MAKING THE CASE
HEALTH ECONOMICS AS APPLIED IN MEXICO
Rafael Santana, MD
1
TALK OVERVIEW
• Some data from Mexico.
• Review of Health Economics.
• Cost Effectiveness Analysis and Cost Utility Analys...
SOME DATA FROM MEXICO
Total population (2010) 112,336,538
Life expectancy at birth m/f (years) 72/78
Gross domestic income...
Demographic Transition in Mexico
Men Women
Millions
7 6 5 4 3 2 1 0 1 2 3 4 5 6 77 6 5 4 3 2 1 0 1 2 3 4 5 6 7
1975 2000 2...
DISTRIBUTION OF CAUSES OF DEATH IN MEXICO, 1955-2030
0
10
20
30
40
50
60
70
80
90
100
1955 1960 1970 1980 1990 2000 2006 2...
Epidemiological Transition in Mexico, 1955-2005
Source: INEGI/Sec Salud. Mortality Database
Ill-defined
Diabetes
Congenita...
MEXICAN HEALTH CARE SYSTEM
1. Governmental organizations: providing services for the uninsured
population (Ministry of Hea...
CHALLENGES TO THE HEALTH CARE SYSTEM
Increasing costs to treat older people and chronic diseases (Cancer,
diabetes, cardio...
TALK OVERVIEW
• Some data from Mexico.
• Review of Health Economics.
• Cost Effectiveness Analysis and Cost Utility Analys...
REVIEW OF HEALTH ECONOMICS.
• Economics is the science that deals
with the consequences of resources
scarcity.
• Economics...
ECONOMICS IS ABOUT CHOICE
Budget
Good ‘A’
Good ‘B’
11
HEALTH ECONOMICS
• Production of health care (doctors, nurses,
hospitals …).
• Distribution of health care across the coun...
1. Could it work (efficacy)?
2. Does it work (effectiveness)?
3. Does it work well (efficiency)?
ECONOMIC EVALUATION13
TALK OVERVIEW
• Some data from Mexico.
• Review of Health Economics.
• Cost Effectiveness Analysis and Cost Utility Analys...
COST-EFFECTIVENESS ANALYSIS (CEA)
Compare treatments.
Measure all costs.
Identify all outcomes
In long term treatment, dis...
COST EFFECTIVNESS ANALYSIS
DRUG A
DRUG B
BENEFITS
BENEFITS
COST
COST
TIME
16
COST-UTILITY ANALYSIS (CUA)
Compare treatments.
Measure all costs.
Identify all outcomes
Discount cost and outcomes to...
HEALTH BENEFITS
• Quality-adjusted life years (QALYs) and Disability-
adjusted life years (DALYs)
• Combine mortality with...
19
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0 10 20 30 40 50 60 70 80 90
Life years
Adjusmentfactor
DALY
QALY
QALYs and DALYs
...
B
C
A
D
more costly
increase in
health effects
decrease in
health effects
Intervention is more
costly and less effective
I...
Needs
Evaluation
Superior
More costly
Less costly
More effectiveLess effective
B
D
Needs
Evaluation
D
Inferior
C
Extra ben...
The more effective, less costly treatment dominates or if
they are equal cost, the more effective or if they are
equally e...
INCREMENTAL COST – EFFECTIVENESS RATE (ICER)
A
B
Effectiveness
Cost
EA EB
CA
CB
Costs B
Effects B
Costs A
Effects A
Costs ...
Economic
Evaluation
B
We reject
Cost +
Cost -
Effectiveness +Effectiveness -
A
D
Economic
Evaluation
We accept
C
Uncertain...
Cost +
Cost -
Effectiveness +Effectiveness -
Uncertainty
Zone
Uncertainty
Zone
Cost-effectiveness plane
25
3 GDP
1 GDP
1 Q...
TALK OVERVIEW
• Some data from Mexico.
• Review of Health Economics.
• Cost Effectiveness Analysis and Cost Utility Analys...
In 2008 was published the first GUIDE FOR ECONOMIC
EVALUATION of new drugs and technologies.
It was modified in 2011.
http...
WHAT IS IMPORTANT FOR THE GENERAL HEALTH
COUNCIL?
• Who paid for the study?
• What actually went into the study?
• How doe...
REQUIREMENTS OF CEA IN MEXICO
• Provide cost and outcomes disaggregated.
• Provide key assumption, data sources, table wit...
Theoretical values (in US$/DALY) for cost-effectiveness based on the “three times Gross Domestic
Product per capita” appro...
‘DRUMMOND’ CHECKLIST
1. Was a well-defined question posed in answerable form?
2. Was a comprehensive description of altern...
‘DRUMMOND’ CHECKLIST
6. Were costs and consequences valued credibly?
7. Were costs and consequences adjusted for different...
TALK OVERVIEW
• Some data from Mexico.
• Review of Health Economics.
• Cost Effectiveness Analysis and Cost Utility Analys...
BARRIERS
• Lack of understanding of Economic Evaluation
• Lack of trust in cost effectiveness analysis
methods
• There are...
BARRIERS
• Short-term horizon.
• Long-term horizon.
• Industry perspective, not societal perspective
• Concern about spons...
BARRIERS
IS THE EVIDENCE SUFFICIENT?
• We might need more evidence
• Costs of getting more evidence
36
IS THE EVIDENCE SUFFICIENT?
• Value of evidence (information)
• How uncertain is the decision?
• Consequences of getting t...
TALK OVERVIEW
• Some data Mexico from.
• Review of Health Economics.
• Cost Effectiveness Analysis and Cost Utility Analys...
PRESSURE ON HEALTH SYSTEM
• Demographic pressure:
• Epidemiological
• Financial
39
ECONOMIC EVALUATION
• Economic Evaluation for new drugs and technologies is
required but needs to be carefully conducted.
...
ECONOMIC EVALUATION
• Efficacy vs. effectiveness.
• Prevention vs. cure
• Other factors such as social, political, ethical...
THANKS
42
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Health Economics As Applied In Mexico

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Rafael Santana, MD

Presented during the 2013 3M Global I.V. Leadership Summit

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  • Cost- efféctiveness analysis is an Economic Evaluation that compare at least two different treatments.It identifies and measures all costs, and identifies and measures all outcomes of health care.Outcomes in these type of evaluations are intermediate outcomes of health care (effect) such as a reduction in the blood pressure or the number of diagnostic cases. In long term treatment it is important to take into account a discount rate for both, costs and outcomes. (The value of money in time)In Mexico we apply 5% discount rate for both.
  • Cost-utility analysis is similar to Cost-effectiveness analysis. It identifies and measures all costs, and identifies and measures all outcomes of health care.Outcomes in these type of evaluations are final outcomes of health care, considering patient preferences or “utility” Outcomes are health benefits.
  • Health Economics As Applied In Mexico

    1. 1. MAKING THE CASE HEALTH ECONOMICS AS APPLIED IN MEXICO Rafael Santana, MD 1
    2. 2. TALK OVERVIEW • Some data from Mexico. • Review of Health Economics. • Cost Effectiveness Analysis and Cost Utility Analysis • The role of CEA and CUA in Mexico • The barriers for implementing Economic Evaluation • Conclusion 2
    3. 3. SOME DATA FROM MEXICO Total population (2010) 112,336,538 Life expectancy at birth m/f (years) 72/78 Gross domestic income per capita (2011) $16,588 Probability of dying under five (per 1 000 live births) 16 Probability of dying between 15 and 60 years m/f (per 1 000 population) 177/95 Total expenditure on health per capita (2010) $ 959 Total expenditure on health as % of GDP (2010) 6.3 Population covered by Social Security (2010) 64.5 % For 2009 unless indicated. Source: Global Health Observatory and INEGI 3
    4. 4. Demographic Transition in Mexico Men Women Millions 7 6 5 4 3 2 1 0 1 2 3 4 5 6 77 6 5 4 3 2 1 0 1 2 3 4 5 6 7 1975 2000 2025 Annual growth rate 65 years and older: 3.8% Under 5 years old: -1.3% 85 + 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 4
    5. 5. DISTRIBUTION OF CAUSES OF DEATH IN MEXICO, 1955-2030 0 10 20 30 40 50 60 70 80 90 100 1955 1960 1970 1980 1990 2000 2006 2030 PERCENTAGE Communicable diseases, reproductive and malnutrition related diseases. Non communicable diseases Injuries 5
    6. 6. Epidemiological Transition in Mexico, 1955-2005 Source: INEGI/Sec Salud. Mortality Database Ill-defined Diabetes Congenital Abnorm.. Maternal Cond. Neuropsychiatric Cond Genitourinary Dis. Chronic Respiratory Dis. Malignant Neoplasms Malnutrition Injuries Cardiovascular Diseases. Perinatal Dis. Respiratory Inf. Diarrheal Dis. Infectious and Parasitic 35% 25% 15% 5% 5% 15% 25% 35%0% 20051955 Epidemiological backlog Emerging problems Ill-defined 6
    7. 7. MEXICAN HEALTH CARE SYSTEM 1. Governmental organizations: providing services for the uninsured population (Ministry of Health, IMSS-Oportunidades and Popular Insurance) 2. Social Security: covering workers in the formal private sector of the economy, state and federal workers, the armed forces and employees of the national oil company (IMSS, ISSSTE, ISSFAM and PEMEX) 3. Private sector: made up of an unorganized hospitals and clinics on a for-profit basis 7
    8. 8. CHALLENGES TO THE HEALTH CARE SYSTEM Increasing costs to treat older people and chronic diseases (Cancer, diabetes, cardiovascular and mental diseases) Continue to deal with infectious diseases, emerging and re-emerging diseases (TB, Influenza Pandemic, HIV, etc) Fragmentation and lack of coordination with inequity in access to care Low expenditure on health (6% GDP) High cost of new drugs and technologies 8
    9. 9. TALK OVERVIEW • Some data from Mexico. • Review of Health Economics. • Cost Effectiveness Analysis and Cost Utility Analysis • The role of CEA and CUA in Mexico • The barriers for implementing Economic Evaluation • Conclusion 9
    10. 10. REVIEW OF HEALTH ECONOMICS. • Economics is the science that deals with the consequences of resources scarcity. • Economics needs to identify the best way to use of scarce resources to satisfy human wants and needs. • Economics needs to Choose between which ‘wants’ and which ‘affords’, given our resource ‘budget’ 10
    11. 11. ECONOMICS IS ABOUT CHOICE Budget Good ‘A’ Good ‘B’ 11
    12. 12. HEALTH ECONOMICS • Production of health care (doctors, nurses, hospitals …). • Distribution of health care across the country. • How much money should the government spend on healthcare? • Economic evaluation for new drugs and technologies Health economics is the study of how (scarce) resources are allocated to and within the health economy. 12
    13. 13. 1. Could it work (efficacy)? 2. Does it work (effectiveness)? 3. Does it work well (efficiency)? ECONOMIC EVALUATION13
    14. 14. TALK OVERVIEW • Some data from Mexico. • Review of Health Economics. • Cost Effectiveness Analysis and Cost Utility Analysis • The role of CEA and CUA in Mexico • The barriers for implementing Economic Evaluation • Conclusion 14
    15. 15. COST-EFFECTIVENESS ANALYSIS (CEA) Compare treatments. Measure all costs. Identify all outcomes In long term treatment, discount cost and outcomes to reflect lower value associated with delay 15
    16. 16. COST EFFECTIVNESS ANALYSIS DRUG A DRUG B BENEFITS BENEFITS COST COST TIME 16
    17. 17. COST-UTILITY ANALYSIS (CUA) Compare treatments. Measure all costs. Identify all outcomes Discount cost and outcomes to reflect lower value associated with delay Measure the improvement on health 17
    18. 18. HEALTH BENEFITS • Quality-adjusted life years (QALYs) and Disability- adjusted life years (DALYs) • Combine mortality with morbidity in single numerical units. • Allows to account for mortality and morbidity • Value given to various states from 0 (worst) to 1 (<healthy>) 18
    19. 19. 19
    20. 20. 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 0 10 20 30 40 50 60 70 80 90 Life years Adjusmentfactor DALY QALY QALYs and DALYs 20
    21. 21. B C A D more costly increase in health effects decrease in health effects Intervention is more costly and less effective Intervention is more effective but more costly Intervention is less effective but less costly Intervention is less costly and more effective less costly Cost-effectiveness plane21
    22. 22. Needs Evaluation Superior More costly Less costly More effectiveLess effective B D Needs Evaluation D Inferior C Extra benefits compensate additional cost? Cost-effectiveness plane A 22
    23. 23. The more effective, less costly treatment dominates or if they are equal cost, the more effective or if they are equally effective, the less costly. • In the absence of dominance, find the Incremental Cost-Effectiveness Ratio (ICER) ECONOMIC EVALUATION23
    24. 24. INCREMENTAL COST – EFFECTIVENESS RATE (ICER) A B Effectiveness Cost EA EB CA CB Costs B Effects B Costs A Effects A Costs B - Costs A Effects B - Effects A Incremental Cost Effectiveness Ratio: Cost Effectiveness Ratios: 24
    25. 25. Economic Evaluation B We reject Cost + Cost - Effectiveness +Effectiveness - A D Economic Evaluation We accept C Uncertainty Zone Uncertainty Zone Cost-effectiveness plane 25
    26. 26. Cost + Cost - Effectiveness +Effectiveness - Uncertainty Zone Uncertainty Zone Cost-effectiveness plane 25 3 GDP 1 GDP 1 QALY/DALY
    27. 27. TALK OVERVIEW • Some data from Mexico. • Review of Health Economics. • Cost Effectiveness Analysis and Cost Utility Analysis • The role of CEA and CUA in Mexico • The barriers for implementing Economic Evaluation • Conclusion 26
    28. 28. In 2008 was published the first GUIDE FOR ECONOMIC EVALUATION of new drugs and technologies. It was modified in 2011. http://www.csg.salud.gob.mx/descargas/pdfs/cuadro_basico/guia_eval_insumos1 1052011.pdf Clear standards Transparency Step 1: Check and value the applications Step 2: Evaluation of evidence. Step 3: Decision ECONOMIC EVALUATION IN MEXICO 27
    29. 29. WHAT IS IMPORTANT FOR THE GENERAL HEALTH COUNCIL? • Who paid for the study? • What actually went into the study? • How does the context of the study resemble and differ from our context? • What is driving the model? • What is likely to change • Uncertainty… sensitivity of results to input parameters in model 28
    30. 30. REQUIREMENTS OF CEA IN MEXICO • Provide cost and outcomes disaggregated. • Provide key assumption, data sources, table with ingredients for model, clinical pathways explicit. • Sensitivity analysis: impact of variation of input parameters on results. • Describe relevant population and its size. • Budget impact analysis (BIA) applied to health care. • 5% discount in cost and benefits • Only 1 GDP per capita 29
    31. 31. Theoretical values (in US$/DALY) for cost-effectiveness based on the “three times Gross Domestic Product per capita” approach proposed in the World Health Organization Report 2002 (WHO 2002). **DALY, Disability-Adjusted Life-Year. * 1 GDP Country 3 GDP threshold (US$/DALY) ** Luxembourg 266,391 U.S.A. 144,336 Australia 125,992 Canada 121,260 Germany 118,368 UK 106,794 France 105,714 Japan 101,004 Italy 98,016 Spain 96,261 New Zealand 93,246 MEXICO* 16,588 Source: World Bank 2011 30
    32. 32. ‘DRUMMOND’ CHECKLIST 1. Was a well-defined question posed in answerable form? 2. Was a comprehensive description of alternatives given? 3. Was there evidence that effectiveness had been established? 4. Were all the important and relevant costs and consequences for each alternative identified? 5. Were costs and consequences measured accurately/appropriately? 31
    33. 33. ‘DRUMMOND’ CHECKLIST 6. Were costs and consequences valued credibly? 7. Were costs and consequences adjusted for differential timing? 8. Was an incremental analysis performed? 9. Was allowance made for uncertainty? 10.Did presentation/discussion of results include all issues of concern? 32
    34. 34. TALK OVERVIEW • Some data from Mexico. • Review of Health Economics. • Cost Effectiveness Analysis and Cost Utility Analysis • The role of CEA and CUA in Mexico • The barriers for implementing Economic Evaluation • Conclusion 33
    35. 35. BARRIERS • Lack of understanding of Economic Evaluation • Lack of trust in cost effectiveness analysis methods • There are no QALYs or DALYs in Mexico • Lack of confidence in extrapolation (modeling) • Weakness of evidence 34.-
    36. 36. BARRIERS • Short-term horizon. • Long-term horizon. • Industry perspective, not societal perspective • Concern about sponsorship bias 35
    37. 37. BARRIERS IS THE EVIDENCE SUFFICIENT? • We might need more evidence • Costs of getting more evidence 36
    38. 38. IS THE EVIDENCE SUFFICIENT? • Value of evidence (information) • How uncertain is the decision? • Consequences of getting the decision wrong • Number of patients who could benefit 37
    39. 39. TALK OVERVIEW • Some data Mexico from. • Review of Health Economics. • Cost Effectiveness Analysis and Cost Utility Analysis • The role of CEA and CUA in Mexico • The barriers for implementing Economic Evaluation • Conclusion 38
    40. 40. PRESSURE ON HEALTH SYSTEM • Demographic pressure: • Epidemiological • Financial 39
    41. 41. ECONOMIC EVALUATION • Economic Evaluation for new drugs and technologies is required but needs to be carefully conducted. • Actual use of Economic Evaluation is quite limited in relation to potentials • Not possible to undertake economic evaluation for all decisions. 40
    42. 42. ECONOMIC EVALUATION • Efficacy vs. effectiveness. • Prevention vs. cure • Other factors such as social, political, ethical, feasibility, human resources, context , etc. 41
    43. 43. THANKS 42
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