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Y2 RESS > Health Economics > Flashcards

Health Economics Flashcards

1
Q

What is economics all about?

A
  • limited resources
  • unlimited “wants”
  • choice in the face of budget constraints

choosing between which wants we can afford given our budget

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2
Q

What is economics not about?

What is it?

A

Economics is NOT:

  • about money
  • a form of accountancy
  • about cutting costs

Economics:

  • assumes resources are scarce
  • is about benefits i.e. optimising utility
  • is about evaluating services
  • is about providing information to assist in the allocation of scarce resources
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3
Q

What is meant by health economics?

In applying economics to health care, what is the purpose?

A

health economics is the discipline of economics applied to the topic of health

in applying economics to healthcare we attempt to describe, evaluate and predict:

  • describe - understand the background & basic descriptive statistics
  • evaluate - quantify the problem
  • predict - identify impact
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4
Q

How can economics be applied to healthcare?

A
  • the budget is fixed by the Government
  • production of healthcare requires resources
  • consumption of healthcare has no bounds - no healthcare system meets all wants for healthcare
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5
Q

Economics is specifically concerned with what 3 features?

A
  • limited resources (e.g. time of a surgeon, number of beds on a ward)
  • unbounded potential uses of resources
  • choice (production and consumption) in the face of budget constraints
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6
Q

Why must it be decided which interventions should be funded?

A

there are many beneficial interventions, but not all of them are funded

choice cannot be avoided therefore decisions have to be made (NHS budget)

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7
Q

How is health economics concerned with choices?

What types of choices need to be made?

A

health economics is concerned with how choices in health and healthcare should be made between competing needs for resources

we have to make choices about quantity and mix of healthcare produced:

  • how to produce it
  • who pays for it
  • how it is distributed
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8
Q

What are the 4 key concepts used by health economics?

A
  • concept 1 - opportunity cost
  • concept 2 - efficiency
  • concept 3 - marginal analysis
  • concept 4 - equity
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9
Q

What is meant by opportunity cost?

A

“choosing A over B means giving up B, which implies the value of the benefits from A is greater than from B”

opportunity cost is the value of foregone benefit which could be obtained from a resource in its next best alternative use

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10
Q

What is the opportunity cost of one IVF course (£2,700)?

A
  • one-third of a cochlear implant
  • 1 heart bypass operation
  • 11 cataract removals
  • 150 vaccinations for MMR
  • half a junior school teaching assistant for one year
  • 2000 school dinners
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11
Q

What is the definition of efficiency?

A

maximising the benefit for the resources used

it can either be technical efficiency or allocative efficiency

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12
Q

What is technical efficiency?

What is an example?

A

meeting a given objective at the least cost

this is concerned with how best to deliver a programme, or achieve a given objective

e.g. shall surgery for tonsillectomy be provided? by way of day surgery or inpatient surgery?

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13
Q

What is meant by allocative efficiency?

What is an example?

A

production that matches consumer demand

it is concerned with whether to allocate resources to a programme or whether to allocate more or less resources to it

e.g. shall surgery for tonsillectomy be provided or an outpatient clinic for asthma

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14
Q

When is economic efficiency achieved?

A

when resources are allocated between activities in such a way as to maximise benefit

the economic question is whether the benefits of X are worth the costs in terms of the sacrifice in lost Y

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15
Q

What is meant by the “margin” in marginal analysis?

A

the margin is defined as “the next step”

it can be an incremental step (a little bit more) or a decremental step (a little bit less)

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16
Q

What 2 factors are compared in marginal analysis?

A

marginal analysis involves comparing:

  • the benefit from that next step which is called marginal benefit
  • the cost of taking the next step which is called marginal cost

in marginal analysis, we are not interested in average cost and average benefit, the relevant cost is the marginal cost and the relevant benefit is the marginal benefit

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17
Q

What is the difference between efficiency and equity?

A
  • efficiency looks at the total benefit without considering who actually benefits
  • equity is another criterion for allocating resources as who benefits may matter to society
  • equity is concerned with the fairness or justice of the distribution of costs and benefits
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18
Q

What is economic evaluation in relation to health?

A
  • how does the NHS make decisions about what to prescribe or to recommend for patients?
  • how do they decide which new technologies to adopt?
  • how do we decide what represents value for money?

economic evaluation provides a tool by which to help make these decisions

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19
Q

What are the 2 different types of health care evaluation?

A

partial economic evaluation

full economic evaluation

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20
Q

What is the definition of economic evaluation?

A

the comparative analysis of alternative course of action in terms of both their costs and consequences

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21
Q

What are the 2 key aspects of the defintiion of economic evaluation from Drummond, Stoddart & Torrance?

A
  • should always compare one health care intervention with one or more alternative interventions for the same population group
  • should include both the costs and consequences of interventions - the resources that they consume and the health outcomes that they produce
22
Q

What are the 5 different types of economic evaluation?

A
  • cost-consequence analysis
  • cost-effectiveness analysis
  • cost-minimisation analysis
  • cost-benefit analysis
  • cost-utility analysis

these are potential complements, not substitutes or mutually exclusive forms of analysis

e.g. you may want to carry out a CEA & a CUA

23
Q

What is a cost-consequence analysis?

A
  • a “first step”
  • disaggregated type of study - show both costs and outcomes but does not combine them
  • consequences measured in a variety of ‘natural units’ e.g. clinical outcomes
  • summary description of all important costs and consequences
24
Q

What are the types of parameters that would be looked at in a cost-consequence analysis?

A

productivity costs are indirect costs such as lost earnings

list all the relevant costs and outcome measures for different interventions with no further analysis

25
Q

What are the pros and cons of cost-consequence analysis (CCA)?

A

pros:

  • can see all outcomes
  • in natural terms
  • disaggregated so makes few assumptions about outcome measures

cons:

  • assumes decision-maker capacity (can manage the information)
  • no indication of relative importance of outcomes (no final single figure)
  • decision rule requires dominance (greater benefit / less costly)
26
Q

What is cost-effectiveness analysis?

A
  • one of the main techniques used
  • consequences in most appropraite natural or physical units
  • results in terms of cost per unit effect
    • e.g. lives saved / complications avoided / cancers detected
  • decision rule - dominance or CE ratio
27
Q

What are the pros and cons of cost-effectiveness analysis (CEA)?

A

pros:

  • clear
  • common / popular
  • easily understandable by the lay-person

cons:

  • many healthcare programmes have multiple objectives and no clear idea of the relative importance between them
  • no obvious main outcome
  • significant differences in secondary outcomes
28
Q

What type of calculation is used to calculate cost-effectivess analysis?

A

difference in cost divided by the difference in effects

this is the incremental cost effectiveness ratio (ICER)

29
Q

What is cost-minimisation analysis?

A
  • all relevant consequences of alternatives are equivalent
  • special case of CEA
  • decision rule - least costly option is the most efficient (implies dominance)
  • caution on use - uncertainty around estimates of outcomes
30
Q

Why is cost minimisation analysis not the same as cost analysis?

A

CMA requires that you have assessed both costs and consequences and have found that the consequences of the programmes / treatments being considered are equivalent

31
Q

What is cost benefit analysis?

A
  • outcomes measured in monetary terms
  • decision rule - net benefit (benefit minus cost)
  • broader in scope than CEA/CUA - compare with other public sector expenditure e.g. education
  • not favoured by NICE
32
Q

When does cost-benefit analysis tend to be used?

A

it is not used a great deal in health, mainly in experimental studies

difficulties with valuation of health outcomes in monetary terms

33
Q

What is one approach of cost-benefit analysis which may be used?

A

willingness to pay (WTP)

  • hypothetical
  • people query underlying reasons for questions & reply tactically
  • UK setting, ability to pay
34
Q

What is meant by cost-utility analysis?

A
  • outcomes measured in QALYs gained (quality adjusted life years)
  • combine life years and quality of life
  • results in cost per additional QALY gained
  • can be used to compare across treatment areas
  • increasingly common and required by decision-makers (e.g. NICE)
35
Q

When should cost-utility analysis be used?

A
  • health-related quality of life is the important outcome
    • e.g. arthritis where QOL is important
  • where survival is important, but also quality of life
    • ​programmes affect both mortality and morbidity and you want to combine both effects
  • programmes affect wide range of outcomes and you want a common unit for comparison
36
Q

When should cost-utility analysis NOT be used?

A
  • if you only have intermediate outcome data
  • effectiveness measure is already captured by another (easily measured) variable
  • effectiveness data show dominance (less costly, more effective)
  • extra cost of obtaining utility values is not cost-effective
37
Q

What are the pros and cons of cost-utility analysis?

A

pros:

  • summarises mortality and quality of life into a single measure
  • comparability with other diseases

cons:

  • cost and effort
  • dependent on method / scale used
    • different questionnaires might give different outcomes
38
Q

How are utility values used in CUA to determine QALYs?

A
  • utility is a measure of preference
  • utility values representing individual preferences can be assigned to health states (usually 1 = healthy, 0 = dead)
  • utility values can be combined with survival data to derive QALYs
39
Q

What is the EQ-5D?

How is it determined?

A

levels of perceived problems are coded:

level 1 is coded as 1

level 2 is coded as a ‘2’

level 3 is coded as a ‘3’

there should be only one response for each dimension

40
Q

How is the EQ-5D score calculated?

A

using the EQ-5D index calculator

values for each health state are based on an algorith derived from preferences elicited using VAS and TTO

41
Q

What is the QALY gain from the operation?

A

QALY gain from operation is 3.5 QALYs

42
Q

Who might be asking the question about costs?

A
  • patient
  • health care provider
  • third party funder
  • pharmaceutical company
  • government
  • what might each of these groups be interested in and what might their questions be?
  • the perspective is important
43
Q

What is the societal cost perspective?

A
  • this includes productivity costs - cost of absence from work, informal care
  • not transfers
    • money flows from one part of the system to another e.g. VAT; social security payments
44
Q

What is involved in the health care system cost perspective?

A
  • costs born by others outside the healthcare system need not be considered
    • e.g. employer costs, family costs
  • transfer payments that leave the healthcare system budget can be considered
45
Q

What is invovled in the cost process?

A

once the perspective is agreed:

  • identify
  • measure (how many?)
  • value (cost £)
46
Q

What is the other cost perspective that should be considered?

A

NICE reference case

  • health and social care provider
47
Q

What is involved in measuring and identifying in the cost process?

A
  • health economics uses electronic data collected by the NHS for use in economic evaluation
  • HES is the national statistical data warehouse for England of the care provided by NHS hospitals and for NHS hospital patients treated elsewhere
  • HES records - inpatient, outpatient, maternity, A&E
  • it doesnt include primary care data or social care data
  • for a societal perspective we need to ask the patients
48
Q

What is the incremental cost-effectiveness ratio?

A

ICER = difference in costs / difference in consequences

calculates the cost per extra unit of benefit

49
Q

What is the cost-effectiveness plane?

A

O could be the status quo or a competing programme

I - most costly and more effective (most decisions here)

II - cheaper and more effective (dominance)

III - cheaper but less effective

IV - most costly and less effective

50
Q
A

Y2 RESS (9 decks)

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