Faculty of Medicine Health Economics and Policies ( 31505391) The value of health

1. Faculty of Medicine Health Economics and Policies (31505391)The value of health By HatimJaber MD MPH JBCM PhD 30-01-2019

2. Introduction to course 31505391(cont..) Course Content • Week 1Introduction to Course introduction to Health: health value, health determinants. • Week 2 Introduction to: Health care management Health Policy and Healthcare Delivery. • Week 3 The scope of health economics :Economics And Health Economics . • Week 4 Demand and Supply Demand for Medical Care. Supply of public health . • Week 5 The Market for Health Insurance • Week 6 Financing health care Economic in Health Policy Cost and price • Week 7 Health systems performance analysis. Measurement and evaluation in health care • Week 8 Midterm assessment (Exams.) 21-3-2018 • Week 9Public Goods, Market Failures, and Cost-Benefit Analysis. • Week 10 Economic evaluation . Economics and efficiency cost analysis and cost effectiveness, • Week 11 Economic effects of Bad habits including smoking and alcohol consumption • Week 12 Quality Improvements in healthcare delivery Methods to improve health care delivery • Week 13 Human resources in Healthcare delivery. • Week 14 Health Markets and Regulation and Economic regulation of health markets • Week 15Final assessment (Exams.)

3. Week 1 • Overview of course syllabus and time table. • Health as social and economic issue. • Determinants of health: Genetic factors , Socioeconomic factors , Environmental factors • Determinants of (inequalities in) health: Exogenous determinants of health • The social and economic environment and health • The value of health: • Health related quality of life • Health vs. Welfare/Utility • Value in Health and Health Care • Measuring Value in Health Care • Definition of health behaviors

4. Presentation outline

6. What is a value? • Qualities, characteristics, or ideas about which we feel strongly. • Our values affect our decisions, goals and behavior. • A belief or feeling that someone or something is worthwhile. • Values define what is of worth, what is beneficial, and what is harmful • Values are standards to guide your action, judgments, and attitudes.

7. Direction: Values – Goals – Behavior – Self-value • Values give direction and consistency to behavior. • Values help you know what to and not to make time for. • Values establish a relationship between you and the world. • Values set the direction for one’s life.

8. Value, Cost and Health Care Cost ≠ Value Cost ≠ Cost of Test •Cost includes cost of test and downstream costs, benefits and harms •High-cost interventions may provide good value because they are highly beneficial •Low-cost interventions may have little or no value if they provide little benefit or increase downstream costs

9. Benefits, Harms, Costs

10. Types of Values: Moral Material Aesthetic Intrinsic Extrinsic Universal/American Group specific values

11. Value-based health care delivery (VBHC) The central goal in health care must be value for patients, not access, volume, convenience, quality, or cost containment Health outcomes Value = Costs of delivering the outcomes The “unit of analysis” for VBHC is the complete cycle of care for treating a patient’s medical condition.

13. An acute medical condition’s complete cycle of care Treatment: medications, diet, exercise Patient problem: Knee pain Recommend surgery Initial MD visit Inpatient post-op care Follow-up visit Surgical consult Surgical prep Pre-op testing and evaluation Rehab Dis-charge Measure Outcomes and Costs Operation

14. The Value of Health Care Percentage of consumers rating each of the following a very good or fairly good value Generic prescription drugs 63% 43% Medical devices OTC (non-prescription) drugs 36% Doctors 35% Pharmacies 32% Hospitals 24% Brand name prescription drugs 21% Health insurance companies 14% Source: Harris Interactive/Wall Street Journal. Aug 19, 2003

17. The Emerging Value Context Rising costs • Rising cost shifting to consumers • Evidence that Innovation makes a difference • Expect more Innovation in long term although gaps in the short run • Potential Paradigm Emerging • High cost, High efficacy, High Customization but unaffordable • The Quest for Value • Balancing cost, quality, access and equity • Evidence based medicine and evidence based benefit design • Pay for Performance • Value Purchasing

18. How Consumers Rate Industries * In 1997 “computer companies” were rated together (I.e. hardware and software companies were not measured separately ** Because airlines were not included in 1997, the trend for airlines is from 1998 - 2002

19. Who Pays for Drugs? Percent of Total National Prescription Drug Expenditures by Type of Payer Private insurance Out-of-pocket Government programs Source: Kaiser Family Foundation and Sonderegger Research Center analysis of CMS data

20. HEALTHCARE SYSTEMS SOCIETY ECONOMIES HEALTHCARE SYSTEMS The value of medicines to patients, healthcare systems and society PATIENTS The biopharmaceutical industry generates essential economic value in terms of job creation, R&D investment, and medications that improve patient productivity • Patients live longer, healthier, more productive lives Innovative medicines can put healthcare systems on a more sustainable path by reducing costs in other parts of the healthcare system such as hospitlisations Society benefits from health and wellness as individuals are able to continue being productive members of the community

21. Patients all over thewolrd are living longer, healthier and more productive lives thanks to innovative medicines developed by biopharmaceutical companies. Value to patients

22. Value to the Economy The biopharmaceutical industry generates essential economic value in terms of job creation, R&D investment, and medications that improve patient productivity

23. Value to society Innovation can deliver significant societal value as development is strongly targeted at societal disease priorities and patients are able to continue contributing to the community.

24. Why measure health? • ‘Health’ is the ‘product’ of health care • not performed, no patients treated etc • Clinical reasons – effectiveness • Economic reasons - efficiency

25. Valuation versus Measurement • Value is determined by benefits sacrificed elsewhere • Valuation requires wade-off benefits • measurement does not

26. What is Welfare • Welfare economics is a branch of economics that uses microeconomic techniques to evaluate well-being (welfare) at the aggregate (economy-wide) level. • The word "welfare" has two very different meanings in economics. The most familiar meaning to the general public is that it refers to a collection of government programs such as food stamps and Medicare, usually intended to help the poor.

27. What is utility • Economics: Pleasure or satisfaction (value for money) derived by a person from the consumption of a good or service or from being in a particular place, and for the maximization of which all economic actions are motivated. • Utility = satisfaction/well-being - reflects a consumers preferences • It is the subjective or psychic return which cannot be measured in absolute or objective terms. • Goods or services that have utility for one person may not have for another, and what may have utility for a person at a certain time or place may not have it at another.

28. What is Health-RelatedQuality of Life (HRQOL)? • For public health surveillance purposes, HRQOL was defined as…“an individual’s or group’s perceived physical and mental health over time.”(Measuring Healthy Days, CDC 2000)

29. Unhealthy Days = days in the past 30 days when both physical and mental health were not good = Mentally unhealthy day = Physically unhealthy day = Healthy day

30. Measures of Health-Related Quality-of-Life

31. Measures of Health – a quick typology • Mortality-based measures • death rates, life expectancies, etc. • All the familiar stuff

32. Measures of Health – a quick typology • Mortality-based measures • death rates, life expectancies, etc. • Morbidity-based measures • indicators • Indicators: • Single, countable things • TB rate • C-section rates • % population who exercise • Examples: • Healthy People 2010 “Leading Indicators” • WHO “Core Health Indicators”

33. Measures of Health – a quick typology • Mortality-based measures • death rates, life expectancies, etc. • Morbidity-based measures • indicators • health status measures • disease-, organ-specific Health Status Measures Disease-, organ-specific.... Created to be sensitive to changes in symptoms or functional impairment due to a particular disease process Examples: • Arthritis Impact Measurement System (AIMS) • Vision Function Questionnaire (VFQ-25) • McGill Pain Questionnaire • NY Heart Association Classification Some physician-reported, others patient-reported

34. Measures of Health – a quick typology • Mortality-based measures • death rates, life expectancies, etc. • Morbidity-based measures • indicators • health status measures • disease-, organ-specific • “generic” Generic Health Status Measures Most famous: SF-36 health profile One questionnaire with many questions  Several questions about each of 8 different domains of health multiple scales to cover broad scope of health, not tied to one disease or organ system Scoring: Arbitrary scales based on summing responses to multiple questions Separate scores for each subscale or health concept PF, RP, BP, GH, VT, SF, RE, MH PCS MCS

35. Measures of Health – a quick typology • Mortality-based measures • death rates, life expectancies, etc. • Morbidity-based measures • indicators • health status measures • disease-, organ-specific • “generic” • health-related quality-of-life (HRQoL) indexes HRQoL indexes Like generic health status – try to comprehensively cover conceptual basis of health with multiple questions about health Scoring • not simple sums--these are not psychometric scales! • econometric methods used to elicit utility weights (“preferences”) for health states • 0 = dead, 1= perfect health • average preference weights from community sample of people

36. Health Promotion Overview: - the idea that good health, or wellness, is a personal and collective achievement - health promotion appears to be more successful and less costly than disease prevention

37. Health Behaviors Role of behavioral factors in disease and disorder: - successful modification of health behaviors can: - reduce deaths due to lifestyle related illnesses - delay time of death, increasing longevity - expand years of life free from chronic disease Reduce complications

38. Health Behaviors (cont.) Health Behaviors: - behaviors undertaken by people to enhance or maintain their health -health habits: - firmly established behaviors that are often performed automatically such as wearing a seatbelt, brushing one’s teeth and eating a healthy diet - primary prevention – instilling good health habits and changing poor ones

39. Health Behaviors (cont.) Practicing and changing health behaviors: Overview:

40. Health Behaviors (cont.) Barriers to modifying poor health behaviors: not knowing when to intervene to change healthhabits instability of health habits health behaviors are elicited and maintained by different factors for different people

41. Changing Health Habits Attitude change and health behavior: - educational appeals: - vivid communications - expert communicator - strong arguments at beginning and end - short, clear, direct messages - messages should state conclusions explicitly - caution with extreme messages - depending on the audience, communication should include favorable and/or non-favorable points - fear appeals - message framing

42. Thank You