Against a background of increasing demands on limited resources, health economics is exerting an influence on decision making at all levels of health care. Health economics seeks to facilitate decision making by offering an explicit decision making framework based on the principle of efficiency. It is not the only consideration but it is an important one and practitioners will need to have an understanding of its basic principles and how it can impact on clinical decision making. This article reviews some of the basic principles of health economics and in particular economic evaluation.
Declaration: The materials incorporated in this document have come from variety of sources and compiler bears no responsibilities for any information contained herein. The compiler acknowledges all the sources although references have not been explicitly cited for all the contents in this document.
Declaration: The materials incorporated in this document have come from variety of sources and compiler bears no responsibilities for any information contained herein. The compiler acknowledges all the sources although references have not been explicitly cited for all the contents in this document.
Application of Pharma Economic Evaluation Tools for Analysis of Medical Condi...IJREST
Application of Pharma Economic Evaluation Tools for Analysis of Medical
Conditions: A Case Study of an Educational Institution in India
1 Dr. Debasis Patnaik, 2 Ms. Pranathi Mandadi
1Assistant Professor, Department of Economics, BITS-Pilani, K K Birla Goa Campus, Goa, India
2Research Scholar, Department of Economics, BITS-Pilani, K K Birla Goa Campus, Goa, India
ABSTRACT
The basic idea of a QALY is straightforward. The amount of time spent in a health state is weighted by the utility score given to
that health state. It takes one year of perfect health (utility score of 1) to generate one QALY, whereas one year in a health state
valued at 0.5 is regarded as being equivalent to half a QALY. Thus, an intervention that generates four additional years in a health
state valued at 0.75 will generate one more QALY than an intervention that generates four additional years in a health state valued
at 0.5. This paper discusses effect of self-medication on health care taking an educational institution population comprising of
students, teaching and non-teaching staff in 2011.
Keywords: Pharma economics, QALY, measuring clinical and health excellence
Is complementary and alternative medicine (CAM) cost-effective? a systematic ...home
Whereas the number and quality of economic evaluations of CAM have increased in
recent years and more CAM therapies have been shown to be of good value, the majority of CAM
therapies still remain to be evaluated
Declaration: The materials incorporated in this document have come from variety of sources and compiler bears no responsibilities for any information contained herein. The compiler acknowledges all the sources although references have not been explicitly cited for all the contents in this document.
Declaration: The materials incorporated in this document have come from variety of sources and compiler bears no responsibilities for any information contained herein. The compiler acknowledges all the sources although references have not been explicitly cited for all the contents in this document.
Application of Pharma Economic Evaluation Tools for Analysis of Medical Condi...IJREST
Application of Pharma Economic Evaluation Tools for Analysis of Medical
Conditions: A Case Study of an Educational Institution in India
1 Dr. Debasis Patnaik, 2 Ms. Pranathi Mandadi
1Assistant Professor, Department of Economics, BITS-Pilani, K K Birla Goa Campus, Goa, India
2Research Scholar, Department of Economics, BITS-Pilani, K K Birla Goa Campus, Goa, India
ABSTRACT
The basic idea of a QALY is straightforward. The amount of time spent in a health state is weighted by the utility score given to
that health state. It takes one year of perfect health (utility score of 1) to generate one QALY, whereas one year in a health state
valued at 0.5 is regarded as being equivalent to half a QALY. Thus, an intervention that generates four additional years in a health
state valued at 0.75 will generate one more QALY than an intervention that generates four additional years in a health state valued
at 0.5. This paper discusses effect of self-medication on health care taking an educational institution population comprising of
students, teaching and non-teaching staff in 2011.
Keywords: Pharma economics, QALY, measuring clinical and health excellence
Is complementary and alternative medicine (CAM) cost-effective? a systematic ...home
Whereas the number and quality of economic evaluations of CAM have increased in
recent years and more CAM therapies have been shown to be of good value, the majority of CAM
therapies still remain to be evaluated
Health Economics In Clinical Trials - Pubricapubrica101
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Rethinking Value Based Healthcare
Around the world healthcare providers are busy exploring how value-based healthcare can both improve the efficiency and effectiveness of healthcare delivery and seed new opportunities for innovation. Continuing our collaboration with Denmark, we are very pleased to release a new perspective on how VBHC can have greater impact in practice. Based on insights from a recent event hosted by DTU Executive Business Education and undertaken in partnership with Rethink Value, this point of view looks at the key issues for patients, physicals, providers and payers.
It explores some of the associated implications for healthcare systems worldwide, highlights several leading early examples of VBHC in practice and looks at how it can have impact at scale. Recommendations focus on the structure of care, key metrics, moving beyond pilots, changes in reimbursement models and the need for greater insight sharing and deeper collaboration.
For related Future Agenda research see www.futureofpatientdata.org
Outcomes, health economics and pharmacoeconomicsDureshahwar khan
Pharmacoeconomics can be regarded as a branch of health economics which deals with identifying, measuring, and comparing the costs and consequences of pharmaceutical products and services. Some of the concepts involved in pharmacoeconomic analysis include cost minimization, cost effectiveness, cost benefit, and cost utility analysis.
This presentation gives a basic introduction to the field of health economics and includes important concepts like that of efficiency, equity, opportunity costs, demand and supply and also includes financial evaluation
Healthy Savings. Medical Technology and the Economic Burden of DiseaseRevital (Tali) Hirsch
As America ages and sedentary lifestyles and unhealthy diets become more common, experts agree the nation is suffering a sharp rise in the prevalence of chronic disease. As the 21st century unfolds, technology – in the form of advanced diagnostic and therapeutic devices -- can meet the need for early detection and more effective management of illness. Some researchers, however, have questioned whether the overall benefit of technical advances outweighs the costs -- a question this report definitively answers.
Accordingly, researchers at the Milken Institute undertook a comprehensive, quantitative documentation of medical technology's impact on the economic burden of disease. The study also projects how future innovation in this sector would affect the health care system and the larger economy -- a positive benefit of more than $23 billion a year for the United States.
The study takes a systematic approach to documenting the full costs and broader economic benefits of health care investments by examining innovations pertaining to four prevalent causes of disability and death: heart disease, diabetes, colorectal cancer, and musculoskeletal disease. The report considers therapeutics and diagnostic devices that are widely used and have substantially affected the lives of patients as well as the overall U.S. economy. Among the 10 devices or device-based procedures studied are pacemakers, insulin infusion pumps, colonoscopies, and joint replacement surgery.
The data demonstrate that the use of medical technology brings considerable economic benefits. These are seen in both aggregate savings in treatment expenditures and prevention as well as the reduction of "indirect impact" through larger contributions to the economy.
Similar to Introduction to health economics for the medical practitioner (20)
Biden leads by double digits as coronavirus takes a toll on the president, Po...Dr Matt Boente MD
President Trump faces a significant challenge in his bid to win reelection in November, with former vice president Joe Biden holding a double-digit lead nationally and the president’s approval ratings crumbling amid a spreading coronavirus pandemic and a weakened economy, according to a Washington Post-ABC News poll.
Top health officials have changed their minds about face mask guidance — but ...Dr Matt Boente MD
(CNN)First, health officials said we shouldn’t wear face masks. Then, they said we should. Now, many are saying we must wear masks if we want to protect the economy, reopen more schools and save tens of thousands of lives.”If we all wore face coverings for the next four, six, eight, 12 weeks across the nation, this virus transmission would stop,” said Dr. Robert Redfield, director of the Centers for Disease Control and Prevention
MLB, players prepared to move in negotiations with 2020 season on the lineDr Matt Boente MD
Behind the scenes, both Major League Baseball and the MLB Players Association are prepared to amend, if slightly, their previously reported stances in their ongoing financial dispute in an effort to come together and open the door to a shortened 2020 season.
Why Cubs, MLB might face 2020 season without key players and what it meansDr Matt Boente MD
No fans at the games? That’s already the plan. But what happens to the 2020 baseball season if it gets started in July without Angels superstar Mike Trout? Or without the defending champs’ All-Star closer, Sean Doolittle?
The Chicago Cubs have struggled to a 1-5 record to open 2019, but they've played every game on the road -- until Monday, when they return to iconic Wrigley Field for a 104th season
Normally baseball trivia is consumed by the average fan in a question-answer format. Today, we are going to try something different. I’ll name a player from Cubs history, present a little background of that player, then finally reveal why the player is relevant in terms of 2018 Cubs trivia. Let’s get started.
Dr. Matt Boente MD obtained his medical degree at Rush Medical College in Chicago and took his residency at Rush Presbyterian Medical Center. He was a Galloway Fellow at the Department of Surgery, Gynecology Division at Memorial-Sloan Kettering Cancer Center in New York. He also completed a fellowship in Gynecologic Oncology at Duke University in Durham, North Carolina.
FDA approves bevacizumab in combination with chemotherapy for ovarian cancerDr Matt Boente MD
On June 13, 2018, the Food and Drug Administration approved bevacizumab (Avastin, Genentech, Inc.) for patients with epithelial ovarian, fallopian tube, or primary peritoneal cancer in combination with carboplatin and paclitaxel, followed by single-agent bevacizumab, for stage III or IV disease after initial surgical resection.
Choosing your career is one of the most important decisions that you will ever make. When asked why they chose to pursue medicine, most physicians respond that they wanted to make a difference by helping people and positively impacting their lives through health care. Serving others as a physician is a noble and challenging way to invest your intellect, skills, and passion in a demanding and rewarding profession.
Health economics uses economic concepts and methods to understand and explain how people make decisions regarding their health behaviours and use of health care. It also provides a framework for thinking about how society should allocate its limited health resources to meet people’s demand/need for health care services, health promotion and prevention.
Are we providing doctors with the training and tools for lifelong learning?Dr Matt Boente MD
Medical practice is evolving rapidly as new information supplants old. Gone are the days when newly graduated doctors were armed with most of the information they would need for a lifetime of practice. Today's clinicians are required to be lifelong learners so that they continue to adapt to the changing ecology of the medical environment. Are our educational systems preparing doctors for this role?
Pulmonary Thromboembolism - etilogy, types, medical- Surgical and nursing man...VarunMahajani
Disruption of blood supply to lung alveoli due to blockage of one or more pulmonary blood vessels is called as Pulmonary thromboembolism. In this presentation we will discuss its causes, types and its management in depth.
micro teaching on communication m.sc nursing.pdfAnurag Sharma
Microteaching is a unique model of practice teaching. It is a viable instrument for the. desired change in the teaching behavior or the behavior potential which, in specified types of real. classroom situations, tends to facilitate the achievement of specified types of objectives.
Prix Galien International 2024 Forum ProgramLevi Shapiro
June 20, 2024, Prix Galien International and Jerusalem Ethics Forum in ROME. Detailed agenda including panels:
- ADVANCES IN CARDIOLOGY: A NEW PARADIGM IS COMING
- WOMEN’S HEALTH: FERTILITY PRESERVATION
- WHAT’S NEW IN THE TREATMENT OF INFECTIOUS,
ONCOLOGICAL AND INFLAMMATORY SKIN DISEASES?
- ARTIFICIAL INTELLIGENCE AND ETHICS
- GENE THERAPY
- BEYOND BORDERS: GLOBAL INITIATIVES FOR DEMOCRATIZING LIFE SCIENCE TECHNOLOGIES AND PROMOTING ACCESS TO HEALTHCARE
- ETHICAL CHALLENGES IN LIFE SCIENCES
- Prix Galien International Awards Ceremony
New Directions in Targeted Therapeutic Approaches for Older Adults With Mantl...i3 Health
i3 Health is pleased to make the speaker slides from this activity available for use as a non-accredited self-study or teaching resource.
This slide deck presented by Dr. Kami Maddocks, Professor-Clinical in the Division of Hematology and
Associate Division Director for Ambulatory Operations
The Ohio State University Comprehensive Cancer Center, will provide insight into new directions in targeted therapeutic approaches for older adults with mantle cell lymphoma.
STATEMENT OF NEED
Mantle cell lymphoma (MCL) is a rare, aggressive B-cell non-Hodgkin lymphoma (NHL) accounting for 5% to 7% of all lymphomas. Its prognosis ranges from indolent disease that does not require treatment for years to very aggressive disease, which is associated with poor survival (Silkenstedt et al, 2021). Typically, MCL is diagnosed at advanced stage and in older patients who cannot tolerate intensive therapy (NCCN, 2022). Although recent advances have slightly increased remission rates, recurrence and relapse remain very common, leading to a median overall survival between 3 and 6 years (LLS, 2021). Though there are several effective options, progress is still needed towards establishing an accepted frontline approach for MCL (Castellino et al, 2022). Treatment selection and management of MCL are complicated by the heterogeneity of prognosis, advanced age and comorbidities of patients, and lack of an established standard approach for treatment, making it vital that clinicians be familiar with the latest research and advances in this area. In this activity chaired by Michael Wang, MD, Professor in the Department of Lymphoma & Myeloma at MD Anderson Cancer Center, expert faculty will discuss prognostic factors informing treatment, the promising results of recent trials in new therapeutic approaches, and the implications of treatment resistance in therapeutic selection for MCL.
Target Audience
Hematology/oncology fellows, attending faculty, and other health care professionals involved in the treatment of patients with mantle cell lymphoma (MCL).
Learning Objectives
1.) Identify clinical and biological prognostic factors that can guide treatment decision making for older adults with MCL
2.) Evaluate emerging data on targeted therapeutic approaches for treatment-naive and relapsed/refractory MCL and their applicability to older adults
3.) Assess mechanisms of resistance to targeted therapies for MCL and their implications for treatment selection
Title: Sense of Taste
Presenter: Dr. Faiza, Assistant Professor of Physiology
Qualifications:
MBBS (Best Graduate, AIMC Lahore)
FCPS Physiology
ICMT, CHPE, DHPE (STMU)
MPH (GC University, Faisalabad)
MBA (Virtual University of Pakistan)
Learning Objectives:
Describe the structure and function of taste buds.
Describe the relationship between the taste threshold and taste index of common substances.
Explain the chemical basis and signal transduction of taste perception for each type of primary taste sensation.
Recognize different abnormalities of taste perception and their causes.
Key Topics:
Significance of Taste Sensation:
Differentiation between pleasant and harmful food
Influence on behavior
Selection of food based on metabolic needs
Receptors of Taste:
Taste buds on the tongue
Influence of sense of smell, texture of food, and pain stimulation (e.g., by pepper)
Primary and Secondary Taste Sensations:
Primary taste sensations: Sweet, Sour, Salty, Bitter, Umami
Chemical basis and signal transduction mechanisms for each taste
Taste Threshold and Index:
Taste threshold values for Sweet (sucrose), Salty (NaCl), Sour (HCl), and Bitter (Quinine)
Taste index relationship: Inversely proportional to taste threshold
Taste Blindness:
Inability to taste certain substances, particularly thiourea compounds
Example: Phenylthiocarbamide
Structure and Function of Taste Buds:
Composition: Epithelial cells, Sustentacular/Supporting cells, Taste cells, Basal cells
Features: Taste pores, Taste hairs/microvilli, and Taste nerve fibers
Location of Taste Buds:
Found in papillae of the tongue (Fungiform, Circumvallate, Foliate)
Also present on the palate, tonsillar pillars, epiglottis, and proximal esophagus
Mechanism of Taste Stimulation:
Interaction of taste substances with receptors on microvilli
Signal transduction pathways for Umami, Sweet, Bitter, Sour, and Salty tastes
Taste Sensitivity and Adaptation:
Decrease in sensitivity with age
Rapid adaptation of taste sensation
Role of Saliva in Taste:
Dissolution of tastants to reach receptors
Washing away the stimulus
Taste Preferences and Aversions:
Mechanisms behind taste preference and aversion
Influence of receptors and neural pathways
Impact of Sensory Nerve Damage:
Degeneration of taste buds if the sensory nerve fiber is cut
Abnormalities of Taste Detection:
Conditions: Ageusia, Hypogeusia, Dysgeusia (parageusia)
Causes: Nerve damage, neurological disorders, infections, poor oral hygiene, adverse drug effects, deficiencies, aging, tobacco use, altered neurotransmitter levels
Neurotransmitters and Taste Threshold:
Effects of serotonin (5-HT) and norepinephrine (NE) on taste sensitivity
Supertasters:
25% of the population with heightened sensitivity to taste, especially bitterness
Increased number of fungiform papillae
The prostate is an exocrine gland of the male mammalian reproductive system
It is a walnut-sized gland that forms part of the male reproductive system and is located in front of the rectum and just below the urinary bladder
Function is to store and secrete a clear, slightly alkaline fluid that constitutes 10-30% of the volume of the seminal fluid that along with the spermatozoa, constitutes semen
A healthy human prostate measures (4cm-vertical, by 3cm-horizontal, 2cm ant-post ).
It surrounds the urethra just below the urinary bladder. It has anterior, median, posterior and two lateral lobes
It’s work is regulated by androgens which are responsible for male sex characteristics
Generalised disease of the prostate due to hormonal derangement which leads to non malignant enlargement of the gland (increase in the number of epithelial cells and stromal tissue)to cause compression of the urethra leading to symptoms (LUTS
These lecture slides, by Dr Sidra Arshad, offer a quick overview of physiological basis of a normal electrocardiogram.
Learning objectives:
1. Define an electrocardiogram (ECG) and electrocardiography
2. Describe how dipoles generated by the heart produce the waveforms of the ECG
3. Describe the components of a normal electrocardiogram of a typical bipolar leads (limb II)
4. Differentiate between intervals and segments
5. Enlist some common indications for obtaining an ECG
Study Resources:
1. Chapter 11, Guyton and Hall Textbook of Medical Physiology, 14th edition
2. Chapter 9, Human Physiology - From Cells to Systems, Lauralee Sherwood, 9th edition
3. Chapter 29, Ganong’s Review of Medical Physiology, 26th edition
4. Electrocardiogram, StatPearls - https://www.ncbi.nlm.nih.gov/books/NBK549803/
5. ECG in Medical Practice by ABM Abdullah, 4th edition
6. ECG Basics, http://www.nataliescasebook.com/tag/e-c-g-basics
Lung Cancer: Artificial Intelligence, Synergetics, Complex System Analysis, S...Oleg Kshivets
RESULTS: Overall life span (LS) was 2252.1±1742.5 days and cumulative 5-year survival (5YS) reached 73.2%, 10 years – 64.8%, 20 years – 42.5%. 513 LCP lived more than 5 years (LS=3124.6±1525.6 days), 148 LCP – more than 10 years (LS=5054.4±1504.1 days).199 LCP died because of LC (LS=562.7±374.5 days). 5YS of LCP after bi/lobectomies was significantly superior in comparison with LCP after pneumonectomies (78.1% vs.63.7%, P=0.00001 by log-rank test). AT significantly improved 5YS (66.3% vs. 34.8%) (P=0.00000 by log-rank test) only for LCP with N1-2. Cox modeling displayed that 5YS of LCP significantly depended on: phase transition (PT) early-invasive LC in terms of synergetics, PT N0—N12, cell ratio factors (ratio between cancer cells- CC and blood cells subpopulations), G1-3, histology, glucose, AT, blood cell circuit, prothrombin index, heparin tolerance, recalcification time (P=0.000-0.038). Neural networks, genetic algorithm selection and bootstrap simulation revealed relationships between 5YS and PT early-invasive LC (rank=1), PT N0—N12 (rank=2), thrombocytes/CC (3), erythrocytes/CC (4), eosinophils/CC (5), healthy cells/CC (6), lymphocytes/CC (7), segmented neutrophils/CC (8), stick neutrophils/CC (9), monocytes/CC (10); leucocytes/CC (11). Correct prediction of 5YS was 100% by neural networks computing (area under ROC curve=1.0; error=0.0).
CONCLUSIONS: 5YS of LCP after radical procedures significantly depended on: 1) PT early-invasive cancer; 2) PT N0--N12; 3) cell ratio factors; 4) blood cell circuit; 5) biochemical factors; 6) hemostasis system; 7) AT; 8) LC characteristics; 9) LC cell dynamics; 10) surgery type: lobectomy/pneumonectomy; 11) anthropometric data. Optimal diagnosis and treatment strategies for LC are: 1) screening and early detection of LC; 2) availability of experienced thoracic surgeons because of complexity of radical procedures; 3) aggressive en block surgery and adequate lymph node dissection for completeness; 4) precise prediction; 5) adjuvant chemoimmunoradiotherapy for LCP with unfavorable prognosis.
Acute scrotum is a general term referring to an emergency condition affecting the contents or the wall of the scrotum.
There are a number of conditions that present acutely, predominantly with pain and/or swelling
A careful and detailed history and examination, and in some cases, investigations allow differentiation between these diagnoses. A prompt diagnosis is essential as the patient may require urgent surgical intervention
Testicular torsion refers to twisting of the spermatic cord, causing ischaemia of the testicle.
Testicular torsion results from inadequate fixation of the testis to the tunica vaginalis producing ischemia from reduced arterial inflow and venous outflow obstruction.
The prevalence of testicular torsion in adult patients hospitalized with acute scrotal pain is approximately 25 to 50 percent
Introduction to health economics for the medical practitioner
1. REVIEW
Introduction to health economics for the medical
practitioner
D P Kernick
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Postgrad Med J 2003;79:147–150
Against a background of increasing demands on limited
resources, health economics is exerting an influence on
decision making at all levels of health care. Health
economics seeks to facilitate decision making by
offering an explicit decision making framework based
on the principle of efficiency. It is not the only
consideration but it is an important one and
practitioners will need to have an understanding of its
basic principles and how it can impact on clinical
decision making. This article reviews some of the basic
principles of health economics and in particular
economic evaluation.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
WHAT IS HEALTH ECONOMICS?
Health economics is the discipline of economics
applied to the topic of health care. Broadly
defined, economics concerns how society allo-
cates its resources among alternative uses. Scar-
city of these resources provides the foundation of
economic theory and from this starting point,
three basic questions arise:
• What goods and services shall we produce?
• How shall we produce them?
• Who shall receive them?
Health economics addresses these questions
primarily from the perspective of efficiency—
maximising the benefits from available resources
(or ensuring benefits gained exceed benefits
forgone). Equity concerns are also recognised—
what is a fair distribution of resources. Considera-
tions of equity often conflict with efficiency
directives. However, due to the contested nature
of this area and the difficulties in quantifying
equity dimensions, this element has not been a
major focus of health economist’s work.
WHY IS HEALTH ECONOMICS
IMPORTANT?
Thirty years ago there were limited options for
doctors making treatment choices and patients
did as they were told. Any values that contributed
to the decision making process were implicit and
determined by the physician. However, against a
background of limited health care resources, an
empowered consumer and an increasing array of
intervention options (see fig 1) there is a need for
decisions to be taken more openly and fairly.
The importance of the economic model is that
it provides useful insights into how health care
can be organised and financed and provides a
framework to address a broad range of issues in
an explicit and consistent manner. Organisational
changes such as the development of the National
Institute for Clinical Excellence and the devolu-
tion of decision making to primary care organisa-
tions have led to an increasing interest in the
subject and its influence on health care organis-
ation and decision making.
WHAT DO HEALTH ECONOMISTS DO?
Health economists are interested in the produc-
tion of health at a number of levels. For example:
• What is health and how do we put a value on
it?
• What influences health other than health care?
• What influences the demand for health care
and health care seeking behaviour?
• What influences the supply of health care?
(The behaviour of doctors and health care pro-
viders.)
• Alternative ways of production and delivery of
health care.
• Planning, budgeting, and monitoring of health
care.
• Economic evaluation—relating the costs and
benefits of alternative ways of delivering health
care.
Although all of these elements offer useful
insights into the delivery of health care, it is eco-
nomic evaluation that provides the bulk of health
economists’ work and is of most relevance to
managers and practitioners. This exercise offers a
framework for measuring, valuing, and compar-
ing the costs (negative consequences) and ben-
efits (positive consequences) of different health
care interventions. In this way we can assess
whether the benefits gained by introducing an
intervention outweigh the benefits that are
foregone. A discussion of economic evaluation
and its principles forms the rest of this paper.
CONCEPT OF ECONOMIC EVALUATION
The concept of economic evaluation underpins
efficiency choices in health care.1
It relates the
benefits of alternative interventions to the re-
sources incurred in their production (see fig 2).
We will first explore three principles that are an
important part of any economic analysis before
looking at the types of economic studies.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Abbreviations: GP, general practitioner; QALY, quality
adjusted life year
. . . . . . . . . . . . . . . . . . . . . . .
Correspondence to:
Dr D P Kernick, St Thomas’
Medical Group, Cowick
Street, Exeter EX4 1HJ, UK;
su1838@eclipse.co.uk
Submitted 1 July 2002
Accepted
5 November 2002
. . . . . . . . . . . . . . . . . . . . . . .
147
www.postgradmedj.com
onJanuary11,2020byguest.Protectedbycopyright.http://pmj.bmj.com/PostgradMedJ:firstpublishedas10.1136/pmj.79.929.147on1March2003.Downloadedfrom
2. Opportunity cost
Health economists stress the importance of value unlike
accountants who are just interested in money. When budgets
are finite, resources invested into one area will be at the
expense of a loss of opportunity in another and resources
should be valued in terms of this lost opportunity—the
opportunity cost.2
For example, if the Cardio-Vascular
National Service Framework dictates an increase in statin
prescribing, we should think carefully about what we are hav-
ing to go without to provide the additional service and value it
in terms of this lost opportunity.
Perspective
Whenever an economic question is being asked it is important
to think carefully about the viewpoint of the analysis. This will
dictate which costs and benefits are important. The perspec-
tive of the patient, health authority, NHS, and society may dif-
fer.
For example, from the perspective of a general practitioner
(GP) practice, the cost of a GP is £21 per hour. If the health
authority perspective is taken then capital costs and manage-
ment overheads are relevant and the cost will be £53 per hour.
From a NHS perspective, undergraduate and postgraduate
training costs will become relevant which must be annuitised
across the expected working life time and the cost is £69 per
hour.
Different perspectives will give different answers when
deciding between treatment options and decision makers
must be clear on the viewpoint that is taken.
Marginal analysis
The relationship between resources invested into an interven-
tion and the benefit that is incurred is rarely linear. As
decisions in health are usually whether to expand or contract
existing services, it is important to consider how increments
in benefit change with increment in resource allocation and
not the average benefits that are incurred by average costs.
This is known as a marginal analysis.3
Figure 3 shows an example where the benefits in terms of
years of life saved are plotted against resources invested in
statin treatment. Three points are highlighted for cost/life year
saved where resources are invested into very high risk, low
risk, and very low risk patients.4
WHAT ARE THE DIFFERENT TYPES OF ECONOMIC
EVALUATION?
We now explore the different types of economic evaluation
which take their name from the way in which benefits are
measured (see table 1).
(1) Cost minimisation analysis
In a cost minimisation analysis, the consequences of two or
more interventions being compared are equivalent. The analy-
sis therefore focuses on costs alone, and the cheapest option is
chosen.
(2) Cost effectiveness analysis
Cost effectiveness analysis is the most common type of analy-
sis and is used to compare drugs or programmes which have a
common health outcome (for example, reduction in blood
pressure, life years saved).5
Results are usually presented in
the form of a ratio (for example, costs per life year gained). For
example, it has been estimated that coronary care units cost
£4900 per life year saved compared with neonatal intensive
care units at £11 500 per life year saved.
Often, intermediate or surrogate outcomes such as cases
detected, reduction in cholesterol are measured and it is
important to ensure that these intermediate measures have
clinical meaning in terms of long term outcome for patients.
(3) Cost utility analysis
Often interventions impact both on quality and quantity of
life. A cost utility analysis can be used to assess costs and ben-
efits of interventions where there is no single outcome of
interest and is useful comparing different programmes across
different treatment areas.6
The most frequently used measure is the quality adjusted
life year (QALY). Benefits are measured based on impact on
length and quality of life to produce an overall index of health
gain. A health state is valued between 0 (worst health) and 1
(best health) combined it with the length of time in that state.
For example, a drug that yields an improvement in health
state value of 0.6 over a period of 10 years would yield 6
Figure 1 Diagrammatic background to health economics—
increasing demands on limited resources (area of each circle reflects
size of each variable).
Figure 2 Economic analysis relates inputs (resources) to outputs
(benefits and the values attached to them) of alternative interventions
to facilitate decision making when resources are scarce.
Figure 3 Costs and benefits in terms of life years saved from statin
treatment. Costs/life years saved are shown for very high risk, low
risk, and very low risk patients.
148 Kernick
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3. QALYs. It has been estimated that coronary artery bypass
grafting costs £2000 per QALY compared with £1100 for hip
replacement.
QALYs reflect people’s preferences for different health states
but their use remains contested in a number of areas.
When acting on the results of cost effectiveness and cost
utility studies, if two treatments A and B are compared and
costs are lower for A and outcomes better, then treatment A
will be preferable. If, as is more commonly the case with a new
drug, costs are higher for one treatment, but benefits are
higher too, it is necessary to calculate how much extra benefits
is obtained for the extra cost. A decision then needs to be
made as to whether this addition in benefit is worth paying
for.7
Table 2 shows some tentative estimates of the cost/QALY of
a range of interventions.
(4) Cost benefit analysis
In a Cost Benefit Analysis, attempts are made to value all the
costs and consequences of an intervention in monetary terms.
If the benefits are less than the costs then the intervention is
acceptable.8
For example, a study of the impact of a triptan at
a cost of £4 per attack in the treatment of migraine found an
economic gain in terms of work absence saved of £12.50 com-
pared with placebo.9
However, the data requirements for this
approach are often large and methodological issues around
the valuation of non-monetary benefits such as lives saved
makes this method problematic.
(5) Cost consequences analysis
Although this approach is not a formal method of economic
analysis and as such is not shown in table 1, it is one that may
be more attractive to decision makers who can apply their own
weight to the various outcomes. In some cases, studies
consider many disparate outcomes that cannot be condensed
into a single measure of benefit.10
In this case, costs and out-
comes are presented in a disaggregated form, which avoids the
need to represent results as a single index but which makes
decision-making more difficult. Never the less it is an
approach which reflects how decisions are made in the real
world. Table 3 shows how a cost consequence study might look
in practice.
A PRACTICAL EXAMPLE—TREATING RAISED
CHOLESTEROL WITH STATINS
We conclude with a practical example demonstrating how
health economics can facilitate a health care decision. Table 4
shows the cost effectiveness of treating raised cholesterol with
statins at various levels of population risk.11
How can we
decide what risk should be targeted?
Table 5 shows some possible alternative uses of our money.
Using the principle of opportunity cost we can get some sort of
idea of what we would have to forego for treating each level of
risk. Clearly there are many other issues to be taken into con-
sideration but this information can help to frame the decision.
However, it should be born in mind that economic analysis
focuses on efficiency which does not necessarily correlate with
affordability. Pickin used existing data to calculate the cost of
Table 1 The four types of formal economic
evaluation
Form of evaluation
Measurement and valuation of
outcomes
(1) Cost minimisation analysis Outcomes are assumed to be
equivalent. Focus of measurement
is on costs. Not often relevant as
outcomes are rarely equivalent
(2) Cost effectiveness analysis Natural units (for example, life
years gained, deaths prevented)
that are common to competing
interventions. This approach
forms the bulk of published
studies and will be of most
relevance to practitioners
(3) Cost utility analysis Health state values based on
individual preferences (for
example, quality adjusted life
years gained). An approach
which is gaining in importance
due to the need to decide
between different interventions at
a national level and the
importance placed on quality of
life. Many methodological
problems remain
(4) Cost benefit analysis All outcomes valued in monetary
units (for example, valuation of
amount willing to pay to prevent
a death). Rarely used due to
methodological problems in
valuing all outcomes in monetary
terms
Table 2 A cost effectiveness league
table. Cost per quality adjusted life
year (QALY) of competing
therapies—some tentative estimates
Intervention
Cost per
QALY (£,
1990 prices)
GP advice to stop smoking 270
Antihypertensive therapy 940
Pacemaker insertion 1100
Hip replacement 1180
Value replacement for aortic
stenosis
1410
Coronary artery bypass graft 2090
Kidney transplant 4710
Breast screening 5780
Heart transplant 7840
Hospital haemodialysis 21970
Table 3 An example of a cost consequence
study—transferring gastroscopy services to primary
care
Costs
Consequences
(benefits/dysbenefits)
GP and nurse (what activity is
being given up by these
practitioners to undertake the new
service)
Health state
Saving in hospital resources (what
is being released and how is it
being utilised?)
Diagnostic accuracy
Capital costs, for example, new
buildings, equipment
Patient satisfaction (better access,
shorter waiting times,
understanding of condition)
Patient costs Patient dissatisfaction (lack of
expert care)
Costs of administering primary
care service including quality
control
Loss of opportunities for
secondary care training
Health economics 149
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4. treating the population with statins at different levels of risk.
Table 6 shows the number of the population needed to treat for
each risk level and the cost. Although treating the population
who have a 2% risk would be efficient in terms of cost/life year
saved when compared to other interventions, it would
consume an unacceptable proportion of our resources.
CONCLUSION
Difficult choices in health care are inevitable and there is an
increasing emphasis on making decisions explicit and fair.
Health economics suffers from a number of methodological
limitations but it can offer us useful concepts and principles
which help us think more clearly about the implications of
resource decisions we make. An understanding of some basic
economic principles is essential for all practitioners not only to
understand the useful concepts the discipline can offer but to
appreciate its limitations and shortcomings.
REFERENCES
1 Drummond M. Economic analysis alongside control trials. London:
Department of Health, March 1994.
2 Kernick D. Costing principles in primary care. Fam Pract
2000;17:1766–70.
3 Torgerson DJ, Spencer A. Marginal costs and benefits. BMJ
1996;312:35–6.
4 Pharoah P, Hollingworth W. Cost effectiveness of lowering cholesterol
concentration with statins in patients with and without existing coronary
heart disease. BMJ 1996;312:1443–8.
5 Robinson R. Cost effective analysis. BMJ 1993;307:793–5.
6 Robinson R. Cost utility analysis. BMJ 1993;307:859–62.
7 Drummond M, Maynard A. Purchasing and providing cost effective
health care. London: Churchill Livingstone, 1993.
8 Robinson R. Cost benefit analysis. BMJ 1993;307:924–6.
9 Wells NE, Steiner TJ. Effectiveness of eletriptan in reducing time loss
caused by migraine attacks. Pharmacoeconomics 2001;18:557–66.
10 Mauskopf J, Paul J, Grant D, et al. The role of cost consequence
analysis in health care decision making. Pharmacoeconomics
1998;13:277–88.
11 Pickin D, McCabe C, Ramsey L, et al. Cost effectiveness of statin
treatment related to the risk of coronary heart disease and cost of drug
treatment. Heart 1999;82:325–32.
Table 4 Cost effectiveness of treating
patients with raised cholesterol at
differing annual risks of an event
Annual risk of
cardiovascular event
(%)
Cost/life year saved
(£)
4.5 5100
3 8200
2 10700
1.5 12500
Table 5 Estimates of the cost
effectiveness of some competing
interventions
Intervention
Cost/life year saved
(£)
Blood pressure reduction 1000
Counselling for activity 3000
Coronary care units 4900
Breast screening 8400
Cervical screening 9000
Neonatal intensive care 11500
Haemodialysis 27000
Table 6 Affordability of treating raised
cholesterol—implications for a typical health authority
of treating raised cholesterol
Annual risk of
cardiovascular event (%)
No needing treatment
(% population)
Cost (£
million)
4.5 5.1 459
3 8.2 885
2 15.8 1712
1.5 24.7 2673
Key references
• Kernick D. Getting health economics into practice. Abing-
don: Radcliffe Press, 2002.
• Jefferson T. Elementary economic evaluation. London: BMJ
Books, 2000.
• Donaldson C. Evidence based health economics. London:
BMJ Books, 2002.
• The BMJ Health Economics Collection: www.bmj.com/cgi/
collection/health_economics.
• The NHS Health Technology Assessment Programme:
www.ncchta.org. Contains some excellent monographs on
areas of health economics that are considered in some
depth but remain accessible. Can be downloaded directly
from the web.
• The NHS Economic Evaluation Database:
www.york.ac.uk/nhsdhp. A comprehensive database of all
economic evaluations that are published.
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