HTA - lecture 2- medical costs and discounting Flashcards
costs definition
c = q*p
c = costs
q = quantity
p = price
costs : 3 steps
- Identify resource items
- Measure resource use
- Estimate the value of resources
health sector resources
- Health care resources consumed consist of the costs of:
o organizing and operating the programme including dealing with the adverse events caused by the programme.
o Identification: (often) listing the ingredients of the programme - both variable costs (e.g., time of health professionals or supplies)
o and fixed or overhead costs (e.g., as light, heat, rent, or capital costs)
important and relevant costs need to be included –> focus on:
- large costs items (e.g. hospital days)
- expected differences between intervention and alternatives
important and relevant costs need to be included –> where to search:
- Consult
o The literature
o Treatment guidelines
o Pilot samples and earlier studies
o Expert opinion
o Patient organisations
remember: costs need to be measured accurately and in appropriate units
Consider:
- The chosen perspective (defined earlier)
- Services that are used/ consumed
- The time horizon (several months/ years versus lifetime)
remember: costs need to be measured accurately and in appropriate units
where to search?
- Registries (Disease specific / drug-based)
- Questionnaires (patient and/or caregiver)
- Diaries (patient, home care, informal caregiver)
- Clinical practice guidelines
- Expert opinion less preferable (less reliable)
- Protocol driven costs (especially in RCT’s)
- Expert opinion: don’t actually know the costs, also doctors
- Registries (most) preferable (internally, less externally); clinical practice guidelines second; protocol driven costs (fixed in schedules)
estimate the value of resources; price evaluation
goal
obtain an estimate of the worth of resources depleted by an illness or intervention
opportunity costs
economic net benefit forgone when selecting one option rather than the next best alternative.
Basis of cost estimates in economic evaluations:
What are the benefits gained from adopting intervention B, compared to loosing benefits from the displaced intervention A?
- Opportunity costs: e.g. study instead of being creative
- Life years/quality of life or costing certain amount of money
- Opportunity costs: treatment interested in effects that are on top on effect of A
using pricing, charges, or tariffs, can be misleading
- Actual cost structure might be different: tariffs etc. might include mark- ups to cover overhead, profit, or other expenses
- Cost variation: between providers (e.g., efficiency and other local factors) might not be captured with uniform tariffs
- Pricing policies: may influence tariffs based on negotiations and not reflect actual costs
- Complex direct cost allocation: might not be captured because of regional and hospital differences
- Potential cross-subsidisation distortions: might not be reflected. not captured, sometimes more subsidies then others, subsidies in subsidies (cross-subsidies); so, not actual costs incurred by patients
overhead costs
- Resources serving different departments and programmes
- Are not directly linked to patient services
- Need to be attributed to programmes (e.g. costs of treatment)
Overhead costs: the different allocation methods
- Direct allocation = overhead costs are directly allocated to final cost centres (by ward’s share)
2./3. Step-down allocation (with iterations) = overhead department are stepwise allocated to other overhead departments and the final cost centre
consider the following: costs
- Costs are often highly skewed: the mean is most informative
- What type of costs per unit are important?
o Total costs = fixed + variable costs - Fixed costs: fixed for a range of output (e.g., building and overhead)
- Variable costs: vary with level of output and can be: proportional, increasing or decreasing
- Highly skewed: no negative costs, then it peaks somewhere and you have always huge outliers (patients with high costs, long hospital stays and medicine) costs skewed to the right, mean is little bit shifted
- Can be proportionally increasing or decreasing
future (non-) medical costs
if people live longer due to a medical intervention: they also consume (non) medical goods in added life years
what are consequences of ignoring future costs:
underestimate opportunity costs of life prolonging interventions
inconsistent: you include only effects but ignore costs
