CAP Lecture 1 (1)
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Transcript of CAP Lecture 1 (1)
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health Economics for Prescribers
Richard Smith (MED)[email protected]
David Wright (CAP)[email protected]
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Learning outcomes
On completion of the unit the student will beable to:
y
Critically appraise pharmaco-econ
omic evaluation
sy Prepare a business case for the introduction and
evaluation of a novel pharmaceutical service designedto improve pharmaceutical care within the NHS;considering local health needs & inequalities,government targets and government strategies forhealth and pharmacy
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Delivery
Workshops & Lectures
No directed study
Expectation of significant reading aroundtopic
Reading list provided on Blackboard is
exhaustive
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Topics
Pharmacoeconomics
Healthcare organisation
Managing the pharmaceutical budget
Procurement & influencing skills
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Assessment
Critical appraisal of pharmaco-economic evaluationy Open book
y Unseen paper
y Use previously seen and tested checklist Business case development (1,500 words)
y Coursework
y Based on PCT where born
y Local health needs assessment
y Description, including costs, of new pharmaceutical servicey Designed to meet government targets for health
y Proposed pharmaco-economic evaluation
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Lecture 1: Economics, Health and
Health Economics
What is economics?
What isnt economics?
What is Health? What is Health Economics?
Key Economic Concepts
y Opportunity cost
y Efficiency
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economics is about
Limited resources
Unlimited wants
Choosingbetweenwhich wants we canafford given ourresource budget
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economics is about choice
Budget
Good AGood B
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Concept 1: opportunity cost
The value of forgone benefit which couldbe obtained from a resource in its next-
best alternative use.
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Example of opportunity cost
Possible Health Expenditure in a Year
Paediatric Care(No ChildrenTreated in 000s)
Care of Elderly(No of ElderlyTreated in 000s)
Opportunity Costof TreatingChildren in Termsof Elderly Patients
Forgone0
12345
30
282418100
0
26122030
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Implications of opportunity cost
Deciding to do A implies deciding nottodo B (i.e. value of benefits from A>B).
Cost can be incurred without financialexpenditure.
Value not necessarily determined by themarket.
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economists view of the world...
Pessimist: bottle empty
Optimist: bottle full
Economist: bottle wasted
inefficient!
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Concept 2: efficiency
Efficiency = maximising benefit forresources used
Technical = meeting a given objectiveEfficiency at least cost (resources)
Allocative = producing the pattern ofEfficiency output (supply) that
matches the pattern ofconsumer want (demand)
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Efficiency and the market
Quantity
Price/Cost
Demand
Supply
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Efficiency and the market
Quantity
Price/Cost
A
Demand
Supply
QA
EquilibriumPrice PA
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Topic versus discipline
Topic = area of study
Discipline = conceptual apparatus
Health economics is the discipline ofeconomics applied to the topic of health.
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Some misconceptions
Economics is
y concerned with money
y the same as accountancyy only practised by economists
y objective
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economics and money
Economics is concerned withy costs (resource use)
y benefitsy choice
y efficiency
Money isy store of value
y means of exchange
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economics and accountancy
Economics is concerned with
y costs (resource use)
y benefitsy choice
y efficiency
Accountancy is concerned with
y monitoring financial transactions
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
The practice of economics
Economics is concerned with
y costs (resource use)
y
ben
efitsy choice
y efficiency
Everyoney weighs the relative benefits of each course of action
and choose the action which maximises well-being
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economics and objectivity
All decisions are based on subjective valuejudgements (or judgements of subjective
value!)
Economics makes these explicit
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
What is health?
World Health Organisation:y Health is a state of complete physical,
men
tal an
d social well-bein
g Health Economics is often Health
Care Economics
Usually health in health economic
(evaluation) is health status according tosome measure
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health status example: EQ-5D
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Applying economics to health (care)
Descriptive = quantification
Predictive = identify impact ofchange
Evaluative = relative preferenceover situations
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health economics map
B. What influencesHealth? (other than
health care)
E. Market Analysis
A. What is Health?What is its value?
D. Supply of
Health Care
G. Planning, budgeting,
regulation mechanisms
H. Micro-Economic Appraisal
C. Demand for
Health Care
F. Macro-
Economic
Appraisal
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
A: Value of health
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health economics map
B. What influencesHealth? (other than
health care)
E. Market Analysis
A. What is Health?What is its value?
D. Supply of
Health Care
G. Planning, budgeting,
regulation mechanisms
H. Micro-Economic Appraisal
C. Demand for
Health Care
F. Macro-
Economic
Appraisal
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
B: Demand for health (Grossman)
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health economics map
B. What influencesHealth? (other than
health care)
E. Market Analysis
A. What is Health?What is its value?
D. Supply of
Health Care
G. Planning, budgeting,
regulation mechanisms
H. Micro-Economic Appraisal
C. Demand for
Health Care
F. Macro-
Economic
Appraisal
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
C/D/E: Supplier-induced demand
Quantity
Price/Cost
D1
S
D2
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health economics map
B. What influencesHealth? (other than
health care)
E. Market Analysis
A. What is Health?What is its value?
D. Supply of
Health Care
G. Planning, budgeting,
regulation mechanisms
H. Micro-Economic Appraisal
C. Demand for
Health Care
F. Macro-
Economic
Appraisal
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
F: WHO ranking of health systems
(top 20)
1 France
2 Italy
3 San Marino
4 Andorra
5 Malta
6 Singapore
7 Spain8 Oman
9 Austria
10 Japan
11 Norway
12 Portugal
13 Monaco
14 Greece
15 Iceland
16 Luxembourg
17 Netherlands18 UK
19 Ireland
20 Switzerlan
d
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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health economics map
B. What influencesHealth? (other than
health care)
E. Market Analysis
A. What is Health?What is its value?
D. Supply of
Health Care
G. Planning, budgeting,
regulation mechanisms
H. Micro-Economic Appraisal
C. Demand for
Health Care
F. Macro-
Economic
Appraisal