Economic Evaluation Flashcards
What makes health economics difficult?4
3rd party involved so lots of uncertainty
Health care interventions have high prices
New treatments only show small improvement
Can’t do everything
When are economic analysis tools needed?
When decisions have to be made about scarce resources
3 points about demand for healthcare
Never enough to satisfy everyone’s need - economic good
Most systems provide it free or highly subsidised
Patients wish to consume resources where perceived individual benefit is higher than cost to individual
What is the result of health economics conditions?
Imbalance: patient’s demands are > system able to provide
Opportunity cost:
Benefit that would be derived from using a resource in its next best alternative use -> benefit forgone
What are the 2 things economic evaluation in healthcare require? what is this needed for?
Comparison of two or more options
examination of costs and outcomes
Needed for licensing by NICE
What does economic evaluation not involve?
Just choosing the cheaper option
Four different types of economic evaluation:
- Cost effectiveness analysis 2. Cost utility analysis 3. Cost minimisation analysis 4. Cost benefit analysis
What is cost effectiveness analysis?
Finds cost per extra outcome gained (eg. per extra MI avoided)
Cost utility analysis:
Uses QALYs as outcome
Cost minimisation analysis:
Looks at cost difference if outcomes are the same
Cost benefit analysis:
How much are we willing to pay per gain in outcome (eg per QALY.
What are the four outcomes in different analysis scenarios?
Effect, utility, cost minimisation, cost benefit analysis
Net monetary benefit formula:
(willingness to pay x delta outcomes)- delta cost
Formula for number of QALYs
utility weight of health state x time spent in that state
What properties must utility weights have?
Interval properties and be anchored (death and perfect health)
How to assure to preferences:
Always be such that people have higher utility
In order to value different health states, we must know people’s preferences
Two types of preference - what to use in health care?
Revealed and stated, can only use stated in health care
Ways to elicit health state preferences:
Rating scale, standard gamble, time trade off, persons trade off
Time trade-off idea
How many years of life would you give up to enjoy full health rather than in current state
What is the time tradeoff formula for w:
w=(T-M)/T
Two limitations to TTO and choice based measurement techniques:
- Results likely to be affected by participant’s time preference - not everyone views life expectancy the same way
- Based on stated preference - not guaranteed to be accurate
4 other patient reported outcome measures:
SF 6D, HUI2, 15 D, AQoL
3 questions for incremental cost effectiveness ratio:
- Does treatment cost more or less compared to another option
- Does treatment result in better or worse outcomes compared to another option
- What is cost per outcome gained?
ICER formula
cost for new -cost for old/QALY new- QALY old
2 questions to ask when using the WTP threshhold:
- Does health benefit from extra effectiveness justify extra cost?
- Could we achieve greater health benefit by using those extra resources in another way within the health system?
What is NICE’s position in regards to ICER?
30k - need a very strong case
What are the differences in perspective of NHS and personal social services vs Societal view;
NHS and PSS only look at the intervention itself, other drugs and surgical costs etc, service use costs
Societal perspective also looks at out of pocket costs, time off work, social services, cost to judicial system, loss of life and QALYs
How is data over costs collected in the UK
tend to use NHS +PSS unless clear societal effect
GP attendance from patients
Other info from patients
Sensitivity analysis use :
Every piece of data has some uncertainty so check and see what effect this has on end results - how robust are these and what assumptions had to be made
What to use in sensitivity analysis to convince decision makers?
Probabilistic sensitivity analysis
5 limitations to economic evaluation:
It only provides one piece of info in the healthcare decision making process
Precision of results (e.g. missing data not always appropriately dealt with)
Consistency of results
Inappropriate use of resources saved
ethics?
