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Pharmacoeconomics > Measuring and Estimating Costs > Flashcards

Measuring and Estimating Costs Flashcards

1
Q

What is cost analysis?

A

Studies related to a product or service’s costs

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2
Q

What is clinical/outcomes analysis?

A

Studies related to the outcomes that result from a product or service

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3
Q

What is PE?

A

Studies both costs and outcomes related to a product or service

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4
Q

What is a cost?

A

Calculated to estimate the resources that are used in the production of an outcome

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5
Q

What are the types of costs?

A
  1. Direct medical costs
  2. Direct non-med costs
  3. Indirect costs
  4. Intagible costs
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6
Q

What is an opportunity cost?

A

True cost of a certain resource
(The value of best-forgone option or the best option)

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7
Q

What is a direct medical cost?

A

Medically related inputs used directly in providing treatments

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8
Q

Types of direct medical costs?

A
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9
Q

What are direct non-medical costs?

A

Costs directly associated with treatment, but are not medical in nature

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10
Q

What are examples of direct non-med costs?

A
  1. Travel expenses
    1. Non-med assistance
  3. Childcare
  4. Food and lodging
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11
Q

What are indirect costs?

A

Cost that result from loss of productivity due to illness or death

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12
Q

Examples of indirect costs?

A
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13
Q

What are intangible costs?

A

Costs of pain, suffering, anxiety, or fatigue that occurs because of an illness or treatment

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14
Q

What are examples of intangible costs?

A
  1. Difficult to measure intangible costs
  2. Pain suffering
  3. Anxiety
  4. Fatigue
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15
Q

What are healthcare sector costs?

A
  1. Medical resources consumed by HC entities
  2. SImilar to direct med cost, but excludes costs paid by patients and non-HC
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16
Q

What are other sector costs?

A

Resources in non-healthcare sectors that could be potentially impacted by patients with certain disease states and treatments

Ex: Resources used and savings incurred by the treatment of patients with schizophrenia

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17
Q

What are examples of patient and family costs?

A
  1. Paid by patient and familty w/o regards to when costs are med or non-med
  2. Patient’s & family’s share of direct medical & non-medical costs
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18
Q

What is a perspective?

A

Describes whose costs are relevant based on the puprose of PE study

Used to detemine what costs are important to measure

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19
Q

What is the current economic theory?

A

Societal costs = most approproate perspective for economic studies

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20
Q

What are examples of a societal cost?

A
  1. costs to the insurance company, paitient, and indirect costs from loss of productivity
  2. Rarely used in PE
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21
Q

What is the most common perspective in PE studies?

A

Institution or payer costs

22
Q

Who is considered a payer?

A
  1. third party
  2. Patient
  3. Combo copay and third party cost
23
Q

When should costs be estimated and adjusted?

A

Collected info >1yr before study, and >1yr into future

24
Q

When is retrospective data used to estimate and adjust costs?

A

Assess resources used for >1 year, costs should be adjusted to the present year

25
Q

What is the standard discount of costs?

A

3-10%

26
Q

What is the rationale of discounting costs?

A
  1. Present value of money today is not worth more in the future
  2. If given money today, a person could invest or use it for an immediate need that increase its value
  3. If not discounted, costs or benefits in the first year will remain stable, which could lead to inaccurate conclusions about the value of the benefit
27
Q

What is the discounting formula to determine cost at present value?

A

PV = FC x DF
PV -> present value
FC -> future cost
DF -> discount factor

28
Q

How do you calculate discount factor?

A

𝟏/〖(𝟏+𝐫)〗^𝐧
r -> discount rate (in decimal form)
n -> year when cost was incurred

29
Q

What are the methods used to calculate costs in CEA?

A
  1. Average cost effectiveness ratio (ACER)
  2. Incremental cost effectiveness ratio (ICER)
30
Q

What is ACER?

A
  1. Ratio of resources used per unit of clinical benefit
  2. Assumed that the calculated ratio is compared to no treatment
  3. Not as clinically relevant because healthcare providers aren’t likely questioning the choice to treat or not
30
Q

What is ICER?

A
  1. Ratio of the difference in costs divided by the difference in outcomes
  2. calculated ratio is comparing two treatment options
  3. extra cost of producing one extra unit of benefit
  4. Most appropriate method for presenting CEA data
31
Q

What are the methods for estimating direct med costs?

A
  1. Direct measurement of costs for indiviual patients (prospectively maintaining financial reocrds and logs)
  2. Retrospective review of patient medical records or third-party insurance reimbursement claims data (disadvantages -> labor and time-consuming)
32
Q

What are common types of direct medical costs?

A
  1. Medications
  2. Med services
  3. Personnel
  4. Hospitalization
33
Q

Why is PE useful for estimating costs?

A

Mirror real-world clinical practice that provides more accurate cost estimates

Enables better, more informed decision-making by HCP

34
Q

What are average wholesale price?

A
  1. Used to calculate the costs of meds in the US
  2. List price, sticker price
  3. Red book
  4. Higher cost estimate than pharamcies
35
Q

What is wholesale aquition cost?

A
  1. Price that estimates the costs to wholesaler from the manufacturer
  2. Catalog price
  3. No discount
36
Q

What is average manufactuer price?

A
  1. Average amount paid to manufacturers by wholesalers after including discounts
  2. More precise estimate of what pharmacies pay for medications
  3. AMP -> proprietary information; not available to general public
37
Q

What is physicion fee refernce?

A

Database that provides the amount reimbursed by payers to healthcare providers

38
Q

What are centers for medicare and aid?

A

Resource for medicare reimbursement rates

39
Q

What has greater reimburcement rates?

A

Physician’s Fee Reference > reimbursement rates for Medicare

40
Q

What are ex of med services?

A
  1. Clinical vistis, labs
  2. list prices of med services
41
Q

How do you determine cost assumptions for the service?

A
  1. Average pharmacist hourly wage
  2. Average hours available
42
Q

HOw do you determine personal cost break even point?

A
  1. “Break-even” point = hourly wage X weekly hours available
  2. Explanation  pharmacy must generate at least $xxx from MTM to pay RPh wages
43
Q

How do you determine profitability of proposed clinical service?

A
  1. Revenue generated < “break-even” point  not profitable
  2. Revenue generated > “break-even” point  profitable
44
Q

What are the methods of estimating hospitalization costs?

A
  1. Per-diem -> LEAST PRECISE
  2. Disease–specific per-diem
  3. Diagnosis–related groups (DRGs)
  4. Micro-costing -> MOST PRECISE
45
Q

What factors contribute to precision in a study?

A
  1. Importance of hospital-related costs to the overall evaluation
  2. Study perspective
  3. Availability of cost data
  4. Availability of resources to conduct study
46
Q

More precise estimates are likely more ___?

A

Labor and time-consuming

47
Q

What is per-diem?

A

Least precise method for estimating hospitalization costs

For each day that a patient is hospitalized, an average cost per day for all types is used as a multiplier.

48
Q

What is disease specific per-diem?

A
  1. More precise method for estimating hospitalization costs than per-diem

For each day that a patient is hospitalized, an average cost per day for a specific disease state is used as the multiplier.

49
Q

What is diagnosis related groups?

A

More precise method for estimating hospitalization costs than per-diem & disease-specific per-diem

Used to classify clinically cohesive diagnoses and procedures that use similar resources

50
Q

What is microcosting?

A

Most precise method for estimating hospitalization costs

Collecting information on resource use for each intervention component to estimate & compare alternatives

Involves reviewing medical records to determine what services were used & assign costs to each service

Institutions maintain records for each service to calculate the amount to charge payers.

Hospitals = profitable

51
Q
A

Pharmacoeconomics (9 decks)

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