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Health Economics

Health Economics. Key slides. The basis of health economics. Budget constrained Healthcare system. New health technologies Health gain Additional cost. Displaced services Health forgone Resources released. Methods of economic evaluation. Cost-minimisation analysis

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Health Economics

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  1. Health Economics Key slides

  2. The basis of health economics Budget constrained Healthcare system • New health technologies • Health gain • Additional cost • Displaced services • Health forgone • Resources released

  3. Methods of economic evaluation • Cost-minimisation analysis • Requires evidence of therapeutic equivalence • Cost-effectiveness analysis • Requires same measure of outcome • Cost-utility analysis • Considers health-related quality of life, and survival • Cost-benefit analysis • Requires assigning monetary value to benefits.

  4. What is a QALY? 1.0 QALYs gained Medicine A QUALITY OF LIFE (Weights) Medicine B 0.0 Death Death QUANTITY OF LIFE (Years)

  5. Cost-effectiveness plane Δ Cost £20-30k/QALY Non-cost- effective Dominated Cost-effective Δ QALYs Non-cost-effective Dominant Cost- effective

  6. NICE Decision ruleRawlins MD and Culyer AJ. BMJ 2004;329:224-227 Below point A, unlikely to reject a technology due to cost-effectiveness A <£20,000 per QALY gained B >£30,000 per QALY gained Probability of rejection on grounds of cost infectiveness To the right of point B, need special reasons for accepting a technology Increasing cost/QALY (log scale)

  7. Summary • Demand for healthcare is infinite, but resources are finite • Economic evaluations are a tool to maximise population health given a fixed budget • Economic analyses rely heavily on modelling and assumptions • But this is better than crude cost comparisons • Health economics should inform (and not make) decisions • It is important to understand the assumptions to make sense of what the evaluation is telling you.

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