Health Economics for MedStud

8/11/2019 Health Economics for MedStud

1/30

Health Economics forMedical Students

Dwidjo Susilo, SE, MBA, MPH

Faculty of Medicine and Health

University of Muhammadiyah Jakarta


2/30

This material is adopted from Health Economics for

Prescribers by Richard Smith (MED) and David Wright

(CAP), the London School of Hygiene & Tropical Medicine.


3/30

Economics, Health and Health Economics

What is economics?

What isnt economics?

What is Health? What is Health Economics?

Key Economic Concepts

Opportunity cost

Efficiency


4/30

Economics is about

Limited resources

Unlimited wants

Choosingbetween which

wantswe can afford

given our resource

budget


5/30

Economics is about choice

Budget

Good AGood B


6/30

Concept 1: opportunity cost

The value of forgone benefit which could beobtained from a resource in its next-best

alternative use.


7/30

Economic Analysis in Health Care by Morris, Devlin and Parkin 2007 John Wiley & Sons Ltd

One In-Vitro Fertilisation course =

2,700

What is the opportunity cost?

1 heart bypass operation

150 vaccinations for Measles,Mumps and Rubella

2000 school dinners

One-third of a cochlear implant

11 cataract removals

Half a junior school teaching

assistant for a year

One-thousandth of a Challenger 2

military tank
http://members.at.infoseek.co.jp/hibiku/military/tank.jpghttp://localhost/var/www/apps/imgres?imgurl=http:/images.icnetwork.co.uk/upl/icliverpool/aug2004/4/1/000D6695-D454-1121-92CC80BFB6FA0000.jpg&imgrefurl=http:/icliverpool.icnetwork.co.uk/0100news/thedebate/tm_objectid=14539857&method=full&siteid=50061&headline=would-you-give-your-child-five-in-one-jab--name_page.html&h=214&w=200&sz=6&tbnid=Pfv7hrAy8_YJ:&tbnh=101&tbnw=94&start=40&prev=/images?q=child+vaccinations&start=20&hl=en&lr=&sa=Nhttp://localhost/var/www/apps/imgres?imgurl=http:/www.carolinaeye.com/gfx/cataracts-img1.jpg&imgrefurl=http:/www.carolinaeye.com/cataracts.html&h=225&w=150&sz=11&tbnid=pYn3QDUIZawJ:&tbnh=102&tbnw=68&start=7&prev=/images?q=cataracts&hl=en&lr=&sa=Ghttp://localhost/var/www/apps/imgres?imgurl=http:/www.tmc.edu/thi/crosslg.jpg&imgrefurl=http:/www.tmc.edu/thi/anatomy2.html&h=469&w=363&sz=66&tbnid=W5KPlnO8m9kJ:&tbnh=124&tbnw=96&start=8&prev=/images?q=human+heart&hl=en&lr=&sa=Ghttp://localhost/var/www/apps/imgres?imgurl=http:/www.abc.net.au/science/slab/cochlear/img/Implant4.jpg&imgrefurl=http:/www.abc.net.au/science/slab/cochlear/default.htm&h=289&w=450&sz=23&tbnid=TuTYJ7-B6s4J:&tbnh=79&tbnw=123&start=9&prev=/images?q=cochlear+implant&hl=en&lr=


8/30

Economists view of the world...

Pessimist: bottle empty

Optimist: bottle full

Economist: bottle wasted

inefficient!


9/30

Concept 2: efficiency

Efficiency = maximising benefit for

resources used

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

Allocative = producing the pattern of

Efficiency output (supply) that

matches the pattern of

consumer want (demand)


10/30

Efficiency and the market

Quantity

Price/Cost

A

Demand

Supply

QA

EquilibriumPrice PA


11/30

Some misconceptions

Economics is

concerned with money

the same as accountancy

only practised by economists

objective


12/30

Economics and money

Economics is concerned with

costs (resource use)

benefits

choice

efficiency

Money is

store of value

means of exchange


13/30

Economics and accountancy



benefits

choice

efficiency

Accountancy is concerned with

monitoring financial transactions


14/30

The practiceof economics



benefits

choice

efficiency

Everyone weighs the relative benefits of each course of action and

choose the action which maximises well-being


15/30

Economics and objectivity

All decisions are based on subjective value

judgements (or judgements of subjective

value!)

Economics makes these explicit


16/30

What is health?

World Health Organisation:

Health is a state of complete physical, mental andsocial well-being

HealthEconomicsis often HealthCareEconomics

Usually healthin health economic

(evaluation) is health statusaccording to somemeasure


17/30

Health status example: EQ-5D


18/30

Applying economics to health (care)

Descriptive = quantification

Predictive= identify impact of change

Evaluative= relative preference over situations


19/30

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


20/30

A: Value of health


21/30

B: Demand for health (Grossman)


22/30

Why Economic Evaluation?

Scarcity choice value of benefits (opportunity cost) efficiency

Economic evaluation = measuring value of alternative courseof action (opportunity cost again)

Opportunity cost forces identification of relevant alternatives Assessment of valuemakes explicit importance of viewpoints

an alternative that seems unattractive from one point ofview may seem more attractive from another (cost to one isbenefit to another)

Valuation requires value judgements to be made explicit Measurement enables uncertainties surrounding orders of

magnitude to be assessed


23/30

Economic evaluation is

The comparative analysis of alternativecourses of action in terms of both their costsand consequences in order to assist policy

decisions(Drummond et al)

Economic evaluation is notchoosing thecheapest

The pursuit of efficient practice is not merelyabout reducing costs. If it were the most efficientprocedure would be to do nothing as that pushescosts to zero(Alan Maynard)


24/30

Important features of economic evaluation

The comparativeanalysis of alternative

courses of action in terms of both their costs

andconsequences in order to assistpolicydecisions(Drummond et al)

1. Costs and consequencesefficiency2. Comparisontechnical efficiency

3. Assist - not replace - decision making


25/30

Place of economic evaluation in the wider

evaluation cycle

needs

assessment

program

planning

program

implementation

process

evaluation

Economic

Evaluat ion

outcome

evaluation

evaluability

assessment

impact

evaluation

1. Can it work (efficacy)?

2. Does it work (effectiveness)?

3. Is it worth doing (efficiency)?


26/30

Characteristics

Economic evaluation has 2 characteristics

1. inputs and outputs (costs and consequences)

2. choice between at least 2 alternatives

Choice

Programme A

Comparator BCostsB

CostsA

ConsequencesA

ConsequencesB


27/30

Types of economic evaluation

Type of Analysis ResultConsequencesCosts

Cost Minimisation

Cost Benefit

Cost Utility

Cost Effectiveness

Money

Single or multiple effects

not necessarily common.

Valuedas utilityeg.

QALY

Different magnitude of acommon measureeg.,

LYs gained, blood

pressure reduction.

Least cost alternative.Identical in all

respects.

Money

Money

MoneyCost per unit of

consequence eg. cost

per LY gained.

Cost per unit of

consequence eg. cost

per QALY.

As for CUA but

valuedin money.

Net

cost: benefit ratio.


28/30

Cost of Illness

Medical care for prevention

Medical care for treatment

Social services for rehabilitation

Productivity loss

Prevention

Treatment

During rehabilitation From decreased workplace productivity as a

result of the disease and death


29/30

Example Cost of Illness

What does cancer cost in Indonesia?

What does heart disease cost the United

States?

What does blindness cost the world?


30/30

Thank You

[email protected]

@dwiedjoe
mailto:[email protected]:[email protected]

Health Economics for MedStud

Documents

Transcript of Health Economics for MedStud