract

1. Navigate to HEOR > Contracts.
2. Click New Contract.
3. Configure:

Field	Required	Description
Contract Name	Yes	Descriptive contract name
Analysis	Yes	Link to an HEOR analysis
Drug Name	No	Drug under contract
Contract Type	No	outcomes_based, amortized, or warranty
Outcome Metric	Yes	Clinical endpoint being measured (e.g., "30-day readmission rate")
Baseline Rate	No	Expected outcome rate without intervention
List Price	No	Drug list price per unit
Net Price Floor	No	Minimum net price after rebates
Measurement Period	No	Months over which outcomes are measured
Effective Date	No	Contract start date
Rebate Tiers	No	Tiered rebate structure (see below)

Rebate Tiers

Rebate tiers define outcome-linked pricing adjustments:

[
  { "threshold": 0.05, "rebate_percent": 10 },
  { "threshold": 0.10, "rebate_percent": 20 },
  { "threshold": 0.20, "rebate_percent": 35 }
]

Each tier specifies: if the outcome improvement exceeds the threshold, the corresponding rebate percentage applies. Tiers are evaluated in order; the highest qualifying tier is used.

Rebate Simulation

Simulate contract rebates based on observed real-world outcomes:

1. Open a contract detail page.
2. Enter the observed outcome rate from your real-world data.
3. Click Simulate Rebate.
4. The system computes:
   • Which rebate tier applies
   • Rebate percentage and dollar amount
   • Net price after rebate
   • Comparison to baseline rate

This enables payers to model financial scenarios before finalizing contract terms.

HEOR Dashboard

The main HEOR page displays:

Statistics Bar

Metric	Description
Total Analyses	Number of analyses created by the current user
Completed	Analyses with computed results
Total Contracts	Value-based contracts managed
By Type	Breakdown of analyses by type (CEA, CBA, CUA, etc.)

Analysis List

Sortable table of all analyses with:

• Name, type, status, perspective, time horizon
• Created and last updated timestamps
• Quick actions (view, edit, run, delete)

Contract List

Separate tab showing all value-based contracts with status (draft, active, expired).

API Reference

Key HEOR API endpoints:

Endpoint	Method	Description
/api/v1/heor/stats	GET	Module statistics
/api/v1/heor/analyses	GET, POST	List/create analyses
/api/v1/heor/analyses/{id}	GET, PUT, DELETE	CRUD for analysis
/api/v1/heor/analyses/{id}/scenarios	GET, POST	List/create scenarios
/api/v1/heor/analyses/{id}/scenarios/{sid}	PUT, DELETE	Update/delete scenario
/api/v1/heor/analyses/{id}/parameters	GET, POST	List/create parameters
/api/v1/heor/analyses/{id}/parameters/{pid}	PUT, DELETE	Update/delete parameter
/api/v1/heor/analyses/{id}/run	POST	Execute analysis
/api/v1/heor/analyses/{id}/results	GET	Retrieve results
/api/v1/heor/contracts	GET, POST	List/create contracts
/api/v1/heor/contracts/{id}	GET, PUT, DELETE	CRUD for contract
/api/v1/heor/contracts/{id}/simulate-rebate	POST	Simulate rebate

Regulatory compliance

HEOR analyses produced by Parthenon are research tools. Economic models used for regulatory submissions (e.g., HTA dossiers, AMCP Format submissions) require additional validation, sensitivity analyses, and expert review beyond what the platform automates. Consult health economics methodologists for regulatory-grade deliverables.