Burden of Disease and Health Economics: Friends or Foes?

1. Burden of Disease and Health Economics: Friends or Foes? Neil Craig Principal Public Health Advisor NHS Health Scotland 15th September 2016

2. Outline • BoD, HE and priority setting • Critique of BoD studies from HE • Counter-arguments • Example • Conclusions

3. BoD, HE and Priority Setting • Scarcity • Choices • Made on the basis of the benefits in relation to costs… • …of alternative uses of scarce resources • Informed by economic evaluation… • …generating incremental cost-effectiveness ratios - ICERs

4. HE Critique of BoD BoD studies • “Measure problems, not solutions” • “Potentially misleading” • “Lead to inefficient and inequitable resource use” Mooney and Wiseman, Health Economics, 2000

5. WHO agrees “Priority cannot be given to diseases or health problems simply because they have the largest [burden]. Additional information is required on the costs required to reduce the burden and the marginal effect of each additional unit of expenditure.” WHO Guide To Identifying the Economic Consequences of Disease and Injury, 2009

6. So are BoD studies unnecessary? • Go ‘straight to the margin’ • We don’t need to know the whole burden to compare the costs and benefits of marginal, or incremental, changes to spending on interventions that reduce the burden • True, but….

7. ICERs and CELTs • The economists’ alternatives to BoD • Incremental cost effectiveness ratios (ICERS) • Cost-effectiveness league tables (CELTs)

8. CELT of ICERs from ACE

9. But how far do CELTs take us? For population-level interventions: • there is no meaningful increment – it’s all or nothing • benefit is a function of the proportion of the population in need who respond to the intervention and the impact that has on their health • In other words, the proportion of the burden avoidable through (effective) intervention

10. Comparators What comparator do ICERs refer to? • EE measures cost-effectiveness in relation to alternatives • One alternative is to ‘do nothing’ • The consequences of ‘doing nothing’ are reflected in the current burden of disease (or can be calculated from it)

11. Population perspective • How much should we spend on each intervention in a CELT? • Do the ICERs stay the same the more or less we spend?

12. Goals of policy • “Assumes health services are purely concerned with disease reduction” (Mooney and Wiseman, 2000) But: • Many methods are primarily concerned with one thinge.g. cost/QALY studies are ‘purely concerned’ with QALY gain. • Not a reason not to do them • A reason to do them alongside (formal or informal) multi-criteria decision analysis

13. Analytical resource • “Inefficient use of very scarce analytical resources in health care” (Mooney and Wiseman, 2000) But: • Analytical resources aren’t the only resources that are scarce. • Decision-making/policy-making resources are scarce too, with substantial fixed costs • The bigger the issues we can address with these scarce resources the greater the potential impact - economies of scale

14. WHO? Agrees with the HE critique up to a point: • insufficient as a basis for setting priorities and allocating resources in health – for which data on effectiveness are also needed But: • economic burden studies may help to identify possible strategies for reducing the cost of disease or injury via appropriate preventive action or treatment strategies WHO Guide To Identifying the Economic Consequences of Disease and Injury, 2009

15. WHO Suggests • primary purpose [of economic impact studies]should be to inform decision makers [about] the magnitude of a disease or a health problem as a complement to methods of deciding how scarce resources should be used to improve health. • A secondary aim of a small sub-set of economic impact studies has then been to isolate the fraction of economic costs attributable to a certain disease or risk factor that is avoidable via a range of effective policy measures or interventions. From a health policy perspective, estimation of these avoidable costs … should be strongly encouraged.

16. BOD/economic evaluation: ACE • Analyses were based on a set of disease and risk factor parameters pertaining to the Australian population from the Australian Burden of Disease study • No single approach was sufficient – necessary to use a range of criteria and info sources to set priorities

17. Conclusions • Burden of disease data, on their own, cannot be used as a basis for priority setting • They complement other forms of analysis and priority setting

18. Or as WHO put it… “Very important to stress .. that the purpose of studying the economic impact and burden of disease is distinct from analysis linked to the allocation of scarce resources to a range of possible health interventions… While these two analyses are inter-related, the purposes of these two exercises should not be confused.” WHO Guide To Identifying the Economic Consequences of Disease and Injury, 2009

19. Questions • What kinds of economic analysis have you carried out using burden of disease data? • What methods have you used for economic analysis? • What are the practical challenges/barriers to analysis?