Download Statistical methods and health economics

Do we need economics in
medicine?
“…the age of chivalry is
gone. That of
sophisters, economists,
and calculators has
succeeded; and the
glory of Europe is
extinguished forever”
Edmund Burke,
1790
dcist.com/2007/12/10/revisiting_edmu.php
Important Similarities Between
Physicians and Economists
• Realistic approach to life’s problems
• Reliance on quantitative information
• Often must make difficult choices in the
face of uncertainty
• Good decisions require comparing benefits
and risks (costs)
Victor R. Fuchs. WHAT SHOULD PHYSICIANS KNOW ABOUT HEALTH ECONOMICS, 2002
Big Difference Between
Physicians and Economists
• Physicians are usually concerned with an
individual patient
• Economists are usually concerned with
large aggregations: organizations,
industries, governments, society as a
whole
Victor R. Fuchs. WHAT SHOULD PHYSICIANS KNOW ABOUT HEALTH ECONOMICS, 2002
Health economics?
• Health economics lies at the interface of
economics and medicine and applies the
discipline of economics to the topic of
health
Why is it important to look at economics
in health?
• Health resources are finite
• A choice must be made about which resources
to use for which activities
• Decision making process has to be based on
the valid and reliable information, and on the
correct decision making principles
But, …
• Economics is not primarily about saving
money
• It is about using scarce resources as efficiently
as possible
Victor R. Fuchs. WHAT SHOULD PHYSICIANS KNOW ABOUT HEALTH ECONOMICS, 2002
Components of health economics
• If we look beyond health, we must incorporate pure
economics, finance and insurance, industrial
organization, labour economics , public policy (and
finance), sociology, and statistical methods into our
thinking.
• Within the health area, the disciplines of health
services research, medicine, medical ethics,
psychology and public health / epidemiology
Measurement
• Are there unmeasurable things?
• How do we measure health?
• How do we measure wealth? (Are the two
linked?)
• Can we measure pain?
Derivation
• Can each measurement be given an economic
value?
• Can everything be given a value?
• Can we estimate a value of a human life?
Example
• Croatian Institute for Health Insurance
• Board for Medicines
• Decides upon which medications are to be
funded by the CIHI
• Which drugs get a priority? Which are
rejected?
Indicators
• We can define an indicator for everything we
measure
• E.g. 5-year survival after surgical treatment,
PTCA and drug treatment, or number of days
spent in hospital
• We can compare costs of all three treatments,
and then perform all analyses to define the
best option for every patient
Indicators
• Indicators have to be relative or adjusted
• Comparison of costs of the primary care in the
rural and urban region?
• In the region of the town with higher
socioeconomic status and slums?
• Comparison across countries?
• Central idea in quality assessment and
improvement
Economic evaluation
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Reality of opportunity cost
Useful alternatives compete for resources
Making choices is sometime unpleasant
Options for colorectal cancer screening
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Fecal blood test
Barium enema
Sigmoidoscopy
Colonoscopy
• Is it worth the extra money?
What is economic evaluation?
• A comparative analysis
• Evaluating alternative courses of action
• Examining both costs and consequences
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Identify
Value
Measure
Compare
Evaluation
Economic Evaluation
•
Economic evaluation considers assessment of intervention effects in
economic terms, which is often of greatest interest to fund allocators
•
Intervention evaluation involves two measures;
 the health effects or effectiveness of the intervention
 the value or efficiency of the effects
•
Economic evaluation expertise can lie outside the competencies of an
individual public health nutritionist however simple economic
assessment tools can be applied
Economic Evaluation
Economic Evaluation
Characteristics of Economic Evaluation
•
Economic evaluation involves identifying, measuring and valuing both
the inputs (costs) and outcomes (benefits) of the intervention/s
•
there are two broad areas of economic measurement;
 Provider or narrow perspective - consider inputs (costs) and outcomes
(benefits), and compares both aspects across alternative interventions
 Societal perspective - include only some elements of inputs and outcomes
•
The provider approach has limitations because ranking interventions in
terms of value for money may be very different if the analysis includes
all costs and benefits
Economic Evaluation
Types of Economic Evaluation
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Tracing all inputs and finding valuations for all resources used can be
difficult but should not deter intelligent estimates being made
Evaluations that consider both outcomes and resources use are full
economic evaluations – there are four distinct types:
1. Cost-minimisation analysis
• Involves comparison between two or more alternative interventions
whose outcomes are assumed to be exactly the same
• Assumes all consequences of the alternative interventions are the
same
• Generally not recommended
Economic Evaluation
Types of Economic Evaluation
2. Cost-effectiveness analysis
• Most common type of economic evaluation in health care
• Benefit is usually measured as a quantifiable unit
 behavioural - fruit and vegetable intake
 health outcome (glucose level)
•
Criticised for failing to recognise the broader benefits of PHN
interventions however quantification of measures is required for analysis
•
Cannot be used to compare interventions - most suitable when
interventions with the same health aims are being compared
Economic Evaluation
Types of Economic Evaluation
3. Cost-utility analysis
• Uses a common measure of outcome to enable comparison between a
range of interventions - between PHN intervention, or between PHN
intervention and treatment approach
•
Benefits or outcome are expressed as a measure that reflects how
individuals value or gain utility from the quality and length of life:
 QALYs (quality adjusted life years)
 DALYS (disability adjusted life years)
 HYE (health year equivalents
•
Can identify only relatively large changes in individual health status and
can put PHN interventions at a disadvantage
Economic Evaluation
Types of Economic Evaluation
4. Cost-benefit analysis
• Measures all outcomes in monetary terms
• Calculates monetary values of health benefits and costs to conclude if
one side is greater than the other
• Commonly expressed as cost-benefit ratio
• Useful for comparing interventions with many diverse outcomes - most
appropriate for economic evaluation of inter-sectoral interventions
Economic Evaluation
Conducting a thorough economic evaluation required specialised health
economics expertise and can be a rather resource intensive process. Ideally
economic evaluation should only be undertaken if the benefits of improving
efficiency of health resources outweigh the costs of evaluation.
There is no consensus of opinion of which method is best and the decision is
likely to be limited to the type and quantity of information available, and
time and resource restraints. Choose a method that is most appropriate to
the data available.
Although funding agencies financing PHN interventions will be interested in
the economic benefit from an organisational perspective most agencies would
prefer to promote the societal benefits the intervention they funded had,
hence taking a societal perspective to economic evaluation is preferred.
Economic Evaluation
Process of Economic Evaluation
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To undertake a high-quality economic evaluation a multidisciplinary team
containing both economists and public health nutritionists is required
The main steps to consider for an economic evaluation are:
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Defining the economic question and perspective
Determining the alternatives to be evaluated
Choosing the evaluation design
Identifying, measuring and valuing the costs
Identifying, measuring and valuing the benefits
Adjusting costs and benefits for the differential timing
Measuring incremental costs and benefits
Putting the costs and benefits together
Testing the sensitivity of the results
Presenting the results
Economic Evaluation