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To estimate the cost-effectiveness ratio of highly-active antiretroviral therapy (HAART) in Canada.A before-and-after analysis to calculate incremental cost of life year gained (LYG) between 1991 and 1995 (pre-HAART period) and between 1997 and 2001 (HAART period) for non-AIDS and AIDS groups (CDC stage of HIV infection).For two Quebec HIV hospital clinics, mean inpatient (IP) days, outpatient (OP) visits and direct health care costs per patient-year (PPY) were calculated. Cox's proportional hazards models calculated disease progression, stratified by study periods and adjusted for gender, age at cohort entry, sexual orientation, injecting drug use and baseline CD4 cell count.For non-AIDS patients, mean IP days was 1.6 (pre-HAART period) compared with 0.8 PPY (HAART period); mean OP visits increased from 2.8 to 5.5 PPY. Total cost was US$ 4265 (pre-HAART period) and US$ 9445 PPY (HAART period) of which 66 and 84%, respectively were spent on antiretroviral drugs. Median progression time was 6.3 years in the pre-HAART period compared with 12.5 years in HAART period (log rank χ2 = 270, P < 0.0001). Incremental cost per LYG between periods was US$ 14 587. For AIDS patients, mean IP days decreased from 13.3 to 4.4 PPY between periods; OP visits increased from 8.3 to 9.2 PPY. Total costs increased from US$ 9099 to US$ 11 754 PPY, while expenditure on antiretroviral drugs increased from 29 to 72% of total cost. Median progression time was 3.8 years in the pre-HAART period, which increased to 13.3 years in the HAART period (log rank χ2 = 158, P < 0.0001); incremental cost per LYG between periods was US$ 12 813.HAART appeared a cost-effective intervention in Canada.