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Measuring Economic Benefits of E-Health: Theory and Practice

Measuring Economic Benefits of E-Health: Theory and Practice. Masatsugu Tsuji Professor of Economics OSIPP, Osaka University. Methods of Measuring Economic Benefits. Revealed preference method 1. Travel cost method (Evaluation I) 2. Replacement cost method

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Measuring Economic Benefits of E-Health: Theory and Practice

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  1. Measuring Economic Benefits of E-Health: Theory and Practice Masatsugu Tsuji Professor of Economics OSIPP, Osaka University

  2. Methods of Measuring Economic Benefits • Revealed preference method 1.Travel cost method (Evaluation I) 2. Replacement cost method (Evaluation II) 3.Hedonic method • Stated preference method 1.Contingent valuation method (CVM) WTP approach (Evaluation III) Workshop on Standardization in E-health

  3. Evaluation I:Teleradiology (D2D) Local clinic University hospital ISDN 128kbps Traditional method (once a week) Salary: US$ 750 Traveling costs: US$ 130 Total costs: US$ 44,000 Telemedicine Initial costs: US$ 7,500 Monthly fees: US$ 500 fees per picture: US$ 20 Telephone bills (year): US$ 3,150 Total costs: US$ 32,000 Workshop on Standardization in E-health

  4. Evaluation II:Replacement Method (1) How much of hospitalization costs can be saved by E-health Estimation of logistic curves CATV and ISDN Hospitalization costs per elderly patient Estimation of the number of tele-home-care systems Hospital Costs-Savings Workshop on Standardization in E-health

  5. Evaluation II: Replacement Cost Method (2) Estimation Result ％ CATV US$ billion 10 ISDN ratio 8 40 6 4 30 2 0 20 10 0 2000 0 2 0 05 2010 2015 2020 2 0 2 0 25 2 0 3 0 2 0 3 5 2 0 4 0 2 0 4 5 2 0 5 0 Workshop on Standardization in E-health

  6. Evaluation III: CVM Approach (1) • Benefits should include:： • Lessanxiety in day-to-day life • 2.Enhanced consciousness • towards health • 3. Stabilization of illness • 4. Decrease in medical expenses, etc. • WTP: Willingness to pay Workshop on Standardization in E-health

  7. Concept of WTP price Benefit to consumer (Consumer’s surplus) Demand function p quantity q Workshop on Standardization in E-health

  8. List of Questionnaire yes: How much? yes: \7,500? yes: \6,500 no: \6,500? no: \5,500 \5,500? yes: \4,500 yes: \4,500? no: \3,500? No: \3,500 no: \2,500 Workshop on Standardization in E-health

  9. Estimation of WTP Probability of acceptance = 1- 1/(1 + exp (-α-βlogWTP)) Workshop on Standardization in E-health

  10. Estimation of WTP Workshop on Standardization in E-health

  11. Economic Assessment of Projects (1) Workshop on Standardization in E-health

  12. Economic Assessment of Projects (2) Workshop on Standardization in E-health

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