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Health Economic Evaluation

Health Economic Evaluation. Nusaraporn Kessomboon , MSc(Health Economics), PhD. Content. Definitions, principles Methods Some examples. Unique nature of health as a good. Non-transferable goods Outcome of an intervention is always uncertain for an individual Supply induce demand

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Health Economic Evaluation

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  1. Health Economic Evaluation Nusaraporn Kessomboon , MSc(Health Economics), PhD

  2. Content • Definitions, principles • Methods • Some examples

  3. Unique nature of health as a good • Non-transferable goods • Outcome of an intervention is always uncertain for an individual • Supply induce demand • Externality

  4. Health Economics Applying economic principles and theories to health and to the health care sector

  5. Health Economic Evaluations Are Just One Part of Health Economics Health Economics Health Economic Evaluation other topics in health economics: optimal size of hospitals, optimal payment for physicians, optimal level of co-payment by patients,….

  6. Definition of Health Economic Evaluation The comparative analysis of alternative courses of action in terms of BOTH their costs and health consequences Pharmaco-economic evaluation = if at least one drug is involved

  7. The Different Steps of Evidence • Can it work? = Efficacy • Does it work in reality? = Effectiveness • Is it worth doing it, compared to other things we could do with the same money?= Cost-effectiveness = Efficiency

  8. Difficult questions and difficult answers ... • which services to provide? • how much to provide? • at what stage in the disease process to provide it? • to whom it should be provided?

  9. Economic Evaluation • costs (inputs) and consequences (outputs) • comparison of two or more alternatives

  10. Economic Evaluation • Partial Evaluation single programme two/more programmes • Full Economic Evaluation two/more programmes

  11. Economic Evaluation 1. PARTIAL EVALUATION 1.1 single programme • 1A Outcome description • 1B Cost description • 2 Cost-outcome description

  12. 1. PARTIAL EVALUATION 1.2 two or more programmes • efficacy • effectiveness • cost analysis

  13. 2. FULL ECONOMIC EVALUATION • two or more programmes • both costs (inputs) and consequences (outputs)

  14. 2. FULL ECONOMIC EVALUATION • Cost-minimization analysis • Cost-effectiveness analysis • Cost-utility analysis • Cost-benefit analysis

  15. Decision making

  16. The use of CE or CU ratios as a decision rule CE ratio = the difference in costs divided by the difference in outcome ∆C= CA - CB` ∆E QALYA - QALYB

  17. ต้นทุนความเจ็บป่วย (Cost of Illness, COI) 1. ต้นทุนตรง (Direct cost) 1.1 ต้นทุนตรงทางการแพทย์ 1.2 ต้นทุนตรงที่ไม่เกี่ยวกับการแพทย์ 2. ต้นทุนทางอ้อม (Indirect cost) 2.1 ความพิการ (Morbidity) : การสูญเสียรายได้เนื่องจากการเจ็บป่วย ความพิการ 2.2 การตายก่อนวัยอันควร (Mortality)

  18. ต้นทุนความเจ็บป่วย (Cost of Illness, COI) 3. ต้นทุนที่จับต้องไม่ได้ (Intangible cost) เช่น ความเจ็บปวด ความทุกข์ทรมานจากการเจ็บป่วย

  19. COST OF ILLNESS

  20. ขั้นตอนการคำนวณต้นทุนความเจ็บป่วยขั้นตอนการคำนวณต้นทุนความเจ็บป่วย 1.) กำหนดแง่มุมในการประเมิน 2.) ระบุรายละเอียดของวิธีการรักษา 3.)กำหนดรายละเอียดของทรัพยากรที่ใช้ 4.) ประเมินค่าของทรัพยากรที่ใช้

  21. ขั้นตอนการคำนวณต้นทุนความเจ็บป่วยขั้นตอนการคำนวณต้นทุนความเจ็บป่วย 5.) ระบุทรัพยากรอื่น ๆ อาจจะเป็นต้นทุนที่มองไม่เห็น เช่น ผลกระทบทางเศรษฐศาสตร์ที่มีต่อครอบครัว เมื่อเกิดการเจ็บป่วย ต้นทุนในลักษณะนี้มักจะไม่นำมาคำนวณเนื่องจากมีความซับซ้อน แต่ควรกล่าวถึงในรายงานการศึกษา 6.) วิเคราะห์ความอ่อนไหว

  22. ต้นทุนต่อหน่วยบริการ

  23. Unit cost determination System analysis NRPCC RPCC PS LC+MC+CC LC+MC+CC LC+MC+CC TDC TDC TDC IDC from NRPCC IDC from RPCC (cost allocation) (cost allocation) Full cost of PS = (IDC+DC) Volume of care provided Unit cost

  24. Consequences analysis • Monetary valuation : benefits • Single outcome : effectiveness • Multiple outcome : utility

  25. Monetary valuation : benefits • Human capital approach • Revealed preference • Stated preference

  26. Revealed preference • extra earnings of construction workers in risky occupations over safe occupations • not appropriate in the healthcare field due to consumer ignorance and zero or subsidized price at the point of use (Arrow,1963; Culyer,1971; Mooney,1986)

  27. Stated preference • Contingent valuation Hypothetical scenarios • Conjoint analysis

  28. Single outcome : effectiveness • Immediate outcome : symptom free • Intermediate outcome : no of ulcer prevented • Final outcome : life years saved

  29. Multiple outcome : utility • Non-preference-based measures of health status : QOL not utility • Preference-based measures of health status : QALYs

  30. Non-preference-based measures of health status • standardized questionnaires • to assess patient health across broad areas : symptoms, physical functioning,work and social activities,and mental well-being

  31. Non-preference-based measures of health status (cont.) • can be disease-specific or generic • can generate a profile of scores, or a single index • usually, scoring procedures (e.g.SF-36 assumes equal weighting for most items.)

  32. Non-preference-based measures of health status (cont.) • to assess the relative efficiency of interventions in very limited circumstances • 3 components to the scoring: (1) equal weighting (e.g.the SF-36) (2) weightings to combine items (3) combined into an overall total score using a set of weigh.(not usually done)

  33. Non-preference-based measures of health status (cont.) • For clinical purposes : present separate scores by dimension.

  34. Preference-based measures of health status • standardized questionnaires • assess patient health across broad areas including symptoms, physical functioning,work and social activities,and mental well-being • can be disease-specific or generic • a single index based on people preferences (e.g.EQ-5D, HIU)

  35. Preference-based measures of health status (cont.) • value of 0-1 • 1 is equivalent to full health • 0 is dead • known as health state utilities • used to calculate quality-adjusted life-years, QALYs

  36. Preference-based measures of health status (cont.) • 5 preference-based measures of health • Quality of Well-Being Scale (QWB) : lengthier interview • Rosser’s disability/ distress sale : self-administration • Health Utility Index (HUI; mark I to III): self-administration

  37. Preference-based measures of health status (cont.) • EQ-5D (EuroQoL) : self-administration • EQ-15D : self-administration • no consensus amongst health economists as to which is better.

  38. Theoretical basis of preference-based • consumer theory • predicting the choices of individuals between different bundles of commodities (Deaton and Muelbauer,1980)

  39. Theoretical basis of preference-based (cont.) • assumes individuals choose the bundle of commodities which maximizes utility subject to budget constraint • utility is an indicator of the consumer’s strength of preference

  40. Theoretical basis of preference-based (cont.) • a person deciding whether or not to purchase health services will consider • the likely effects they are expected to have on their health • whether the benefits of these effects are worth the costs of the health care

  41. Theoretical basis of preference-based (cont.) • Trading • e.g. have an operation associated with the risk of mortality VS life extending chemotherapy with side effects

  42. Theoretical basis of preference-based (cont.) • The main economic theory of decision-making under uncertainty is expected utility theory (EUT) • Individuals choose between prospects as to maximize their expected utility (Von Neumann and Morgenstern,1947)

  43. Practice of measuring preferences for health • Paired Comparison (PC) • Visual analogue scale (VAS) • Magnitude estimation (ME) • Standard gamble (SG) • Time trade-off (TTO :Torrance, 1986) • Person trade-off (PTO : Nord, 1992)

  44. Visual analogue scale (VAS) • Category rating (CR) • Rating scale (RS) • Visual aids e.g., “feeling thermometer” are used • widely used to value health states : QWB, HUI-II and HUI-III transform VAS values into SG

  45. Standard gamble • two alternatives • 1 : treatment with two possible outcomes: return to normal health and lives for an additional t years(P), or dies immediately (1-P) • 2 : has the certain outcome of chronic state i for life (t years) (Torrance, 1986)

  46. Standard gamble • Probability P is varied until the respondent is indifferent between the two alternatives, at which point the required preference value for state i is simply P, that is Ui = P(Torrance, 1986)

  47. Standard gamble (SG) Utility 1.0 0 Ui Gamble 1 EU1 = EU2 (p*1.0)+[(1-p)*0] = 1*Ui

  48. Time trade-off • two alternatives • 1:state i for time t (life expectancy of an individual with the chronic condition) followed by death • 2: healthy for time x; x < t followed by death(Torrance, 1986)

  49. Time trade-off • time x is varied until the respondent is indifferent between the two alternatives, at which point the required preference value for state i is given by Ui = x/t(Torrance, 1986)

  50. Time trade-off (TTO :Torrance, 1986) x*1.0 = t*Ui x / t = Ui

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