12.2 Health Economics

Question 1

What is NICE and what is its purpose?

Answer 1

National Institute for Health and Care Excellence (NICE) established in 1999

• Equitable access to treatments of proven clinical and cost effectiveness
• Faster uptake of new technologies
• The effective use of NHS resources

Question 2

What is the definition of economic evaluation?

Answer 2

A comparative analysis of alternative courses of action in terms of both costs and consequences

Question 3

What are the types of costs that the NHS takes?

Answer 3

Question 4

What are the types of outcomes that NICE aim to achieve?

Answer 4

Proxy outcomes

• Cancers detected
• Change in cholesterol levels

Condition-specific measures

• Questionnaires (specific)
  
  • e.g. Roland Morris questionnaire for back pain
• Tests (specific)

Genetic measure

• Life years gained

Question 5

How can we value health?

Answer 5

Using quality adjusted life-years (QUALYs)

• Combines length & quality of life into single unit
• Used to measure life years
• It is measured as:
  
  • ​1 = maximum value (perfect health)
  • 0 = minimum value (death)
• You can undergo a comparison of life years have person recieving treatement vs no treatment

Helped by using EQ-5D questionnaire

1. Mobility
2. Self-care
3. Usual activities
4. Pain/discomfort
5. Anxiety/depression

• ​Each dimension has 3 levels (new has 5)
• Higher score = WORSE

Question 6

What is the question does the incremental approach answer?

Answer 6

‘What is the difference in costs and the difference in consequences of option A compared to option B?’

Question 7

Explain the cost-effectiveness plane

Answer 7

The incremental cost-effectiveness ratio (ICER) is a statistic used in cost-effectiveness analysis to summarise the cost-effectiveness of a health care intervention

Question 8

How do you work out the incremental cost-effectiveness ratio (ICER)?

Answer 8

Question 9

What are the main types of economic evaluation & briefly explain them?

Answer 9

Cost-effectiveness analysis (CEA)

• Can use CE ratio
• Most choose ONE single outcome
  
  • Increased survival (e.g. dif in cost/dif in survivors = ICER)
  • Reduction in symptoms

Cost-utility analysis (CUA)

• Must consider quality of life & combined life years
• QUALYs (dif in mean cost/QUALYs = ICER per QUALYs gained)
• Can use CU ratio
• Used in NICE

Cost-benefit analysis (CBA)

• Measure benefits in monetary terms

Question 10

What is the decision rule in NICE?

Answer 10

• NICE consider a new therapy to be cost effective if the cost per QALY is less than £20,000
  
  • ​Cancer funds allow more expensive therapies to be used
    
    • ​This thresholds cause controversies e.g.
      
      1. ‘NO’ = decisions UNpopular
      2. ‘YES’ = decision adds to NHS cost

Question 11

What do we want to distribute fairly in NICE?

Answer 11

• Health
• Use of health care
• Access to health care

Question 12

What are the types of equity in health economics?

Answer 12

​Horizontal equity

• People with equal health needs receive equal access to treatment irrespective of demographics
• Factors/barriers e.g. geography, waiting times, patient information

Vertical equity

• Individuals with unequal needs should be treated according to their differential need
• Obvious but operationally difficult
• How unequal do conditions need to be in order to pursue equity objectives?

Question 13

What are the types of rationing in health economics?

Answer 13

Implicit rationing

• Denial (ineligibility, cost considerations, “postcode lottery”)
• Delay (e.g. waiting lists)
• Deterrence
• Dilution (e.g. reduced time with patients)

Explicit rationing

• Efficiency e.g. NICE