WHAT IS WHAT IS HEALTH HEALTH ECONOMICS?ECONOMICS?

ACCOUNTANTS CARE ONLY ABOUT $ACCOUNTANTS CARE ONLY ABOUT $$$$$$$$$$$$$$$$$$$

PHYSICIANS CARE ONLY ABOUT PHYSICIANS CARE ONLY ABOUT PATIENTS……PATIENTS……

HEALTH ECONOMISTS CARE ABOUT HEALTH ECONOMISTS CARE ABOUT RESOURCE$ AND PATIENTSRESOURCE$ AND PATIENTS

ECONOMICS IS HOW TO ALLOCATE ECONOMICS IS HOW TO ALLOCATE SCARCE RESOURCESSCARCE RESOURCES

COST-COST-EFFECTIVENESS EFFECTIVENESS ANALYSIS (CEA)ANALYSIS (CEA)

A B C

S A M E G O A L

5 10 4

The cheapest method of attaining the SAME GOAL

is the most cost-effective.

CHRONIC RENAL CHRONIC RENAL DISEASE DISEASE (Klareman)(Klareman)

HOSP DIALYSIS ($104,000)HOSP DIALYSIS ($104,000)

9 years gained. CPLY=$11,6009 years gained. CPLY=$11,600

HOME DIALYSIS ($38,000)HOME DIALYSIS ($38,000)

9 years gained. CPLY=$4,2009 years gained. CPLY=$4,200

TRANSPLANT ($44,500)TRANSPLANT ($44,500)

17 years gained CPLY=$2,60017 years gained CPLY=$2,600

BURDEN

Process IProcess I

1. Literature

search

2. Epi

parameters

Analysis, review

3. Country

data

4.Burden

Estimates

BURDEN SCENARIOS

Fig 2: Projected Hepatitis A Cases with and without Vaccination Program in Kazakhstan 2002-2041

0

10,000

20,000

30,000

40,000

2002 2006 2010 2014 2018 2022 2026 2030 2034 2038

Cas

es

BURDEN SCENARIOS

PROGRAMCOSTS

BURDENSCENARIOS

VACCINEPROGRAMCOSTS

DISEASETREATMENTCOSTS

DISEASETREATMENTCOSTS

Utilisation Rates for: self-care, self care +medication/herbs, traditional healer, community clinic/GP, in-hospital care, intensive care, out-patient visits.

XUnit Costs, including Laboratory tests, Pharmaceuticals and Medications.

+ COSTS OF DISEASE SEQUELLAE

NET COST PER DALYNET COST PER DALY

Net Cost = Cost of Intervention less Net Cost = Cost of Intervention less

Averted Treatment Averted Treatment CostsCosts

DALYS = sum of life years saved DALYS = sum of life years saved due to decreased mortality + life due to decreased mortality + life years saved due to decreased years saved due to decreased morbidity + reduction in caregiver morbidity + reduction in caregiver burdenburden

0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2

Distal-radius

Proximal-humerus

Vertebral

Hip

Morbidity Mortality

DALY LOSS PERDALY LOSS PER FRACTUREFRACTURE

COST-UTILITY ANALYSIS

PER: LIFE YEAR GAINED

LIFE SAVED

CASE-PREVENTED

NET COST

DALY

COST COST SAVINGSAVING

IF savings in treatment IF savings in treatment costscosts

> program costs> program costs

then we can reduce mobidity then we can reduce mobidity and mortality AT NO NET COSTand mortality AT NO NET COST

STRONG PSYCHOLOGICAL PUSH STRONG PSYCHOLOGICAL PUSH FOR PROGRAMMEFOR PROGRAMME

VERY COST VERY COST EFFECTIVEEFFECTIVE

Project considered Project considered acceptable in relation to acceptable in relation to resources available in resources available in individual countriesindividual countries

CPDALY < GNP per headCPDALY < GNP per head

COST COST EFFECTIVEEFFECTIVE

Project considered Project considered acceptable in relation to acceptable in relation to resources available in resources available in individual countriesindividual countries

CPDALY < 3 x GNP per CPDALY < 3 x GNP per headhead

ALBANIA has $1,120 GNP ALBANIA has $1,120 GNP per Head, CPDALY for per Head, CPDALY for HIB=$347HIB=$347

CPDALY < 3 x GNP per CPDALY < 3 x GNP per headhead

VERY cost-effective ifVERY cost-effective ifWHO report, says project WHO report, says project

is cost-effective ifis cost-effective if

CPDALY < GNP per headCPDALY < GNP per head

Disease ClubsDisease Clubs

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

BURDEN:Deaths

0

20

40

60

80

100

A B C D E

BURDEN:Life Years Lost Disease B occurs at younger age

0

1000

2000

3000

4000

5000

A B C D E

BURDEN: DALYDis. C has high morbidity & sequelae

0

2000

4000

6000

A B C D E

SCENARIO: Potential DALYS SAVEDDisease D has high intervention efficacy

0

1000

2000

3000

4000

5000

A B C D E

CUA: Cost per DALY: Disease E has low intervention cost

$0

$10

$20

$30

$40

A B C D E

3,500 additional DEATHS PREVENTED with $10m budget

0

3000

6000

9000

A E

250,000 extra DALYS SAVED WITH $10m BUDGET

0

200000

400000

600000

A E

INFECTIOUS NCDINFECTIOUS NCD

Good efficacy Good efficacy data, short data, short length of length of trialstrials

Hard to Hard to model herd model herd immunity immunity

Poor efficacy Poor efficacy data due to data due to long term long term needed for needed for results (statins, results (statins, latency period)latency period)

Prevention Prevention ProgrammesProgrammes

Eg: smoking cessation or dietary Eg: smoking cessation or dietary controlcontrol

Very little population based Very little population based efficacy data as trials usually were efficacy data as trials usually were on specific populations such as on specific populations such as persons employed in factory etc.persons employed in factory etc.

GCEA: THREE GCEA: THREE PROGRAMME EXAMPLEPROGRAMME EXAMPLE

A = Operation on rare disease A = Operation on rare disease (Cost = $1m, QALYS saved = 1)(Cost = $1m, QALYS saved = 1)

B = Operation and drug B = Operation and drug treatment for rare disease (Cost treatment for rare disease (Cost = $1,001,000, QALYS saved = 2)= $1,001,000, QALYS saved = 2)

C = Preventive Nutritonal C = Preventive Nutritonal Campaign (Cost = $1,001,000, Campaign (Cost = $1,001,000, QALYS= 500)QALYS= 500)

A B C1m

0

$

1 2 500QUALYS

A to B, get 1 QALY for $1000 CPQALY = $,1000

Cost =$ 1,001,000QALY=500CPQALY=

$2,000

INCREMENTAL CEAINCREMENTAL CEA

CHOOSE B SINCE CHOOSE B SINCE CPQALY = $1,000 cfCPQALY = $1,000 cf

$2000 for nutrition $2000 for nutrition programmeprogramme

A B C1m

0

$

1 2 500QUALYS

CPQ=2,000

CPQ= $500,500

CPQ=$1,000,000

GENERALISED CEAGENERALISED CEA

CALCULATE NULL SETTING WHERE CALCULATE NULL SETTING WHERE NO INTERVENTION OCCURSNO INTERVENTION OCCURS

CALCULATE ALL INTERVENTIONS CALCULATE ALL INTERVENTIONS WITH RESPECT TO NULLWITH RESPECT TO NULL

CHOOSE INTERVENTION C AND CHOOSE INTERVENTION C AND GAINGAIN

2000-2 = 1998 QALYS2000-2 = 1998 QALYS

352

432

1888

7536

9248

22640

0 5 10 15 20 25

Thousands

Lower CHOLby diet

GP smokingcessation

Hipreplacement

KidneyTransplant

Breast CaScreening

Lower CHOLby drugs

COST per QALY ($)COST per QALY ($)

CEA or CUACEA or CUA TRANSPARENT, MORE TRANSPARENT, MORE

DEMOCRATIC METHOD OF DEMOCRATIC METHOD OF CHOOSING PROGRAMMES CHOOSING PROGRAMMES THAN BY MARKET, PRESSURE THAN BY MARKET, PRESSURE GROUPS, DONOR GROUPS ETC. GROUPS, DONOR GROUPS ETC.

BIASED AGAINST ELDERLY AND BIASED AGAINST ELDERLY AND HANDICAPPED!HANDICAPPED!

MORE EFFICIENT METHOD IN MORE EFFICIENT METHOD IN TERMS OF MAXIMISING TERMS OF MAXIMISING HEALTH OUTPUT (DALYS- HEALTH OUTPUT (DALYS- reflecting mortality and reflecting mortality and morbidity gains)morbidity gains)

HEALTH ECONOMICS

HEALTH ECONOMICSWITHOUT

THANK YOUTHANK YOU………...….………...….…..opportunity cost…..opportunity cost