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Fundamentals of Health Economics PowerPoint Presentation

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This medical PowerPoint presentation is about health economics, a branch of economics that focuses on the allocation of resources and the study of economic behaviors in healthcare systems. The goal of health economics is to improve the efficiency, effectiveness, and equity of healthcare delivery by analyzing how individuals, healthcare providers, and government entities allocate scarce resources.

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Published on : Jun 23, 2023 | Views : 541 | Downloads : 0

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Slide 1-

Fundamentals of health economics: A user guide to the Disease Atlas 1
Slide 2-

Table of Contents:1) Introduction to health economics2) User guide to the Disease Atlas
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Why is health economics relevant to healthcare professionals? 3 1. Beecroft. BMJ Opinion 2016, https://blogs.bmj.com/bmj/2016/02/29/claire-beecroft-why-all-medical-students-need-an-education-in-health-economics/; 2. Kernick. Postgrad Med J 2003;79(929):147–150; 3. Jain. Perspect Med Ed 2016;5:45–7 “…it is time to accept that basic health economics should form part of the core medical curriculum – it is no longer a ‘niche’ topic for those with interest in this aspect of healthcare”1 “An understanding of some basic economic principles is essential for all practitioners not only to understand the useful concepts the discipline can offer but to appreciate its limitations and shortcomings”2 “Political expectations are growing that hospital doctors will get to grips with finances and be more involved in budget management and commissioning “But for many doctors a role in managing budgets or improving efficiency seems an overwhelming task, without much background knowledge, or training”3
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1) Introduction to health economics
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Economics is based on the idea that there will never be enough resources to satisfy the demand for them – the principle of scarcity2 This means that, in healthcare systems, the growth of healthcare resources is outstripped both by the demand for those resources and by the number and cost of treatment options that become available,1,2 driven by several factors:3 Demographic change; as individuals live longer, there is a greater proportion of elderly people requiring healthcare, further constraining welfare systems Improvements in health technology mean that more pharmacological, surgical, and diagnostic treatments are available The expectations individuals have of a healthcare system rise over time Time Resources available Demand for healthcare resources Number of intervention options The economics of healthcare 5 1. Kernick. Postgrad Med J 2003;79(929):147–150; 2. Phillips. Health Economics: An Introduction for Health Professionals. Blackwell, 2005;3. Drummond. An Introduction to Health Economics. Brookwood Medical Publications, 1995 The economics of healthcare1,2 Demand or availability
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e.g., lost productivity at work, unemployment,unpaid caregiver time The costs of healthcare 6 Treatment options use healthcare resources, in the form of direct and indirect costs:1 Direct costs relate directly to a treatment, e.g., drug acquisition costs, doctor and nursing staff time Indirect costs relate to losses to society, e.g., lost productivity at work, unpaid caregiver time Indirect costs are not always considered, and there is a level of debate about their relevance; an individual’s work is typically covered in their absence by another person, so is there really a loss to society when the individual is off sick?2 Sometimes there are multiple treatment options available, each with their own benefits. In this case, a choice has to be made about which treatment option to use 1. Phillips. Health Economics: An Introduction for Health Professionals. Blackwell, 2005;2. Drummond. An Introduction to Health Economics. Brookwood Medical Publications, 1995 Directcosts e.g., drug costs Indirect costs Societal costs e.g., homelessness, incarceration
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Weighing up costs and benefits of treatments 7 All treatments are associated with a cost1,2 Resources are allocated to one healthcare area at the expense of investment in another; e.g., if more money is spent on cancer treatment, then that same money cannot be spent on treating mental disorders1,2 To be able to answer the question, “Is the increase in cost between different treatments worth paying?” some measure of the benefits of each drug is needed, so that the treatment costs can be considered against the benefits when comparing alternative treatment options Measures of benefit include years of life saved, events averted1 (e.g., psychotic relapse), and number of symptom-free days, DALYs? 1. Kernick. Postgrad Med J 2003;79(929):147–150; 2. Phillips. Health Economics: An Introduction for Health Professionals. Blackwell, 2005 Benefit Cost - + Feasibility
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Cost–effectiveness comparisons 8 When the treatment costs are known and a metric for benefit, or effectiveness, has been established, treatment options can be compared and analysed on a cost–effectiveness plane1 It might be clear that one treatment is more effective and less costly (i.e., dominant) than an alternative. Sometimes, the situation is less clear-cut; an alternative treatment can be more effective and also more costly1,2 Discerning the value of alternative treatment options requires health economic evaluations to be performed2 1. Phillips. Health Economics: An Introduction for Health Professionals. Blackwell, 2005; 2. Kernick. Postgrad Med J 2003;79(929):147–150 Cost Benefit (effectiveness) The new treatment has greater benefits, but is more costly The new treatment has fewer benefits, and is also more costly The existing treatmentis said to ‘dominate’ The new treatment has fewer benefits, but is less costly The new treatment has greater benefits and is less costly The new treatment is said to ‘dominate’ The cost–effectiveness plane1
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Types of health economic evaluations 9 DALY=disability-adjusted life year; QALY=quality-adjusted life year 1. Areda et al. Br J Pharmaceut Sci 2011;47(2):231–240; 2. Drummond. An Introduction to Health Economics. Brookwood Medical Publications, 1995;3. York Health Economics Consortium website. https://www.yhec.co.uk/glossary/budget-impact-analysis
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Types of budget-impact models 10 Adapted from: York Health Economics Consortium website. https://www.yhec.co.uk/glossary/budget-impact-analysis; Lundbeck Institute Campus website. World map, draft; Mtech website. http://www.mtechaccess.co.uk/all-services/budget-impact-modelling/;Silva et al. Epidemiol Serv Saude 2017;26(2):421–424 Schizophrenia: $10 million, 1.7% impact Total budget: $600 million, 100%
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2) User guide to the Disease Atlas
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Incidence and prevalence 1. Oxford. Concise Colour Medical Dictionary. 4th edition, 2007 12 Incidence is a measure of morbidity based on the number of new events (such as episodes of an illness, or occurrence of a disorder) in a given time period,1 usually expressed as a rate: number of new events per 1,000 of the population, or as a percentage Prevalence is a measure of morbidity based on the current sickness of a population,1 usually expressed as a rate: number of affected individuals per 1,000 of the population, or as a percentage, or as a raw number representing the total number of cases in that population
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Perfect health: 0.00 Measles: 0.15 Tuberculosis: 0.27 Respiratory tract infection: 0.28 Femur fracture: 0.37 Parkinson’s disease: 0.39a Schizophrenia: 0.53 MDD: 0.60a Alzheimer’s disease: 0.64 Spinal cord injury: 0.73 Terminal cancer: 0.81 Health utility scores Health utility scores (disability weights) can be generated using several interview and questionnaire methods, including the examples shown here1 13 aDisability weights are presented for untreated condition; MDD=major depressive disorder 1. Phillips. Health Economics: An Introduction for Health Professionals. Blackwell, 2005; 2. Prüss-Üstün et al. Introduction and methods. Assessing the environmental burden of disease at national and local levels. WHO, 2003; 3. WHO. Global Burden of Disease 2004 Update. WHO, 2008 Example disability weights2,3 1. Standard gamble1 Individuals are presented with a choice between a certain health state (e.g., the current state), or a gamble with one better (e.g., perfect health) and one worse (e.g., death). The odds are adjusted until the individual takes the gamble, e.g., a 10% chance of dying against a 90% chance of being cured back to perfect health 2. Time trade-off1 Individuals are asked how many years of perfect health they would trade for their life expectancy in their current health state – what proportion of their life they would sacrifice to be cured of a certain condition 3. Visual-analogue rating scales1 Individuals are asked to mark along a scale, where a certain health state lies:
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QALYs and DALYs (I) A QALY is the product of years of life lived, and the health utility score associated with a health state:1,2 A year of perfect health is 1 QALY, a year in a health state rated 0.5 (half perfect health) is 0.5 QALY, and 5 years in the 0.5 health state is 2.5 QALYs1,3 1 QALY = 1 year of perfect health1 14 A DALY is the sum of the years of life lost (YLL) due to premature death, and years lived with disability (YLDs):4 1 DALY = 1 lost year of healthy life5 DALY=disability-adjusted life year; HRQoL=health-related quality of life; QALY=quality-adjusted life year; YLD=years lived with disability; YLL=years of life lost 1. Sassi. Health Policy Plan 2006;21(5):402–408; 2. Gold et al. Ann Rev Public Health 2002;23:115–134; 3. Phillips. Health Economics: An Introduction for Health Professionals. Blackwell, 2005; 4. Prüss-Üstün et al. Introduction and methods. Assessing the environmental burden of disease at national and local levels. WHO, 2003; 5. Murray & Lopez. The Global Burden of Disease. WHO, 1996 YLL YLD + YLL = N x L Where N is number of deaths,L is standard life expectancy YLD = I x DW x L Where I is number of incident cases, DW is the disability weight, and L is average duration of disability Years of life Utility score x
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QALYs and DALYs (II) QALYs The area under this curve is the QALYs accumulated by the person over this portion of his or her lifetime – the area is approximated by summing the areas of the rectangles 15 DALYs Total DALYs – the years lost from an ideal lifetime living to the maximum life expectancy in full health – are approximated by summing the areas of the rectangles above the curve Adapted from: Gold et al. Ann Rev Public Health 2002;23:115–134 Years Health-related quality of life Death Years Degree of disability Life expectancy Death 0 1 1 0
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How DALYs work in practice for an individual This is John He is a Canadian man, and was born in 1940 He developed Alzheimer’s disease (AD) at the age of 66 In 2012, he died aged 72 16 A DALY is the sum of the years of life lost (YLL) due to premature death, and years lived with disability (YLDs):1 The WHO associates AD with a utility of 0.6 (in other words, a utility loss of 0.4)1 throughout the 6 years that John lived with AD YLL – the mortality part of the DALY is 8 (because John died aged 72 and not aged 80,a a difference of 8 years) YLD – the morbidity part of the DALY is 3.6 (6 x 0.6 = 3.6) This is a total of 11.6 DALYs – 11.6 years of healthy life lost a80 years was the life expectancy of a Japanese male, which is used as the male benchmark for DALYs2 AD=Alzheimer’s disease; DALY=disability-adjusted life year; WHO=World Health Organization; YLD=years lived with disability; YLL=years of life lost 1. Prüss-Üstün et al. Introduction and methods. Assessing the environmental burden of disease at national and local levels. WHO, 20032. Murray & Lopez. The Global Burden of Disease. WHO, 1996 YLL YLD +
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Direct costs Medical direct costs: Physician visits Hospitalisation costs Pharmaceuticals Non-medical direct costs: Social services Special accommodation Costs incurred by the family (e.g., home modificationsa) Indirect costs Lost productivity due to absenteeism, presenteeism, or early retirement Informal care Disability payments Cost per patient 17 aSometimes considered within indirect costs Adapted from: ADI World Alzheimer Report 2015; Bovolenta et al. Clin Interv Aging 2017;12:2095–2108; Greenberg et al. J Clin Psychiatry 2003;64(12):1465–1475; Gustavsson et al. Eur Neuropsychopharmacol 2011;21:718–779; Jin & Mosweu. Pharmacoeconomics 2017;35(1):25–42; Kowal et al. Mov Disord 2013;28(3):311–318; Mudiyanselage et al. Parkinsons Dis 2017;2017:5932675; Okumura & Higuchi. Prim Care Companion CNS Disord 2011;13(3):PCC.10m01082; Teoh et al. Neuropsychiatr Dis Treat 2017;13:1979–1987; Wu et al. J Clin Psychiatry 2005;66(9):1122–1129; Yang & Chen. Parkinsons Dis 2017;2017:8762939; Zhai et al. Int J Ment Health Syst 2013;7(1):26; Zhang et al. Neuropsychiatr Dis Treat 2016;12:941–949; Zhao et al. Eur J Neurol 2011;18(3):519–526 Reporting of the ‘cost-per-patient’ metric varies depending on how the underlying analyses have been designed, which may bring uncertainty in making cross country comparisons For example, ‘direct’ costs may consider several of many different parameters; ‘indirect’ costs may, or may not, be included It is important to bear this in mind when comparing cost-per-patient values using tools such as the Lundbeck Institute Disease Atlas
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Example: $20,000 per patient, prevalence 0.2%, population 50,000 people The total prevalence of the condition in the whole population is: 50,000 x 0.002 = 100 individuals The budget impact is this prevalence multiplied by the cost per patient 100 x $20,000 = $2 million Budget impact To calculate the impact that a particular illness has on a healthcare budget, the prevalence of that illness is multiplied by the estimated cost per patient 18 Cost per patient Totalprevalence x
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Example: a budget impact of $2 million and a total budget of $20 million This means that 5% of the healthcare budget is spent on this particular illness Disease investment Budget impact is usually presented as a proportion of the total healthcare spend, by dividing the budget impact by the annual healthcare budget 19 Budget impact = $2 million Total budget Budget impact $2 million $20 million = 5% ( ) x100 Total healthcare budget
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Summary Health economics provides useful insights into how healthcare can be organised and financed, and provides frameworks to address the values of different interventions in a explicit and consistent manner1 QALYs and DALYs provide a common currency, formalising the effect of a illness or a treatment on the quality and quantity of an individual’s life2 The Lundbeck Institute Campus Disease Atlas is an interactive tool that can be used to display and compare health statistics for certain conditions, by region and country:3 Prevalence – the proportion of a population that experience an illness DALYs – a measure of disease burden expressed as years of healthy life lost Budget impact – the total cost of the disease for all patients Disease investment – the proportion of the total health care expenditure that is spent on the disease 20 DALY-disability-adjusted life year; QALY=quality-adjusted life year 1. Kernick. Postgrad Med J 2003;79(929):147–150; 2. Gold et al. Ann Rev Public Health 2002;23:115–134; 3. Lundbeck Institute Campus website. World map, draft