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PRIORITY SETTING

Health Economic Course Series. PRIORITY SETTING. http://diankusuma.wordpress.com. Economics = study of unlimited needs combined with limited resources Government intervention required where market fails

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PRIORITY SETTING

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  1. Health Economic Course Series PRIORITY SETTING http://diankusuma.wordpress.com

  2. Economics = study of unlimited needs combined with limited resources • Government intervention required where market fails • Given limited resources and unlimited needs, how does government prioritize its interventions?

  3. Mechanism to decide on Best Use of Resources • Free Markets = price mechanism • Cooperative/community schemes = bottom up • Centralized rational planning (e.g. communist/socialist countries) = top down • Non of these is perfect • Equity? • Efficiency? • Combinations • Importance of clear criteria

  4. Historical Allocation Most widely used method = “give the same last year” If needed adapted to budget changes, inflation etc This avoids difficult choices, BUT -what if needs change (e.g. epidemic)? -what if technology changes (e.g. cheaper provision)? -what if costs change (e.g. economies of scale)?

  5. Criteria for Resource Allocation • Technical Efficacy of intervention – researchers • Operational Effectiveness of interventions – doctors • Political desirability – politicians • Feasibility – planners • Fit within development agenda – donors • Preferences – consumers • Equity – all • Burden of disease – epidemiologist • Costs of interventions - economists

  6. Priority setting framework WDR 93

  7. Which interventions save most lives? Burden of disease (BoD) = Total quantity of life years lost due to mortality and morbidity, adjusted for the decreased quality of life experienced due to illness. Measured in: Disability Adjusted Life Year (DALY) = quantitative indicator of burden of disease that reflects the total amount of healthy life that would be lost, from premature mortality or from some degree of disability during a period of time, due to disease.

  8. DALYs due to living with disability

  9. DALYs due to early death(Black area measures DALYs; Black+White is a standard life)

  10. DALYs due to disability and premature death combined

  11. Choices behind DALYs • Choice of standard life expectancy for men and women • Severity weight for disabilities: • 1 is severely disabled or death, 0 is healthy • Weight for age which disease occurs: • Children and old < adults • Time preference: • Long term effects “discounted”, • i.e. future is valued less

  12. Disability weights

  13. Example of DALY calculation Girl, 5 years old, treated successfully for deafness, who lives until she is 82,5 Life 82,5 – 5 = 77,5 Disabled life Deafness = 30% disability 1 year of life = (1-30%) = 0,7 year DALY if deaf 77,5 x 0,7 = 54 year DALY lost due to deafness or DALY gained due to treatment 77,5 – (77,5 x 0,7) = 0,3 x 77,5 =77,5 – 54 = 23,5

  14. Priority setting framework WDR 93

  15. Different types of economics evaluation 1. Cost effectiveness Used to compare interventions on the basis of a specific health outcome (e.g. DALY saved) 2. Cost utility Used to compare interventions on the basis of a utility-weighted health outcome (e.g. QALY saved) 3. Cost benefit Used to compare interventions on the basis of a monetary value of the health outcome (e.g. $ cost -- $ benefits)

  16. Cost effectiveness of interventions Cost-effectiveness ratio = Cost of intervention DALYs gained Costs: = Direct service costs (fixed and variable) that could be attributed to particular interventions. Excluded: indirect and private costs (government perspective), intangible costs (pain & suffering)

  17. Cost-effectiveness of interventions • Relative concept: • More/less cost-effective interventions • Overall budget • Measurement of costs limited • Measurement of effectiveness limited • Other criteria to prioritize

  18. Priority setting framework WDR 93

  19. Priority Setting • Priority interventions are those that: • Address conditions that are a high burden of disease (high DALY loss) • Can be delivered with low cost per DALY gained (cost effective) • “League tables” of interventions: • Low to high cost effectiveness ratio ($/DALY gained) • More or less cost effective

  20. Example: HIV/AIDS

  21. EDR 1993 Package of priority interventions • Public Health • Immunization • School-base health services • IEC on nutrition and FP • Reduction tobacco and alcohol • Improvements of household environment • AIDS prevention • Clinical Services • Maternal health • Family planning • TB • STDs • Child and infant health $12 per capita

  22. Macroeconomics and Health 2001 Essential health services package, scaled up to reach 80-90% of the population by 2015. = $14 per capita for the least developed countries. • Revision: • New interventions added (ART) • New evidence on effectiveness • Updated BoD since 1993 • Country-specific costs • Costs of scaling-up included

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