Calculations

Question 1

What is the basic premise of economic evalution of a new healthcare intervention?

Answer 1

Compare the increase/ decrease in cost of the new treatment over the current and compare this to the difference in benefits.

Question 2

How is the incremental cost calculated?

Answer 2

Cost of intervention 1- intervention 2/ benefits 1 -2.

E.g. Intervention 1 costs £100,000 and 500 people quit smoking, whereas intervention 2 costs £200,000 but 4000 people quit.
200,000-100,000/ 4000-500= £100,000 for an extra 3500 =incremental cost is £29 per extra quitter.

Question 3

Different points of view of costing?

Answer 3

From healthcare point of view- only costs to the hospital/GP in terms of resources used, doctors/ nurse wages etc.

For societal point of view- also include personal costs to patients e.g. travelling to surgery, car parking, time off work etc.

Question 4

Economic evalautions need which three aspects to be evaluated? Else are what? Give examples?

Answer 4

Examines costs, examines outcomes, compares to alternatives.
1. Only examines outcomes- if no comparison to alternative simply an outcome discription, if does compare then a RCT.
2. Examines costs only- no comparison= cost description, if comparison= cost evaluation.
3. Both but no comparison= cost-outcome evaluation.
With comparison= economic evaluation.

Question 5

5 types of economic evaluation- v brief summary?

Answer 5

1. Cost effectiveness Analysis (CEA)- on one outcome
2. Cost utility Analysis (CUA)- QUALYs or DALYs
3. Cost benefit Analysis (CBA)- costs and benefits in money terms
4. Cost minimisation Analysis (CMA)- outcomes equal, compare costs only.
5. Cost consequence analysis (CCM)- disaggreated outcomes.

Question 6

What are the different denominators (bottom) of the economic evaluation calculations?

Answer 6

CEA: One health outcome in natural units e.g. lives saved, hospital admissions prevented.
CUA: QALYs or DALYs
CBA: Money saved by outcome
CMA: Nothing- assume is the same
CCA: all outcomes reported individually no calculation.

Question 7

What is a cost effectiveness analysis (CEA)?

Answer 7

Cost/ one outcome measure.
Outcome is measured in natural units (interval properties e.g. 4 is double 2), and only one outcome is measured e.g. hospital visits avoided, lives saved- unless a multi-dimentional survey is used e.g. EQ5D.

Question 8

Advantages of cost effectiveness analysis (CEA)?

Answer 8

1. can answer technical efficiency questions if two interventions are for the same disease.
2. Easy to understand by a lay person.
3. simple to do, dont need to value the outcome as in for QALYs or monetary CBA.

Question 9

Disadvantages of cost effectiveness analysis (CEA)?

Answer 9

1. Unidimentional: Only use one outcome measure (unless survey- which needs lots of testing), so will likely miss a lot of the wider benefits.
2. The outcome may have interval values (e.g. BP mmHg) but is the risk also linear to this? Likely after certain value higher benefit but this only says reduced by 10mmHg etc.
3. Cannot compare interventions of different diseases as likely dont have the same outcome measure
4. No sense of value to the outcome measures- cannot answer allocative questions at all.

Question 10

What is a cost utility analysis (CUA)?

Answer 10

A special case of CEA, mainly used by NICE. Outcomes are all measured and valued in terms of healthy or disability life years- so this is a multidimentional measure of mortality and morbidity. If it is known how much the government is willing to pay per QALY (NICE £20-30,000) then can answer allocative questions. Utility is measured on a scale of 0-1.
Cost change/ QALY or DALY change- therefore get the additional price per QALY gained/ DALY averted.

Question 11

What is a QALY?

Answer 11

The number of years lived in full health, e.g. if someone lives another 10 years and their QoL is 0.2, this would only be 2QALYs, but if was at 0.8 would be 8. So it is a measure of both extra life saved but also quality of life.

Utility: 0=as bad as dead, 1=full health.
Surveys can be used to estimate, that are either generic or specific to the disease- these take into account the patients health values if completed by them.

Question 12

What is a DALY?

Answer 12

Disability adjusted life year- it is the opposite of QALY, so if 10 years at a QoL of 0.2 is 2 extra QALYs, it would be 8 DALYs (8 disabled years and 2 at full health)
Utility DALYs: 1=as bad as dead, 0=full health.
So, 1 year of health with a utility as bad as dead would equal 0 QALYs, but 1 DALY.
QALYs gained= DALYs averted.

Question 13

QALY calculation:
Without an operation the patient would live another 2 years with a utility of 0.5.
With the operation, would live 5 years at 0.9.
QALYs gained from the operation?
Operation costs £3500?

Answer 13

Without: 2x0.5= 1 QALY
WIth: 5x 0.9=4.5 QALYs
Therefore, 3.5 QALYs are gained.
Say the operation costs £3500, that would be £1000 per QALY gained.

Question 14

DALY calculation:
No operation health utility at 0.4 (disability state at 0.6) with 2 years to live, and a total of 3 life years lost.
Operation: a disability state of 0.1 for 5 years.
DALYs averted?

Answer 14

Without: (0.6x2)+(3x1)= 4.2
With: (0.1x 5)= 0.5
Therefore 4.2-0.5= 3.7 DALYs averted.

Question 15

Advantages of Cost utility analysis CUA? (6)

Answer 15

1. can use it for technical and allocative efficiency
2. Easy comparuison between different diseases/ interventions.
3. Considers morbidity as well as lives saved.
4. can assess multiple outcomes and combine into quality of life
5. Takes into account the patients values of health to work out their quality of life.
6. Interval properties- can get info from RCTs easily.

Question 16

Disadvantages of Cost utility analysis CUA? (5)

Answer 16

1. Don’t know whether the QALY is made up of life years of qoL e.g. 2 QALYs is that 2 years at full health or 8 years at 0.25 health?
2. How sensitive is this to changes?
3. How to calculate how many years are lost for DALYs is hard- how do you know their life expectancy? Or QALys gained, have to estimate how long they would have lived etc.
4. Linking public health society outcomes to QALYs is very hard.
5. May miss other outcomes e.g. increase in productivity

Question 17

What is Cost benefit analysis (CBA)?

Answer 17

Main method used by UK GOV, not just for health. Measures all outcomes in monetary terms, benefits are valued by the savings they generate.
In health terms some are easy e.g. loss of productivity- use their income to calculate, and fewer visits to the hospital, but what about valuing improved QoL for the patient?
Cost/savings

Question 18

Two methods for valuing health for cost benefit analysis?

Answer 18

1. Willingness to pay

2. Human capital approach

Question 19

What is willingness to pay?

Answer 19

Used in CBA studies to value health. A description is given of lots of symptoms etc and the public says how much they would be willing to pay for treatment if that were them. Multiply the average spending by the no. of cases to get the money that should be spent.
This slightly takes into account the patients values, but often people have no concept of how much health costs.

Question 20

What is the human capital approach?

Answer 20

Used in CBA studies to value health, through measuring it in terms of productivity. These years of life lost, or days of work are valued using the persons salary.
Ethical?
How to measure morbidity? Self confidence, pain etc
No patient values taken into account, but includes some societal impacts.

Question 21

Advantages to cost benefit analysis? (5)

Answer 21

1. Answers both technical and allocative questions
2. Can include wider societal benefits e.g. crime, education.
3. Can capture process utility (E.g. advantage to patient taking a pill once a week vs 3 times a day)
4. Can capture externality e.g. can include benefit to others in the willingness to pay method.
5. Can use for non-health interventions, so keeps it consistant between government departments.

Question 22

Disadvantages to cost benefit analysis? (4)

Answer 22

1. Ethics behind putting a monitary value on life, and boiling illness down to loss of productivity and therefore salary of that person- that person worth less if their salary is less? (human capital approach)
2. how accurate is willingness to pay- in UK lack of concept of how much health costs.
3. Human capital approach is incapable of valuing many healthcare benefits, or public health. e.g. pain, self esteem etc.
4. does the CBA decision rule make sense in a budget confined system? E.g. people answer WTP based upon their individual incomes, but the health budget is not he countries total income combined, like say in private healthcare in the US.

Question 23

What is Cost minimisation analysis? (CMA)

Answer 23

A comparison based upon incremental costs only, ‘assumes’ the outcomes are the same. E.g. two drugs with same effectiveness but different price- can work out the cost savings with one of the other.
E.g. two drugs, one injected at home, one IV. SC more expensive but dont need to have hospital costs? Assumed to be the same effectiveness- but are people more likely to be less complient at home etc.

Question 24

Advantages of the cost minimisation analysis CMA? (2)

Answer 24

1. Easy to do and understand

2. Useful for technical efficiency if are equivalent

Question 25

Disadvantages of the cost minimisation analysis CMA? (4)

Answer 25

1. Often two interventions are assumed to have the same outcome without a trial testing, could be compliance differences, or patient preferences e.g less painful etc.
2. virtually impossible for public health.
3. doesn’t answer allocative efficiency.
4. Only use when two outcomes are the same

Question 26

What is cost consequence analysis?

Answer 26

Where the benfits of alternative interventions are listed but not aggregated. They are presented separately for the decision maker to weigh up. There is not a clear conclusion, but does mean all of the information is available and not hidden within ‘1 QALY’ etc. Useful for PH interventions especially, and useful to do in addition to one of the other calculations.

Question 27

Advtanges of cost consequence analysis? (4)

Answer 27

1. Useful for complex interventions with lots of different outcomes that are hard to value e.g. public health interventions.
2. Clear what the benefits are and not hidden within say ‘1 QALY’ but instead ‘One still birth saved’ etc given meaning.
3. Can be useful to use in addition to one of the other calculations
4. can create an exhaustive list

Question 28

Disadvtanges of cost consequence analysis? (3)

Answer 28

1. Unweighted values, so more difficult to see the value of certain outcomes.
2. Not a clear winner for the decision maker, which could mean that they could use this information in a biased way to support the argument they want.
3. Can’t answer allocative efficiency questions, or directly for tehcnical efficiency either.

Question 29

Best economic analysis method for allocative efficiency?

Answer 29

Cost benefit analysis, but also cost utility analysis starts to answer.

Question 30

Best economic analysis methods for allocative efficiency?

Answer 30

Cost benefit analysis, utility, effectiveness and if outcomes are truely equivalent minimisation analysis

Question 31

Other 3 types of economic calculations that can be used?

Answer 31

1. Cost of illness study
2. Budget impact analysis
3. Return on investment

Question 32

What is a cost of illness study?

Answer 32

Calcualtes the burden of disease by calculating the total cost of a disease for the whole population based usually on prevalance. So total cost of all hospital stays, GP visits, prescriptions etc multiplied by the total number with disease.
Some could add the morbidity costs e.g. loss to productivity using HCA.
Often quoted in news to give alarming figures.
Not compared to anything so not economic evalution, and not that useful as if see that say obesity is a big burden from this and allocate more funds to, the total will just increase- circular.

Question 33

What is budget impact analysis?

Answer 33

Estimates likely expenditure changes to help with financial planning for healthcare initiative reimbersements. Estimates uptake of the intervention over time, to calculate the money that will be needed by when.
It is comparative but doesnt include outcome measures so is not economic evaluation, but does say if the intervention can be done or not in terms of money.
Something could be cost-effective but if can’t free up the money, cant be done.

Question 34

What is return on investment calculations?

Answer 34

Calculates the ocsts and savings (benefits)- sometimes can include health benefits in the savings if valued by HCA.
E.g. 10% return on investment= benefits 10% higher than the costs.
Often uses poor quality evidence e.g. bias info before and after the intervention.
Can be an economic evaluation as is comparative, includes costs and can include outcomes by HCA but doesn’t always, and may miss some health outcomes that way.

Question 35

Which economic evalution for:

“How much money to allocate to immunisation over the next 5 years?”

Answer 35

Cost benefit analysis- allocative question

Question 36

Which economic evalution for:

“Whether to invest in fixed site or mobile clinics for cataract surgery?”

Answer 36

Cost effectiveness analysis- as simple one measure of how many patients can be seen/treated in a given time period.
Could do cost utility analysis if sufficient info on morbidity and mortality.

Question 37

Which economic evalution for:

“Whether to switch to a new drug for malaria?”

Answer 37

Cost utility analysis- may vary in morbidity as well as mortality

Question 38

Which economic evalution for:

“Whether to adopt a new but more expensive drug that doesnt improve outcomes but decrease hospital stay length?”

Answer 38

Cost minimisation analysis- no difference in outcomes, but potential difference in costs.
But need to be careful not any difference in patients severity meaning they stay less time etc

Question 39

Calculation for ICER. Incremental cost effectiveness ratio?

Answer 39

Extra cost/ extra benefit:

Mean cost of new intervention- Mean cost of TAU) / (Mean outcome of new- mean outcome of TAU

Question 40

ICER example question:
Cost of new treatment= £700,000 and saves 60 QALYs.
TAU= £500,000 and saves 50 QALYS.

Answer 40

700,000-500,000/ 60-50

£200,000 for the extra 10 QALYs, £20,000 per extra QALY gained.