1. 1 Econoqualimetrics Edward Broughton, PhD., MPH Senior Economic Analyst, USAID Health Care Improvement Project, EnCompass,

2. USAID HEALTH CARE IMPROVEMENT PROJECT Objectives What are the quality improvement interventions that we evaluate? What is cost-effectiveness analysis? Why do we do CEAs on QI interventions? How do you do CEAs of QI interventions? How do you interpret the results? What do you do with the results of a CEA?

3. USAID HEALTH CARE IMPROVEMENT PROJECT What are the quality improvement interventions that we evaluate? Improvement collaboratives Standards-based management Client-oriented, provider-efficient (COPE) Continuous quality improvement others

4. USAID HEALTH CARE IMPROVEMENT PROJECT EONC QI intervention in Niger Essential Obstetric and newborn care Program to address poor birth outcomes for mothers and children Coordinated and supported multiple facility-based teams to overcome barriers to implementation of interventions to reduce PPH and maternal and newborn mortality Teams worked on common set of evidence-based care practices, monitored indicators, and met regularly to share successful changes Active management of the third stage of labor (AMTSL) and immediate essential newborn care (ENC) 25 reference hospitals in 7 of Niger’s 8 regions in 2006. Expanded to 8 primary care maternities.

5. USAID HEALTH CARE IMPROVEMENT PROJECT What is cost-effectiveness analysis? A way to measure efficiency of an intervention Cost-effectiveness = costs ÷ effects Cost-effectiveness ANALYSIS is the cost-effectiveness of one intervention relative to a baseline One of many forms of economic analysis. Others include cost-minimization, cost-utility analysis and cost- benefit analysis

6. USAID HEALTH CARE IMPROVEMENT PROJECT Why do cost-effectiveness analysis of QI programs? Compare the QI intervention to doing nothing Compare one QI intervention to another Compare a QI intervention to another health intervention Determine what the biggest contribution to the cost- effectiveness of a program is Determine whether a program is affordable / sustainable

7. USAID HEALTH CARE IMPROVEMENT PROJECT How to do a CEA There is a flu epidemic at and there is a 100% certainty that you will contract the disease Cost of the flu vaccine (100% effective) is $15 Treatment of a case of flu costs $10 Cost of flu vaccine strategy is: $15 - $10 = $ 5

8. USAID HEALTH CARE IMPROVEMENT PROJECT Is it cost-effective? Incremental cost-effectiveness ratio (ICER) = difference in costs / difference in effects ICER = ($ 15 – 10) / (1 – 0) = $5 / flu case averted What if the flu vaccine cost $ 5 ? ICER = ($ 5 – 10) / (1 – 0) = – $ 5 /per flu case averted

9. USAID HEALTH CARE IMPROVEMENT PROJECT CEA of EONC QI intervention in Niger Answers the question of what are the effects of the intervention on mothers and newborns Cost-effectiveness = Cost of the intervention per outcome (birth) CEA is cost-effectiveness after the intervention relative to the cost- effectiveness before the intervention Active management of the third stage of labor (AMTSL) and immediate essential newborn care (ENC) 25 reference hospitals in 7 of Niger’s 8 regions in 2006. Expanded to 8 primary care maternities.

10. USAID HEALTH CARE IMPROVEMENT PROJECT Defining the study What is the specific question we are asking? From whose perspective are we asking it? What is the time-frame? What are the outcomes we are considering?

11. USAID HEALTH CARE IMPROVEMENT PROJECT Data Costs –Costs of the intervention: HCI/USAID, MOH, (patients) –Change in costs of services (deliveries) –(costs to the MOH if they were doing the intervention) Effectiveness –Process measures Compliance with treatment standards –Patient outcomes PPH, deaths averted –Composite measures DALYs, QALYs

12. USAID HEALTH CARE IMPROVEMENT PROJECT Models

13. USAID HEALTH CARE IMPROVEMENT PROJECT Key results: : Cost effectiveness analysis of the EONC QI intervention in Niger Therefore the MOH implementing the improvement collaborative improves service delivery and maternal outcomes AND saves money Total cost of QI intervention w HCI and MOH: $ 843,000 or $ 9.45 per delivery Incremental total cost: $ 217,000 or $ 2.43 per delivery Total cost of MOH alone: $ 404,000 or $ 4.50 per delivery Incremental cost: -$ 152,000 or -$ 1.70 per delivery Average cost per delivery: Before QI: $ 35After QI: $ 28 Incremental cost-effectiveness With MoH & HCI & development costs W. costs for MoH to implement program Estimate ($) Per PPH averted 147-101 Per additional mother receiving AMTSL 3.48-2.43 Per child receiving essential neonatal care 3.13-2.07 Per DALY averted 3.17-2.23

14. USAID HEALTH CARE IMPROVEMENT PROJECT Cost effectiveness plane 14 Higher cost Lower cost More effective Less effective Willingness-to-pay threshold $3.17 -$2.23

15. USAID HEALTH CARE IMPROVEMENT PROJECT Willingness to pay For the individual: how much would you be willing to pay for good health / avoid bad health? For society: how much have decisionmakers decided to pay for good health / avoid bad health? –UK threshold approx £35,000 (US$55,650) –Australia and NZ about the same –Developing countries: ? Affordability –Use of league tables

16. USAID HEALTH CARE IMPROVEMENT PROJECT Cost effectiveness plane 16 Higher cost Lower cost More effective Less effective Willingness-to-pay threshold Accept Reject Accept Reject Accept (?)

17. USAID HEALTH CARE IMPROVEMENT PROJECT Interpretation of results Intervention cost $843,000 but saved $626,000 therefore the net cost was $217,000 (or $2.43/delivery) The relative cost-effectiveness (ICER) is $ 3.17 per DALY averted if HCI does the intervention or … …about —$2.23 per DALY averted if MOH does the intervention

18. USAID HEALTH CARE IMPROVEMENT PROJECT But….. Efficiency is only one criteria for health resource allocation decisions We should consider equity We should consider affordability We should consider sustainability

19. USAID HEALTH CARE IMPROVEMENT PROJECT Mini-Exam Which of the following is true?: A.0.1 QALYs is better health than 0.1 DALYs B.0.1 DALYs is better health than 0.1 QALYs C.0.1 QALYs is roughly equivalent health to 0.1 DALYs D.Not enough information to decide If comparing your health program to a baseline, which of the following is true?: A.negative incremental cost-effectiveness ratio is better than positive B.Positive incremental cost-effectiveness ratio is better than negative C.The sign on an incremental cost-effectiveness ratio is irrelevant D.Not enough information to decide

20. USAID HEALTH CARE IMPROVEMENT PROJECT Mini-Exam Which of the following is true?: B.0.1 DALYs is better health than 0.1 QALYs If comparing your health program to a baseline, which of the following is true?: A.negative incremental cost-effectiveness ratio is better than positive