Introduction to health economics and principles of resource allocation [NEED TO COMPLETE] Flashcards
Discuss concept of scarcity in relation to health care provision
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Discuss concept of opportunity costs in relation to health care provision
‘Opportunity cost’ is what is lost when an alternative service is not provided because resources are directed elsewhere.
Discuss concept of efficiency in relation to health care provision
Efficiency- When resources are scarce it is important to evaluate how well they are being used to achieve a desired outcome.
There are three key concepts of efficiency: technical, productive and allocative efficiency.
Technical efficiency=Technical efficiency:
- is the effectiveness with which a given set of inputs (resources) is used to achieve a desired output (health outcome).
- is achieved when the maximum possible improvement in a health outcome is achieved from a combination of available resources.
Productive efficiency=Productive efficiency involves assessing the relative value for money of different interventions, which have outcomes that are directly comparable. In other words, productive efficiency compares alternative interventions based on the relative costs of these different resources. The concept of productive efficiency is, therefore, to minimize the cost of resources for a given healthcare outcome or maximize the outcome for a given cost.
Allocative efficiency= Allocative efficiency involves measuring the extent to which the available resources are allocated to individuals or (a group of people) who will benefit the most. The allocative efficiency takes into account the productive efficiency of the resources available and the efficiency of distribution of the outcomes in society
In other words/ shorter :
While technical efficiency involves maximizing an outcome using the resources available, productive efficiency involves comparing alternative interventions to achieve the maximum health outcome benefit for a given cost.
- Technical efficiency is the effectiveness with which a given set of inputs (resources) is used to achieve a desired output (health outcome).
- Productive efficiency involves assessing the relative value for money of different interventions, which have outcomes that are directly comparable. In other words, productive efficiency compares alternative interventions based on the relative costs of these different resources.
- Allocative efficiency involves measuring the extent to which the available resources are allocated to individuals or (a group of people) who will benefit the most.
Discuss the role of the National Institute for Health and Care Excellence (NICE) in assessing whether a new therapy ought to be recommended for funding on the NHS.
NICE Publishes guidelines :
on the use of health technologies (new health technologies?)
on the appropriate treatment and care of people with specific diseases/conditions
for social care services and users.
NICE was established in an attempt to end the so-called postcode lottery of healthcare
where treatments that were available depended upon the NHS Health Authority area.
Acquired a high reputation internationally as a role model for the development of clinical guidelines and
NICE also plays an important role in pioneering technology assessment in healthcare systems internationally.
What does full economic evaluation evaluation involve?
• A full economic evaluation of healthcare involves systematically comparing the costs (inputs) and benefits (outcomes) of at least two alternative interventions (e.g., novel treatment versus usual treatment, disease prevention versus disease treatment measures, care provided at location A versus care provided at location B) to evaluate the best use of the scarce resources available.
In short, other words.:
A full economic evaluation involves:
- comparing two or more alternative interventions.
- considering both the costs and benefits of all alternative interventions being compared.
What does NICE stand for ?
National Institute for Health and Care Excellence
