Health Economics

Question 1

What is priority setting

Answer 1

Allocation of resources to different services, patient groups or different elements of care

Question 2

What is rationing

Answer 2

The effect that the priority setting decisions have on individual patients. The extent of which patients receive less than than the best treatment

Question 3

What is priority setting and rationing together

Answer 3

Some services that may be of benefit to people are withheld on grounds which include cost

Question 4

Why set priorities

Answer 4

Scarcity of resources - demand is higher than supply

Question 5

Why has demand risen in the NHS

Answer 5

Lots of long term health conditions in over 60’s, people are living longer, increased prevalence of cancer

Question 6

What are the two forms of rationing

Answer 6

Explicit - defined rules, institutional procedures, systematic allocation
Implicit - decisions made by individual clinicians without criteria for the decisions being explicit

Question 7

Problems with implicit rationing

Answer 7

Lead to inequities and discrimination, open to abuse, based on perception of ‘deservingness’, doctors find it difficult and uncomfortable to make these decisions

Question 8

3 parts of explicit rationing

Answer 8

Decisions and reasonings for them is explicit, technical processes (assessments), political processes

Question 9

Explicit rationing advantages

Answer 9

Transparent, can be debated, more equity, accountable

Question 10

Explicit rationing disadvantages

Answer 10

Complex, treats patients as if everyone is the same, less clinical freedom, patient distress when they find treatments we do not offer online, patient hostility

Question 11

What does NICE do

Answer 11

Provides guidance on treatment recommendations, assess cost effectiveness, minimise variations of available treatments (lower inconsistency). Equal access.

Question 12

NICE controversy

Answer 12

If treatments are approved, NHS then has to find funding to offer them, sometimes at the cost of other treatments. If they are not approved, patients are denied access to treatment.

Question 13

6 basic concepts of health economics

Answer 13

SEEUO

Scarcity, Efficiency, Equity, Effectiveness, Utility, Opportunity Cost.

Question 14

What is equity

Answer 14

Distribution of resources is far

Question 15

What is utility

Answer 15

Value that an individual places on a health state. How much do they value the effect.

Question 16

What is opportunity cost

Answer 16

Once you spend resources, you cannot use them elsewhere. Sacrifice of other treatments. Measured by the treatments you will have lost because of this new treatment.

Question 17

What is opportunity cost measured in

Answer 17

BENEFITS FOREGONE

Question 18

Two types of efficiency

Answer 18

Technical - most efficient way, how should we provide the care? At hospital or in community?
Allocative - choosing between needs. Which treatments shall we fund?

Question 19

Economic evaluation

Answer 19

Comparing alternative ways of delivering care. Takes into account the cost of the input and the cost of the output of treatment.

Eg input would be cost of resources, output would be benefits/value

Question 20

What is taken into account when measuring cost

Answer 20

Economic costs to employer/employee and to society, cost of healthcare services, care-giving cost, patients time, other illness costs

Question 21

How do you measure benefits

Answer 21

More difficult but -
impact on health status (eg symptoms, quality of life, survival)
savings of other healthcare services
Improved productivity eg can go back to work or contribute to society

Question 22

4 ways of comparing cost and benefits

Answer 22

Cost:
Minimisation 
Benefit
Utility 
Effectiveness

Question 23

What is cost minimisation analysis

Answer 23

Assumes all outcomes are equal, FINANCIAL FOCUS

outcomes are often not the same but good example is hip replacement. If all improve mobility equally, choose cheapest

Question 24

Cost effectiveness analysis

Answer 24

Compare drugs or interventions with common outcome eg drop in blood pressure.
Compared by cost per unit outcome (eg cost to reduce BP by 5mm/Hg)

How much does it cost to achieve a specific drop in blood pressure? Is one more expensive but more effective?

Question 25

Cost benefit analysis

Answer 25

Inputs and outputs are given a monetary value
Comparison
Methodological difficulties - how do you value lives saved monetary
Willingness to pay is often used (how much would you be willing to pay for this benefit)
PROBLEMATIC

Question 26

Cost utility analysis

Answer 26

Type of cost effectiveness analysis
Quality of health outcomes produced
Use QALY
Value of the quality of treatment based on quality of life

Question 27

Why QALY (quality adjusted life years)

Answer 27

Compare cost effectiveness by taking into account life expectancy and quality of life

Question 28

What is one QUALY

Answer 28

1 perfect year of health
10 years of 10% perfect health
2 peoples 6 months of perfect health
2 years at 50% health

Question 29

How does NICE use QUALY’s

Answer 29

If below 20K per QUALY - approved
20-30K - take into account uncertainty, other benefits not captured, if QoL has been accurately captured
30K+ - need a stronger case

Question 30

Criticisms of QALY

Answer 30

Do not distribute according to need but benefit gained
Disadvantage common conditions
Technical calculation problems 
Don’t assess impact on carers or family
Not embrace all dimensions of benefit