5 do we need economics in medicine

8/13/2019 5 Do We Need Economics in Medicine

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Do we need economics in

medicine?


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Edmund Burke,

1790dcist.com/2007/12/10/revisiting_edmu.php

the age of chivalry is

gone. That ofsophisters, economists,

and calculators has

succeeded; and theglory of Europe is

extinguished forever


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Important Similarities Between

Physicians and Economists

Realistic approach to lifes problems

Reliance on quantitative information

Often must make difficult choices in the

face of uncertainty

Good decisions require comparing benefits

and risks (costs)

Victor R. Fuchs. WHAT SHOULD PHYSICIANS KNOW ABOUT HEALTH ECONOMICS, 2002


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Big Difference Between

Physicians and Economists

Physicians are usually concerned with an

individual patient

Economists are usually concerned with

large aggregations: organizations,

industries, governments, society as a

whole


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Health economics?

Health economics lies at the interface of

economics and medicine and applies the

discipline of economics to the topic ofhealth


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Why is it important to look at economics

in health?

Health resources are finite

A choice must be made about which resources

to use for which activities

Decision making process has to be based on

the valid and reliable information, and on the

correct decision making principles


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But,

Economics is notprimarily about saving

money

It is about using scarceresources as efficiently

as possible



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Components of health economics

If we look beyond health, we must incorporate pure

economics, finance and insurance, industrial

organization, labour economics , public policy (and

finance), sociology, and statistical methods into ourthinking.

Within the health area, the disciplines of health

services research, medicine, medical ethics,

psychology and public health / epidemiology


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Measurement

Are there unmeasurable things?

How do we measure health?

How do we measure wealth?(Are the twolinked?)

Can we measure pain?


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Derivation

Can each measurement be given an economic

value?

Can everything be given a value?

Can we estimate a value of a human life?


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Example

Croatian Institute for Health Insurance

Board for Medicines

Decides upon which medications are to befunded by the CIHI

Which drugs get a priority? Which are

rejected?


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Indicators

We can define an indicator for everything we

measure

E.g. 5-year survival after surgical treatment,

PTCA and drug treatment, or number of days

spent in hospital

We can compare costs of all three treatments,

and then perform all analyses to define the

best option for every patient


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Indicators

Indicators have to be relative or adjusted

Comparison of costs of the primary care in the

rural and urban region?

In the region of the town with higher

socioeconomic status and slums?

Comparison across countries?

Central idea in quality assessment and

improvement


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Economic evaluation

Reality of opportunity cost

Useful alternatives compete for resources

Making choices is sometime unpleasant

Options for colorectal cancer screening

Fecal blood test

Barium enema

Sigmoidoscopy Colonoscopy

Is it worth the extra money?


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What is economic evaluation?

A comparative analysis

Evaluating alternative courses of action

Examining both costs and consequences Identify

Value

Measure

Compare


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Economic evaluation considers assessment of intervention effects in

economic terms, which is often of greatest interest to fund allocators

Intervention evaluation involves two measures;

the health effects or effectiveness of the intervention

the value or efficiency of the effects

Economic evaluation expertise can lie outside the competencies of an

individual public health nutritionist however simple economic

assessment tools can be applied

EvaluationEconomic Evaluation

Economic Evaluation


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Economic Evaluation


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Characteristics of Economic Evaluation

Economic evaluation involves identifying, measuring and valuing both

the inputs (costs) and outcomes (benefits) of the intervention/s

there are two broad areas of economic measurement; Provider or narrow p erspect ive - consider inputs (costs) and outcomes

(benefits), and compares both aspects across alternative interventions

Societal perspect ive- include only some elements of inputs and outcomes

The provider approach has limitations because ranking interventions in

terms of value for money may be very different if the analysis includesall costs and benefits

Economic Evaluation


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Types of Economic Evaluation

Tracing all inputs and finding valuations for all resources used can be

difficult but should not deter intelligent estimates being made

Evaluations that consider both outcomes and resources use are full

economic evaluations there are four distinct types:

1. Cost-min imisat ion analys is

Involves comparison between two or more alternative interventions

whose outcomes are assumed to be exactly the same

Assumes all consequences of the alternative interventions are thesame

Generally not recommended

Economic Evaluation


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3. Cost-ut i l i ty analysis

Uses a common measure of outcome to enable comparison between a

range of interventions - between PHN intervention, or between PHNintervention and treatment approach

Benefits or outcome are expressed as a measure that reflects how

individuals value or gain utility from the quality and length of life:

QALYs (qual i ty adjus ted l i fe years)

DALYS (disab i l i ty adju sted l i fe years)

HYE (health year equivalents

Can identify only relatively large changes in individual health status and

can put PHN interventions at a disadvantage

Economic Evaluation


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4. Cos t-benefit analys is

Measures all outcomes in monetary terms

Calculates monetary values of health benefits and costs to conclude if

one side is greater than the other Commonly expressed as cost-benefit ratio

Useful for comparing interventions with many diverse outcomes - most

appropriate for economic evaluation of inter-sectoral interventions

Economic Evaluation


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Economic Evaluation

Conducting a thorough economic evaluation required specialised health

economics expertise and can be a rather resource intensive process. Ideally

economic evaluation should only be undertaken if the benefits of improving

efficiency of health resources outweigh the costs of evaluation.There is no consensus of opinion of which method is best and the decision islikely to be limited to the type and quantity of information available, and

time and resource restraints. Choose a method that is most appropriate tothe data available.

Although funding agencies financing PHN interventions will be interested in

the economic benefit from an organisational perspective most agencies wouldprefer to promote the societal benefits the intervention they funded had,

hence taking a societal perspective to economic evaluation is preferred.


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Process of Economic Evaluation To undertake a high-quality economic evaluation a multidisciplinary team

containing both economists and public health nutritionists is required

The main steps to consider for an economic evaluation are: Defining the economic question and perspective

Determining the alternatives to be evaluated

Choosing the evaluation design

Identifying, measuring and valuing the costs

Identifying, measuring and valuing the benefits

Adjusting costs and benefits for the differential timing

Measuring incremental costs and benefits

Putting the costs and benefits together

Testing the sensitivity of the results

Presenting the results

Economic Evaluation

5 do we need economics in medicine

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