W2- Introduction to economic evaluation Flashcards
(29 cards)
DEFINE THE OPPORTUNITY COST
the values of the best alternative use of resources
why do we need eco eval
Scarcity, choices, opportunity cost
EE aims to ensure the benefits of programmes that are implemented exceed their opportunity costs
what is Technical Efficiency
assesses the best way of achieving a given objective, eg minimising the amount of resources required to achieve something, doing things right (fixed budget)
what is Allocative efficiency
concerned with decisions about whether to allocate R to a programme, ie is it good for the people, increase ell-being, doing the right things (changes in budget)
How do you get the incremental cost
2 interventions we know one cost 100,000, and has a result of 500, while the other cost 200,000 and a result of 4000- (200,000-100,000)/(4000-500)- Ic=29
Fir 1 intervention it is the population cost eg 100,000 divide by the result eg 500- IC=100,000/500= 200
what is eco eval
The comparative analysis of alternative courses of action in terms of both their costs and consequences
Basic task of ee is to identify, measure, value and compare the cots and consequences of the alternatives under consideration
what is are the different types of ee
Cost-effectiveness analysis (CEA)- natural unit outcomes or patient/clinician reported outcomes
Cost-Utility analysis (CUA)- quality or disability adjusted life years
Cost-benefit analysis (CBA)- monetary outcomes
Cost-minimisation analysis (CMA)-outcomes known to be equal in value for alternative
Cost-consequence analysis (CCA)-natural unity disaggregated outcomes
what is Cost-effectiveness analysis (CEA)
Outcomes measured in terms of; natural units from clinical studies. Can be used across diseases/intervention where the outcome is common
Uni or multi-dimensional measures of outcomes e.g. a health measure to assess pain.
Costs are in monetary terms, concerned with technical efficiency (limited to them
what is the advantage of using natural unit in CEA
Simple to carry out, readily understood by clinicians and decision makers
Limitations of natural units in CEA
Uni-dimensional measures of outcomes- can miss out on important outcomes
Comparisons can be difficult if outcomes are different
Not include value
Limited use for allocative efficiency Q
Limitations of natural units in CEA
Uni-dimensional measures of outcomes- can miss out on important outcomes
Comparisons can be difficult if outcomes are different
Not include value
Limited use for allocative efficiency Q
what is Cost-Utility analysis (CUA)-
use quality or disability adjusted life years (DALY, QULY)
Quality adjused life years (QALY)
Disability adjusted life years (DALY)
Composed of 2 parts; the quality or disability adjustment which reflects morbidity or QOL, the length of life which reflects mortality of quantity of life
Measured in a 0-1 scale
QALY- 1 represents perfect health, 0 is death or equivalent, <0 is worse than dead
DALY- 1 represents death or equivalent, 0 is perfect health
What is a Quality adjused life years (QALY)
used in CUA
Utilised more in clinical trial data collection. Related to interventions
Generic and condition specific measures completed by patients in trials or effectiveness studies, used where weights are available. Also be direct valuation by patents
what is a Disability adjusted life years (DALY)
used in CUA
Developed to assess global disease burden
Aim to provide disability weights for as many conditions as possible using standised approch with globally representative samples
CUA QALY equation
No op vs op
No op- current health state has U value of 0.5, current life expectancy is 2 years at a constant health state – QALY= 2 X 0.5- 1
Op- health state has U value of 0.9, life expectancy is 5 years at a constant health state. QALY- 5 X 0.9= 4.5
QALY gain from op=3.5, (4.5-1)
DALY equation
No op
Current health state has disability weight of 0.5, current years to live with d 2 years and years of lost life 3 (assuming that they are at the end of their life expectancy after 5 years left)- DALY= (2x0.5)+3=4
Op
New health state has d weight of 0.1
New years to live with d 5 years
DALY=5X0.1=0.5
DALY averted from op= 4-0.5=3.5
Advantaged of CUA
comparison between interventions- can addresses allocative Q in the health budget, allows for you to account for opportunity cost, provide a common lang for understanding interventions, Can address allocative efficiency Q, measures quality and length of life, produces single measure of outcome
Limitations of CUA
Difficult in deriving health state preferences, may be sensitive to changes due to treatment, may be difficult to link to intermediate public health outcomes eg health promotion, limited to health benefits.
what is cost-benefit analysis
monetary outcomes
Measured outcomes are valued in monetary terms- this doesn’t have to be limited to health outcomes, process utility,
If the value of outcomes is greater than the net cost of intervention, then the intervention is worthwhile (or cost-effective)
CBA is the main method of analysis used by the IK gov for public sector schemes.
Valuing benefits for CBA
Benefits are not valued by saving they generate
2 main methods are the willingness to pay technique (contingent valuation) and the human capital approach (HCA)
what is the human capital approach (HCA)
Patient is valued in the same as a piece of capital, by the value of productive output (more years more money they can earn)
Mortality is easy to measure in no. of years lost X by national average salary
Morbidity is less easy, pain will result in days off, but how do you value cosmetic difs and self-confidence
If total benefit is greater than net cost, then it is worth doing
what is willingness to pay
If total benefit is greater than net cost, then it is worth doing
Replace the real market value with a hypothetical market- multiply the outcome bu number of avoid outcome with the intervention in place to get total benefit
CBA Advantages
Answers technical and allocative efficiency Q, can include outcomes outside of health care, can include ‘process utility’, can include externalities (some people without the issue are willing to pay).
CBA limitations
Putting a monetary value on lives make some decisions makers uneasy and the public hostile, validity of WTP results questionable, HCA incapable of valuing many benefits of health care or public health
what is Cost-minimisation analysis (CMA)
type of ee- outcomes known to be equal in value for alternative
Comparison based on incremental cost only
The outcomes or benefits of the alternative treatments being compared are equivalent i.e. of equal value
May discover equivalence through a study
Or may already known in advance, e.g generic dugs
A lot of the time it is assumed or based on poor quality evidence
Limited to technical efficiency…can’t compare hips and hearts on cost alone
CMA Limitations
Need to judge whether the outcomes are identical (hard to show with drugs and tec), impossible for complex health interventions, limited to technical efficacy, never 100% certain, no matter how big the trail is.
