Post on 24-Dec-2015
Economic Evaluations, Briefly…
CHSC 433CHSC 433
Module 6/Chapter 13Module 6/Chapter 13UIC School of Public
HealthL. Michele Issel, PhD, RN
Objectives
To understand the conceptual basis of
economic evaluations
Be able to distinguish among the types of
economic evaluations
Be confident as a participant in a team that
undertakes an economic evaluation
NOT: be fully competent to do on own!
Be a critical consumer
Not all publications and
reports are what they seem
or do what they are titled.
Be a savvy consumer of
economic evaluations…
Types of Economic Evaluations
Cost Description
Cost Analysis
Cost-Effectiveness
Cost-Benefit
Cost-Utility Note: These are not mutually exclusive,
nor the only way to typify economic evaluations.
Which Economic Evaluation to Do?
To formulate the economic evaluation question decide whether:
Are 2 or more programs being compared?
Are cost only, or costs and impact being considered?
Types of Economic Evaluations (Drummond et al, 1997)
Looks at: Impact onlyImpact only Costs onlyCosts only Impact and costsImpact and costs
One One programprogram
Outcome description
Cost description
Cost-impact description
2 or more 2 or more programsprograms
Efficacy or effectiveness evaluation
Cost analysis
Cost-effectivenessCost-benefitCost-utility
Similarity of process
The steps are basically the same
Note: The alternative program can be either the do-nothing option or the “standard treatment”
Terminology to know
Opportunity CostsExternalitiesDiscountingInflationDepreciationSensitivity analysis
Steps in Cost & Effect Evaluations
Define program• Target population, Interventions to be
evaluated, Program goals and objectives
Identify the alternatives to be compared
Develop decision rules• assumptions, definitions
Steps (Continued)
Compute costs related to the program(s)• Resources utilized by program and by
participants• Productivity loss/gain of participants,
family burden, etc
•Adjust for time through discounting, inflation, depreciation
Steps (continued)
Identify and measure program impacts or outcomes
Compute costs of effects Conduct sensitivity analysis
Disseminate findings
Cost-Effectiveness Analysis (CEA)
Asks: Does Program AA have more effect for the dollars expended than does Program BB?
Findings: Specific comparison between programs
C/E ratio is the incremental price to get one unit of effect compared to the alternative
CEA
Effects of the programs are measured in natural or physical units of health effects that are common to both programs
QALYs, DALYs, HLYs can be used
Amount of cost per amount of effect for each program
Low C/E ratio is a good buy
Formula for CEA Ratio
Basically ~
Numerator of Cost $ Denominator of Health Effect Unit
Cost = health care resources + non-health care resources + informal caregiving + participant time
Cost-Benefit Analysis (CBA)
Asks: Are benefits gained worthwhile to society, given the costs?
Findings: Broad, policy implications because of societal focus
Grounded in welfare economics
CBA
Benefits (impacts) measured in market value, willingness to pay (WTP), life expectancy. Measures ALL outcomes.
Value in dollars is used to compare programs. Often compare to the do-nothing option.
Formula for CBA Ratio
Basically ~
Numerator of Cost $Denominator of Benefit $
Benefit $= participant productivity + gain in taxes + reduction in health expenses + etc...
Cost-Utility Analysis (CUA)
Asks: How much is it worth to have a particular state of health?
Findings: Reflect importance; difficult to use for planning or policy because of idiosyncratic nature of preferences.
CUA
Measures Used: Utility measures, weighted utility measures.
Utility refers to a preference for a state of health, which is achieved as an impact from the program.
Utility Determination
Example~ Would you rather have sever, chronic
hypertension or Type II diabetes? Would you rather loose right leg or
left hand? Would you rather loose you left hand
or have Type II diabetes
Criteria for Assessing Published Economic Evaluations
(Drummond et al 1997; Gold et al 1996)
FRAMEWORKFRAMEWORK:
Well defined economic question
Description of alternative programs
Effectiveness of intervention(s)
established
Criteria (continued)
DATA and METHODSDATA and METHODS: Costs and consequences/impact identified for
alternative programs Appropriateness of units of measure Credible values for costs and
consequences/impacts Cost adjustments for timing (discounting,
etc) State year and type of currency Software used
Criteria (continued)
RESULTSRESULTS: Sensitivity analysis conducted Graphical presentation of C/E results Any secondary analyses
DISCUSSIONDISCUSSION: Limitations of the study Policy implications Intervention implications
Economic Evaluations Across the Pyramid
Direct Health Care
Services____________________
Enabling Services___________________________
Population-Based Services___________________________________
Infrastructure Services
Note:
Possible at each level
Precision in cost estimation decreases as move down the pyramid