Session 8 - Part II Flashcards
What is opportunity cost?
Value of the next best alternative use of those resources
Measured in benefits foregone
Eg nurse costs £20,000, opportunity cost = lost benefit to 50 children needing overnight stay in hospital.
What are the basic concepts in health economics?
Scarcity - need outstrips resources so prioritisation needed
Efficiency - getting the most of out limited resources
Equity - extent to which distribution is fair
Effectiveness - extent to which intervention produces desired outcomes
Utility - vale an individual places on a health state
Opportunity cost - once you have used a resource in one way, you no longer have it to use in another way
What are the 2 methods for looking at efficiency?
Technical - how to meet needs, most efficient way of delivering care
Allocative - choosing which needs should be met
What is economic evaluation?
Comparison of resource implications and benefits of alternative ways of delivering healthcare Underpinned by the concepts of; Scarcity/sacrifice Efficiency Opportunity cost Utility
How do you measure costs?
Hard to measure
Identify, quantify and value resources needed
What are the categories of costs?
Costs of health care services Costs of the patients time Costs associated with care giving Other costs associated with illness Economic costs
How do you measure benefits?
Hard to measure
QALY
QoL
What are the categories for benefits?
Impact on health status
Savings in other health care resources
Improved productivity (if patient returns to work earlier)
What are the 4 types of economic evaluation for comparing costs and benefits?
Cost minimisation analysis
Cost effectiveness analysis
Cost benefit analysis
Cost utility analysis
What is cost minimisation analysis?
If all of the treatments/interventions have the same effectiveness, use the cheapest one
What is cost effectiveness analysis?
If one intervention/treatment is more effective, but also more expensive, is the increased effectiveness worth the extra money
What is cost benefit analysis?
All inputs/outputs are assigned a cost and valued
Best for interventions outside of healthcare
Methodical issues due to putting a price on people’s lives
What is a QALY?
Quality Adjusted Life Year
One year of healthy life for one person
1 QALY = 2 years at 50% QoL for 1 person
What is sensitivity analysis?
Check effects of assumptions
What is discounting?
Method of calculating present values and outcomes which accrue in the future
