Ch 13- 16 Flashcards
(74 cards)
1
Q
define– Cost–benefit analysis.
A
Cost–benefit analysis. An economic evaluation technique in which outcomes are expressed in monetary terms.
2
Q
define– Cost-effectiveness analysis.
A
Cost-effectiveness analysis. An economic evaluation technique in which out- comes are expressed in health units such as life years saved.
3
Q
define– Cost–utility analysis.
A
Cost–utility analysis. An economic evaluation technique where outcomes are expressed in health units that capture not just the quantity but quality of life.
4
Q
define– Economic evaluation.
A
Economic evaluation. Compares the costs and consequences of alternative health care interventions to assess their value for money.
5
Q
define– Sensitivity analysis.
A
Sensitivity analysis. The process of assessing the robustness of the findings of an economic evaluation by varying the assumptions used in the analysis.
6
Q
what is comparative analysis?
A
- compares 2 or more options
- in terms of their costs and their consequences
7
Q
what are the 4 main forms of economic evaluation?
A
- CBA. cost benefit analysis (expressed in monetary terms)
- CEA. cost effectiveness analysis (expressed in single health effects such as life years saved)
- CUA. cost utility analysis (multiple effects can be captured under measures such as QALYs)
- CMA. cost minimization analysis
8
Q
the main forms of economic evaluation are used to pursue what 2 types of efficiency?
A
- economic efficiency. ‘what is the least costly way to achieve a particular goal?’
- allocative efficiency. resources are allocated and goods distributed in a way that maximizes social welfare
9
Q
which economic evaluation can assess potential Pareto improvement?
A
CBA cost benefit analysis can be used to measure both economic and allocative efficiency questions.
10
Q
which economic evaluation can focus on the least cost way of producing a good?
A
CEA and CUA are based on the production function approach.
11
Q
What are the four broad steps in undertaking an economic evaluation:
A
- defining the decision problem (also known as ‘framing the evaluation’);
- identifying, quantifying and valuing the resources needed;
- identifying, quantifying and valuing the health consequences;
- presenting and interpreting the evidence for decision-making.
12
Q
Define– Annual cost.
A
Annual cost. The cost of an intervention, calculated on a yearly basis, including all the capital and recurrent costs.
13
Q
Define– Annualized costs.
A
Annualized costs. The annual share of the initial cost of capital equipment or investments, spread over the life of the project – usually modified to take account of depreciation.
14
Q
Define– Average cost.
A
Average cost. Total cost divided by quantity.
15
Q
Define– Capital cost.
A
Capital cost. The value of capital resources which have useful lives greater than one year.
16
Q
Define– Direct cost.
A
Direct cost. Resources used in the design, implementation, receipt and continuation of a health care intervention.
17
Q
Define– Discount rate.
A
Discount rate. The rate at which future costs and outcomes are discounted to account for time preference.
18
Q
Define– Discounting.
A
Discounting. A method for adjusting the value of costs and outcomes which occur in different time periods into a common time period, usually the present.
19
Q
Define– Financial (budgetary) cost.
A
Financial (budgetary) cost. The accounting cost of a good or service, usually representing the actual (historical) amount paid – distinct from the economic (opportunity) cost.
20
Q
Define– Indirect cost.
A
Indirect cost. The value of resources expended by patients and their carers to enable individuals to receive an intervention.
21
Q
Define– Intangible cost.
A
Intangible cost. The costs of discomfort, pain, anxiety or inconvenience
22
Q
Define– Marginal cost.
A
Marginal cost. The change in the total cost if one additional unit of output is produced.
23
Q
Define– Overhead cost.
A
Overhead cost. A cost that is not incurred directly from providing patient care but is necessary to support the organization overall (e.g. personnel functions).
24
Q
Define– Recurrent cost.
A
Recurrent cost. The value of resources with useful lives of less than one year that have to be purchased at least once a year.
25
Define-- Shadow price.
Shadow price. The true economic price of a good that reflects its value to society.
26
Define-- Time preference
Time preference. People’s preference for consumption (or use of resources) now rather than later because they value present consumption more than the same consumption in the future.
27
Define-- Total (economic) cost.
Total (economic) cost. The sum of all the costs of an intervention or health problem.
28
explain total cost
the sum of all costs of an intervention, taking into account the value of all the resources used
29
explain annual cost
the cost of the intervention calculated on a yearly basis – including all the annualized costs of capital expenditures as well as the yearly recurrent costs. Annual costs will vary from one year to another – in the first year, the start-up costs will be greater whereas after the intervention has been in operation for a while, the recurrent costs may form a higher part of the annual cost.
30
explain average costs
total cost divided by the total units of activity or outcome. Average cost gives an indication of how efficiently, on average, different providers are functioning.
31
explain marginal costs
change in the total cost if one extra unit of output is produced.
32
define-- Disability adjusted life year (DALY).
Disability adjusted life year (DALY). A measure of health based on the length of a person’s life weighted by the level of disability they experience.
33
define-- Human capital approach.
Human capital approach. An approach that uses market wage rates to measure the value of productivity lost through illness.
34
define-- Quality adjusted life years (QALY).
Quality adjusted life years (QALY). A health outcome measure based on survival weighted by quality of life, where quality of life is scored between 1.0 for full health and zero for death.
35
define-- Willingness to pay (WTP).
Willingness to pay (WTP). The monetary value, representing the maximum amount an individual would be prepared to pay out of his or her own income, to gain an improvement in health.
36
what are the 3 main types of economic evaluation?
cost-effectiveness analysis (CEA)
cost–utility analysis (CUA)
cost–benefit analysis (CBA)
37
what is mortality?
| useful measure of health consequence in what situations?
number of deaths averted’ or ‘number of life years gained. useful across many dz and interventions. less helpful if dz causes morbidity but not death.
38
what are some measures of morbidity?
- - Number of cases cured or disease incidence. good for acute illness. can only be used on interventions with same outcomes. just measures presense or absence of dz.
- - Disease-specific indices: for chronic dz. capture severity of disease and/or impact on quality of life. can only be used to compare inter- ventions where the type of outcome is identical
- - Generic health measures (indices and profiles): across different types of disease and interventions and to summarize core concepts of health and quality of life
39
what are intermediate measures of health outcomes
a proxy measure when outcomes that are very downstream are difficult to measure. ex. it's known that elevated BP is related to CVD, so looking at HTN.
40
what is a process measure of health outcome?
activities which are known to or are believed to have a direct bearing on the outcomes achieved by the intervention – e.g. length of hospital stay or correct diagnosis.
41
what are some measures of health outcomes?
```
morbidity
mortality
intermediate measures
process measures
money
```
42
what are QALYs
- - measures yrs lived in good health
- - 0 = death, 1 = best health
- - discounting may be used as good health now is valued more than good health in the future
- - thus the higher QALY, the better
43
what is a DALY?
- - measures the gap between ideal age of death and premature death/ years with disability
- - thus the smaller the DALY, the better
- - 0 = full health, 1 = death
44
what are 4 methods of direct ways to estimate utility weights for economic evaluation
standard gamble (SG)
time trade-off (TTO)
person trade-off
visual analogue scale (VAS)
45
what is the "standard gamble" direct method of estimating utility in economic evaluation?
Respondents are given a choice between living in a specific diseased state or treatment. The treatment has a certain probability of total recovery or death. The probabilities are varied, until the pt is unable to say whether they'd prefer treatment risk or living with disease. The probability at this point is their valuation of the diseased state, the worse the disease, the more likely they'll take a risk of treatment with low probability of success.
- best mimics real life choices and the associated unknowns
46
what is the "time trade off" direct method of estimating utility in economic evaluation?
Respondents are given a choice between living X number of years in a diseased state followed by death, and living T number of years in full health followed by death. T is decreased until both alternatives are equally desirable. The valuation is T/ X. Ex: 20 yrs/ 30 yrs = 0.67.
47
what is the "visual analogue scale" direct method of estimating utility in economic evaluation?
what are the limitations?
Respondents told to assign a value on a thermometer like scale of different disease states. 0 = death, 1 = full health.
limitations:
- - tend to rank the disease states rather than assigning a value (ppl tend to compare rather than assigning a stand alone value)
- - not given options to show preference
- - subject to biases like "end of scale bias", avoiding the extremes
48
what is the "person trade off" direct method of estimating utility in economic evaluation?
Respondent told to choose between 2 groups of ppl to save. Gp A-- 1000 healthy individuals get to live an additional year and die. Gp B -- X number of blind (or some other disease) get to live an extra yr, and then die. Assumption is healthy will be chosen over diseased until X reaches a large enough number. Valuation is 1000/ X of diseased ppl
49
what is an indirect method of assess health utility for economic evaluation?
Using health questionnaires like the EQ5D that assesses a pt's mobility, usual activities, self care, anxiety, and pain to get a sense of their health states. These can then be translated into numbers and DALYs/ QALYs.
50
what are some limitations to the "human capital approach" to assigning a monetary value to human life and quality of life?
Human capital approach assigns monetary value by calculating lost wages due to sickness.
limitations:
- - high earners will seem to have higher indirect benefit than low earners
- - how to value homemakers, kids, elderly
- - health and productivity more complex relationship, because low earners may have less access to care
- - intangible costs not included
51
what are monetary approaches to valuing health and non health consequences?
- -Human capital approach assigns monetary value by calculating lost wages due to sickness.
- -Friction cost approach, which focuses on the productivity losses and the resources needed to replace that worker's absense.
- - Observed/ revealed preferences examine the actual choices (i.e. preferences) that decision-makers or individuals express in real life and their cost. Ex: $ awarded in court injury cases. Difference in wages and risks associated with jobs.
- - Stated preferences are surveys to elicit max willing to pay for a good/service or to avoid something.
52
what are two of the main methods for eliciting stated preferences?
- - contingent valuation (CV). max willing to pay for a good in a hypothetical market.
- - discrete choice experiments (DCEs). individuals asked to state their preference between hypothetical scenarios.
53
what are some strengths of willingness to pay studies?
- - can be applied to any situation
- - analyst can make up any desired scenario
- - money is the denominator, it's something that's easy to understand for people
- - can be used to estimate benefit to social welfare and not just an individual
54
what are some weaknesses of willingness to pay studies?
- - logistics a/w surveys (low response, how much info to give)
- - respondent incomes influence their responses
- - estimates what folks say they will do, and not what they'll actually do
- - many ppl have trouble putting a value on lives, this skews the data
- - types of ppl who respond to surveys may not reflect the population
- - hypothetical scenarios may be difficult to understand
55
define-- Average cost-effectiveness ratio (ACER)
Average cost-effectiveness ratio (ACER). Ratio of the difference in cost to the difference in effect of a single intervention against its baseline option (e.g. no programme or current practice).
56
define-- Benefit–cost ratio (BCR).
Benefit–cost ratio (BCR). Ratio of total monetized benefits divided by total costs. An indicator used in cost–benefit analysis (CBA).
57
define-- Incremental cost-effectiveness ratio (ICER).
Incremental cost-effectiveness ratio (ICER). Ratio of the difference in costs between two alternative programmes to the difference in effectiveness between the same two programmes.
58
define-- Marginal cost-effectiveness ratio (MCER).
Marginal cost-effectiveness ratio (MCER). Ratio of the difference in cost and effect resulting from the expansion or contraction of a programme.
59
define-- Net present value (NPV).
Net present value (NPV). Total monetized benefits minus costs.An indicator used in CBA.
60
what are two summary measures typically used in cost– benefit analysis (CBA)?
* net present value (NPV)
| * benefit–cost ratio (BCR)
61
what are three types of cost-effectiveness ratios?
1. Average cost-effectiveness ratio (ACER)
2. Marginal cost-effectiveness ratio(MCER)
3. Incremental cost-effectiveness ratio (ICER)
62
what is Average cost-effectiveness ratio (ACER)?
It's a cost effectiveness ratio.
Used for comparing a single intervention with a baseline intervention (no tx or current tx). Calculated by dividing total cost of intervention by the total number of health outcomes prevented.
63
what is Marginal cost-effectiveness ratio(MCER)?
It's a cost effectiveness ratio.
Assesses the changes in cost and effect when a program is expanded or contracted.
An example might be the cost of extending the same vaccination service to another village and dividing this by the additional number of vaccinations in order to approximate the marginal cost per additional child vaccinated.
64
what incremental cost-effectiveness ratio (ICER)
It's a cost effectiveness ratio.
Compares the differences between the costs and health outcomes of two alternative interventions that compete for the same resources.
Generally described as the additional cost per additional health outcome.
How efficiently the intervention can produce an additional unit of effect.
65
when comparing a new intervention with a status quo, what is the principle of dominance?
Dominance is a strategy to maximize benefits and minimize costs.
66
when is weak/ extended dominance used?
what 2 assumptions does it operate under?
Used when there's multiple mutually exclusive interventions, to help figure out the best intervention.
assumptions:
1) that treatments are perfectly divisible
2) that there are constant returns to scale
67
what is incremental cost-effectiveness plane?
A way to visually depict the incremental cost and effect.
The horizontal axis divides the plane according to incremental effect (positive above, negative below) and the vertical axis divides the plane according to incremental cost (positive to the right, negative to the left). This divides the incremental cost-effectiveness plane into four quadrants.
68
what are some examples of economic evaluations used to ration health care?
-- World Dev Report. is World Bank's recommendation for the minimum healthcare services that low income countries should prioritize public funding
-- Oregon plan was a plan for high income country to ration fixed Medicaid budget.
-- Copenhagen consensus was the plan for prioritizing the top 10 global challenges and inviting a panel of economist to propose answers if 50 billion available
-- NICE used QALYs to assess cost benefit of interventions
69
true or false
CEA is used widely in public health to evaluate alternative programmes or policies to gain the maximal health outcome for a given level of resources.
true
70
true or false
A CEA would be useful for an organization to determine the return on investment from a health programme.
false. A CBA (cost benefit analysis), not a CEA (cost effectiveness analysis measures outcomes in monetary value and should be used to know the return on investment.
71
true or false.
For a CEA to be useful in comparing two different programmes, common health outcomes must be employed.
true
72
true or false
The results of a CEA evaluating a vaccination programme designed to reduce infant mortality in a developing country could be used by a programme manager in the UK for evidence of the programme’s cost-effectiveness.
false.
The risk factors and exposures of vaccine-preventable diseases among children in the developing world are different than those experienced by children in developed nations, which would result in dissimilar outcomes that should not be compared.
73
what are some differences between CBA (cost benefit analysis) and CEA (cost effectiveness analysis)?
CBA
- results expressed in monetary units
- explicit valuation on life or health benefits
- does not need to have the same outcome when comparing health interventions
- lists all costs and benefits, even non-health ones
CEA
- results expressed in natural health units
- implicit valuation on life or health benefits
- compares different programs with the same outcome
74
what are some other criteria to look at when deciding on which interventions to fund?
- -cost, ability to pay for interventions
- -horizontal and vertical equity
- -adequacy of demand
- -public attitude and wants
- -is intervention a public good, does it yield a lot of externalities
- -poverty
- -available budgetings
- -effectiveness of an intervention
- -are incentives needed to achieve full potential effectiveness
