Resource Allocation Flashcards
Why does the NHS need to set priorities?
Due to scarcity of resources
What is meant by scarcity of resources in the NHS?
Demand outstrips supply, so can’t fund everything we want to
What did Donaldson say in 2008 about difficult decisions having to be made in the NHS?
“To sustain publicly funded health care, societies need to wake up and tackle rationing through explicit recognition and management of scarcity”
What was the gross expenditure of the NHS in 1948?
£437 million, or about £15 billion in todays money
What was the gross expenditure of the NHS in 2015/16?
£117.2billion
What is the planned expenditure of the NHS for 2017/18?
£120.611 billion
What is the increase in exenditure of the NHS driven by?
Demographics
What is the number of over 75’s expected to be by 2031?
8.2 million
What % of those over the age of 65 have a long term condition?
60%
What is happening to the prevalence and incidence of cancer?
It is increasing
What is the economic problem with the increase in cancer?
New cancer therapies are often very expensive, and generally expand the pool of candidates
How do new cancer therapies expand the pool of candidates?
- Broader indications
- Fewer side effects
What is often true of new medicines?
They often don’t cure, but offer increased survival
What is the problem with new medicines bringing increased survival, rather than cure?
Brings extra cost
What questions are there regarding preventer drugs?
Should they be funded
What is the result of resources being scare, and being able to be used in many ways?
Have to deicde what, and what not, to pay for
Ethically, what should be done before deciding where to spend money in the NHS?
Should be clear and explicit about what we are trying to achieve, and who benefits from public expenditure
What are the forms of rationing?
- Explicit rationing
- Implicit rationing
What is explicit rationing?
The use of institutional procedures for the systemic allocation of resources within health care system
What is explicit rationing based on?
Defined rules of entitlement, with a very clearly set out procedure for making decisions
Is care limited in explicit rationing?
Yes
How does explicit rationing take place?
- Technical processes
- Political processes
Give an example of a technical process by which explicit rationing takes place?
Assessments of efficiency and equity
Give one example of a political process by which explicit rationing takes place
Lay participation
What are the advantages of explicit rationing?
- Transparent
- Accountable
- Opportunity for debate
- More clearly evidence-based
- More opportunities for equity in decision-making
What are the disadvantages of explicit rationing?
- Very complex
- Doesn’t recognies and adapt to heterogenity of patients and illnesses
- Patient and professional hostility
- Impact on clinical freedom
- Some evidence of patient distress
What is implicit rationing?
The allocation of resources through individual clinical decisions, without the criteria for those decisions being explicit
Are patients aware of the decisions being make in implicit rationing?
They may not be
Is care limited in implicit rationing?
Yes
Are the decisions, or basis for decisions, clearly expressed in implicit rationing?
No
What are the problems with implicit rationing?
- Can lead to inequities andn discrimination
- Open to abuse
- Decisions based on perceptions of social deservingness
- Doctors appear increasingly unwilling to do it
What is meant by decisions being based on perceptions of ‘social deservingness’?
Decisions not necessarily made on the basis of good clinical evidence
Why do doctors appear increasing unwilling to participate in implicit rationing?
It puts doctors in very difficult position
What merit can be seen in implicit rationing?
Giving the complexity of medical care, and individual patients have very different circumstances, this is a much more sensitive way of doing it
What was NICE set up to do?
Enable evidence of clinical and cost effectiveness to be integrated to inform a national judgement on the value of a treatment(s) relative to alternative use of resources
What does NICE provide?
Guidance on wether treatments (new or existing) can be recommended for use in the NHS in England
What does NICE say regarding the implementation of their guidelines?
‘We expect you to take our guidance into account, but people also have the right to be involved in discussions, and make informed decisions, about their care’
So patients still have choice, and can decline treatment, but CCGs are obliged to provide approved treatments
What is NICE asked to do when there are significant new drugs and devices?
Appraise them to ‘help make sure that effective and cost effective products are made available to patient’s quickly, and to minimise variation in the availability of treatments’
What happens once national guideance has been issued by NICE?
It replaces local recommendations, and promotes equal access for patients across the country
What are CCGs starting to do, regarding NICE and their own guidance?
Put their own, additional requirements to protect their own budget
E.g. for hip replacement referrals
Where does NICE have a particularly controversial role?
Expensive treatments
Why does NICE have a particularly controversial role with expensive treatments?
- Because if the treatment is not approved, they are effectively denied access to them, expect for individual requests, but this is an exception rather than the norm
- If approved, local NHS organisations must fund them (if clinically appropriate), sometimes with adverse consequences to other priorities
What do doctors need to know the basics of health economics?
Because doctors are involved in decisions about resource allocation, and knowing the basics help them contribute to/learn from evidence
What are the basic concepts in health economics?
- Scarcity
- Efficiency
- Equity
- Effectiveness
- Utility
- Opportunity cost
What is meant by scarcity in health economics?
Need outstrips resources, so prioritisation is inevitable
What is meant by efficiency in health economics?
Getting the most out of limited resources
What must be considered when looking at efficiency in health economics?
What is trying to be achieved
What is meant by equity in health economics?
The extent to which distribution of resources is fair
What is meant by effectiveness in health economics?
The extent to which intervention produces desired outcomes
What is meant by utility in health economics?
The value an individual places on a health state
The clinical outcome that the treatment improves has to be one that the patient values
What is meant by opportunity cost in health economics?
Once you have used a resource in one way, you no longer have it to use in another way
The opportunity cost of the new treatment is the value of the next best alternative use of those resources
How is cost viewed in health economics?
As sacrifice, rather than financial expenditure
How is opportunity cost measured?
In benefits foregone
What kinds of efficiency do you have to think about when making choices in healthcare?
- Technical efficiency
- Allocative efficiency
What is technical efficiency interested in?
The most efficient way of meeting a need
What happens in technical efficiency?
Decide on the outcome, then work on the best way of achieving it
What happens in allocative efficiency?
You are choosing between which of the many needs that need to be met, and how much to allocate to each
What is economic evaluation in the context of healthcare?
Comparison of resource implication and benefits of alternative ways of delivering healthcare
What happens in economic evaulation?
Compares the inputs (resources) and outputs (benefits, and value attached to them) of alternative interventions
How can economic evaluation help with decision making?
Can facilitate decisions so that they are more transparent and fair
What does economic evaluation allow for?
Better decisions to be made about which interventiosn represent best value for investment
How do you measure costs?
By identifying, quantifying, and resources needed
What are the categories of cost in healthcare?
- Costs of the healthcare services
- Costs of the patients time
- Costs associated with care-giving
- Other costs associated with illness
- Economic costs bourne by employers, other employees, and the rest of society
What are the costs of healthcare services related to?
- Drugs
- Staff
- Beds
- Equipment
What are the costs associated with care-giving?
- Catering
- Cleaning
Why are benefits harder to measure?
Improved (or maintained) health hard to value
What are the categories of benefits/consequences?
- Impact on health status
- Savings in other healthcare resources in patient’s health state is improved
- Improved productivity if patient, or family members, returns to work earlier
What is meant by impact on health status?
Survival or quality of life, or both
How may savings be made in other healthcare resources if a patient’s health state is improved?
Due to reduction in;
- Drugs
- Hospitalisations
- Procedures
What does measuring benefits in terms of savings in other healthcare resources rely on?
Assumptions and modelling
What are the types of economic evaluation?
- Cost minimisation analysis
- Cost effectiveness analysis
- Cost benefit analysis
- Cost utility analysis
What happens in cost minimisation analysis?
Outcomes are assumed to be equivalent, and the focus is on cost
What is the problem with cost minimisation analysis?
Not often relevant as outcomes are rarely equivalent
Where is a cost effectiveness analysis used?
To compare drugs or interventions which have a common health outcome
What are drugs compared in terms of in a cost effectiveness analysis?
Cost per unit outcome
Why is it important to compare drugs in terms of cost per unit outcome?
If costs are higher for one treatment, but benefits are too, need to calculate how much extra benefit is obtained for the extra cost
What happens in a cost benefit analysis?
All inputs and outputs are valued in monetary terms
What is the advantage of a cost benefit analysis?
Can allow comparison with interventions outside of healthcare
What are the methological difficulties with cost benefit analyses?
- Putting monetary value on non-monetary benefits, such as lives saved, is difficult
- Willingness to pay is often used, but this is problematic
Why is the use of willingness to pay problematic in cost benefit analyses?
Problems with overesimation, as they know they’ll never have to pay
What is a cost utility analysis?
A particular type of cost effectiveness analysis
What does a cost utility analysis focus on?
Quality of health care outcomes produced or foregone
How is cost utility most frequently measured?
Using quality adjusted life years
What do all types of economic evaluation consider?
Cost
How do the types of economic evaluation differ?
In the extent they attempt to measure and value consequences/benefits
What do we need to do to use cost-effectiveness as a guide to decision-making?
Compare the cost effectiveness of different uses of resources
When is the measure of life-years gained useful?
When survival is the main outcome, which is often not the case in healthcare
What is quality adjusted life years?
A composite of survival and quality of life
What is 1 QALY?
1 year of perfect health
You can trade off survival and quality of life
Why has QALY attracted considerable controversy?
- Controversy about the values they embody
- Doesn’t distribute resources according to need, but according to benefits gained per unit cost
- May disadvantage common conditions
- Technical problems with their calculations
- May not embrace all dimensions of benefit
- Do not assess impact on carers or family
- RCT evidence is not perfect
Why may QALYs not embrace all dimensions of benefit?
Values expressed by experimental subjects may not be representatives
Why is the RCT evidence for QALYs not perfect?
- Comparison therapies may differ
- Length of follow up
- Atypical care
- Limited generalisability
- Sample sizes
What can address some problems and areas of uncertainty in RCTs into QALYs?
Statistical modelling
What alternatives to QALYs are there?
- Health Year Equivalents (HYEs)
- Saved-young-life equivalents (SAVEs)
- Disability adjusted life years (DALYs)
How are QALYs used to assess cost effectiveness?
The QALY score is integrated with the price of treatment
What is the result of the integration of QALYs with the price of treatment?
‘Cost per QALY’ figure
What does a cost per QALY figure allow?
NICE to determine the cost-effectiveness of treatment
At what cost per QALY level will technology normally be approved?
Below £20k per QALY
What will £20-30k per QALY judgements take account of?
- Degree of uncertainty
- If change if HRQoL is adequately captured in QALY
- Innovation that adds to demonstrable and distinctive benefits
What happens when the price per QALY is above £30k?
Need increasingly stronger case
What are the problems with NICE?
- May be resented by patient groups
- May be resenting by pharmaceutical companies
- CCGs prioritise NICE-approved interventions, sometimes with unintended consequences
- Concerns about political interference
