Optimising return on investment: spending your budget and generating the best value for money

Public Health England’s Health Economics team• Lexie Blawat• Emily Green• Scott Mahony

Some quick questions to start

1) How many people think value for money is an important consideration when making health investment decisions?

2) How many people think we are using health economic ideas enough in the health care sector?

3) How many people are comfortable thinking about/discussing health economics?

Agenda

Section 1: The context in which we work

Section 2: PHE’s health economics tools and resources

Section 3: What more needs to be done

Section 1: The context in which we work

Ageing population• The number of people in the UK aged over 85 is set to double over the next 20

years

Increase in chronic illness• The number of people living a single chronic illness has increased by 4% per year• The number of people living with multiple chronic illnesses has increased by 8% per

year

As life expectancy has increased, healthy life expectancy has not followed the same trend. Therefore a greater proportion of people’s lives are spent in poor health. The number of people with chronic conditions is growing faster than population growth and ageing, with experts pointing to lifestyle factors as the cause.

A large portion of ill health is avoidable – potentially preventable risk factors such as smoking, alcohol consumption, physical activity, diet, and others explain 40% of ill health in England.

Future challenges for the health sector

Population pyramids for the UK – 2005 compared to 2015Source: ONS

Section 2: PHE’s Health Economics tools and resources

1) Return on investment tools2) Prioritisation Framework

The focus of the PHE Health Economics Team

• PHE’s Health Economic team has around 10 FTE economists split between London and York

Our team has two main objectives: 1) Making the economic case for investing in prevention and early intervention at a

national and local level2) Build capacity within PHE and local systems by providing tailored training and

support

As already mentioned, with the future challenges that face the health sector, and funding for public health falling, making the economic case for investment in prevention is more important than ever

Resources the PHE Health Economics team have produced

• Our team has produced a variety of tools and resources to support cost-effective decision making at a local level for a number of clinical areas including:

➢Mental Health services

➢Falls prevention

➢Musckuloskeletal interventions

➢Colorectal cancer

➢Prenatal and 0-5 year services

➢Air pollution

➢Contraceptive services

What do we mean by Return on Investment?

• Cost-benefit analysis (CBA) is an economic evaluation metric which compares the costs and benefits of an intervention using a monetary unit, to see whether the benefits exceed the costs

• ROI is a general term encompassing the techniques for comparing the costs and benefits generated by an investment

• ROI = Benefits/Costs

• There are two types of ROI values, a financial ROI and a societal ROI

An example: The Falls Prevention ROI Tool

• What is the context?:o There are around 255,000 falls-related emergency hospital admissions in England among patients aged

65 and over each yearo It is estimated that fragility fractures cost the UK around £4.4 billion, of which 25% is for social care.

• What questions does the tool answer?:o The tools helps local decision makers understand how cost effective a variety of interventions are aimed

at preventing fallso This information can be used to ensure local provision provides good value for money

• Who is interested in this tool?:o Local Authoritieso CCGso STP areaso Voluntary sector

An example: The Falls Prevention ROI Tool

An example: The Falls Prevention ROI Tool

An example: The Falls Prevention ROI Tool

An example: The Falls Prevention ROI Tool

An example: The Falls Prevention ROI Tool

Poor decision making

Why do people make poor decisions?

1) The number of options are overwhelming2) Information overload3) Conflicting information4) Historic biases – the security of the status quo5) Irrationality/belief

So what to do? How do we make decision better?

Simplification

Transparency

+

Better decision making

PHE’s Prioritisation Framework

• A system to that looks to support LAs make informed, transparent and robust decisions on how to allocated budget across multiple programmes

• Developed in conjunction with LAs • Backed by a comprehensive support package• Primarily powered by multi criteria decision analysis

Multicriteria decision analysis

• Complicated name – fairly simple system• Earliest roots trace back to 18th C. where Benjamin Franklin

used a paper based system to make important decisions• The modern systems has been used extensively across

multiple sectors:• UK and US government used to determine underground

nuclear deposited sites in the 1980s• Understand the relative harm of illegal drugs across UK• Being explored by numerous HTA bodies, including NICE• Many other situations where the problem is messy

How it works

• Looks to mimic the natural decision making process• Simplifies thinking and documentation by breaking complex problems into smaller

chunks:

• Things are generally clearer with an example

Natural decision making MCDA transformation

What am I trying to achieve? Criteria

How important are these things relative to one another?

Weighting

How well do my options meet my needs/wants? Scores

Holiday plans

Weights Paris Prague Hong Kong Rio

Cost 35 3 5 1 2

Temperature 15 2 2 3 4

Food 15 4 3 5 2

Flight time 5 5 4 2 2

Attractions 30 5 3 4 3

TOTAL 100 3.7 3.6 2.9 2.6

Is it too clinical? Does it strip the human element out of decision making?PF should encourage dialogue and discussion with key stakeholders

Triangulation of info

‘Potential’ – what

value could be

achieved

‘Current’ – What do

our programmes

look like relative to

other areas?

Budget – How do we

use our resources at

the moment?

Feasibility:

How able are we to

change a programme

and achieve more value?

Bring all the

elements together

to inform

“direction of

travel”

Because we are dealing with a non-binary problem things are a little more complex

How it has been used

• After development, the Framework was tested with four local authorities:

• All four areas have completed the process and have fed back on their experiences• Several other local authorities have expressed interest in using the system

Lessons learned

Throughout, PHE has learned a number of valuable lessons on Prioritisation exercises:1) Getting people on side early is essential2) Slow and steady wins the race3) Strong leadership keeps the process focused4) It is going to be uncomfortable

These lessons and more will be captured by an upcoming evaluation

Section 3: What more needs to be done

What is next?

• The need for health economics and prioritisation are at an all time high

• Failure to think through the consequences of actions is unethical

• Adoption is not as wide spread as it should be

• We need advocates for the methods and ideas (that is hopefully you!)

Have a look yourself

• All our tools and resources can be found on our gov.uk page• Easiest way to find is to Google: “Public health economics”

• Email: healtheconomics@phe.gov.uk

Time for questions