C5 - What the heck are economists talking about - Chuck - Salon F
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C5 - What the heck are economists talking about - Chuck - Salon F






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C5 - What the heck are economists talking about - Chuck - Salon F Presentation Transcript

  • 1. What the heck areeconomist talking aboutAnderson Chuck, PhDDirector of Economic Evaluation and Analytics
  • 2. OutlineEveryone knowswhat Economistsare TalkingChallenge is how tooperationalize it in a DecisionFrameworkWhat theHeck isLambda?PracticalChallengesLead topresentations
  • 3. Basic Idea Demand for health care services are greaterthan what society can afford.
  • 4. Basic Idea How do decision makers trade off healthresources and the benefits associated withhealth care programs/services/interventions?
  • 5. Basic IdeaHealth Care BudgetHealth OutcomesServices / ProgramsLives savedDiseasespreventedCures HRQLEtc.OUPUT/OUTCOMESALLOCATIONALLOCATIONServices / ProgramsALLOCATIONINPUTSPhysiciansNursesOther professionalsEquipmentSuppliesEtc.
  • 6. IntuitiveHealth Care BudgetCardiologyPrimary Health CareMental HealthTertiary CareData Management
  • 7. Challenge is how to operationalized in adecision framework?Incorporate allrelevant evidenceIndicate level ofuncertainty inevidence andanalysisCompare fullrange of relevantalternativesAssessment ofValue for Money
  • 8. Interpretation/Policy Implications Vary byType – CEA vs CBAOutcomesOne-dimensional NaturallyOccurring Units (e.g. life year =CEATypes differ in how output isdefined.Multidimensional healthoutcomes expressed in healthutilities (e.g. QALYs) = CUAHealth Outcomes areexpressed in dollars (e.g.value of statistical life) = CBAHow output is defined determineswhat is being maximized in theproduction functionWhat is being maximized hasdifferent interpretations andresulting decision rules/policyimplications
  • 9. CEA and CUAObjective is to Maximize Technical EfficiencyICERs inform the cost to produce anadditional unit of output. They do notdirectly tell us whether the additionaloutput is worth the cost.CostICEROutcome∆=∆Given an objective, what is the cheapest way ofachieving that objectiveWhether additional output is worth the cost dependson an external standard (λ).If technology is more effective and more costly,adopt technology if: λ > ICER of the technology
  • 10. Δ COSTSΔOutcomesNW quadrantAlternative is lesseffective and morecostlyNE quadrantAlternative is moreeffective and morecostlySW quadrantAlternative is lesseffective and lesscostlySE quadrantAlternative is moreeffective and lesscostlyHealth Economic Evaluation is defined as acomparison between at least two alternative coursesof action of both their costs and outcomes
  • 11. Straight line from originrepresents ICERMost often, new health technologies produce greaterbenefit but at greater costsA (status quo)BBut how do you know ifoutcomes worth the cost?ΔCOSTSΔ OutcomesCosts this much moreTo get this much morebenefitCostICEROutcome∆=∆
  • 12. Δ CostsΔOutcomes
  • 13. What the heck is λ? Societal WTP for unit outcome?? reconcile CBA with CEA literature But societal preferences ≠ operationalrealities Represents the value for money associated withdoing other things with those resources (i.e.what was foregone) Comparisons with other programs directly Comparisons to a threshold representing existingprograms or what is displaced/foregone
  • 14. Practical Challenges Payers/Health System Difficult to identify what the next best alternative is Local = PBMA Overall system = thresholds Industry Implicit that λ would decrease over time? Measurement An agreed to definition of value Qualitative, quantitative, how to incorporate othervalues
  • 15.  How far one can go without quantifying OCs? Janet Martin. Quantifying opportunity costs: NICE experienceand OHTAC experience Mike Paulden Incorporating the unquantifiable Katherine Duthie Policy decisions Diane McArthur
  • 16. Thank you!