Public Health PTS Flashcards
(318 cards)
Why is health economics relevant?
Finite resources
Hard choices – some patients will not get something that will benefit them
As a doctor we have to explain this to patients
As a commissioner – will have to decide
What is opportunity cost?
To spend resources on one activity (e.g. heart transplant) means a sacrifice in terms of a lost opportunity cost elsewhere (e.g. fewer hip replacements)
The opportunity cost of an activity is the sacrifice in terms of the benefits forgone from not allocating resources to the next best activity
i.e. if one patient gets a very expensive treatment, others miss out on another treatment
What is economic efficiency?
Achieved when resources are allocated between activities in such a way as to maximise benefit
i.e. if you have £3000 to spend and one treatment costs 1500 compared to another which costs 300, it would be more efficient to go with the cheaper treatment to save more lives/help more people
What is economic equity?
About what is fair and just
Fair and just distribution of costs and benefits
Economists are clear in principle about the definition of efficiency, but there are opposing views about what is ‘fair’
Such considerations are difficult to quantify and the decision making process is much more complex and subjective
What is meant by an equity-efficiency trade-off?
Improving equity often leads to a loss in efficiency
For example – funding the treatment of rare disease with very expensive drugs that may only have a limited benefit
This funding is then not available to treat other people with common diseases where the benefits will be much greater for the same cost
On balance there is a loss of health
This is inefficient, but it’s more equitable
Define economic evaluation
The assessment of efficiency - a comparative study of the costs and benefits of healthcare interventions (i.e. cost benefit analysis)
Costs and effects are analysed in terms of their ‘increments’ or differences
Are the incremental benefits of a new treatment worth the incremental costs?
How can health benefits be measured?
Natural units – e.g. blood pressure/pain score/number of cases detected
Quality adjusted life years
Monetary value
What is a quality adjusted life year (QALY)?
Combines length of life with quality of life
Length (years) x quality (“utility”) weighting (0 to 1 scale)
One QALY = 1 year perfect health
One QALY = 2 years in half perfect health
Allows comparison across diseases
What are the 4 types of economic evaluation?
Cost-effectiveness analysis
Cost-utility analysis
Cost-benefit analysis
Cost-minimisation analysis
What is cost-effectiveness analysis?
Outcomes measured in natural units
E.g. incremental cost per life year gained
What is cost-utility analysis?
Outcomes measured in QALYs
E.g. incremental cost per QALY gained
Remember because the name for quality of life in the QALY eqution is utility
What is cost-benefit analysis?
Outcomes measured in monetary units
e.g. net monetary benefit
What is cost-minimisation analysis?
Outcomes (measured in any units) are the same in both treatments
Therefore, just minimise cost
What is incremental analysis?
Everything is relative
There must always be a comparison – for example:
New drug vs old drug
New treatment vs watch and wait
New surgical option vs medical treatment
What is cost effectiveness analysis?
Simplest form of economic evaluation is cost-effectiveness analysis (CEA)
Uses ‘natural’ units to measure health e.g. life years gained
Comparison across disease areas difficult
Which do you fund:
ICER (heart transplants) = £10,000 per life year gained
ICER (hip replacement) = £3,000 per pain-free year gained
Cost utility analysis?
More complex – using QALYs
Combined length of life and quality of life
In principle, all treatments can be evaluated using CUA – making funding decisions easier
ICER (heart transplants) = £18,000 per QALY
ICER (hip replacements) = £8,000 per QALY
Cost benefit analysis?
Rarely used in healthcare
As it requires putting a monetary value on all outcomes which is difficult
What is a funding threshold?
When a new more experience treatment is funded, another treatment somewhere else in the NHS needs to have its funding stopped to pay for it
NICE thinks that any services that are closed down to fund new services probably generate benefits at around £20,000 per QALY
Taking £20,000 from somewhere else therefore loses 1 QALY
So it only makes sense to fund new things if we get at least 1 QALY per £20,000 (cost must be less than £20,000 per QALY)
What are some other considerations that need to be taken into account in health economics?
Age (equity)
Severity of illness (equity)
End-of-life (equity)
Rarity of condition (equity)
Causation (equity)
Innovation (wider economic benefit)
Patient convinience (and choice)
What are the 3 main models of financing healthcare?
Publicly-funded health systems
Social insurance funded health systems
Privately funded health systems
Define epigenetics
The expression of a genome depends on the environment
Define allostasis
The same as homeostasis
The stability through change of our physiological systems to adapt rapidly to change in environment
Define allostatic load
Long-term overtaxation of our physiological systems leading to impaired health (stress)
Define salutogenesis
Favourable physiological changes secondary to experiences which promote healing and health