Transcript Getting to the essential

Knowing what you get for
what you pay
An introduction to cost effectiveness
FETP India
Objective this lecture
Understand how cost effectiveness studies
are conducted
Key areas
• Types of analysis
• Conducting a cost effectiveness analysis
• Generalized cost effectiveness
Cost benefit analysis
• Concept
 Use of dollars as the common metric
 No use of health outcome
 Results expressed in benefit-cost ratio
• Advantages
 Allows comparisons with non health programmes
 Useful when intervention generates non health outcomes
• Disadvantages
 Controversial
 Assigns a value to human life
Public health managerial processes
Planning
Relevance
Programming
Adequacy
Implementation
Inputs
Programmed
resources
----------Allocated
resources
Process
Output
Norms and
procedures
Agreed
objectives /
targets
----------------Achieved
objectives /
targets
---------Applications
of norms /
procedures
Progress
Efficiency
Outcome
Impact
Effectiveness
Efficiency and effectiveness
• Efficiency
 Relationship between the output obtained and
the efforts (input) invested
• Effectiveness
 Degree of attainment of pre-determined
objectives of a programme
(e.g., in terms of reducing death / disability)
Definition of cost effectiveness analysis
• Method used to evaluate public health interventions
in terms of cost per health outcome
• No attempt made to assign a monetary value to
disease averted
• Outcome used:
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Cases
Deaths
Years of life
DALYs
Cost effectiveness analysis: Relevance
• Estimates cost per health outcome
• Provide additional information to decision
makers
• Is not the only criteria to take into account
to make decisions
Effectiveness
• Obtain documented data on effectiveness
• Measure effectiveness precisely
 Meta analysis
 Confidence intervals
• Document assumptions
The cheapest way to go to the moon is to jump. However, we
don’t do it because it does not work
Cost utility analysis
• Subset of cost effectiveness analysis
• Take YLLs or DALYs as outcome
Discounting
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Reflect time preference
Applies to costs
Applies to effects
Subject to discussion
Conducting a cost effectiveness study
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Frame the problem
Identify interventions
Define outcome measures
Estimate net costs
Estimate effects
Compile costs and effects
Perform sensitivity analysis
1. Frame the problem
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Write study question
Define economic perspective
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Chose time frame for intervention
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Ministry of health
Health system
Societal
Absorb start up costs
Chose analytic horizon for consequences
2. Identify interventions
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Take the baseline
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“Do nothing” scenario
Define potential interventions
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Describe components
Relate to measurable effectiveness
3. Define outcome measures
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Intermediate outcomes
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Cases identified, treated
Final outcomes
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Cases prevented
Life saved
YLLs
DALYs
Cost utility
4. Estimate costs
• Cost of the intervention
• ? Cost of the disease averted
 Medical costs
 Non medical costs
• ? Productivity losses
Net costs = Cost
intervention
- Cost
disease averted
5. Estimate effects
•
Burden of disease
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Incidence of disease
Incidence of complications (natural history)
Utility calculations
Effectiveness of intervention
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Documented effectiveness estimates
Compliance
Coverage
6. Compile costs and effects
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Calculation of cost effectiveness ratio
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Average
Incremental
Can address various options
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Coverage
Discounting
7. Perform sensitivity analysis
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Parameters to examine
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Costs
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ps and qs
Discounting
Effectiveness
Burden of disease
Combinations
Advanced analysis
Key elements of the report of a cost
effectiveness study
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Study perspective, time frame and horizon
Study question
Assumptions
Description of interventions
Identification of relevant costs
Cost effectiveness ratios
Sensitivity analysis
Discussion
Cost effective and cost saving
• Some interventions have negative net costs
• Cost saving interventions are:
 Uncommon
 Subject to distributional effects
• Cost effective does not mean cost saving
• Human life is not “cost effective”
 Investment is needed to sustain it
Cost effectiveness criteria
• Not cost effective
 Cost per DALY above 3 GDP / capita
• Cost effective
 Cost per DALY under 3 GDP / capita
• Highly cost effective
 Cost per DALY under 1 GDP / capita
WHO commission on macroeconomics and health
Cost effectiveness
versus burden of disease
• Cost effective intervention can prevent only
a small burden of disease
• Some large sources of burden of disease may
be preventable through non cost effective
interventions
Cost effectiveness
of various health interventions
Limitations of traditional
cost-effectiveness studies
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Different horizons
Different types of costs included
Different costing methods
Different discounting rates
Different outcome measures
Incremental approach
 Existing interventions not reconsidered
• One dimension
• May not address variations by regions
• Conflicts of interests
The WHO CHOICE project:
Generalized cost-effectiveness
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Identical horizons
Standardized approach to including costs
Unique costing methods
Standardized discounting policy
DALY as outcome measures
Null case base
 Existing interventions reconsidered
• Multiple dimension
• Region specific
• Science dissociated from advocacy
Generalized cost effectiveness:
Challenges
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Recent concept
Difficulties in adapting theoretical concepts
Resource intensive
Single study team (at the moment)
Generalized cost effectiveness:
Example of results for the SEAR D region
Intervention costs
DALY averted
Average CE
ratio
Disinfection at point of use with education
523,019,455
3,248,440
161
Halving the population without improved
water supply
585,826,305
951,318
616
Halving the population without improved
water supply and sanitation
5,907,522,335
4,908,162
1,204
Improved water supply and sanitation (98%)
11,578,743,777
9,627,739
1,203
Improved water supply and sanitation with
disinfection (98%)
14,184,319,328
25,443,560
557
Piped water supply and sewage with
treatment (98%)
39,689,844,066
38,442,566
1,032
Intervention
Other criteria to chose an intervention
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Feasibility
Ethics
Equity
Sustainability
Acceptability
Take home messages
• Chose cost effectiveness analysis
• Frame the question right
• Follow up progress on the generalized cost
effectiveness concept