overview of the day
DESCRIPTION
Overview of the day. 1015-1100Introduction to Health Economics 1100-1200Introduction to Economic Evaluations 1200-1300LUNCH 1300-1400Appraising Economic Evaluations practical 1400-1430Prioritisation and Resource Allocation 1430-1530Practical. Introduction to Health Economics. - PowerPoint PPT PresentationTRANSCRIPT
![Page 1: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/1.jpg)
Overview of the day
1015-1100 Introduction to Health Economics
1100-1200 Introduction to Economic Evaluations
1200-1300 LUNCH
1300-1400 Appraising Economic Evaluations practical
1400-1430 Prioritisation and Resource Allocation
1430-1530 Practical
![Page 2: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/2.jpg)
Introduction to Health Economics
Dr Carol ChattDr Arun Ahluwalia
![Page 3: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/3.jpg)
Learning Outcomes
• Gain a general understanding of health economics
• Be aware of different types of economic evaluation
• Be able to critically appraise an economic evaluation
• Gain an understanding and experience of prioritisation & resource allocation
![Page 4: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/4.jpg)
What do you think?
• The over-riding duty of a doctor is to ensure the best possible outcome for their patient…and cost should not be a factor
• The patient should not be concerned about the cost of treatment being given to them
• Life-saving interventions are preferable to those that improve the quality of life
![Page 5: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/5.jpg)
The NHS context• The NHS has limited resources
Although spending has increased!
![Page 6: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/6.jpg)
The NHS context• The public have increasing expectations
Source: HES Data
![Page 7: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/7.jpg)
The NHS context
• We need to decide what we can afford with our limited budget
• Health Economics is about choice
• But for every choice there is an ‘opportunity cost’
![Page 8: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/8.jpg)
Key Concept – Opportunity Cost
• “The value of foregone benefit which could be obtained from a resource in its best alternative use
• E.g. if you have a holiday and you take a 2 week cruise…you forego the opportunity of going skiing
![Page 9: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/9.jpg)
• In the NHS, how do we choose which treatments to provide?
Economic evaluation
![Page 10: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/10.jpg)
Economic Evaluation
• “The comparative analysis of alternative course of action in terms of both their costs and consequences in order to assist policy decisions” (Drummond & McGuire, 2001)
• This does not just mean always choosing the cheapest options
• We must also consider the consequences (or outcomes) of each option, including equity
![Page 11: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/11.jpg)
Key Concept: Equity
• “A system of justice based on conscience and fairness”
• Equality is giving everyone the same share• Equity is giving everyone a share according to
their need– Horizontal equity – Equal treatment of equals– Vertical equity – Unequal treatment of unequals
![Page 12: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/12.jpg)
Economic Evaluation components
• Costs– To the NHS– To the whole public sector (e.g. social services)– To the patient (e.g. time off work, transport to
appointments, etc)– (Resources saved)
• Consequences– Health state change– Other gains e.g. employment
Narrow costing perspective
Wider costing perspective
![Page 13: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/13.jpg)
Types of evaluation
![Page 14: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/14.jpg)
Types of Economic Evaluation
1. CMA Cost-Minimisation Analysis2. CCA*Cost-Consequence Analysis*3. CBA Cost-Benefit Analysis4. CEA Cost-Effectiveness Evaluation5. CUA Cost-Utility Analysis
*not considered by some to be a true economic evaluation
![Page 15: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/15.jpg)
1 Cost-Minimisation Analysis
• Requires evidence that outcomes are equivalent
• Cheapest option is preferable
• Simvastatin and Atorvastatin lead to similar cholesterol reductions– Simvastatin 40mg costs £1.17 per month– Atorvastatin 20mg costs £24.64 per month
![Page 16: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/16.jpg)
2 Cost-Consequence Analysis
• Costs and consequences are reported separately
• Costs and consequences not aggregated into single measures
• Needs interpretation – may be influenced by personal judgment
![Page 17: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/17.jpg)
3 Cost-Benefit Evaluation
• Costs and consequences measured in terms of money• If sum of consequences is greater than cost, treatment is
acceptable
• Methodologically can be difficult accurately assigning monetary values– What is the monetary value of an extra 6 months of life?
• Also need to consider problems of a fixed budget• E.g. Triptan drug costs £4 per migraine, saved £12.50 in
work absences
![Page 18: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/18.jpg)
3 Cost-Benefit Analysis cont.
![Page 19: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/19.jpg)
4 Cost-Effectiveness Analysis
• Outcomes measures in ‘natural units’– E.g. years of life saved, symptom-free days,
number of cases detected
• Difficult to compare interventions that are measured in different units
![Page 20: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/20.jpg)
4 Cost-Effectiveness Analysis cont.
![Page 21: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/21.jpg)
5 Cost-Utility Analysis
• Consequences presented as a single generic measure (e.g. Quality Adjusted Life Year, QALY)
• Similar to CEA but now able to compare consequences of treatments with different outcomes, e.g. life-saving treatments can be compared to life-improving treatments
• Which intervention has a better Cost-Utility outcome?– Hip replacement– Coronary Artery Bypass Graft £2000 per QALY gained
£1100 per QALY gained
![Page 22: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/22.jpg)
QALYs
• Combines:– Quality of Life (QoL)– Length of Life
• Measuring QoL:– Can use HRQoL
questionnaire e.g. EQ-5D– Or a direct valuation• Visual Analogue Scale• Standard Gamble• Time Trade Off
![Page 23: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/23.jpg)
EQ-5D
• Example results for 5 patients using EQ-5DPatient A B C D EMobility 1 1 2 3 5Self-Care 1 2 2 4 5Usual Activities 1 2 3 4 5Pain or discomfort 1 2 3 4 5Anxiety or depression 1 2 3 4 5QoL Score 1.00 0.65 0.55 0.06 -0.59
QoL 1 = perfect health
QoL 0 equivalent to death QoL <0 = worse than death
![Page 24: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/24.jpg)
Standard Gamble
• The respondent chooses between two alternatives with two possible outcomes: a good outcome with the probability p and a bad outcome with the probability of 1-p
• The probability of outcomes is varied until the respondent is indifferent about the two alternatives (Columbia University, 2012)
![Page 25: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/25.jpg)
Standard Gamble example
• You are paraplegic (can’t walk), and offered a treatment which has:– 70% chance of perfect recovery for 30 years…then
death (BUT a 30% chance of instant death)or
– Remain in your current health state for 30 years…then death
![Page 26: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/26.jpg)
Standard Gamble example
• How about:– 80% chance of recovery with 20% chance of death– Or remain as you are
![Page 27: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/27.jpg)
Time Trade-Off
• The respondent is asked to choose between 2 alternatives, e.g.
• 30 years as a person with paraplegiaor
• 28 years of perfect health
• 30 years as a person with paraplegiaor
• 20 years of perfect health
![Page 28: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/28.jpg)
QALYs
• QALY = Σ (QoL × Length of time in that state)• 1 QALY is one year of perfect health
• Calculating QALYs mini-practical
![Page 29: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/29.jpg)
Advantages of QALYs
• A convenient non-monetary unit
• Can compare life-extending / life-improving / life-saving interventions
![Page 30: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/30.jpg)
Disadvantages of QALYs
• Only considers outcome of patient– Ignores effects on family, society, etc– Only measures health-related effects
• Assumes that the value of the health state is independent of the duration– Humans adapt!
• Elicitation method– Sensitivity of EQ-5D is a separate issue– Valuation depends on who is asked (Dr > public >
patients)• Inherently ageist
If you reject QALYs what do you use instead?
![Page 31: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/31.jpg)
How to present your CEA and CUA results (1)
• What is the difference in costs and the difference in consequences of a new treatment compared to the current treatment?
• The incremental cost-effectiveness ratio (ICER) is:
ICER = Difference in costs_______Difference in consequences
• This calculates the cost per extra unit of benefit
![Page 32: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/32.jpg)
How to present CEA and CUA results (2)• The cost-effectiveness plane
NE
SW
NW
SE
Difference in effectiveness
Difference in cost
Current treatment
![Page 33: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/33.jpg)
“North West never invest…South East always invest”
NE
SW
NW
SE
Difference in effectiveness
Difference in cost
New treatment is more expensive and less effective
New treatment is less expensive and more effective
![Page 34: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/34.jpg)
The North East quadrant – A or B ?
NE
SW
NW
SE
Difference in effectiveness
Difference in cost
A
B
Ceiling Ratio (R c)
Ceiling Ratio – this is an arbitrary upper limit on what ‘we’ are willing to pay
NICE set this at about £20,000 to £30,000 per QALY
![Page 35: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/35.jpg)
South West quadrant – C or D ?
NE
SW
NW
SE
Difference in effectiveness
Difference in cost
C
D
Ceiling Ratio (R c)
![Page 36: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/36.jpg)
The cost-effectiveness plane
ENE
WSW
NW
SE
Difference in effectiveness
Difference in cost
Ceiling Ratio (R c)
NNE
SSW
Alternative is cost-effective
Alternative dominates currentCurrent is not
cost-effective
Current dominates alternative
![Page 37: Overview of the day](https://reader036.vdocument.in/reader036/viewer/2022062520/568164b6550346895dd6bf80/html5/thumbnails/37.jpg)
References• Barton P (2012). Lecture: Economic Evaluation in Health Care: an
Introduction.• Columbia University (2012).
http://people.dbmi.columbia.edu/~cmr7001/sdm/html/methods.htm [accessed 31/08/2012)
• Drummond M & McGuire A (2001). Economic Evaluation in Health Care. Oxford: Oxford University Press.
• EQ-5D (2012). http://www.euroqol.org/news-list/article/interim-scoring-for-the-eq-5d-5l-eq-5d-5l-crosswalk-index-value-calculator.html [accessed 31/08/2012]
• Maheswaran H (2003). Lecture: WM Masterclass.• Wells NE, Steiner TJ (2001). Effectiveness of eletriptan in reducing time
loss caused by migraine attacks. Pharmacoeconomics 2001;18:557–66.