Transcript Economic effect

EVALUATION OF THE EFFICIENCY
OF MEDICAL ACTIVITY
Elena A. Abumuslimova
Ph.D., Associate Professor
Department of Public Health and Health Care,
Northern-West State Medical University named after I.I. Mechnikov, SaintPetersburg

Evaluation of the efficiency of
medical activity is a logical and
explicit framework to health care
workers, decision-makers,
governments or society at large, to
make choices on how best to use
resources.
2

There is difference between "effect" and
"efficiency" of medical activity.

The concept of "effect" means the result of the
actions, consequences of effect of any reason. For
example, spending the economic resources to treat
the patient, the doctor receives recovery or
improvement of the patient’s condition.

The term "efficiency" refers to the degree of
achievement of results in relation to the inputs
spending for the treatment. Evaluating the
effectiveness shows how to use the material,
human and financial resources in any medical
method, intervention, treatment or prevention.
3

The concept of "effectiveness of medical care"
shouldn’t be identified with general economic
category, with the corresponding criterion in the
sphere of material production.
It is possible to have "zero" or even "negative"
economic outcome in health care, even with the
most skilled labor and the use of modern medical
technology.
4

The concept of efficiency is close to the notion of
effectiveness.

Effectiveness is generally understood as the
degree of achievement of positive outcomes,
without regard to the cost of their implementation.
From this point of view, the efficiency can be defined
as the effectiveness in relation to the costs. But high
effectiveness can be achieved with the excessive
effort and expense that sharply lowers economic
efficiency.
5
Efficiency and effectiveness of health care may be in
direct and inverse relationship. This is due to the
action of two groups of factors:
 1. The influence on the treatment’s outcome of the
individuality of a patient. Thus for the same
treatment in different patients may be expected a
different outcomes and when the same result can be
achieved with different costs.
 2. Different criterion for evaluating of the
effectiveness of different levels of care. By assigning
a patient a potent and expensive medicine doctor
evaluates the positive results as obtained at
minimum cost, while total hospital inputs can be
high and low efficiency.

6

Effectiveness of general health care, its
services and separate activities is measured
as a set of criteria and indicators, each of
them characterizes some aspect of the
process of medical practice.
7

The effectiveness of the health care industry is expressed
by the criteria close to macroeconomic ones: its impact on
maintaining and improving public health, reducing the
costs of health and social care, the cost savings in other
sectors of the economy, an increase in the growth of
national income.

The effectiveness of public health establishments will be
determined by a set of indicators approved by the relevant
health authorities (morbidity, disability, demographic and
other criteria).

The efficiency of the private health organizations will
mostly be defined such a macroeconomic indicator as the
size of the resulting profits.

The effectiveness of the doctor working in the medical
establishments, mainly will be measured by the structure
of outcomes of treated patients, the positive dynamics of
the patients under observation, etc.
8
Directions for estimation of
efficiency in public health care:

By a type of efficiency: medical, social, economic.

By a level: the level of the physician, the level of
work units, the level of health establishment, the
level of the health care industry, the level of the
national economy.

By stages or sections of work: the preventive
stage of the disease, the treatment stage, the
rehabilitation stage.
9
Directions for estimation of
efficiency in public health care:

Volume of work: the effectiveness of treatment and
preventive measures, the effectiveness of medical-social
programs.

According to the method of measurement results:
by estimation a reduction of a loss of resources; be
counting the saving of resources; an additional result,
the integrated index which takes into account all the
results.

According to the cost: cost of public labor; total ratio
of costs of living and social labor.

By types of factors: standard indicators of population
health; indicators of labor costs, cost parameters.
10

Unlike other sectors of the economy the results of
therapeutic measures in health care are analyzed
from the standpoint of the three types of efficiency:
social, medical and economic. The most priorities of
which are medical and social efficiency. Without
taking into account medical and social efficiency
economic efficiency can’t be determined. There is a
relationship and interdependence between these
three types of efficiency.
11
Medical efficiency

there is degree of achievement of
objectives for the prevention,
diagnosis, treatment and rehabilitation
of diseases.
12
Medical efficiency

Medical effectiveness is evaluated on several levels.

On the level of one specific patient medical
efficiency is healing or improvement of health,
recovery of lost functions of specific organs and
systems.

On the level of the health facilities and public
health industry in general medical effectiveness is
measured by many specific indicators: share of
recovered patients, the reduction of cases of
transition to the chronic form of the disease,
reducing the frequency of morbidity among the
population, etc.
13
Medical efficiency
Number of cases of
achievement of objectives
for the treatment
Medical efficiency
=
Number of all evaluated
cases
14

Medical efficiency reflects the extent of achievement
of aims in diagnostic and treatment of diseases in
the context of quality criteria, adequacy and
effectiveness.
Medical intervention may be more effective if the
scientific level and their implementation provide the
best result of health care at the lowest cost of all
resources. But even under ideal quality of medical
work the main goal for this activity – person’s health
- can be don't achieved.
15
Social efficiency

is the extent of achievement of social
results.
16
Social efficiency

This kind of efficiency in health care is also assessed
at two levels:

at the level of a specific patient: his return to
work and an active social life, satisfaction with
quality of medical aid;

at the level of the public health industry:
increasing of the life expectancy of the population,
reducing criteria of mortality and disability,
satisfaction of society with quality of medical aid
system as a whole.
17
Social efficiency
Social
efficiency
Number of cases with satisfaction
of quality of medical aid
=
Number of all evaluated cases
18
Economical efficiency of health care

is the economic effect of the medical
establishments activity correlating with the
amount of money spent on public health
care.
Economical
efficiency
Economical effect that was
achieved
=
Amount of money spent on the
treatment
19

Assessing the benefits and costs, economic analysis can
compare various medical programs, technologies,
services aimed at qualitatively similar results, but
obtained with different efficiencies.

Health care specific feature is that often the medical
therapeutic and preventive measures can be economically
unfavorable, but the medical and social effects demand
their carrying out.
Thus the organization of health care action for older
people with chronic and degenerative diseases, patients
with mental problem, etc. has the apparent positive
medical and social effectiveness but on the other hand
economic effect will be negative.
20

Medical and social effects are achieved by using
modern medicine, intensive care - the man's life is
saved, but he/ she can become disabled and lose the
opportunity to engage in socially useful work.

However the cost effectiveness in the health care
don't determines the choice of certain therapeutic
measures. But the criteria of economic efficiency
along with medical and social efficiency can help in
prioritizing of certain medical activities in conditions
of limited resources.
21


The main objectives of economic analysis in public
health are comparing health costs with the level of
social and economic society’s losses from morbidity
and mortality. The next aim is receiving economical
effect by improving public health. Generally
improving public health accelerates the
development of social production and the growth of
national income and welfare.
Cost-effectiveness is associated with the search for
the most economical use of available resources. This
criterion is a necessary element in the assessment of
the functioning health care system as a whole, its
certain departments and agencies, as well as
economic feasibility of measures for the protection
of health of population.
22
Economic efficiency in health care is considered in
two ways:

at the first, for compare the effectiveness of using of
different types of resources,

secondly, in terms of evaluating of influence of
public health on the development of social
production in general.
23

Methodological approaches in determining of the
cost-effectiveness of health care is based primarily
on determining of the cost of the special types of
medical care and epidemiological service and the
amount of damage caused by various diseases.
Cost parameters of medical care are the initial points
for comparing the costs of medical aid and economic
effect in evaluation of the economic effectiveness of
health care.
24
Economic effect

- is prevented economic damage, that is the
damage was prevented as a result of the
complex medical measures.
25
There are also direct and indirect economic effects.

The direct economic effect is got due to improved
methods or organization of any medical activity leading
to its cheaper. E.g., introduction of new forms of
organization of work for health workers and using of new
forms of medical aid (department of nursing, one day
hospital, hospital at home, day hospital care) lead to
savings of beds fund. Using of cheaper and more effective
methods of diagnosis and treatment allow reducing the
cost of patient’s treatment and cost per bed-day.

Indirect economic effect is a result of medical and social
effects leading to a reduction of costs through the savings
of resources spent on a treatment of diseases and
reducing economic losses due to population’s disability
and death.
26

There are actual and expected economic effect.
When planning an activity we are dealing with the
expected effects. In a retrospective evaluation of the
results we calculate actual effect.
27
There are also direct and indirect economic losses.

Direct economic losses - are the direct costs for
treatment, prevention, sanitary-epidemiological
service, scientific research and development,
training of medical personnel, payment of benefits
for temporary incapacity and disability pensions.

Indirect economic damage - is the economic losses
associated with the reduction of productivity of
work, non-produced products and a reduction of the
national income level of the economy as a result of
illness, disability or premature death.
28

The most noticeable economic damage among
the working population is due to the temporary or
permanent disability.
An employee unable to work isn’t involved in the
production of the social product and the society
spends on he/ she its resources in the form of grants,
pensions, medical aid, education of disable people
due to the re-qualification and all kinds of social
benefits.
29

If a disabled person retains a partial capacity to work and
continues to work by profession or on the job is paid at
least the same salary, then economical damages of
society will be smaller, since they do not include losses
related to non-production of new value.

If as a result of partial disability patient moves to a work
with lower salary it can be assumed that producing by
him/ her national income for the certain year is reduced
compared to the previous value of national income he/she
was produced. This difference of reducing correlates with
a share of reducing of an annual salary. Disability is
detrimental to society as a whole and the patient’s family.
This damage is manifested in for a number of years since
determining of a disability up to restore of a workability,
retirement or death.
30
The analysis of the total cost of the
disease

- characterized by the total value of the costs
incurred by the society, specific health
establishment, family in connection with
providing of all diagnostic and treatment
activities during the treatment of the disease.




Ctcd = Cdc + Cic,
Ctcd – coefficient of total cost of diseases
Cdc – coefficient of direct cost
Cic – coefficient of indirect cost
31

Direct costs - these are the costs of medical
activities which are directly related to patient's care.
These include: the costs of diagnostic, treatment
and preventive measures, handling and procedures,
the cost of medicines, patient’s feed and fees for the
use of medical equipment and buildings, etc.

Indirect costs are charges that are not directly
related to the therapeutic process, but create the
conditions for it. Indirect costs, as a rule, constitute
the largest part of the costs of organization, but they
are not related with the treatment's process directly.
These types of expenses are related to the use of
service units (community facilities, transports,
information systems, communication services, etc.).
32

Cost minimization analyses (CMA)
allows comparative analysis of two or more
interventions having the same therapeutic
effect and safety, but different economic
costs (for instance, a simple surgery in
outpatient or inpatient conditions).
33
 Cost-effectiveness analyses (CEA)
is fundamental in the clinical-economic
analysis. It reflects the costs to a one
cured patient (per unit of effect).

Cost effectiveness analysis shows the
amount you have to spend to get the unit
effect. Cost effectiveness coefficient
allows to compare different methods of
treating diseases, leading to the
achievement of common goals (e.g.
reduction of mortality).
34

The main demand for the use of cost-effectivness
analyses is the presence of the same units of
measurement of the effect:
the years of life saved;
 preventing deaths;
 prevention of disability;
 the number of cured patients;
 the number of prevented complications etc.

35


Integral gain efficiency
- based on the principle of effective approach of
care’s analyses and reflects the degree of
achievement of specific results in certain costs. This
coefficient depends primarily on the choice of
medical technologies and their application, that is
on the quality of medical care.
Under the specific results in depending on the
estimated object refers indicators of a condition’s
dynamic of the patient, changing specific health
parameters of certain contingent (e.g. moving from
one dispensary group to another in assessing clinical
examination, customer satisfaction, which can be
both patient and health care worker who has
appointed any study).
36

Cost-utility analysis (QUA)
allows to evaluate the results of the intervention
in terms of "utility" from the point of view of the
health care consumer (e.g. improvement quality
of life). The most often used integral index of
"quality adjusted life years » (QALY).

It is unacceptable in health care to consider
economic efficiency in isolation from medical
activities. And even more, the only effective
medicine that provides a good clinical effect and
brings the patient to the "utility" of 1.00, i.e. to a
state of absolute health. "Utility" is expressed by
a conventional unit as a "gain in life years" or
"prevent death."
37

Cost-utility ratio is considering the "utility" as a
measure of results. In monetary terms the results are
calculated as the cost per unit of "utility" or costs
"for a year of healthy life taking into account health
status» (QALY).

The analysis of a cost-utility it is estimation not only
the achievement of certain clinical outcomes but the
opinion of the patient about health condition’s
progress in terms of their “utility”, i.e. it is taken into
account patient’s preference in choosing of a method
of treatment and its outcome.
38
Quality of life

The term quality of life (QOL) references the
general well-being of individuals and societies.
The term is used in a wide range of contexts,
including the fields of international
development, healthcare, and politics.

Quality of life should not be confused with the
concept of standard of living, which is based
primarily on income. Instead, standard
indicators of the quality of life include not only
wealth and employment, but also the built
environment, physical and mental health,
education, recreation and leisure time, and
social belonging.
39

When the phrase is used in reference to
medicine and healthcare as Health
Related Quality of Life (HRQoL), it
refers to how the individual’s wellbeing
may be impacted over time by a
disease, a disability, or a disorder.
40

The current concept of HRQoL acknowledges
that subjects put their actual situation in
relation to their personal expectation.

The latter can vary over time, and react to
external influences such as length and
severity of illness, family support, etc. As
with any situation involving multiple
perspectives, patients' and physicians' rating
of the same objective situation have been
found to differ significantly.
41

Consequently, HRQoL is now usually
assessed using patient questionnaires. These
are often multidimensional and cover
physical, social, emotional, cognitive, workor role-related, and possibly spiritual aspects
as well as a wide variety of disease related
symptoms, therapy induced side effects, and
even the financial impact of medical
conditions.
42