Session 8 Lecture 1- Introduction to resource allocation and health economics

Question 1

There are two forms of rationing; Explicit rationing and Implicit rationing.

What does explicit rationing mean?

Answer 1

based on defined rules of entitlement

decisions are explicit as is the reasoning behind decisions

Question 2

There are two forms of rationing; Explicit rationing and Implicit rationing.

What does implicit rationing mean?

Answer 2

care is limited, but neither the decisions nor the bases for decisions are clearly expressed

Question 3

Advantages of explicit rationing

Answer 3

• transparent, accountable
• opportunity for debate
• more clearly evidence-based
• more opportunity for equity in decision making

Question 4

Disadvantages of explicit rationing

Answer 4

• very complex
• heterogeneity of patient and illnesses
• patient and professional hostility
• impact on clinical freedom
• some evidence of patient distress

Question 5

How do you compare costs and benefits?

Answer 5

• cost minimisation analysis
• cost-effectiveness analysis
• cost-benefit analysis
• cost-utility analysis

Question 6

What is cost minimisation analysis?

Answer 6

• outcomes assumed to be equivalent
• focus is on costs
• not often relevant as outcomes rarely equivalent

e.g say all prosthetics for hip replacement improve mobility equally, choose the cheapest one.

Question 7

What is cost-effectiveness analysis?

Answer 7

• used to compare drugs or interventions which have a common health outcome
• compared 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

Question 8

What is cost benefit analysis?

Answer 8

• all inputs and outputs valued in monetary terms

- can allow comparison with interventions outside healthcare

Question 9

What is cost utility analysis?

Answer 9

• a particular type of cost-effectiveness analysis
• focuses on quality of health outcomes produced or foregone(lost by not funding other treatments)
• the most used measure is quality-adjusted life-year (QALY)

Question 10

Advantages of using QALYs?

Answer 10

effectiveness measure to allocate resources by using quality and quantity of life

Question 11

Disadvantages of QALYs?

Answer 11

• may disadvantage common conditions
• doesn’t assess the impact on carers or family
• technical problems with their calculations

Question 12

How to calculate QALYs?

Answer 12

quality of life (QoL) x expected years to live