L16: Introduction to resource allocation Flashcards
What is priority setting?
Allocation of resources between the competing claims of different services, different patient groups and different elements of care
What is rationing?
Describes the effects of those decision on individual patients
The extent to which patients receive less than the best possible treatment as a result
Why set prioritites?
Scarcity of resources- demand outstrips supply
Difficult decisions have to be made
How are priorities set?
Resources could be used in many ways
Ethics need to be clear and explicit about what we are trying to achieve and who benefits from public expenditure
What are the two different forms of rationing?
Explicit and implicit rationing
Explicit: Based on defined rules of entitlement
Implicit: Care is limited but neither the decisions, nor the bases for those decisions are clearly expressed
What are the problmes to implicit rationing?
Lead to inequalities and discrimination
Open to abuse
Decisions based on perception of social deservingness
Doctors appear increasingly unwilling to do it
How are the rules for explicit rationing determined?
Care is limited
Technical processes e.g. assessment of efficiency and equity
Political processes e.g. lay participation
What are the pro for explicit rationing?
Transparent and accountable
Opportunity for debate
More clearly evidence based
More opportunities for equity in decision-making
What are the cons for explicit rationing?
Very complex Heterogeneity of patients and illnesses Patient and professional hostility Impact on clinical freedom Some evidence of patient distress
What is NICE and why was it set up?
National Institute fro Health and Care Excellence
Provide guidance on whether treatment (new or existing) can be recommended for use in the NHS in England
What role does NICE play in terms of treatment?
Controversial role in relation to expensive treatment
If not approved, patients are effectively denied access to them
If approved local, NHS organisations must fund them (if clinically approprite) sometimes with adverse consequence for other priorities
What are the basic concepts in health economics?
Scarcity Efficiency Equity Effectiveness Utility Opportunity costs
What does scarcity mean?
Needs outstrips resources
Prioritisation is inevitable
What does efficiency mean?
Getting the most out of limited resources
What does equity mean?
The extent to which distribution of resources is fair
What does effectiveness mean?
The extent to which an intervention produces desired outcome
What does utility mean?
The value and individual places on a health state
What does opportunity cost mean?
Once you have used a resource in one way, you no longer have it to use in another way
Viewed as a sacrifice rather than financial expenditure
Measure in benefits foregone
opportunity cost in the value of the next best alternative use of those resource
What is the difference between technical efficiency and allocative efficiency?
Technical efficacy→interested in the most efficient way of meeting a need
Allocative efficacy→ you are choosing between the many needs to be met
What is economic evaluation?
Comparison of resource implications and benefits of alternative ways of delivering healthcare
Can facilitate decision so that they can be more transparent and fair
How do we measure cost?
Different ways of measuring cost Cost of: →healthcare service →patients time →associated with care-giving →associated with illness →economic cost borne by other employers, other employees and the rest of society
How can you measure benefit?
Improved or maintained health is hard to measure Is benefit: → impact on health status → saving in other healthcare resources → improved productivity
How can you compare costs and benefits?
Different ways to do so
- Cost minimisation analysis
- Cost effectiveness analysis
- Cost benefit analysis
- Cost utility analysis
What is cost minimisation analysis?
- Outcome assumed to be equivalent
- Focus is on cost
- Not used often as the outcomes are often not equivalent
e. g. range of different things produce the same outcome choose the cheapest one
What is cost effectiveness analysis?
- Compare drugs or interventions which have a common health outcome → e.g. reduction in BP
- Compared in terms of cost per unit outcome
- If cost are higher for one treatment but benefits are too need to calculate how much extra benefit is obtained for the extra cost
- Key q’s: Is the extra benefit worth the extra cost?
What is cost benefit analysis?
- All inputs and outputs are valued in monetary terms
- Can allow comparison with interventions outside healthcare
- Methodological difficulties e.g. putting monetary value on non-monetary benefits such as lives saved
- ‘Willingness to pay’ often used, but this is also problematic
What is cost utility analysis?
- Particular type of cost effectiveness analysis
- Focuses on quality of health outcome produced or foregone
- Most frequently used measure is quality adjusted life years (QALY)
- Interventions can be compared in cost per QALY terms
How do you know which type of analysis to use?
1) Is there good evidence on effectiveness of interventions being compared? → No- costing study → Yes - 2) Are the interventions equally effective? → Yes - cost minimization study → No - 3) Can all outcomes be values in monetary terms (willingness to pay)? → Yes - cost benefit analysis → No - 4) Can outcomes be measures as QALYs? → No - cost effectiveness analysis → Yes - cost utility analysis
Why QALYs?
Need to compare cost-effectiveness of different uses of resources
Need an effectiveness measure that can be used over a wide range
QALYs→ composed of survival and quality of life
How do QALYs work?
Assumes that 1 year of perfect health = 1 QALY
Quality and quantity of life included
What are some alternatives to QALYs?
Health year equivalents (HYE)
Saved-young-life equivalents (SAVEs)
Disability Adjusted Life Years (DALYs)
How does NICE make its decisions?
Below £20K QALY technology will normally be approved
£20-£30K judgements will take account of:
- Degree of uncertainty
- If changes in HRQoL is adequately captured in the QALY
- Innovation that adds demonstrable and distinctive benefits not captured in QALYs
Above £30K need an increasingly stronger case
What are some of the criticisms of QALYs?
- 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
