Introduction To Resource Allocation And Health Economics

Question 1

Name and describe the 2 different forms of rationalising

Answer 1

Explicit rationalising - Based on defined rules of entitlement (NICE)

Implicit Rationalising - Care is limited, but neither the decisions, nor the bases for those decisions, are clearly expressed.

Question 2

What are the pros and cons of implicit rationalising?

Answer 2

Pros - simple, quick, allows clinical freedom, allows doctors to treat patients and illnesses as individuals

Cons - Can lead to discrimination, open to abuse, decisions based on perceptions of “social deservingness”, doctors appear increasingly unwilling to do implicit rationalising.

Question 3

What are the pros and cons of explicit rationalising?

Answer 3

Pros - Transparent, accountable decisions making. Opportunity for debate. More clearly evidence based as much research had occurred before setting guidelines. More opportunities for equity in decision making through treatment alternatives.

Cons - very complex and require a lot of research and decisions, heterogeneity of patients and illnesses. Patient and professional hostility, impact on clinical freedom, patient distress.

Question 4

What is NICE? What do they do?

Answer 4

National institute for health and care excellence.

Provides guidance on whether treatments can be recommended for use in the NHS in England. NICE is asked to appraise significant new drugs and devices to make sure they are effective and cost effective.

Question 5

How do NICE guidelines vary from local guidelines?

Answer 5

Individual requests can get patients access to treatments denied by NICE

Approved treatments aren’t always followed in local guidelines as local NHS organisations must fund them, which may sometimes cause adverse consequences for other priorities.

Question 6

What is scarcity in health economics?

Answer 6

Need outstrips resources. Prioritisation is inevitable

Question 7

What is efficiency in health economics?

Answer 7

Getting the most out of limited resources

Question 8

What is equity in health economics?

Answer 8

The extent to which distribution of resources is fair

Question 9

What is effectiveness in health economics?

Answer 9

The extent to which an intervention produces desired outcomes

Question 10

What is utility in health economics?

Answer 10

The value an individual places on health state

Question 11

What is opportunity cost in health economics?

Answer 11

Once you have used a resource in one way, you no longer have it to use in another way. Must decide on the best way to use resource. Measured in BENEFITS FOREGONE.

Question 12

What is technical efficiency?

Answer 12

Interested in the most efficient way of meeting a need.

Question 13

What is allocative efficiency?

Answer 13

Choosing between the many needs to be met

Question 14

What is economic evaluation?

Answer 14

Comparison of resource implication and benefits of alternative ways of delivering healthcare.

Helps facilitate decision making so that they are fair and transparent

Question 15

How do we measure costs?

Answer 15

1. Costs of the healthcare services
2. Patients time
3. Costs associated with care giving
4. Other costs associated with illnesses
5. Economic costs borne by employers and society

Question 16

What is cost minimisation analysis?

Answer 16

Outcomes of different conditions assumed to be equivalent. Only focuses on costs ( inputs not outputs ).
Irrelevant as outcomes rarely equivalent

Question 17

What is cost effective analysis?

Answer 17

Compares treatments that have a common health outcome. Measures them in cost per unit outcome (effectiveness). Calculates how much extra benefit is obtained for extra cost.

Question 18

What is cost benefit analysis?

Answer 18

Inputs and outputs valued as money. Methodological difficulties of putting a monetary value on non monetary benefits. Willingness to pay often used - problematic

Question 19

What is the cost utility analysis?

Answer 19

Focuses on quality of health outcomes produced or foregone. Measured in QALY, interventions compared in cost per QALY

Question 20

Name the 4 different types of cost analysis/ economic evaluation for health economics?

Answer 20

Cost minimisation study
Cost benefit analysis
Cost effectiveness analysis
Cost utility analysis

Question 21

What is QALY? Why is it used?

Answer 21

Quality adjusted life years - composite of survival and quality of life.
An effectiveness measure.
1 QALY = one year of perfect health
1 QALY = 2 years of 0.5 perfect health
1 QALY = 6 months of perfect health life for 2 people

Question 22

Name some alternatives to QALY

Answer 22

Health Year Equivalents (HYEs)

Saved-young-life equivalents (SAVEs)

Disabled Adjusted Life Years (DALYs)

NICE uses cost per QALYs to determine cost effectiveness

Question 23

How do NICE make its decision of treatment£

Answer 23

Below £20k pre QALY will normally be approved

£20-£30 k will be considered depending on change of HRQoL, benefits not captured in the QALY etc.

£30k+ needs a stronger case

Question 24

What criticisms have there been of QALYs?

Answer 24

Resources are not distributed based on need but according to the benefits gained per unit cost.
May disadvantage common conditions.
QALYs do not assess impact on family or careers
Technical problems with their calculations
QALYs may not embrace all dimensions of benefit; values expressed by experimental subjects may not be representative.