1 cost-effectiveness of improving medical services in low-resource settings edward broughton, phd,...
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![Page 1: 1 Cost-effectiveness of improving medical services in low-resource settings Edward Broughton, PhD, MPH, PT University Research Co. May 21, 2014 ebroughton@urc-chs.com](https://reader030.vdocuments.net/reader030/viewer/2022032802/56649de85503460f94ae2270/html5/thumbnails/1.jpg)
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Cost-effectiveness of improving medical services in low-resource
settingsEdward Broughton, PhD, MPH, PT
University Research Co.
May 21 , 2014
![Page 2: 1 Cost-effectiveness of improving medical services in low-resource settings Edward Broughton, PhD, MPH, PT University Research Co. May 21, 2014 ebroughton@urc-chs.com](https://reader030.vdocuments.net/reader030/viewer/2022032802/56649de85503460f94ae2270/html5/thumbnails/2.jpg)
USAID Applying Science to Strengthen and Improve Systems
Your decision….
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USAID Applying Science to Strengthen and Improve Systems
What would you pay?
• An error while splinting wrist fractures can cause pain in the 5th digit for ~ 10 hours
• An effective improvement intervention can avert error
• What is it worth to you to avoid the error?
• What is your willingness to pay?
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USAID Applying Science to Strengthen and Improve Systems
What would you pay?
• Your choice: this pain for 10 hours or pay $ to not have pain
• How much are you willing to pay?
10 cents?...... $ 100,000?
$ 1? …….. $ 10,000
$ 10?……. $ 1,000? etc.
Please write down your answer
This is your willingness to pay (WTP)
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USAID Applying Science to Strengthen and Improve Systems
What is economic analysis?
• Comparative analysis of two or more courses of action in terms of the costs and consequences of an intervention
• Different types of analyses:– Cost-minimization– Cost-effectiveness– Cost-utility– Cost-benefit
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USAID Applying Science to Strengthen and Improve Systems
What is cost-effectiveness analysis?
• A way to measure efficiency of an intervention in which costs are related to a single common effect
• Cost-effectiveness = costs ÷ effects
• Cost-effectiveness ANALYSIS is the cost-effectiveness of one intervention relative to a baseline / comparison
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USAID Applying Science to Strengthen and Improve Systems
But we need to know:
• Whose perspective?
• What time-frame?
• What units of effectiveness?
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USAID Applying Science to Strengthen and Improve Systems
Our improvement intervention example
• Training / coaching program that prevents errors that lead to adverse event (pain)
• Before intervention, 50% risk of pain. After intervention, 10% risk of pain
• Cost of improvement intervention = $ 100 / patient
• Cost of treating pain = $ 8 / patient (average) but ineffective
Is intervention cost-effective?
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USAID Applying Science to Strengthen and Improve Systems
Important details:
• Whose perspective? = Health system
• What time-frame? = 1 year
• What units of effectiveness? = adverse event averted or hour of pain avoided or DALY averted or QALY gained
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USAID Applying Science to Strengthen and Improve Systems
Cost of improvement intervention
• What are the costs above what would happen without the improvement intervention?
• Staff time costs should be included even if staff were not paid more
• Any other costs we should consider?
• Assume a cost of $ 100 per patient (divided among all patients who benefit)
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USAID Applying Science to Strengthen and Improve Systems
Decision tree
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USAID Applying Science to Strengthen and Improve Systems
Calculations
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Incremental cost effectiveness ratio = difference in costsdifference in effects
ICER = [(0.1 x 100) + (0.9 x 100)] – [(0.5 x 8) + ( 0.5 x 0)]. [( 0.1 x 0 ) + ( 0.9 x 10 )] – [( 0.5 x 0 ) + ( 0.5 x 10 )]
ICER = $ 24.00 / hr of pain relief
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USAID Applying Science to Strengthen and Improve Systems
Table of results
Strategy Cost Incremental cost
Effect Incremental effect
Inc. cost-effectiveness
ratio
Improve-ment
100 96 9 hours of pain
avoided
4 hours of pain
avoided
$ 24 / hour of pain avoided
Business-as-usual
4 5 hours of pain
avoided
All data are per recipient of strategy
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USAID Applying Science to Strengthen and Improve Systems
Cost effectiveness plane
14
Higher cost
Lower cost
More effective
Less effective
Willingness-to-pay threshold
$ 24
1 hr pain relief
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USAID Applying Science to Strengthen and Improve Systems
Cost effectiveness plane
15
Higher cost
Lower cost
More effective
Less effective
Willingness-to-pay threshold
$ 24
Hr of pain relief
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USAID Applying Science to Strengthen and Improve Systems
If we include the economic consequences of the improvement intervention …..
Taking the societal perspective:
• Can people work with pain caused by error?
• Assuming no work, calculate lost income / productivity
• Assume income / productivity = $ 50 / hour
• Assume no difference in the cost of treatment ( $ 8 )
• Now redo calculations
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USAID Applying Science to Strengthen and Improve Systems
CEA calculation
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Incremental cost effectiveness ratio = difference in costsdifference in effects
ICER = [(0.1 x 100) + (0.9 x(-500))] – [(0.5 x 8) + ( 0.5 x(-500)]. [( 0.1 x 0 ) + ( 0.9 x 10 )] – [( 0.5 x 0 ) + ( 0.5 x 10 )]
ICER = – $ 48.50 / hr of pain relief
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USAID Applying Science to Strengthen and Improve Systems
Table of results
Strategy Cost Incremental cost
Effect Incremental effect
Inc. cost-effectiveness
ratio
Improve-ment
– 440 –194 9 hours of pain
avoided
4 hours of pain
avoided
– $ 48.5 / hour of pain
avoided
Business-as-usual
– 246 5 hours of pain
avoided
All data are per recipient of strategy
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USAID Applying Science to Strengthen and Improve Systems
Cost effectiveness plane
19
Higher cost
Lower cost
More effective
Less effective
Willingness-to-pay threshold
$ 24
- $ 48.5
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USAID Applying Science to Strengthen and Improve Systems
Cost effectiveness plane
20
Higher cost
Lower cost
More effective
Less effective
Willingness-to-pay threshold
$ 24
- $ 48.5
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USAID Applying Science to Strengthen and Improve Systems
Why CEAs of improvements difficult in LMICs?
• Often “effectiveness” is process indicator, not clinical outcome (eg: compliance with standard of care)
• Difficult to transform into a clinical outcome
• Often improvement has many different effects
• Need modeling to convert to DALYs, QALYs etc.
• Need to guess how long improvement will last
• Data often dubious
• No control groups to determine attributability
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USAID Applying Science to Strengthen and Improve Systems
Clarifying the question
• What are you comparing your intervention to?– Doing nothing– Another intervention– Several other interventions
• What point of view / perspective are you taking?– Recipient of the intervention– One or several of the funders– Everyone (societal)
• Why are you doing the CEA?– Who is your audience?– What is the information going to be used for?
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USAID Applying Science to Strengthen and Improve Systems
Calculating DALYs and WTP
• Global burden of disease: 2004 Update• http://www.who.int/healthinfo/global_burden_diseas
e/GBD2004_DisabilityWeights.pdf?ua=1
• DALYs for AE = 10/(365 x 24) x 0.132 = 0.001142• WHO: > 3 x GDPPC / DALY, WB = 1 x GDPPC / DALY• For US, $ 178 (WHO) or $ 59 (WB)
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USAID Applying Science to Strengthen and Improve Systems
Questions?
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