Session 8 - Resource allocation

Question 1

Give two factors which outline the inevitability of rationing

Answer 1

Demography

Technology

Question 2

How does demography change increase healthcare costs?

Answer 2

Ageing population, old people cost more

Question 3

How does technology changing increase cost of healthcare

Answer 3

New technologies expensive, expand pool of candidates. Don’t cure but offer increased survival.

Question 4

What are the 5ds of rationing in the NHS

Answer 4

o Deterrent
 Demands for healthcare are obstructed (e.g. prescriptions)
o Delay
 Waiting lists
o Deflection
 GP’s deflect demand from secondary care (gatekeepers)
o Dilution
 Fewer tests, cheaper drugs
o Denial
 Range of services denied to patients (e.g. reversal of sterilisation)

Question 5

What is explicit rationing?

Answer 5

Explicit health care rationing or priority-setting is the use of institutional procedures for the systematic allocation of resources within health care systems

Question 6

Who maekes explicit rationing decisions?

Answer 6

Clinical Commisioning Groups

Question 7

What is explicit rationing based on?

Answer 7

Defined rules of entitlement

Question 8

Give four advantages of explicit rationing

Answer 8

• Transparent, accountable
• Opportunity for debate
• Use of evidence based practice
• More opportunities for equity in decision- making

Question 9

Give five disadvantages of explicit rationing

Answer 9

Very complex
Heterogeneity of patients and illness
Patient and professional hostility
Threat to clinical freedom
Evidence of patient distress

Question 10

What is implicit rationing?

Answer 10

Implicit rationing is the allocation of resources through individual clinical decisions without criteria for those decisions being explicit

Question 11

What are two disadvantages of implicit rationing?

Answer 11

 Open to abuse

 Decisions made on perceptions of “social deservingness”

Question 12

Give five levels or rationing

Answer 12

1. How much allocation to NHS compared to other government priorities
   o E.g. education, defence
2. How much to allocate across sectors
   o E.g. mental health, cancer
3. How much to allocate to specific interventions within sectors
   o E.g. end of life drugs versus drugs with curative intent
4. How to allocate interventions between different patients in the same group
   o E.g. which patients with advanced cancer should be treated?
5. How much to invest in each patient once an intervention has been initiated
   o E.g. how long should cholesterol be lowered in treated patients?

Question 13

Why was the national insitute for health and care excellence set up?

Answer 13

Set up to ‘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 uses of resources’.

Question 14

What does NICE do?

Answer 14

o NICE provides guidance on whether treatments (new or existing) can be recommended for use in the NHS in England and Wales.

Question 15

How does NICE appraise drugs?

Answer 15

 Clinical benefit

 Costs

Question 16

Give a negative result of NICE disapproving a treatment?

Answer 16

Patient denied access to them

Question 17

Give a negative result of NICE approving treatment

Answer 17

NHS organisations must fund treatments, with adverse consequences

Question 18

What is a tariff?

Answer 18

o Payment by Results
o 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

Question 19

What do tariffs do?

Answer 19

 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

Question 20

What is scarcity of resource?

Answer 20

Need outstrips resources. Prioritisation is inevitable.

Question 21

What is efficiency of resource?

Answer 21

 Getting the most out of limited resources.

Question 22

What is equity of resourceS?

Answer 22

 The extent to which distribution of resources is fair.

Question 23

What is effectiveness of reources?

Answer 23

 The extent to which an intervention produces desired outcomes.

Question 24

What is utility of resoucres?

Answer 24

 The value an individual places on a health state.

Question 25

What is an opportunity cost?

Answer 25

 Once you have used a resource in one way, you no longer have it to use in another way.

Question 26

Give four different methods of comparing cost benefit

Answer 26

Cost minimisation analysis
Cost effectiverness analysis
Cost benefit analysis
Cost utility analysis

Question 27

What is cost minimisation analyiss?

Answer 27

 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

Question 28

What is cost effectiveness analysis?

Answer 28

 Used to compare drugs or interventions which have a common health outcome
 E.g. blood pressure in terms of cost per reduction of 5mm/Hg
 Is extra benefit worth extra cost?

Question 29

What is cost benefit analysis?

Answer 29

3. Cost benefit analysis
    All inputs and outputs valued in monetary terms
    “How much would you pay to have your hip replaced?

Question 30

What is cost utility analysis?

Answer 30

 Quality of health comes produced or foregone

 QUALY

Question 31

What is a QALY?

Answer 31

Quality adjusted life year
o Uses a single index incorporating quality and quantity of life
o 1 perfect year of health = 1 QUALY
o Assumes that 1 year in perfect health is equal to 10 years with a quality of life of 10% of perfect health.

Question 32

How is QALY measured?

Answer 32

Using a generic HR QoL instrument - EQ-5D

Question 33

How does NICE assess cost-effectiveness?

Answer 33

By integrating Qualy score with price of treatment using incremental cost effectiveness ratio

Question 34

How are cost per QUALY figures used?

Answer 34

o < £20k per QUALY technology normally approved
o £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
o > £30k per QUALY technology needs an ‘increasingly stronger case’

Question 35

Give four criticisms of QUALYs

Answer 35

o Do not distribute resources according to need, but according to the benefits gained per unit of cost
o Technical problems with their calculations
o QUALYs may not embrace all dimensions of benefit; values expressed by experimental subjects may not be representative of the population
o Controversy about the values they embody

Question 36

Why was the national insitute for health and care excellence set up?

Answer 36

Set up to ‘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 uses of resources’.