Health Economics: Introduction and Overview Flashcards
What is scarcity?
What do economic analyses do?
- scarcity is the idea that resources are limited
- health analyses help decisino-makers faced with choices concerning resource scarcity
What is the difference between a normative and postive stance on economic analyses?
Normative = certain objectives are to be achieved, base decision on this Positive = predict observable factors on costs and benefits
What is involved in health economics?
A - things that influence health B - what is health? value of health C - demand for healthcare D - supply of healthcare E - microevaluation at the treatment level F - market equilibrium G - evaluation at whole system level H - planning budgeting and monitoring mechanisms
What is opportunity cost?
the value of the consequence forgone by choosing to deploy resources in one way rather than in their best alternative use
What is technical efficiency?
- producing output in the best way possible, without wasting scarce resources
- meeting a given objective at least cost
- e.g. treatments for glue ear, which is the best treatment?
What is allocative efficiency?
- producing the pattern of output that best satisfies the pattern of consumers wants or needs
- do we treat glue ear or do we treat something else/?
What are the key objectives of economic analysis?
- to promote the efficient use of healthcare resources
- to ensure the maximum total benefit is derived from the finite resources available
Define economic evaluation
- a comparative analysis of alternative courses of action in terms of both costs and consequences
What are the main types of economic evaluation?
- cost effectiveness analysis
- cost utilty analysis
- cost consequence analysis
- cost minimisation analysis
- cost benefit analysis
What is cost-utility analysis?
- must consider QoL
in Quality Adjusted Life Years (QALY’s)
What is cost-effectiveness analysis?
- must choose one single outcome
- in natural units
e. g. lives saved, increased survival
An incremental economic evaluation answers the following question:
What is the difference in costs and the difference in consequences of option A compared to option B
What is meant by marginal benefit?
- the increase in befit as a result of increasing production by one additional unit
- average benefit goes down and so does marginal benefit
What is meant by marginal cost?
- the increase in costs as a result of increasing production by one additional unit
What is the difference between marginal and incremental cost?
- the increase in costs as a result of increasing production by one additional unit
- incremental is the additional cost comparing A and B
What is the decisions rule for cost-effectiveness analysis?
- dominance = new intervention is cheaper and better
- CE ratio = difference in costs/differnce in consequences
What kind of questions can CEA address?
technical efficiency questions
- what is the best way to treat glue ear?
What is the ICER
incremental cost effectiveness ratio
difference in costs/differences in benefits
- gives you £ per extra unit of benefit
Why is CUA preferred over CEA?
- CEA hard to judge if it is good value as in natural units
- preferred CUA as QALY’s used
- QALY’s help with allocative efficiency as you can compare across interventions
What does NICE consieer to be cost effective?
less than £20,000 per QALY
Define equity
- attempting to address equitable concerns requires a departure from the pursuit of maximisation to enzsre a more equal distribution in the relevant outcome
- focuses on pursuit of a fair distribution and the burden of finance
What is healthcare needs to be fair?
- health
- the use of healthcare
- access to healthcare
What is horizontal equity?
people with equal health needs receive equal treatment, irrespective of demographic
What is vertical equity?
individuals with unequal needs should be treated according to their differential need
