what is health economics? accountants care only about $$$$$$$$$$ accountants care only about...
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WHAT IS WHAT IS HEALTH HEALTH ECONOMICS?ECONOMICS?
ACCOUNTANTS CARE ONLY ABOUT $ACCOUNTANTS CARE ONLY ABOUT $$$$$$$$$$$$$$$$$$$
PHYSICIANS CARE ONLY ABOUT PHYSICIANS CARE ONLY ABOUT PATIENTS……PATIENTS……
HEALTH ECONOMISTS CARE ABOUT HEALTH ECONOMISTS CARE ABOUT RESOURCE$ AND PATIENTSRESOURCE$ AND PATIENTS
ECONOMICS IS HOW TO ALLOCATE ECONOMICS IS HOW TO ALLOCATE SCARCE RESOURCESSCARCE RESOURCES
COST-COST-EFFECTIVENESS EFFECTIVENESS ANALYSIS (CEA)ANALYSIS (CEA)
A B C
S A M E G O A L
5 10 4
The cheapest method of attaining the SAME GOAL
is the most cost-effective.
CHRONIC RENAL CHRONIC RENAL DISEASE DISEASE (Klareman)(Klareman)
HOSP DIALYSIS ($104,000)HOSP DIALYSIS ($104,000)
9 years gained. CPLY=$11,6009 years gained. CPLY=$11,600
HOME DIALYSIS ($38,000)HOME DIALYSIS ($38,000)
9 years gained. CPLY=$4,2009 years gained. CPLY=$4,200
TRANSPLANT ($44,500)TRANSPLANT ($44,500)
17 years gained CPLY=$2,60017 years gained CPLY=$2,600
BURDEN
Process IProcess I
1. Literature
search
2. Epi
parameters
Analysis, review
3. Country
data
4.Burden
Estimates
BURDEN SCENARIOS
Fig 2: Projected Hepatitis A Cases with and without Vaccination Program in Kazakhstan 2002-2041
0
10,000
20,000
30,000
40,000
2002 2006 2010 2014 2018 2022 2026 2030 2034 2038
Cas
es
BURDEN SCENARIOS
PROGRAMCOSTS
BURDENSCENARIOS
VACCINEPROGRAMCOSTS
DISEASETREATMENTCOSTS
DISEASETREATMENTCOSTS
Utilisation Rates for: self-care, self care +medication/herbs, traditional healer, community clinic/GP, in-hospital care, intensive care, out-patient visits.
XUnit Costs, including Laboratory tests, Pharmaceuticals and Medications.
+ COSTS OF DISEASE SEQUELLAE
NET COST PER DALYNET COST PER DALY
Net Cost = Cost of Intervention less Net Cost = Cost of Intervention less
Averted Treatment Averted Treatment CostsCosts
DALYS = sum of life years saved DALYS = sum of life years saved due to decreased mortality + life due to decreased mortality + life years saved due to decreased years saved due to decreased morbidity + reduction in caregiver morbidity + reduction in caregiver burdenburden
0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2
Distal-radius
Proximal-humerus
Vertebral
Hip
Morbidity Mortality
DALY LOSS PERDALY LOSS PER FRACTUREFRACTURE
COST-UTILITY ANALYSIS
PER: LIFE YEAR GAINED
LIFE SAVED
CASE-PREVENTED
NET COST
DALY
COST COST SAVINGSAVING
IF savings in treatment IF savings in treatment costscosts
> program costs> program costs
then we can reduce mobidity then we can reduce mobidity and mortality AT NO NET COSTand mortality AT NO NET COST
STRONG PSYCHOLOGICAL PUSH STRONG PSYCHOLOGICAL PUSH FOR PROGRAMMEFOR PROGRAMME
VERY COST VERY COST EFFECTIVEEFFECTIVE
Project considered Project considered acceptable in relation to acceptable in relation to resources available in resources available in individual countriesindividual countries
CPDALY < GNP per headCPDALY < GNP per head
COST COST EFFECTIVEEFFECTIVE
Project considered Project considered acceptable in relation to acceptable in relation to resources available in resources available in individual countriesindividual countries
CPDALY < 3 x GNP per CPDALY < 3 x GNP per headhead
ALBANIA has $1,120 GNP ALBANIA has $1,120 GNP per Head, CPDALY for per Head, CPDALY for HIB=$347HIB=$347
CPDALY < 3 x GNP per CPDALY < 3 x GNP per headhead
VERY cost-effective ifVERY cost-effective ifWHO report, says project WHO report, says project
is cost-effective ifis cost-effective if
CPDALY < GNP per headCPDALY < GNP per head
Disease ClubsDisease Clubs
Many donors adopt Many donors adopt specific diseases, creating specific diseases, creating jobs and disease clubs, jobs and disease clubs, who advocate using who advocate using burden data, but avoid burden data, but avoid true comparisons of true comparisons of interventions using CEA. interventions using CEA.
BURDEN:Deaths
0
20
40
60
80
100
A B C D E
BURDEN:Life Years Lost Disease B occurs at younger age
0
1000
2000
3000
4000
5000
A B C D E
BURDEN: DALYDis. C has high morbidity & sequelae
0
2000
4000
6000
A B C D E
SCENARIO: Potential DALYS SAVEDDisease D has high intervention efficacy
0
1000
2000
3000
4000
5000
A B C D E
CUA: Cost per DALY: Disease E has low intervention cost
$0
$10
$20
$30
$40
A B C D E
3,500 additional DEATHS PREVENTED with $10m budget
0
3000
6000
9000
A E
250,000 extra DALYS SAVED WITH $10m BUDGET
0
200000
400000
600000
A E
INFECTIOUS NCDINFECTIOUS NCD
Good efficacy Good efficacy data, short data, short length of length of trialstrials
Hard to Hard to model herd model herd immunity immunity
Poor efficacy Poor efficacy data due to data due to long term long term needed for needed for results (statins, results (statins, latency period)latency period)
Prevention Prevention ProgrammesProgrammes
Eg: smoking cessation or dietary Eg: smoking cessation or dietary controlcontrol
Very little population based Very little population based efficacy data as trials usually were efficacy data as trials usually were on specific populations such as on specific populations such as persons employed in factory etc.persons employed in factory etc.
GCEA: THREE GCEA: THREE PROGRAMME EXAMPLEPROGRAMME EXAMPLE
A = Operation on rare disease A = Operation on rare disease (Cost = $1m, QALYS saved = 1)(Cost = $1m, QALYS saved = 1)
B = Operation and drug B = Operation and drug treatment for rare disease (Cost treatment for rare disease (Cost = $1,001,000, QALYS saved = 2)= $1,001,000, QALYS saved = 2)
C = Preventive Nutritonal C = Preventive Nutritonal Campaign (Cost = $1,001,000, Campaign (Cost = $1,001,000, QALYS= 500)QALYS= 500)
A B C1m
0
$
1 2 500QUALYS
A to B, get 1 QALY for $1000 CPQALY = $,1000
Cost =$ 1,001,000QALY=500CPQALY=
$2,000
INCREMENTAL CEAINCREMENTAL CEA
CHOOSE B SINCE CHOOSE B SINCE CPQALY = $1,000 cfCPQALY = $1,000 cf
$2000 for nutrition $2000 for nutrition programmeprogramme
A B C1m
0
$
1 2 500QUALYS
CPQ=2,000
CPQ= $500,500
CPQ=$1,000,000
GENERALISED CEAGENERALISED CEA
CALCULATE NULL SETTING WHERE CALCULATE NULL SETTING WHERE NO INTERVENTION OCCURSNO INTERVENTION OCCURS
CALCULATE ALL INTERVENTIONS CALCULATE ALL INTERVENTIONS WITH RESPECT TO NULLWITH RESPECT TO NULL
CHOOSE INTERVENTION C AND CHOOSE INTERVENTION C AND GAINGAIN
2000-2 = 1998 QALYS2000-2 = 1998 QALYS
352
432
1888
7536
9248
22640
0 5 10 15 20 25
Thousands
Lower CHOLby diet
GP smokingcessation
Hipreplacement
KidneyTransplant
Breast CaScreening
Lower CHOLby drugs
COST per QALY ($)COST per QALY ($)
CEA or CUACEA or CUA TRANSPARENT, MORE TRANSPARENT, MORE
DEMOCRATIC METHOD OF DEMOCRATIC METHOD OF CHOOSING PROGRAMMES CHOOSING PROGRAMMES THAN BY MARKET, PRESSURE THAN BY MARKET, PRESSURE GROUPS, DONOR GROUPS ETC. GROUPS, DONOR GROUPS ETC.
BIASED AGAINST ELDERLY AND BIASED AGAINST ELDERLY AND HANDICAPPED!HANDICAPPED!
MORE EFFICIENT METHOD IN MORE EFFICIENT METHOD IN TERMS OF MAXIMISING TERMS OF MAXIMISING HEALTH OUTPUT (DALYS- HEALTH OUTPUT (DALYS- reflecting mortality and reflecting mortality and morbidity gains)morbidity gains)
HEALTH ECONOMICS
HEALTH ECONOMICSWITHOUT
THANK YOUTHANK YOU………...….………...….…..opportunity cost…..opportunity cost