CAP Lecture 1

8/12/2019 CAP Lecture 1

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Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics

Heal th Econom ics for Presc r ibers

Richard Smith (MED)[email protected]

David Wright (CAP)[email protected]


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Learn ing ou tcomes

On completion of the unit the student will beable to:

Critically appraise pharmaco-economic evaluations

Prepare a business case for the introduction andevaluation 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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Delivery

Workshops & Lectures

No directed study

Expectation of significant reading aroundtopic

Reading list provided on Blackboard is

exhaustive


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Topics

Pharmacoeconomics

Healthcare organisation

Managing the pharmaceutical budget Procurement & influencing skills


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Assessment

Critical appraisal of pharmaco-economic evaluation Open book

Unseen paper

Use previously seen and tested checklist

Business case development (1,500 words) Coursework

Based on PCT where born

Local health needs assessment

Description, including costs, of new pharmaceutical service Designed to meet government targets for health

Proposed pharmaco-economic evaluation


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7/33Health 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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Econom ics is about cho ice

Budget

Good AGood B


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Concept 1: opportun i ty cost

The value of forgone benefit which couldbe obtained from a resource in its next-

best alternative use.


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Example of opportun i ty cost

Possible Health Expenditure in a YearPaediatric Care

(No ChildrenTreated in 000s)

Care of Elderly

(No of ElderlyTreated in 000s)

Opportunity Cost

of TreatingChildren in Termsof Elderly Patients

Forgone012345

30282418100

026122030


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Impl icat ions of opportun i ty cost

Deciding to doA 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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Econom ists v iew of the wor ld ...

Pessimist: bottle empty

Optimist: bottle full

Economist: bottle wasted

inefficient!


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Concept 2: eff ic iency

Efficiency = maximising benefit forresources used

Technical = meeting a given objectiveEfficiency at least cost (resources)

Allocative = producing the pattern of

Efficiency output (supply) thatmatches the pattern ofconsumer want (demand)


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Efficiency and the market

Quantity

Price/Cost

Demand

Supply


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Efficiency and the market

Quantity

Price/Cost

A

Demand

Supply

QA

EquilibriumPrice PA


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Top ic versus disc ip l ine

Topic = area of study

Discipline = conceptual apparatus

Health economics is the disciplineof

economics applied to the topicof health.


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Econom ics and money

Economics is concerned with costs (resource use)

benefits choice

efficiency

Money is store of value

means of exchange


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Econom ics and accountancy

Economics is concerned with

costs (resource use)

benefits choice

efficiency

Accountancy is concerned with

monitoring financial transactions


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The practice of economics

Economics is concerned with

costs (resource use)

benefits

choice

efficiency

Everyone weighs the relative benefits of each course of action

and choose the action which maximises well-being


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Econom ics and object iv ity

All decisions are based on subjective valuejudgements (or judgements of subjective

value!)

Economics makes these explicit


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What is health?

World Health Organisation: Health is a state of complete physical,

mental and social well-being

HealthEconomics is often HealthCare Economics

Usually health in health economic

(evaluation) is health statusaccording tosome measure


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Health s tatus example: EQ-5D


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App ly ing econom ics to heal th (care)

Descriptive = quantification

Predictive = identify impact ofchange

Evaluative = relative preferenceover situations


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Health economics map

B. What influences

Health? (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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A: Value o f health


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B. What influences

Health? (other than

health care)

E. Market Analysis

A. What is Health?

What is its value?

D. Supply of

Health Care




C. Demand for

Health Care

F. Macro-

Economic

Appraisal


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B: Demand for heal th (Grossman)


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B. What influences

Health? (other than

health care)

E. Market Analysis

A. What is Health?

What is its value?

D. Supply of

Health Care




C. Demand for

Health Care

F. Macro-

Economic

Appraisal


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C/D/E: Supp l ier-induced demand

Quantity

Price/Cost

D1

S

D2


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B. What influences

Health? (other thanhealth care)

E. Market Analysis

A. What is Health?

What is its value?

D. Supply of

Health Care




C. Demand for

Health Care

F. Macro-

Economic

Appraisal

F: WHO rank ing of heal th systems


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F: WHO rank ing of heal th systems

(top 20)

1 France2 Italy

3 San Marino

4 Andorra5 Malta

6 Singapore

7 Spain8 Oman

9 Austria

10 Japan

11 Norway12 Portugal

13 Monaco

14 Greece15 Iceland

16 Luxembourg

17 Netherlands18 UK

19 Ireland

20 Switzerland


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Health Economics for Prescribers Lecture 1: Economics Health and Health Economics


B. What influences

Health? (other thanhealth care)

E. Market Analysis

A. What is Health?

What is its value?

D. Supply of

Health Care




C. Demand for

Health Care

F. Macro-

Economic

Appraisal

CAP Lecture 1

Documents

Transcript of CAP Lecture 1