6 Intro to Health Economics

Question 1

what does it mean when economic analyses are normative?

Answer 1

indicates the nature of the resource allocation decision that ought to be followed if certain objectives are to be achieved

Question 2

What does it mean for economic analyses to be positive?

Answer 2

seek to predict obervable factors and so provide information on the likely costs and benefits associated with alternative courses of action

Question 3

What is opportunity cost?

Answer 3

the value of consequences forgone by choosing to deploy resources in one way rather than in their best way

Question 4

What is technical efficiency?

Answer 4

maximising output without wasting scarce resources

Question 5

What is allocative efficiency?

Answer 5

producing the pattern of output that best satisfies the pattern of consumers wants / needs

Question 6

What are the key objectives of economic analysis?

Answer 6

promote efficient use of health care resources

ensure maximum total benefit is derived from the finite resources available

Question 7

What are the potential outcomes of cost effective analysis?

Answer 7

lives saved

increased survival

Question 8

What are the potential outcomes of cost utility analysis?

Answer 8

QALYs

Question 9

name 5 types of economic evaluation

Answer 9

cost consequence analysis (CCA)
cost effectiveness analysis (CEA)
cost minimisation analysis (CMA)
cost utility analysis (CUA)
cost benefit analysis (CBA)

Question 10

What is the incrimental appraoch?

Answer 10

assessing the different costs and consequences of 2 options

Question 11

What is marginal benefit?

Answer 11

increase in benefit as a result of increasing production by one additional unit

Question 12

What is the marginal cost?

Answer 12

increase in cost as a result of increasing production by one additoanl unit

Question 13

how do you calculate incremental cost effectiveness ratio?

Answer 13

ICER = (difference in cost) / (difference in consequence)

Question 14

What is the most desired area on the cost-effectiveness plane for a new drug?

Answer 14

SE

Question 15

What are the fundamentals of the NICE decision rule

Answer 15

cost per QALY < £20 000 will be approved

will be considered up to £30 000

Question 16

What are the pros of cost consequence analysis (CCA)?

Answer 16

see all outcomes
in natural terms
disaggregated (few assumptions are made)

Question 17

What are the cons of cost-consequence analysis?

Answer 17

assumes decision maker has capacity

gives no indication as to the relative importance of the decision rule

Question 18

How is cost benefit analysis (CBA) outcome measured?

what problems does this present?

Answer 18

in monetary units

this is not always a good representation of health outcomes
willingness to pay

Question 19

What types of analysis were made because of the problems surrounding cost benefit analysis (CBA)?

Answer 19

cost effective analysis (CEA)
cost utility (CUA)

Question 20

What is the difference between CBA and CEA?

Answer 20

with CEA, we are no longer focusing on all utility but on health

Question 21

How are CEA outcomes measured?

Answer 21

lives saved
complications avoided
symptom free days

Question 22

What is CMA and when is it used?

Answer 22

cost minimisation analysis

treats all relevant consequences of alternatives as equivalent, making the most cost effective one dominant
this isn’t really used at all anymore

Question 23

What is CUA and how are its’ outcomes measured?

Answer 23

cost utility analysis
(an extra-welfarist approach)

QALYs gained

Question 24

What are the pros of CUA?

Answer 24

summarises mortality and QoL into a single measure

facilitates comparison with other diseases

Question 25

What are the cons of CUA?

Answer 25

cost and effort dependent on method

many more challenges to follow in outcomes