Economic Analysis

Question 1

What is the relationship between quality and cost?

Answer 1

inherant association
quality increase=cost increase

-except at some point quality plateuas and then declines slightly as cost keeps increasing

Question 2

What are the 3 major types of economic analysis?

Answer 2

Cost minimization
Cost Effectiveness
Cost benefit

Question 3

What is cost minimization?

Answer 3

Two interventions with the same benefit but different costs

Question 4

What is cost effectiveness?

Answer 4

Interventions with different costs and different benefits
-measured in outcomes (not dollars): lives saved, number not injured, etc.

Cost utility: outcomes in terms of QALY
-measured via VAS (dead vs. perfect health) or EQ5D (range from -.11 to 1)

ICER: cost per QALY for given treatment

• cost/change in QOLxtime
• willingness to pay cutoff usually 1 QALY $ amount

Question 5

What is cost benefit?

Answer 5

Compare cost/benefits in terms of dollars

-rare in health care

Question 6

What are the 10 steps in cost-effectiveness analysis?

Answer 6

1. define project
2. determine perspective of analysis
3. define target population
4. select intervention/comparator
5. decide how long data needs to be collected
6. determine health outcomes in both groups
7. determine costs for both groups- direct, indirect, and intangible costs
8. conduct analysis that compares benefit in outcomes AND costs
9. Conduct sensitivity analysis
   - due to large amount of estimates involved- use tornado

Question 7

What are cost-effectiveness planes- Monte carlo (bootstrap)

Answer 7

cost-effectiveness and cost-utility analysis

X axis=QALY
Y axis= cost

Ideal scenario: - cost +QALY
Consider: + both
Worst: + cost -QALY

Question 8

What is a tornado diagram?

Answer 8

Sensitivity analysis that estimates the contribution of each variable

• shows ICE ($/QALY) contribution
• shows change in $ value if input variables is changed from highest to lowest value

Question 9

What is the Cost-effectiveness Acceptability Curves?

Answer 9

CEAC

• Analysis in light of willingness to pay
• shows at whatever $ amount willing to pay the probability it’s effective for different interventions

Question 10

How do you appraise the applicability of these studies?

2 questions

Answer 10

Can patient expect similar COSTS?

Can patient expect similar RESULTS?

Question 11

How do you asses internal validity of studies?

6 questions

Answer 11

1. Did research question clearly/accurately define options compared?
2. Was perspective of analysis defined?
   - societal, individual, organizational?
3. Was there a good sample?
4. Was there appropriate oucome measurement?
5. Was there appropriate cost measurement/value?
6. Was there a sensitivity analysis (tornado)?
   - appropriate allowance made for uncertainties in evaluation by including sensitive variations of variables