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

COST-EFFECTIVENESS ANALYSIS (CEA) 5 10 4 The cheapest method of attaining the SAME GOAL is the most cost-effective.

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

COST-UTILITY ANALYSIS

BURDEN

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

BURDEN SCENARIOS

SCENARIOS BURDEN PROGRAM COSTS

BURDEN SCENARIOS VACCINE PROGRAM COSTS DISEASE TREATMENT COSTS

+ COSTS OF DISEASE SEQUELLAE Utilisation Rates for: self-care, self care +medication/herbs, traditional healer, community clinic/GP, in-hospital care, intensive care, out-patient visits. DISEASE TREATMENT COSTS 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 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 bibliog adj to israel

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

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 CPDALY < GNP per head

COST EFFECTIVE 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 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.

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

Prevention Programmes 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.

GCEA: THREE PROGRAMME EXAMPLE 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) C = Preventive Nutritonal Campaign (Cost = $1,001,000, QALYS= 500)

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

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

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

GENERALISED CEA CALCULATE NULL SETTING WHERE NO INTERVENTION OCCURS CALCULATE ALL INTERVENTIONS WITH RESPECT TO NULL CHOOSE INTERVENTION C AND GAIN 2000-2 = 1998 QALYS

COST per QALY ($)

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

HEALTH ECONOMICS WITHOUT HEALTH ECONOMICS

THANK YOU ………...….…..opportunity cost