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

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

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

BURDEN

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

BURDEN SCENARIOS

BURDEN SCENARIOS PROGRAM COSTS

BURDEN SCENARIOS VACCINE PROGRAM COSTS DISEASE TREATMENT COSTS

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

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

DALY LOSS PER FRACTURE

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

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

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

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

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

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

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

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

GCEA: THREE PROGRAMME EXAMPLE A = Operation on rare disease (Cost = $1m, QALYS saved = 1) 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) 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) C = Preventive Nutritonal Campaign (Cost = $1,001,000, QALYS= 500)

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

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

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

GENERALISED CEA CALCULATE NULL SETTING WHERE NO INTERVENTION OCCURS CALCULATE NULL SETTING WHERE NO INTERVENTION OCCURS CALCULATE ALL INTERVENTIONS WITH RESPECT TO NULL CALCULATE ALL INTERVENTIONS WITH RESPECT TO NULL CHOOSE INTERVENTION C AND GAIN CHOOSE INTERVENTION C AND GAIN = 1998 QALYS

COST per QALY ($)

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

HEALTH ECONOMICS WITHOUT

THANK YOU ………...….…..opportunity cost