8 - Resource Allocation and Healthcare Economics Flashcards
What is priority setting?
Decisions about the allocation of resources between the competing claims of different services, patient groups and care
What is rationing?
The effect of priority setting on individual patients, the extent to which the patients recieve less than the best possible treatment
Why do we have to set priorities?
Scarcity of resources, demand outweighs supply
What is implicit rationing and the disadvantages of it?
The allocation of resources through individual clinical decisions, without the criteria for these decisions being explicit
What is explicit rationing and the pros and cons of it?
Use of institutional procedures for the systematic allocation of resources within the healthcare system
Who is the main body of explicit rationing?
NICE - they set guidelines, that if approved, replace local recommendations. If on NICE local NHS must fund the treatment at the cost of other priorities
What is scarcity?
Need outweighs resources. Prioritisation is inevitable
What is efficiency?
Getting the most out of limited resources
What is equity?
The extent to which the distribution of resources is fair
What is effectiveness?
The extent to which an intervention produces desired outcome
What is utility in health economics?
The value an indiviual places on a health state
What is opportunity cost?
- The opportunity cost of the new treatment is the value of the next best alternative use of those resources
- Resources spent on a new treatment, now cannot be spent on other treatments
- BENEFITS FOREGONE
What is technical efficiency?
The most efficient way of meeting a need
What is allocative efficiency?
Choosing between the many needs to be met
e.g hip replacement or neonatal care
What is economic decision-making?
BEST VALUE OF INVESTMENT
What are the ways of measuring costs of illness?
How do you measure health benefits?
What are the four ways of comparing costs and benefits?
What is cost minimisation analysis?
- Least used
- All outcomes assumed to be equivalent, focus on costs and choose the cheapest one
- e.g all prosthetics the same, choose the cheapest*
What is cost effective analysis?
Compare drugs and treatments that have a similar outcome. Calculate how much extra benefit for extra cost
e.g blood pressure reduction
What is cost benefit analysis?
- All input and outputs are viewed in monetary terms
- Methodology issues as difficult to put a price on saving a life
- Allows comparisons with interventions outside healthcare
What is cost utility analysis?
- Type of cost effectiveness
- Focuses on quality of health outcomes produced or foregone
- Uses QALYS
What is a QALY?
- QUALITY ADJUSTED LIFE YEARS
- Adjusts life expectancy for quality of life
- 1 QALY is one year of perfect health
How do you choose what type of economic evaluation to use?
This same woman, with 16.1 QALYs (23 years of 70% perfect health) can take treatment and live for 23 years with 0.95 perfect health. The treatment is 50 GBP per annum.
What is the cost per QALY gained?
- QALYs with treatment = 21.85 (0.95 x 23)
- QALYs gained = 5.75 (21.85 - 16.7)
- Total cost of treatment = £1,150 (23 x 50)
Cost per QALY gained = £200 (£1,150 / 5.75)
What happens why there are no gains in QALYs?
It is a cost decison or the patients decision
What are some alternatives to QALYs?
- Health year equivalents (HYE)
- Saved-young life equivalents (SAVEs)
- Disability adjusted life years (DALYs)
How does NICE make the decisions based on QALYs?
Below 20k = approved
20-30k = judgments taken into account, implicit rationing
Over 30k = very strong case
What are some criticisms of QALYs?
- May disadvantage common conditions
- QALYs may not embrace all dimensions of benefit
- Values expressed by experimental subjects may not be representative
- QALYs do not assess impact on carers/family
- Do not distribute acording to need but according to benefits gained per cost
- Assumes every patient has equal advantages and disadvantages
