Health Economic Evaluation Basics - Putting a price tag on health -

[Music] welcome to this video on health economic evaluation we're going to have a very broad look at what it is and introduce the four main types of economic evaluations so first of all why do we need health economic evaluations there are many effective and worthwhile health interventions or programs that can be used to improve the health of a population if we had a lot of money to spend we could use it for every beneficial health program the reality however is that we usually don't if we spend all the money we have on one intervention then we don't have any left for others this is called an opportunity cost because of this difficult decisions have to be made to ensure the limited amount of money is spent to achieve the most benefit health economic evaluation is a tool that helps with making those decisions it allows us to compare two or more health interventions on the basis of their costs and outcomes there are four main types of economic evaluations cost minimization cost effectiveness cost utility and cost benefit analysis they all compare costs with outcome but do so in different ways let's have a look at the different types of costs first direct costs are costs that are directly associated with intervention for example the cost of medicines the cost of equipment like x-ray machines salaries of healthcare staff or the cost of transport to the health center direct costs are the main focus of most economic evaluations indirect costs are costs associated with reduced productivity due to the illness or its treatment an example is missed wages because of not working due to the illness intangible costs are subjective such as pain suffering or grief due to the illness or treatment these costs are quite hard to put a monetary value on that's a look at the different types of costs now let's take a look at the different types of economic evaluations the first type of economic evaluation is a cost minimization analysis this type of analysis is used when the product or outcome is the same and what we're comparing is the cost for example let's say we're comparing blood pressure reducing medications that are made by different manufacturers and have different prices in a cost minimization analysis because the medicine is the same we simply compare the costs the second type of analysis is a cost effectiveness analysis this is used when we're comparing different interventions that have a common health outcome examples of health outcomes are reduction in blood pressure cancer cases avoided kilos lost or life years gained these are called natural units let's take a look at an example let's say we're comparing two different interventions to reduce weight a diet program and weight loss medication the health outcome we're interested in is how many kilos have been lost the diet program had a two kilogram weight loss and cost three hundred dollars the cost per kilo lost is one hundred and fifty dollars this is called a cost effectiveness ratio let's compare this with a medication based program that leads to a weight loss of three kilograms but cost fifteen hundred dollars in this intervention the cost per kilo lost is five hundred dollars so in this scenario the diet-based program is more cost-effective compared to the medication-based program so a cost-effective analysis compares the cost per natural units for different interventions but what do we do if we want to compare interventions that have different health outcomes for this we use a type of economic analysis called a cost utility analysis let's have a look say we want to compare between drug therapy to reduce high blood pressure breast screening to reduce the number of breast cancer cases and a kidney transplant for end-stage kidney disease to improve kidney function these are different health interventions that have different health outcomes so in order to compare these different interventions we need to have a common outcome measure that can be applied to all these interventions the measure that is most commonly used is called the quality adjusted life year or quali in short let's have a look at what a quali is health interventions try to prolong a person's life by increasing the number of years a person lives and they also try to improve the quality of those years lived a quality adjusted life year is a combined measure that takes into account both of these aspects a quali is calculated by taking the number of extra years gained as a result of the intervention and multiplying it by the quality of life of those extra years quality of life is graded from zero to one from zero being the worst possible health state and one being the best possible health state there are many different ways to determine these gradings they usually involve asking people how they rate their quality of life a variety of tools can be used for this measures such as qualis are called health utility measures because they measure an individual's preference for different health outcomes let's have a look at an example if an intervention leads to a person living five years in perfect health a health utility of one then the number of qualities gained as a result of this intervention is 5. similarly if an intervention leads to a person living an extra 5 years but with a quality of life of 0.2 then the qualities gained as a result of that intervention is one now that we have a common outcome measure a quali we can compare the cost per quali across different interventions so a cost utility analysis compares the cost of a utility measure such as a quali for different interventions now let's have a look at cost benefit analysis this type of analysis measures both the cost and outcome in monetary terms a cost benefit analysis tries to account for all costs and all benefits direct indirect and intangible to calculate benefits a variety of tools can be used the willingness to pay method determines the value that people attach to health outcomes for example by asking people how much they're willing to pay to have the benefits of the treatment or to avoid the costs of illness the human capital method places a monetary value on the person's life the value is based on the loss or gain of income due to the illness although this type of evaluation is comprehensive the data requirements can be quite high and there are methodological issues when it comes to determining a value on life and productivity in reality economic evaluations can be quite complex to do and require various statistical calculations and adjustments such as stratification to adjust for different patient groups that might benefit differently from the interventions discounting to account for cost and benefits that occur at different times and sensitivity analysis to adjust for uncertainties in the data and that's a very quick introduction to health economic evaluation an important tool that helps us make decisions about allocating health resources we've had a look at what it is and the different types of economic evaluations

Channel: Let's Learn Public Health

Views: 119,368

Keywords: health economic evaluation, economics, evaluation, cost benefit, cost effectiveness, cost utility, cost minimisation, scarce resources, resource allocation, public health, public health education, public health training, sensitivity analysis, opportunity cost, discounting, health education, health economics, finance, health budgets, health sector, health sector planning, health departments, equity

Id: cUgkWYeRsJk

Length: 8min 10sec (490 seconds)

Published: Wed Mar 24 2021