WHAT IS HEALTH ECONOMICS?

1. WHAT IS HEALTH ECONOMICS? • ACCOUNTANTS CARE ONLY ABOUT $$$$$$$$$$ • PHYSICIANS CARE ONLY ABOUT PATIENTS…… • HEALTH ECONOMISTS CARE ABOUT RESOURCE$ AND PATIENTS • ECONOMICS IS HOW TO ALLOCATE SCARCE RESOURCES

2. COST-EFFECTIVENESS ANALYSIS (CEA) 10 5 4 The cheapest method of attaining the SAME GOAL is the most cost-effective.

3. CHRONIC RENAL DISEASE (Klareman) • HOSP DIALYSIS ($104,000) 9 years gained. CPLY=$11,600 • HOME DIALYSIS ($38,000) 9 years gained. CPLY=$4,200 • TRANSPLANT ($44,500) 17 years gained CPLY=$2,600

4. COST-UTILITY ANALYSIS

5. BURDEN

6. Process I Analysis, review 2. Epi parameters 1. Literature search 4. Burden Estimates 3. Country data

7. BURDEN SCENARIOS

9. SCENARIOS BURDEN PROGRAM COSTS

10. BURDEN SCENARIOS VACCINE PROGRAM COSTS DISEASE TREATMENT COSTS

11. Utilisation Rates for: self-care, self care +medication/herbs, traditional healer, community clinic/GP, in-hospital care, intensive care, out-patient visits. DISEASE TREATMENT COSTS X Unit Costs, including Laboratory tests, Pharmaceuticals and Medications. +COSTS OF DISEASE SEQUELLAE

12. NET COST PER DALY Net Cost = Cost of Intervention less Averted Treatment Costs DALYS = sum of life years saved due to decreased mortality + life years saved due to decreased morbidity + reduction in caregiver burden

13. DALY LOSS PERFRACTURE

14. NET COST DALY PER: LIFE YEAR GAINED LIFE SAVED CASE-PREVENTED COST-UTILITY ANALYSIS

15. COST SAVING IF savings in treatment costs > program costs then we can reduce mobidity and mortality AT NO NET COST STRONG PSYCHOLOGICAL PUSH FOR PROGRAMME

16. VERY COST EFFECTIVE • Project considered acceptable in relation to resources available in individual countries CPDALY < GNP per head

17. COST EFFECTIVE • Project considered acceptable in relation to resources available in individual countries CPDALY < 3 x GNP per head

18. ALBANIA has $1,120 GNP per Head, CPDALY for HIB=$347 CPDALY < 3 x GNP per head • VERY cost-effective if • WHO report, says project is cost-effective if CPDALY < GNP per head

20. Disease Clubs • Many donors adopt specific diseases, creating jobs and disease clubs, who advocate using burden data, but avoid true comparisons of interventions using CEA.

28. Good efficacy data, short length of trials Hard to model herd immunity Poor efficacy data due to long term needed for results (statins, latency period) INFECTIOUS NCD

29. Prevention Programmes Eg: smoking cessation or dietary control Very little population based efficacy data as trials usually were on specific populations such as persons employed in factory etc.

30. GCEA: THREE PROGRAMME EXAMPLE • A = Operation on rare disease (Cost = $1m, QALYS saved = 1) • B = Operation and drug treatment for rare disease (Cost = $1,001,000, QALYS saved = 2) • C = Preventive Nutritonal Campaign (Cost = $1,001,000, QALYS= 500)

31. $ B A C 1m Cost = $ 1,001,000 QALY=500 CPQALY= $2,000 A to B, get 1 QALY for $1000 CPQALY = $,1000 0 1 2 QUALYS 500

32. INCREMENTAL CEA • CHOOSE B SINCE CPQALY = $1,000 cf $2000 for nutrition programme

33. $ CPQ=$1,000,000 B A C 1m CPQ= $500,500 CPQ=2,000 0 1 2 500 QUALYS

34. GENERALISED CEA • CALCULATE NULL SETTING WHERE NO INTERVENTION OCCURS • CALCULATE ALL INTERVENTIONS WITH RESPECT TO NULL • CHOOSE INTERVENTION C AND GAIN 2000-2 = 1998 QALYS

35. COST per QALY ($)

36. CEA or CUA • TRANSPARENT, MORE DEMOCRATIC METHOD OF CHOOSING PROGRAMMES THAN BY MARKET, PRESSURE GROUPS, DONOR GROUPS ETC. • BIASED AGAINST ELDERLY AND HANDICAPPED! • MORE EFFICIENT METHOD IN TERMS OF MAXIMISING HEALTH OUTPUT (DALYS- reflecting mortality and morbidity gains)

37. HEALTH ECONOMICS WITHOUT HEALTH ECONOMICS

38. THANK YOU………...….…..opportunity cost