Lecture 34: Health economics

Question 1

Define the concepts of scarcity, opportunity costs and an aging population

Answer 1

Scarcity:

• There are limited resources
• Societies needs > resources
• Choices need to be made where to allocate funding

Opportunity costs:
- Doing one thing means not doing another thing - one patient would lose out

Aging population:

• The proportion of older people in our population is higher than in previous decades/socieites
• This effects the health needs of these individuals as some disorders/diseases will be more prevalent than others

Question 2

What two components do all economic evaluations include

Answer 2

Compare at least two interventions

Assess the cost and outcome

• Cost is resources required for each intervention
• Effectiveness assess the consequences of each intervention - different impacts on outcome

Question 3

Describe the different methods for cost consequences analysis and which each focusses upon?

Answer 3

1. Cost-effectiveness analysis
   - How much cost for a change in outcome - typically point difference on a scale - diseases specific outcome (could also be blood pressure/cholesterol)
2. Cost-utility analysis
   - How much cost for a standardised measure - i.e. QALY - preference based resource
3. Cost benefit analysis
   - Change in outcomes is in financial terms - i.e save £X
4. Cost Consequences analysis
   - Incorporates a range of outcomes - i.e. effectiveness which is disease-specific, generic measures (QALY) and monetary units

Question 4

What are decision models?

Answer 4

Systematic and quantitative approach to making decisions under uncertainty

While we should know which economic evaluation should assess if differences in outcomes are present over a long period of time - not often the case except for those involved in terminal illness - therefore decision models may be used to give evidence over a longer time frame

Economic evaluation is now included within RCTs to provide financial information for certain outcomes derived from an intervention

Question 5

What is cost-offset and cost-minimisation?

Answer 5

Cost offset - is the economic savings from an intervention independent of the health benefits - i.e. branding/generic drug rather than saved cost through less consultations

Cost minimisation is comparing two interventions of same clinical utility and looking at the costs

Question 6

What is a cost-effectiveness acceptability curve?

Answer 6

It summarises the uncertainty in estimates of cost effectiveness

Probability of an intervention being effective is placed on the Y axis
Willingness to pay for an incremental improvement in outcome measure on X axis

i.e. if society was not willing to pay anything what is the likelihood of the intervention being effective - if a high probability then may be worth it

Used when there is a lack of statistical difference in cost of an outcome and the effectiveness of the outcome

Question 7

Outline some domains of care costs?

Answer 7

Costs to agencies

Cost of intervention

Cost of carers

• All includes cost to public sector and agenices
• Top two consider cost to public sector
• Cost from lack of employment may not be considered

Question 8

How is the cost of an intervention calculated?

Answer 8

Number of interventions x unit cost