Health Economic techniques to decide which treatments available NHS Flashcards
Define economic evaluation
The systematic appraisal of costs & benefits of projects, undertaken to determine the relative economic efficiency of programs.
Define cost analysis
Analysis of the comparative costs of alternative interventions or programs
Define cost effectiveness
The point at which the minimum amount of input (& therefore cost) is used to achieve a given output.
Define clinical effectiveness
The application of interventions which have been shown to be efficacious to appropriate patients in a timely fashion to improve patients’ outcomes & value for the use of resources.
Define cost (opportunity cost)
Cost= the value of opportunity forgone, strictly the best opportunity forgone, as a result of engaging resources in an activity.
Define average cost benefit
The sum (usually expressed in money terms) of the effects on well-being (positive or negative) which a particular program bestows upon society.
Define quality adjusted life years
Units of measure of utility which combine life years gained as a result of health interventions / health care programs w/ a judgment about the quality of these life years.
Define willingness to pay
A technique which aims to assign value to health benefits by individual preferences of general public who are asked how much they would be prepared to pay to acquire benefit or avoid certain events
Why is health economic evaluation needed?
- Allows you to make good use of the resources available to you
- Prescriptions must be appropriate, responsible & patient’s best interests
- You should be aware of the clinical importance & cost-effectiveness of interventions published by NICE.
What does a economic evaluation involve?
A full economic evaluation involves:
- comparing two or more alternative interventions.
- considering both the costs (inputs) & benefits (outcomes) of all alternative interventions being compared.
- To evaluate best use of scarce resoruce available
Types of economic evaluations?
Cost effectiveness analysis
cost utility analysis
cost benefit analysis
NOTE: Main difference is way in which outcomes (benefits) are measured
- cost for each analysis is measured same- i.e. £
Cost-effectiveness analysis: Define, what is COST measurement, what is OUTCOME measurement?
An economic evaluation in which the costs & consequences of alternative interventions are expressed cost per unit of health outcome
Cost measurement- monetary unit i.e £
Outcome measurement- non-monetary units- measured on a
unidimensional scale e.g. no of lives saved, cases detected
Pros vs Cons of Cost-effectiveness analysis
Pros:
- simple to do
- Often uses outcome measures which are routinely collected / meaningful in a particular field
- As measures are likely to be specific to disease area or problem then may be more sensitive (compared to generic measures)
Cons:
- Not comprehensive - Outcome is uni-dimensional so cannot incorporate other aspects of outcome/health in CE ratio
- Comparability - Interventions w/ different aims cannot be compared w/ one another
- Interpretation - Not always clear what value of outcome is & method assumes outcome is worthwhile e.g., cases detected
Cost-utility analysis: Define, what is COST measurement, what is OUTCOME measurement?
Interventions which produced different consequences in terms of both quantity & quality of life are expressed in terms of both length of life & subjective
Cost measurement- £
Outcome measurement- QALY- quality of life after life has been saved e.g. will go down if patient becomes disabled
Pros vs Cons of Cost Utility Analysis
Pros
- Extends CEA to incorporate quality of life
- Multi-dimensional so can allow comparison of trade-offs
- Comparability between health care programmes
- So can be used to make allocative decisions between programmes
- Can be valued so clearer what outcome is worth & what represents ‘value for money’
Cons:
- Limited to health benefits
- Many items not calculated e.g., knowledge, equity etc.
- Comparability w/in healthcare sector only
- i.e. can’t help us decide on spending decisions for health compared to education
- Cannot determine optimal size of health care budget
Cost-benefit analysis: Define, what is COST measurement, what is OUTCOME measurement?
An economic evaluation in which all cost & consequences of a program are expressed in the same units, usually money
- Valuation of non-health benefits e.g., process, information, convenience
Overall objective: to maximise net benefit from available resources
Cost measurement- £
Outcome measurement- £, Willingness to pay
Objections to cost-benefits analysis?
Differences in methodology:
Choice of comparator
- Method of estimating utility values?
- Range of costs included?
What ‘threshold’ should be used?
Difficulties in measuring health benefits in monetary units
How would you decide the cost effectiveness of an independent treatment i.e. there’s only ine drug of interest on the market.
Average cost effectiveness ratio (ACER)
Average C/E ratio= Cost (C) / Effectiveness (E)
How would you decide the cost effectiveness of mutually exclusive programmes i.e. 2 drugs on the market, both of interest?
Incremental cost-effective ratio (ICER)
ICER= difference between costs/ difference between effectiveness
How to calculate an ICER?
- An ICER value is calculated for each treatment.
- Represents the extra cost for the most expensive treatment per each outcome.
- Whether the treatment is accepted on the NHS or not, depends on whether extra cost for that particular treatment surpasses the cost-effectiveness threshold, decided by governing bodies, e.g. NICE.
- Rank treatments from least to most costly.
- Exclude both less effective and more costly treatments.E.g B is more expensive than AANDit has a poorer outcomethanA, so Ainstantly dominates it.
- Calculate ICER for each successive treatment: incremental cost/incremental QALYs.
- Identify treatments that are subject toextended dominance: less effective, higher ICER.
- Is the ICER below the cost-effectiveness threshold of e.g. £20,000-£30,000/QALY?
Conclusion:Is society willing to pay an extra£250per year of life for treatment C?
What is NICE? What is their purpose?
Public body of department of health
Purpose- Publishes guidelines:
- on use of health technologies
- on appropriate treatment & care of people w/ specific diseases
- for social care services/users
^ based on their clinical efficacy & their cost-effectiveness.
Aim:
- to maximise the outcomes for the NHS for the same money
Why was NICE set up?
To attempt to end postcode lottery of healthcare
- where treatments were available depending on NHS health authority area
Regional inequalities still exist + north/south divide
- wealth & deprivation of people
