Resource Allocation Flashcards
What impacts do scarce resources have on the work of doctors?
Healthcare expenditure is rising worldwide
Healthcare systems confront the problem of allocating limited healthcare resources in relation to competing demands
No country can keep up
How does demography affect resource allocation?
Population is ageing
An 85 year old patient costs the NHS 15x as much as a 5-14 year old
What is the role of technology in resource rationing?
New therapies e.g. cancer are often v expensive & generally expand the pool of candidates (e.g. broader indications, fewer side effects)
Don’t often cure but offer increased survival
Why does rationing have to take place in healthcare?
Resources are scarce
Demand greater than supply
So it is clear who benefits from public expenditure
So we are clear if spending is ‘worth it’
What are the 5 D’s of rationing in the NHS?
Deterrent - demands for healthcare are obstructed (e.g. prescriptions)
Delay - waiting lists
Deflection - GP’s deflect demand from secondary care (gatekeepers)
Dilution - Fewer tests, cheaper drugs
Denial - Range of services denied to patients (e.g. reversal of sterilisation)
What is explicit rationing?
priority-setting as care is limited
Institutional procedures used for the systematic allocation of resources within health care systems
Describe the aspects of explicit rationing
Based on defined rules of entitlement
Care is limited, decisions are explicit, as there are reasons behind them (made by CCGs)
Technical process - Assessments of efficacy & equity
Political process - Lay participation
What are the advantages of explicit rationing?
Transparent, accountable
Opportunity for debate
Use of evidence based practice
More opportunities for equity in decision-making
What are the disadvantages of explicit rationing?
Very complex Heterogeneity of patients & illness Patient & professional hostility Threat to clinical freedom Evidence of patient distress
What is implicit rationing?
The allocation of resources through individual clinical decisions without criteria for those decisions being explicit
(Care limited, neither the decisions nor bases for these decisions are clearly expressed)
Describe the aspects of implicit rationing
Before 1990, NHS relied on implicit rationing
Clinicians made decisions within overall budgetary constraints
Open to abuse
Decisions made on perceptions of “social deservingness”
What levels of rationing are there?
- How much allocation to NHS compared to other government priorities? e.g. education
- How much to allocate across sectors e.g. cancer
- How much to allocate to specific interventions within sectors e.g. end of life vs curative drugs
- How to allocate interventions between different patients in the same group
- How much to invest in each patient once an intervention has been initiated
Why was the National Institute for Health and Care Excellence (NICE) set up?
To ‘enable evidence of clinical & cost effectiveness to be integrated to inform a national judgement on the value of a treatment(s) relative to alternative uses of resource’
What is the function of NICE?
Provides guidance on whether treatments (new or existing) can be recommended for use in the NHS in England and Wales.
Appraises new drugs and devices: Clinical benefit, Costs
During appraisal NHS organisations make decisions on its use locally
Once national guidance is issued by NICE it replaces local recommendations and promotes equal access for patients across the country.
What happens to treatments that are/aren’t approved by NICE?
If expensive treatments are not approved, patients are effectively denied access to them
If approved, NHS organisations must fund treatments, sometimes with adverse consequences for other priorities
Occasional exceptional rulings, e.g. Herceptin in early stage breast cancer. Treatment has a large cost, impact on allocation of budget resources elsewhere.
What are tariffs?
Payment by results, introduced in 2003, tariffs are set nationally
Healthcare Resource Groups (HRG) reflect an (imperfectly measured) average cost for an individual patient spell
When a hospital treats a patients, diagnosis and treatment are recorded
- Information decides which HRG the patient is assigned to and therefore which tariff is paid
- E.g. caesarean birth has a higher tariff than normal birth
What is the purpose of tariffs?
Efficient trusts can make a profit, but inefficient trusts can lose money
- Incentive to become more efficient over time
- If avoidable complications occur, trusts may lose money
- ‘Never-Event’ – no payment for in-hospital maternal death from haemorrhage after elective caesarean section
What is scarcity?
Need outstrips resources
Prioritisation is inevitable
What is efficiency?
Getting the most of limited resources
What is equity?
The extent to which distribution of resources is fair
What is effectiveness?
The extent to which an intervention produces desired outcomes
What is utility?
The value an individual places on a health state
What is opportunity cost?
Once you have used a resource in one way, you no longer have it to use in another way.
E.g. The cost to hire someone is £20,000. It costs £400 for an overnight hospital stay for acutely ill children. If you hire someone, there is lost benefit to 50 children needing overnight observation (opportunity cost)
How can costs & benefits be compared?
Cost minimisation analysis
Cost effectiveness analysis
Cost benefit analysis
Cost utility analysis
What is cost minimisation analysis?
Outcomes assumed to be equivalent e.g. all hip prostheses improve mobility equally, so choose the cheapest one
Not often relevant as outcomes are rarely equivalent
What is cost effectiveness analysis
Used to compare drugs or interventions which have a common health common
E.g. BP in terms of cost per reduction of 5mm/Hg
Is extra benefit worth extra cost?
What is cost benefit analysis?
All inputs & outputs valued in monetary terms
“How much would you pay to have your hip replaced?”
What is cost utility analysis?
Quality of health comes produced or foregone
QUALY
What is a QUALY?
Quality Adjusted Life Year
Used since the 1970’s
Allows for broad comparisons across differing programmes
Uses a single index incorporating quality and quantity of life
1 perfect year of health = 1 QUALY
Assumes that 1 year in perfect health is equal to 10 years with a quality of life of 10% of perfect health.
Measured using a generic HR-QoL instrument, e.g. EQ-5D
How do NICE assess cost-effectiveness?
Integrate QUALY score with the price of treatment using the incremental cost-effectiveness ratio (ICER)
Gives a cost per QUALY figure
Which QUALY technologies are approved?
< £20k per QUALY technology normally approved
£20k - £30k judgements take account of
- Degree of uncertainty
- If change in HRQoL is adequately captured in the QUALY
- Innovation that adds demonstrable and distinctive benefits not captured in the QUALY
- > £30k per QUALY technology needs an ‘increasingly stronger case’
What criticisms of QUALYs are there?
Do not distribute resources according to need, but according to the benefits gained per unit of cost
Technical problems with their calculations
QUALYs may not embrace all dimensions of benefit; values expressed by experimental subjects may not be representative of the population
Controversy about the values they embody
What evidence is there for the criticism of QUALYs?
RCT evidence
- Comparison therapies may differ
- Length of follow-up
- Atypical patients
- Atypical care
- Limited generalisability
- Sample sizes
- Statistical models can address some of these problems, but still not great
