Class lecture on priority setting in health care

1. Prioritization in Healthcare

2. Parent with Three Children
You see a parent. He has diabetes for which he takes
medicines, on a diet, and exercise. He works at an office
(junior management) and is the sole earning member of
the family. They three children: one suffers from
Chronic Asthma and needs regular medication, the
secod has a congenital heart disease and will need
surgery soon, and the third just got diagnosed with
tonsillitis and the doctor wants him operated urgently.
What will be your advice to the parent to manage this?

3. Clinic Director
X has set up a clinic around Avonhead (an
upscale yet recent immigrant dense
neighbourhood). The population that the clinic
serves is aging (60% above 65 years and 40%
are young families (35 years average age with
two kids).
X wants to set up a suite of services to offer to
this community but has resource limitations.
What mix of services you will advise him?

4. Range of Services
Y is a consultant and wants to work in areas of
public health and preventive health services at a
rural township where a large farming community
exists. The average age of the population is about
55 years, most are locally based farmers, or work
in sheep shearing sheds, or have work with
farming machineries.
With Limited Budget, what kind of services would
you advise Y to plan for?

5. How to Play God
Z is a venture capitalist and just got an offer
from the Bill and Melinda Gates foundation
that he has 5 million dollars to spend but has to
pick ONLY two disease
control/prevention/public health issues in
Canterbury. Z comes to you for advice.
What will you advise Z?

6. Sequence of This Presentation
• The Problem
• Describe Priority Setting in Healthcare
• Outline How Priority Setting in Healthcare
Adds Value
• Outline the Challenges of Priority Setting in
Healthcare
• Discuss the Processes, Approaches and
Frameworks
• Discuss How to Identify Who Lost
• Revisit the Issues

7. Dilemma
• Imagine you have only $1000 to spare to
pay for treatment
• Who will get treatment?
$1000 to Spend
Child with appendicitis
needs an urgent
surgery, overall cost
$1000 out of your pocket
You need to get a root
canal treatment done
for a cavity in your
tooth
Cosmetic surgery (skin
grafting) to cover an
old burn scar

8. Sustainability of healthcare systems is threatened
by a growing demand for services and availability
of expensive innovative technologies.

9. How do We Find a Middle Path?

10. What is Priority Setting?
• Process of assigning rank orders
• Individual disease or health states and
interventions or approaches
• To mitigate specific health situations,
• Based on their relative contribution to
quality of life, and cost effectiveness of
interventions.
• Complex calculations are complex and
• Often fraught with controversies

11. Priority Setting — Concepts
• Precedence, established by order of
importance or urgency.
• Establishment of the order of
precedence
• Rationing and Resource Allocation
• Rationing - Taking care of existing
demands when the supply of resources
constrained
• Resource allocation — Limited resources
(time, money) invested systematically

12. Levels Where Priorities are Set
Individuals (Micro)
Health Agencies
(Meso )
System Level (Macro)

13. Nature of Prioritization
Exercises
• Core Issues are Political and Ethical
• How Resources, Rights, and
Responsibilities are distributed.
• Political considerations underpin why
implement validated technical
interventions are difficult

14. Politics & Priority Setting
• Ever-expanding waiting lists for treatment —
> political pressure for a system to prioritize
patients on waiting lists (Norway)
• Press and Media as Watchdogs on cases
where patients were denied services (UK)
• Reports of differential access in different
parts of the country (UK)
• New legislation regarding health insurance
created a need to decide what services
should be provided (Holland, Israel)

15. Trip Up Points
• Multiplicity of priorities and
• Lack of institutional mechanisms to
rationalize services and spending often
results in
• Poor overall system performance,
• Low coverage for highly cost-effective
health technologies

16. Alternatives to Prioritization
• Add More
Resources
• Take out Services

17. Why Prioritize When Adding
Resources Might Work?
• Assure donors to maintain or increase the
flow of funds
• Prioritization can itself increase resources
• Prioritization is needed if we are to know
that prioritization is insufficient
• Most important when there is little money
• Risk of Spending Too Much on Tertiary
Care: Poor Spending Pattern
• Unfunded Primary Care —> Lethal in the
poorest countries

18. Challenges of Prioritization
• Resources are limited
• Impossible to provide everyone with
every effective intervention
• Limited resources and unlimited demands
• Justice and efficiency
• Lack of Consensus
• Little interaction about priority setting
among decision makers

19. Controversies of Prioritization
• Process Affects Who, What, “How
Much”, “When”, and at “What Cost”
• Donors want to see their investments
incorporated into public budgets
• No simple or purely technical answers
• Uncertainties around which values should
guide decisions about Prioritization

20. Adjudication in the Context of
Prioritization Exercises
• Every Disease Condition is a Priority
• Governments Cannot set policies in
vacuum.
• Between many relevant values and that
• People (and disciplines) disagree which
values should dominate
• There is no agreed upon normative
approach

21. How to Conduct Priority Setting
Exercises
• Collect information on the costs and
benefits of all the interventions to be
considered —> creating a common
currency for measuring and comparing
the benefits
• Use models and assessments, such as
the burden of disease and cost-
effectiveness, to create a package of
services

22. Factors Considered for Priority
Setting Exercises
• Burden of Disease
• Cost effectiveness of Interventions
• Equity
• Existing Capacity to Deliver
• Risk Pooling

23. Risk Pooling
• Some health conditions are rare and too
costly for most uninsured individuals to
pay out-of-pocket

24. Approaches to Priority Setting
• Using Formulae or Models
• Using Guidelines or Technology Assessments
• Utilize Explicit Criteria (NZ early
90s, UK, Holland, Oregon)
• Include community needs, community
preferences, economic evaluations of cost-
effectiveness, public health considerations
• Basic package of services is provided or financed
based on an agreed criteria list
• Social preferences can influence how the
different benefits are combined and valued

25. Frameworks
• Frameworks Are Necessary
• Explicit Processes != Haphazard
Rationing
• Ethical Issues Can be Addressed
• Inevitable Policy and Implementation
Issues localized
• Helps to Choose Among Alternative
Treatments

26. Available Frameworks
• A4R Framework
• PBMA Framework
• Sibbald‟s Framework
• “7+7 framework” seven principles and
processes

27. Accountability for Reasonableness
Framework (A4R)
• Decision procedures for Rationing must have general
features if they are to qualify as legitimate and fair
• They must provide publicly available rationale
• Decisions about coverage of new technologies must
be publicly available
• The rationale must follow a reasonable argument
as to how to meet the medical needs of a covered
population
• There must be mechanisms for considering
challenges to the decisions that are made
• There should be voluntary or public regulation to
see that the above conditions are met

28. PBMA Framework
• Program budgeting and marginal analysis (PBMA) is an
economic framework specifically designed to help local
decision makers set health service priorities
• While making decisions between competing claims on
scarce health service resources, economic tools and
thinking have much to offer. In particular, decision making
should explicitly consider opportunity cost and „the margin‟.
Recent evidence shows that decision makers both
understand these economic principles and would like to use
economic tools in setting priorities
• The intent of PBMA is to assist local decision makers in
directing resources to maximize benefits from health
services, considering both opportunity cost and resource
shifts „at the margin‟

29. Sibbald’s Framework
• Explicit Process
• Consideration of Context and Values
• Stakeholder Engagement
• Transparency
• Effective and Efficient Information Management
• Revision or Appeals Mechanism
• Positive Externalities
• Externalities may include positive media coverage (which
can contribute to public dialogue, social learning, and
improved decision making in subsequent iterations of priority
setting), peer-emulation or health sector recognition (e.g. by
other health care organizations, accreditation
bodies, etc), changes in policies, and potentially changes to
legislations or practice

30. 7 by 7 Framework
• Priority setting should be scientifically
rigorous, transparent, consistent, independent
from vested interests, contestable, timely, and
enforceable.
• Standardize Registration
• Select and Scope Topics based on Evidence
• Assess Budget Impacts
• Allow for Appeals, Tracking, and Evaluation
• Conduct Cost Effectiveness
• Use Deliberative Processes
• Decide Consistently

31. Best Practices
• Use recent data
• Analysis should be country specific
• Be based on a well functioning and
representative set of information systems
• Rank Order by Burden and by population
subgroup in order to provide useful advocacy
information for the different groups
• Build Flexibility in Budget
• Build Linkages across services
• Ensure Sufficient time and resources to deliver
the interventions

32. Role of Losers
• Group of people that inevitably will get
less, in terms of benefits or services, than
others
• Policy Attention Usually paid to the
groups in society that make the loudest
noise about their perceived needs.
• Those segments of society that have the
least “voice” or political influence are
likely to be the ones that receive the least
attention

33. How to Identify the Losers in the
System?
• Conduct a Benefit Incidence Assessment
• Need Detailed household survey data
• Identify Who are using the services
• Estimate cost to the Payors of making the
services available
• Assess Unit cost to the Payors

34. Steps of Benefit Incidence
Analysis
• 1. Group users by socioeconomic
category
• 2. Determine service use by group
• 3. Calculate the unit cost for the service
• 4. Subtract the out-of-pocket fees from
cost
• 5. Multiply the net unit cost by the group
service use to determine group benefit

35. Conclusions and Comments
• Priority Setting As Balance Between
Resources and Demands
• Necessary for Best Allocation of
Resources
• Frameworks Provide Good Structures to
Achieve Prioritization
• Class Exercise
• Discussions and Comments?