PPHC 10: Health (Health Economics II) – How do we decide what is good value? Flashcards
If markets work well, what do competition and consumer choice solve?
- problems of allocative efficiency – who gets a product or service
- problems of technical efficiency – the most efficient way to convert inputs (raw materials) into outputs (products, services), lowering the price
What is health technology assessment?
process to evaluate health technologies (ie. drugs, devices, diagnostics, etc.) to decide what to provide/fund
Why do we do health technology assessment?
to understand what is best to provide for a population to maximize health
What are the 5 components of a health technology assessment?
- clinical effectiveness – does the technology improve health outcomes relative to other alternatives
- economic evaluation – does the technology provide good value for money (ie. comparing costs and outcomes) relative to other alternatives
- social and ethical impact – how does the technology affect different populations
- organizational impact – how would adopting the technology impact the healthcare delivery, infrastructure, planning
- budget impact analysis – estimating the short-term financial burden on healthcare system
What is economic evaluation?
systematic, comparative analysis of two (or more) courses of action in terms of their costs and consequences
- systematic: a unified framework – what are the relevant components of an analysis, how do they relate to one another, how should the analysis be conducted
- comparative: efficiency – two (or more) alternatives, costs, and consequences – how do we get most output from a govern set of inputs
- courses of action: a particular way of using resources, delivery of healthcare services, programs, policies, etc., assessment required before approval
What are the 3 building blocks of economic evaluation?
- objective
- choice
- costs and consequences
What are the 3 building blocks of economic evaluation in healthcare?
- objective: maximize health for a population
- choice: which policy/program/intervention will most efficiently achieve the objective
- costs and consequences: alternative A or alternative B – what resources are needed (cost), what effects does it generate (benefits or consequences)
What does economic evaluation tell us?
the price tag of an extra unit of effectiveness (however you decide to measure effectiveness)
- ie. $/liter of gas, $/kg of cornflakes
- healthcare benefit isn’t as divisible as gas or cornflakes
What does economic evaluation NOT tell us?
- how much you should be willing to pay – ie. only decision-maker knows that (or we make it up – ie. $50,000 per QALY)
- the budget impact – ie. how many litres of gas you have to buy
What is the objective of economic evaluation?
focuses on value and long-term efficiency – compares the costs and health outcomes of different interventions to determine which provides the best value over the long term
- which intervention is most efficient in terms of health benefits gained per dollar spent
- ie. Canada’s Drug Agency suggests cost-utility analysis, to understand the price tag of getting an extra QALY
What is the objective of budget impact analysis (BIA)?
focuses on immediate financial feasibility – assess the short-term affordability of introducing a new intervention, looking at the financial impact on a specific budget (usually over 1-5 years) without directly assessing long-term health outcomes
- ie. can I afford it
What are the 4 types of economic evaluation?
- cost-minimization analysis
- cost-benefit analysis
- cost-effectiveness analysis
- cost-utility analysis
Cost-Minimization Analysis
- costs
- benefits/effectiveness
- $
- 0 (equivalent)
Cost-Benefit Analysis
- costs
- benefits/effectiveness
- $
- many outcomes (in $)
Cost-Effectiveness Analysis
- costs
- benefits/effectiveness
- $
- 1 outcome (natural units)