WHAT IS HEALTH ECONOMICS?

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WHAT IS HEALTH ECONOMICS?

• ACCOUNTANTS CARE ONLY ABOUT
• PHYSICIANS CARE ONLY ABOUT PATIENTS
• HEALTH ECONOMISTS CARE ABOUT RESOURCE AND
  PATIENTS
• ECONOMICS IS HOW TO ALLOCATE SCARCE RESOURCES

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COST-EFFECTIVENESS ANALYSIS (CEA)
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The cheapest method of attaining the SAME GOAL
is the most cost-effective.
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CHRONIC RENAL DISEASE (Klareman)

• HOSP DIALYSIS (104,000)
• 9 years gained. CPLY11,600
• HOME DIALYSIS (38,000)
• 9 years gained. CPLY4,200
• TRANSPLANT (44,500)
• 17 years gained CPLY2,600

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COST-UTILITY ANALYSIS
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BURDEN
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Process I
Analysis, review
2. Epi parameters
1. Literature search
4. Burden Estimates
3. Country data
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BURDEN
SCENARIOS
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SCENARIOS
BURDEN
PROGRAM COSTS
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BURDEN
SCENARIOS
VACCINE PROGRAM COSTS
DISEASE TREATMENT COSTS
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Utilisation Rates for self-care, self care
medication/herbs, traditional healer, community
clinic/GP, in-hospital care, intensive care,
out-patient visits.
DISEASE TREATMENT COSTS
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Unit Costs, including Laboratory tests,
Pharmaceuticals and Medications.
COSTS OF DISEASE SEQUELLAE
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NET COST PER DALY

• Net Cost Cost of Intervention less
• Averted Treatment Costs
• DALYS sum of life years saved due to decreased
  mortality life years saved due to decreased
  morbidity reduction in caregiver burden

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DALY LOSS PER FRACTURE
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NET COST
DALY
PER LIFE YEAR GAINED LIFE SAVED CASE-PREVENTED
COST-UTILITY ANALYSIS
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COST SAVING

• IF savings in treatment costs
• gt program costs
• then we can reduce mobidity and mortality AT NO
  NET COST
• STRONG PSYCHOLOGICAL PUSH FOR PROGRAMME

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VERY COST EFFECTIVE

• Project considered acceptable in relation to
  resources available in individual countries
• CPDALY lt GNP per head

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COST EFFECTIVE

• Project considered acceptable in relation to
  resources available in individual countries
• CPDALY lt 3 x GNP per head

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ALBANIA has 1,120 GNP per Head, CPDALY for
HIB347

• CPDALY lt 3 x GNP per head
• VERY cost-effective if
• WHO report, says project is cost-effective if
• CPDALY lt GNP per head

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Disease Clubs

• Many donors adopt specific diseases, creating
  jobs and disease clubs, who advocate using
  burden data, but avoid true comparisons of
  interventions using CEA.

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INFECTIOUS NCD

• Good efficacy data, short length of trials
• Hard to model herd immunity

• Poor efficacy data due to long term needed for
  results (statins, latency period)

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Prevention Programmes

• Eg smoking cessation or dietary control
• Very little population based efficacy data as
  trials usually were on specific populations such
  as persons employed in factory etc.

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GCEA THREE PROGRAMME EXAMPLE

• A Operation on rare disease (Cost 1m, QALYS
  saved 1)
• B Operation and drug treatment for rare
  disease (Cost 1,001,000, QALYS saved 2)
• C Preventive Nutritonal Campaign (Cost
  1,001,000, QALYS 500)

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B
A
C
1m
Cost 1,001,000 QALY500 CPQALY 2,000
A to B, get 1 QALY for 1000 CPQALY ,1000
0
1
2
500
QUALYS
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INCREMENTAL CEA

• CHOOSE B SINCE CPQALY 1,000 cf
• 2000 for nutrition programme

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CPQ1,000,000
B
A
C
1m
CPQ 500,500
CPQ2,000
0
1
2
500
QUALYS
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GENERALISED CEA

• CALCULATE NULL SETTING WHERE NO INTERVENTION
  OCCURS
• CALCULATE ALL INTERVENTIONS WITH RESPECT TO NULL
• CHOOSE INTERVENTION C AND GAIN
• 2000-2 1998 QALYS

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COST per QALY ()
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CEA or CUA

• TRANSPARENT, MORE DEMOCRATIC METHOD OF CHOOSING
  PROGRAMMES THAN BY MARKET, PRESSURE GROUPS, DONOR
  GROUPS ETC.
• BIASED AGAINST ELDERLY AND HANDICAPPED!
• MORE EFFICIENT METHOD IN TERMS OF MAXIMISING
  HEALTH OUTPUT (DALYS- reflecting mortality and
  morbidity gains)

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HEALTH ECONOMICS
WITHOUT
HEALTH ECONOMICS
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THANK YOU......opportunity cost