L15- Resource allocation and health economics Flashcards
NHS is in crisis due to
budget cuts
- must make hard decisions with regards to where money is spent
priority setting describes
decisions about the allocation of resources between the competing claims of different services, different patient groups or different elements of care
rationing describeds
the effect of those decisions on individual patients, that is, the extent to which patients receive less than the best possible treatment as a result
why set priorities
- Resources are scarce and could be used in many ways
- Demand outweighs supply
- Difficult decisions have to be made
demand driven by
changing demographics
changing demographics
- Number of over 75s is rising
- 60% of over 65s have LTC
- Increased incidence and prevalence of cancer
ethics
need to be clear and explicit about what we are trying to achieve and who benefits from
public expenditure
two forms of rationing
explicit rationing
implicit rationing
explicit rationing
the use of institutional procedures for the systematic allocation of resources within health care system
with explicit rationing the decisions are made by an
administrative authority as to the amounts and types of resources to be made available, eligible populations
simple explicit rationing
specific rules for allocations
positives of explicit rationing
- transparent
- accountable
- opportunity for debate
- evidence based
- more opportunities for equity in decision-making
negative of explicit rationing
- very complex
- heterogeneity of patients and illnesses
- patient and professional hostility
- impact on clinical freedom
- patient distress
implicit rationing
is the allocation of resources through individual clinical decisions without the criteria for those decisions being explicit
with implicit rationing discretionary decisions are made by
managers, professionals, and other health personnel functioning within a fixed budgetary allowance
weaknesses of implicit rationing
- Can lead to inequities and discrimination
- Open to abuse
- Decisions based on perceptions of social deservingness
- Doctor appear increasingly unwilling to do it
o e.g. Dr deciding not to give treatment of someone they don’t think worthy e.g. a criminal
NICE stands for
national institute of health and care excellence
NICE was set up to
to enable evidence of clinical and cost effectiveness to be integrated to inform a national judgement on the value of a treatment relative to alternative uses of resources
NICE provides guidance on
whether treatments (new or existing) can be recommended for use in the NHS in England
NICE is asked to
• NICE is asked to appraise significant new drugs and devices to help make sure the effective and cost effective products are made available to patients quickly and to minimise variations in the availability of treatments
people dont like NICE because
- controversial role inr elation to expensive treatments
- ## if not approved patients are effectively denied access to them
if drug is approved by NICE
NHS mist fund them- with adverse consequences for other priorities
scaricity
need outstrips resources. Prioritisation is inevitable
efficiency
getting the most out of limited resources
equity
the extent to which distribution of resources is fair
effectiveness
the extent to which an intervention produces desired outcomes
utility
the value an individual places on health state
opportunity cost
once you have used a resource in one way, you no longer have it to use in another way
two types of efficiency
technical and allocative
technical efficiency
Interested in the most efficient way of meeting a need (e.g. should antenatal care be community or hospital based?)
allocative efficiency
Choosing between the many needs to be met ( e.g. fund hip replacement or neonatal care?)
opportunity cost explained
o When deciding to spend resources on a new treatment, those resources cannot now be used on other treatments
opportunity cost of the new treatment is the . value of the
next best alternative sue of those resoruces
cost is viewed as
sacrifice rather than financial expenditure
opportunity cost measured in
benefits forgone e.g. cost of IVF
opportunity cost of IVF
One course of IVF treatment is £2700. Three courses of IVF (£8100) increases probability of pregnancy by 30%.
Good value? Not a life threatening condition With £8100 could also fund: - Cochlear implant - 1 heart bypass operation - 11 cataract removals - 150 MMR vaccinations
economic evluation
Comparison of resource implications and benefits of alternative ways of delivering healthcare.
Used to make funding decisions more transparent and fair
how to measure cost
Identify, quantify and value resourced needed
- cost fo the healthcare services
- cost of patients time
- cost associated with care-giving
- other costs associated with illness
- economic costs borne by employers, other employees and the rest of society
how do you measure benefits?
harder to measure- improved health hard to value
- impact on health status
- savings in other healthcare resources
- improved productivity
types of evaluation which compare cost and benefit
- cost minimisation analysis
- cost effectiveness analysis
- cost benefit anlysis
- cost utility analysis
cost benefits analysis
all inputs and outputs valued in monetary terms
- willingness to pay often used
- can allow comparisons-with interventions outside healthcare
weakness of cost benefit analysis
methodological difficulties e..g putting monetary value on non-monetary benefits such as lives saved
cost minimisation analysis
outcomes assumed to be equivalent
- focus on costs (only inputs)
e. g. all prostheses for hip replacement improve mobility equally
- choose the cheapest one
weakness of cost minimisation analysis
not often relevant as outcomes rarely equivalent
cost effectiveness analysis
used to compare drugs or interventions which have a common health outcome e.g. reduction in blood pressure
compared in terms of cost per unit outcome
e.g. cost per reduction of 5mm/Hg
with cost analysis if costs are higher for one treatment, but benefits are too, need to calculate how much extra
benefit is obtained for the extra cost
is extra benefit worth extra cost
cost-utility analysis
particular type of effectiveness analysis
cost utility analysis focusses on
quality of health outcome produced or foregone
uses QALYs
intervention can be compared in costs per QALY terms
Quality adjusted life years
a measure of effectiveness of a treatment s
QALY incorporates
quality and quantity of life gained§ by a treatment
1 year of perfect health
1 QALY
2 years of 50% QOL
1 QALY
Example: man is diagnosed with cancer
Told he has 1 year to live if he does not have treatment
• His quality of life, without treatment, will be 0.8 of perfect
health and he will then die quickly
• Without treatment = 0.8 QALYs
• If he receives treatment he will live for 4 years, but his QoL will be 0.2 of perfect health
• With treatment = 0.8 QALYs (4 x 0.2)
No gain in QALYS associated with treatment
alternatives to QALYs
- Health Year Equivalents (HYEs)
- Save-young-life equivalents (SAVE)
- Disability adjusted life years (DALYs)
NICE use
QALY
NICE and cost per QALY
below £20k per QALy will normally be approved
- £20-£30k per QALY
judgements will take account of:
o Degree of uncertainty
o If change in HRQoL is adequately captured in the QALY
o Innovation that adds demonstrable and distinctive benefits not captured in the QALY
above £30k
need an increasingly stronger case
criticism of QALY
- Controversy about the values they embody
- Do not distribute resources according to need, but according to the benefits gained per unit of cost
- May disadvantage common conditions
- Technical problems with their calculations
- QALYs may not embrace all dimensions of benefit; values expressed by experimental subjects may not be representative
- QALYs do not assess impact on carers or family
