Lectures 1-4 Flashcards
Economic evaluation is a broad term and captures
Cost-effectiveness analysis (CEA) ►Cost utility analysis ►Cost minimization analysis ►Cost benefit analysis ►Net monetary benefit analysis
Providers
Role: improve patient health
►Value: ensure the intervention offers best clinical value to patient
►Relates to comparative effectiveness research
Hospitals
Role: improve patient health
►Value: provide best clinical value to patient and make a strong value proposition
►Consider example of robotic-assisted surgery
Insurers
Role: improve patient health within budgetary limits
►Value: ensure patients receive best value
Government
Role: Improve patient health and use policies to incentivize value
►Value: Maximize health within budgetary limits
Patients
Role: Improve their health
►Value: Best clinical value that they can afford
Nongovernmental organizations
Role: How to measure value and incentivize optimal allocation
►Value: Defines, assesses, and constructs policies to promote value
Manufacturers
Product pricing (“value for money”) ►Marketing strategy
Third party payers (health insurers)
Coverage decisions (new therapies, drugs, devices...) ►Payment decisions (provider reimbursement, patient cost-sharing)
Medical professional organizations
Practice guidelines
Health systems (hospitals)
Management tools (control cost while maintaining quality)
intervention
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
Resources
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
Opportunity cost
Opportunity cost = value of what we are giving up to acquire a resource
Market Prices
►
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
Imperfect Market of Health Care
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
11
Medical costs
Direct cost for medical goods and services
►For example, cost of drugs or surgical procedures
Morbidity costs
Any nonmedical costs associated with the morbidity of a condition
►Often opportunity costs
►For example, lost wages due to illness
Mortality costs
►Any nonmedical costs associated with the mortality of a condition
►Often opportunity costs
►For example, lost wages due to illness
Other nonmedical costs
Nonmedical costs associated with an illness that are not captured by the above
►Often direct costs such as transportation cost
Payment transfers
Costs associated with the payment or receipt of money due to an illness
Micro-Costing Approach
►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
Burden of Disease Studies
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
Cost-Effectiveness/Utility Analysis (CEA/CUA)
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
