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Improving the cost-effectiveness
of addiction treatment centres
Professor Larry Phillips
London School of Economics
and
Facilitations Limited
iCAAD
Conference
7 May 2018
2
Value Probability Trade-offs
SMART CHOICES
3
Decision Analysis
3
“The spirit of decision analysis
is divide and conquer:
decompose a complex problem
into simpler problems, get one’s thinking
straight on these simpler problems, paste
these analyses together with logical glue, and
come out with a program of action for the
complex problem.”
Howard Raiffa 1968, Decision Analysis, p. 271
MCDA (Multi-Criteria
Decision Analysis)
• An extension of decision
theory that covers
decisions with multiple
objectives.
• A methodology for
appraising options on
individual, often
conflicting criteria, and
combining them into one
overall appraisal.
4
A system not based on MCDA
5
MCDA converts all
input evaluations of
decision outcomes
into the common
currency of value
added (extent to
which objectives are
met).
• A one-to-three-day workshop
• To resolve important issues of concern
• Attended by key players who represent the
diversity of perspectives on the issues
• Facilitated by an impartial specialist in group
processes & decision analysis
• Using a requisite (just-good-enough)
model created on-the-spot to help
provide structure to thinking
Decision Conference
6
7
Based on the Priority Index, PI
COST
RISK-
ADJUSTED
BENEFIT
VALUE
for
MONEY
Use MCDA to combine all
benefits onto one preference
value scale for each project.
Risk adjust, e.g., multiply each
project’s overall benefit by
probability of success.
Commissioning health care
8
Purpose:
• Provide basis for
allocating an
additional £1m
on a recurrent
basis, 2008-12
Objectives:
• Increase health
(less mortality,
more QoL)
• Reduce health
inequalities
• Operationally &
politically feasible
Isle of Wight PCT
Areas
Projects
Efficient frontier
9
All 21 projects (black
point at top of each
triangle) stacked in
order of their triangle’s
slopes.
Cumulative expected
benefits versus costs
Green ‘football’
contains all possible
portfolios (2,304
combinations of
projects).
The affordable frontier package
10
‘F’ project and the 7 to
the left cost £985,000.
They are the best
value-for-money.
Different portfolios can
be explored with the
software (Equity 3) to
find a combination of
projects that is
acceptable to the
decision makers.
Airoldi, M., Morton, A., Smith, J., & Bevan, G. (2011). Healthcare prioritisation at the local level: a socio-technical approach.
In G. Bevan (Ed.), Priority Setting for Population Health (pp. 1-24). London: London School of Economics & Political Science.
The affordable projects
11
Force ‘Prevention’ into the frontier
12
Putting the ingredients together
= Smart choices!
+
Group judgementMulti-criteria model
In summary: THINK TRIANGLES
14
A guide to further reading
Harvard University Press,
1992.
Shows how to articulate
values and make wise
decisions.
15
Wiley, 2014, 5th Ed.
MCDA in Chapter 3,
prioritisation and
resource allocation
in Chapter 14.
Department for
Communities and
Local Government
Introduction to MCDA
in Chapter 6
Download free copy at:
http://eprints.lse.ac.uk/12761/1/Multi-criteria_Analysis.pdf

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PROFESSOR LARRY PHILLIPS - IMPROVING THE COST-EFFECTIVENESS OF ADDICTION TREATMENT CENTRES.

  • 1. Improving the cost-effectiveness of addiction treatment centres Professor Larry Phillips London School of Economics and Facilitations Limited iCAAD Conference 7 May 2018
  • 3. 3 Decision Analysis 3 “The spirit of decision analysis is divide and conquer: decompose a complex problem into simpler problems, get one’s thinking straight on these simpler problems, paste these analyses together with logical glue, and come out with a program of action for the complex problem.” Howard Raiffa 1968, Decision Analysis, p. 271
  • 4. MCDA (Multi-Criteria Decision Analysis) • An extension of decision theory that covers decisions with multiple objectives. • A methodology for appraising options on individual, often conflicting criteria, and combining them into one overall appraisal. 4
  • 5. A system not based on MCDA 5 MCDA converts all input evaluations of decision outcomes into the common currency of value added (extent to which objectives are met).
  • 6. • A one-to-three-day workshop • To resolve important issues of concern • Attended by key players who represent the diversity of perspectives on the issues • Facilitated by an impartial specialist in group processes & decision analysis • Using a requisite (just-good-enough) model created on-the-spot to help provide structure to thinking Decision Conference 6
  • 7. 7 Based on the Priority Index, PI COST RISK- ADJUSTED BENEFIT VALUE for MONEY Use MCDA to combine all benefits onto one preference value scale for each project. Risk adjust, e.g., multiply each project’s overall benefit by probability of success.
  • 8. Commissioning health care 8 Purpose: • Provide basis for allocating an additional £1m on a recurrent basis, 2008-12 Objectives: • Increase health (less mortality, more QoL) • Reduce health inequalities • Operationally & politically feasible Isle of Wight PCT Areas Projects
  • 9. Efficient frontier 9 All 21 projects (black point at top of each triangle) stacked in order of their triangle’s slopes. Cumulative expected benefits versus costs Green ‘football’ contains all possible portfolios (2,304 combinations of projects).
  • 10. The affordable frontier package 10 ‘F’ project and the 7 to the left cost £985,000. They are the best value-for-money. Different portfolios can be explored with the software (Equity 3) to find a combination of projects that is acceptable to the decision makers. Airoldi, M., Morton, A., Smith, J., & Bevan, G. (2011). Healthcare prioritisation at the local level: a socio-technical approach. In G. Bevan (Ed.), Priority Setting for Population Health (pp. 1-24). London: London School of Economics & Political Science.
  • 12. Force ‘Prevention’ into the frontier 12
  • 13. Putting the ingredients together = Smart choices! + Group judgementMulti-criteria model
  • 14. In summary: THINK TRIANGLES 14
  • 15. A guide to further reading Harvard University Press, 1992. Shows how to articulate values and make wise decisions. 15 Wiley, 2014, 5th Ed. MCDA in Chapter 3, prioritisation and resource allocation in Chapter 14. Department for Communities and Local Government Introduction to MCDA in Chapter 6 Download free copy at: http://eprints.lse.ac.uk/12761/1/Multi-criteria_Analysis.pdf

Editor's Notes

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