L11 Flashcards
Why is economic evaluation of HC important?
to inform decision-making about the allocation of scarce resources and make sure resources are being used efficiently and equitably
What is welfarism?
Utility maximising allocation of resources (see notes? how does this link to the following definitions?)
What is individualism?
Consumer choice theory: the only relevant info. in making social choices is the view of individuals
What is consequentialism?
We are concerned with outcomes of choices rather than processes
What is the Pareto principle?
A desirable allocation of resources should at least satisfy the idea that no one can be made better off without making someone else worse off
Why is the pareto principle not the be all and end all of welfarism?
Is very easily met! tells us nothing about how equitable an allocation is tf doesn’t help us find optimal social welfare tf not a very useful concept in Health econ.
What was Kalder’s (1939) compensation principle?
A policy is beneficial if those gaining from the move could potentially compensate those who lose
Explain how Kalder’s (1939) principle may be applied?
Add up value of gains and losses - if sums to a positive value then potential pareto improvement, tf should be implemented, and then (may) choose to compensate those who lose out (note: two parts are theoretically seperable; one doesn’t have to compensate - see example in notes)
2 advantages of welfarism?
1) only interested in individual’s utility, which sum to make up society tf should be fine!
2) utility of individuals should reflect what they find important
Disadvantage of welfarism and implication of it?
Money must be used as an indicator of utility (eg. utility of health/life) therefore puts a monetary value on HC concepts like life and death; many people dislike this idea
Therefore HC uses an extra-welfarism approach
Theoretical characteristics of extra-welfarism? (3)
1) Use of outcomes rather than utility (health focus)
2) Sources of valuation other than just the affected individuals (population-based - how much do non-affected people value the intervention)
3) Permits interpersonal comparisons of well-being
What does the ‘extra’ refer to?
Health rather than utility
Why do welfarists criticise EWism?
Believe that health -> utility tf unnecessary approach
Why do EWists argue in favour of EWism?
Argue that EWism makes it harder to distinguish between equity and efficiency - in welfarism it is too easy to compensate poor health with health from a different source, EWism is not easy to do this (???)
What is economic evaluation?
Comparative analysis of alternative courses of actions ITO both costs and consequences
Define opportunity cost?
Value of the best forgone alternative when a decision is made
5 types of HC analysis?
1) CEA (cost-effectiveness analysis)
2) CCA (cost-consequence analysis)
3) CMA (cost-minimisation analysis)
4) CUA (cost-utility analysis)
5) CBA (cost-benefit analysis)
Cost-effectiveness analysis: approach? measurement unit types? type of questions it addresses?
Extra-welfarist
eg. lives saved/cancers detected - physical/natural unit
Addresses technical efficiency questions
2 ways a CEA evaluates its findings?
1) Dominance: eg. more units at a lower cost/unit - makes sense!
2) Cost effectiveness ratio (CER): calculates the cost per extra unit of benefit (see slides 8 and 9 example?)
ICER = ?
Difference in costs/difference in consequences
2 advantages of CEA?
1) straightforward to calculate
2) appealing to clinicians
2 disadvantages of CEA?
1) not clear what measure to use if no obvious outcome
2) not informative system for decision-makers/commissioners
What is a CCA?
Special case of a CEA: it lists all costs and consequences of different choices (basically a ‘first step’) (see slide 1 page 10)
Pros of a CCA? (3)
1) can see all outcomes
2) natural units
3) Few ‘assumptions’
Cons of a CCA? (3)
1) no relative importance indicators
2) decision rule requires dominance
3) assumes decision maker capacity
What is a CMA?
Special type of a CEA: ignores outcome/performance element, only concerned with the LOWEST COST OPTION (dominance decision rule is this)
Con of CMA?
Too simplistic to assume all interventions have equivalent outcomes!
What is approach is a CUA? How are outcomes measured? How are results described?
Extra-welfarist
QALYs
Results ITO cost per additional QALY gained
What is a QALY?
Quality-adjusted life year
Combines life years in a particular state of life
1 QALY is one life year in full health
What is the decision rule for a CUA?
Dominance or cost-utility ratio
When are CUA best used? (3)
1) When health-related QofL is most important outcome
2) Interventions that affect both mortality and morbidity
3) Suitable for comparing a wide range of outcomes
When not to use a CUA?
When existing variable is already available and appropriate and documented
2 pros of CUA?
1) Combines both length and quality of life into one unit
2) Allows cross-disease comparisons
2 cons of CUA?
Costly and time-consuming
Dependent on method/scale used
What is a CBA? What units does it use? What is its decision rule?
Monetary valuation of costs and benefits of a decision to address whether a programme should be implemented
Decision rule: implement if B-C>0 (net benefit)
Advantage of CBA over CEA/CUA? Why rarely used in health?
Broader scope than CEA/CUA (for example…?)
Not used much in health bc. of difficulties in applying some elements (eg. WTP and DCE)
Also places monetary value health concepts like life tf many dislike it in health! (see table page 13 of lecture notes?)
