Health economics Flashcards
What is economics?
Choosing between which wants we can afford
4 key concepts of economics
Opportunity cost
Efficiency
Marginal analysis
Equity
Opportunity cost principle
The value of forgone benefit which could be obtained from a resource in its next best alternative use
Choosing A over B means giving up B which implies the value of the benefits from A is greater than from B
Efficiency
Maximising the benefit for the resources used
Types of efficiency
Technical
Allocative
Marginal analysis
Margin is the next step
Marginal Analysis involves comparing:
the benefit from that next step which is called Marginal Benefit
with the cost of taking the next step which is called Marginal Cost
Equity
Efficiency combined with considering who benefits
Concerned with fairness and justice
Economic evaluation
Tool allowing for comparative analysis of alternative courses in terms of costs and consequences
Three types of economic evaluation
Cost benefit
Cost effectiveness
Cost utility
Outcome in cost benefit
Monetary values
Outcome in cost effectiveness
Natural units
E.g. life years saved
Outcome n cost utility
Utility values
E.g. QALYS
Cost benefit analysis
Compares benefits with costs of an intervention, where all benefits are valued in monetary terms
Not favoured by NICE
Cost effectiveness analysis
Addresses technical efficiency
Interventions with different objectives/ outcome cannot be compared
Cost utility analysis
Interventions compared in terms of cost per quality adjusted life years (QALY)
Compares not just the quantity of life gained after an intervention but also the quality
Addresses allocative efficiency within the health care budget
Allows different outcomes to be compared
