Lectures 1-4

Question 1

Economic evaluation is a broad term and captures

Answer 1

Cost-effectiveness analysis (CEA)
►Cost utility analysis
►Cost minimization analysis
►Cost benefit analysis
►Net monetary benefit analysis

Question 2

Providers

Answer 2

Role: improve patient health
►Value: ensure the intervention offers best clinical value to patient
►Relates to comparative effectiveness research

Question 3

Hospitals

Answer 3

Role: improve patient health
►Value: provide best clinical value to patient and make a strong value proposition
►Consider example of robotic-assisted surgery

Question 4

Insurers

Answer 4

Role: improve patient health within budgetary limits

►Value: ensure patients receive best value

Question 5

Government

Answer 5

Role: Improve patient health and use policies to incentivize value
►Value: Maximize health within budgetary limits

Question 6

Patients

Answer 6

Role: Improve their health

►Value: Best clinical value that they can afford

Question 7

Nongovernmental organizations

Answer 7

Role: How to measure value and incentivize optimal allocation
►Value: Defines, assesses, and constructs policies to promote value

Question 8

Manufacturers

Answer 8

Product pricing (“value for money”)
►Marketing strategy

Question 9

Third party payers (health insurers)

Answer 9

Coverage decisions (new therapies, drugs, devices...)
►Payment decisions (provider reimbursement, patient cost-sharing)

Question 10

Medical professional organizations

Answer 10

Practice guidelines

Question 11

Health systems (hospitals)

Answer 11

Management tools (control cost while maintaining quality)

Question 12

intervention

Answer 12

An intervention is a ”choice” we will evaluate in economic evaluation
It represents a change in health care practice that aims to either improve health or reduce costs
►Drugs
►Surgery techniques
►New technology
►Screening strategy
►Public health campaign
►New process or structure of care

Question 13

Resources

Answer 13

Resources can represent a variety of inputs
►Resources can be
►Time
►Labor
►Capital
►Technology
►We can think of these resources in terms of money such that we have a common unit
►Remember, time = money

Question 14

Opportunity cost

Answer 14

Opportunity cost = value of what we are giving up to acquire a resource

Question 15

Market Prices

Answer 15

►
Market prices is the result of demand meeting supply
►
Buyers have varying willingness to pay for a specific good
►
Sellers have varying willingness to sell a specific good (function of quantity)
►
Where these meet determines market clearing price

Question 16

Imperfect Market of Health Care

Answer 16

The health care market is imperfect for many reasons including:
1.Buyers often rely on agents for purchasing health care
●Doctor prescribing drugs or treatments
2.Information about prices is not widely available
●What insures pay is often hidden
3.Price is rarely negotiated
4.Price and demand is often subsidized by insurance
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Question 17

Medical costs

Answer 17

Direct cost for medical goods and services

►For example, cost of drugs or surgical procedures

Question 18

Morbidity costs

Answer 18

Any nonmedical costs associated with the morbidity of a condition
►Often opportunity costs
►For example, lost wages due to illness

Question 19

Mortality costs

Answer 19

►Any nonmedical costs associated with the mortality of a condition
►Often opportunity costs
►For example, lost wages due to illness

Question 20

Other nonmedical costs

Answer 20

Nonmedical costs associated with an illness that are not captured by the above
►Often direct costs such as transportation cost

Question 21

Payment transfers

Answer 21

Costs associated with the payment or receipt of money due to an illness

Question 22

Micro-Costing Approach

Answer 22

►Micro costing is used to estimate the cost of a health intervention
►As the name suggests, it estimates each individual components cost
►Three stages of micro-costing:
►Identification of all resources involved in the provision of care (e.g., human-resources, time, and supplies)
►Measurement of each resource (for example using time-and-motion studies)
►Valuation of the resources used

Question 23

Burden of Disease Studies

Answer 23

Takes into account:
►Morbidity of disease (time disabled or sick)
►Mortality of disease (time lost due to premature death)
►Often source of information for economic evaluation modeling and decision analysis

Question 24

Cost-Effectiveness/Utility Analysis (CEA/CUA)

Answer 24

Examines two or more alternative activities (interventions)
►Single, common outcome that differs only in magnitude between the alternative activities
►Results are expressed as a ratio of differences in cost and differences in effects

Question 25

Cost-Effectiveness Analysis (CEA)

Answer 25

CEA outcome (effects) measured in “natural units”
►Life-years, gain in life expectancy
►Clinically relevant outcomes (e.g., Hg for blood pressure; HbA1c for diabetes, etc.)
►Infections averted; number of diseased patients, or symptom-free days

Question 26

Cost-Utility Analysis (CUA)

Answer 26

CUA outcome (effect) based on individual or societal preferences (utilities)
►Outcome measured in quality‐adjusted life years (QALYs), disability‐adjusted life years (DALYs), or Healthy years equivalent (HYE)
►Outcomes capture both quality and quantity of health

Question 27

Disadvantages to CEA and CUA

Answer 27

Cannot be used to compare interventions beyond the health sector (i.e., costs can be directly compared, but outcomes cannot)
►May not capture inter-health sector comparisons completely
►Some health interventions have other outcomes which must be explicitly listed as inputs to the decision-making process
►Requires studies to estimate utility (for QALY measurement) or disability weights (for DALY measurement)
►Theoretical controversies and measurement issues in the field
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Question 28

Theory behind Economic Evaluation

Answer 28

The principle aim of economic evaluation is to maximize societal health for a given budget
►Maximization requires optimal allocation
►Utilize the intervention with the best value first before utilizing the next intervention
►Microeconomics underpins much of economic evaluation
►Multiple theories within microeconomics

Question 29

Decision analysis:

Answer 29

a quantitative method for choosing from a set of alternatives under conditions of uncertainty

Question 30

Model

Answer 30

a representation of some real-world phenomena, object, or behavior

Question 31

Cohort study

Answer 31

A cohortis a group of people related in some way (e.g., socio-economic and demographic characteristics): e.g., a birth cohort is a cohort of people born within a given time period
►Researchers can compare outcomes between members of the cohort exposed to the intervention and those not exposed

Question 32

Case-control study

Answer 32

►Compares subjects who have an outcome of interest (cases) with subjects who do not have the outcome (controls)
►Looks back retrospectively to compare how frequently the exposure to a risk factor is present in each group to determine the relationship between the risk factor and the outcome

Question 33

Markov Models

Answer 33

State-transition models
►Assume finite numbers of health states (Markov states)
►Patients assigned to one and only one state at a given time
►Patients can transition between states based on some state transition probabilities
►Transition probabilities can be time-dependent (e.g., chance of death increases with age, independent of health)
►The probabilities of moving from one state to all other possible states must always add up to 1
►Highly flexible and allow for an infinite variety of diseases or interventions to be simulated and understood
►Most popular tools for public health and health care research
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