S4) Healthcare Economics Flashcards
Scarcity is a basic concept in healthcare economics. What does it mean?
- Scarcity is when the need outstrips resources
- Prioritisation is inevitable
Efficiency is a basic concept in healthcare economics. What does it mean?
Efficiency means getting the most out of limited resources
Equity is a basic concept in health economics. What does it mean?
Equity is the extent to which distribution of resources is fair
Effectiveness is a basic concept in healthcare economics.
What does it mean?
Effectiveness is the extent to which an intervention produces desired outcomes
Utility is a basic concept in healthcare economics.
What does it mean?
Utility is the value an individual places on a health state
Opportunity cost is a basic concept in health economics.
Explain what it means using an example
E.g. Resources spent on a new treatment, cannot now be used on other treatments
The opportunity cost of the new treatment is the value of the next best alternative use of those resources
What is technical efficiency?
Technical efficiency is finding the most efficient way of meeting a need e.g. should antenatal care be community or hospital-based?
What is allocative efficiency?
Allocative efficiency involves choosing between the many needs to be met e.g. fund hip replacements or neonatal care?
What does an economic analysis involve?
An economic analysis compares the inputs (resources) and outputs (accompanying benefits and value) of alternative interventions
Identify 5 ways of measuring costs
- Costs of the healthcare services
- Costs of the patient’s time
- Costs associated with care-giving
- Other costs associated with illness
- Economic costs borne by the employers, etc
How do we measure benefits?
- Impact on health status
- Savings in other healthcare resources if the patient’s health state is improved
- Improved productivity if patient returns to work earlier
Identify 4 ways of comparing costs and benefits
- Cost minimisation analysis
- Cost effectiveness analysis
- Cost benefit analysis
- Cost utility analysis
Outline cost minimisation analysis
- Outcomes assumed to be equivalent
- Focus is on costs i.e. only the inputs
- E.g. All prostheses for hip replacement improve mobility equally. Choose the cheapest one.*
Describe the use of cost effectiveness analysis
Used to compare drugs or interventions which have a common health outcome
E.g. reduction in blood pressure - if costs are higher for one treatment, but benefits are too, calculate how much extra benefit is obtained for the extra cost
Describe the use of cost benefit analysis
- All inputs and outputs valued in monetary terms
- Methodological difficulties e.g. putting monetary value on non-monetary benefits such as lives saved
What are QALYs?
- QALYs adjust life expectancy for quality of life
- 1 year of perfect health = 1 QALY
