Economic Value of Digital Technology In Healthcare
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1 Economic Value of Digital Technology In Healthcare Francis Fatoye PhD, MSc (HEcon), MBA, BSc, FHEA, MCSP Professor of Health Economics and Outcomes Adjunct Professor Great Lakes University of Kisumu, Kenya
2 Learning Outcomes To understand the importance of economics in relation digital technology in healthcare. To understand the various methods of economic evaluations used to determine outcomes (value) of healthcare interventions.
3 Health Economics Application of economic theories, models and empirical techniques to the analysis of decision-making (Moriss et al. 2007). Developed to facilitate resource allocation/utilisation in health care/practice. Every decision - large or small - that we make when managing and delivering care practice is an economic decision. Such decisions always relate to the principles of supply and demand.
4 Annual Health Spending (World Bank, 2015) Botswana Canada France Ghana Germany Nigeria South Africa United Kingdom United States
5 Life Expectancy (World Bank, 2015) Botswana Canada France Ghana Germany Nigeria South Africa United Kingdom United States
6 Scarcity Scarcity means that there are limited resources to provide all health services desired by the society (Dewer, 2010). A key concept in Health Economics.
7 Scarcity (Truog et al. 2006) Workforce Equipment Walking Aids
8 Economic Evaluation Economic evaluation is the quantification of changes in healthcare resource utilisation because of introducing an alternative course of action (Newhouse, 2010). It identifies, measures, values and compares the costs and consequences of alternatives that are solutions to the same problem (Drummond et al., 2005).
9 Economic Evaluation Methods Method Cost Effectiveness Analysis Cost Benefit Analysis Cost Utility Analysis Cost Minimisation Analysis Cost Consequence Analysis Measure Natural units Monetary value Quality Adjusted Life Year (QALY s) = (QoL x Life Expectancy) Equal or identical benefit Descriptive terms
10 Costing: Type of Costs Direct costs: Medical costs (e.g. costs of treatment, cost of staff time, diagnostic tests, equipment). Patient costs (e.g. out-of-pocket costs for over-the-counter medicines, transport to and from hospital). Indirect costs these include the costs of lost productivity through absence from work. Intangible costs include the pain and suffering that may be associated with treatment (e.g. adverse drug reactions). These are the most difficult to which to attach monetary value
11 Costing: Perspectives Healthcare Societal Patient or Carer (Out-of-pocket expenses)
12 Measuring Costs Practitioner/researcher-led Interviews Patient/carer-reported questionnaire/dairy Patient databases/registries/medical records
13 Incremental Cost Effectiveness Ratio (ICER) ICER = Cost of intervention 2 Cost of intervention 1 Benefits of intervention 2 Benefits of intervention 1 Intervention 2 = New intervention Intervention 1 = Control/usual care
14 Costs Intervention 2 = 17,500 Intervention 1 = 12,500 Benefits Intervention 2 = 0.6 QALY Intervention 1 = 0.35 QALY ICER - Example ICER = 17,500 12,500 = 5000 = 20,000/QALY
15
16
17 Hollinghurst et al. (2013) Intervention PhysioDirect involving telephone assessment, advice and face-to-face Control group (743 pts) Usual care face-to face Perspective (1506) Patient, NHS, Society Design CCA; CUA Outcome measures SF-36, global improvement score, patient satisfaction, QALYs, cost data etc Results: No difference in cost of physio, other NHS services, personal costs, time off work Cost of PT and QALY gained were higher in PhysioDirect, ICER = 2889
18 Hollinghurst et al. (2013)
19
20 Kidholme et al. (2016) Results: Both total cost and QALY gained were higher in the intervention group ICER = 518,280/QALY Intervention (64 pts) Cardiac Telephone Rehabilitation Control group (55 pts) Traditional Cardiac Rehabilitation Perspective Health Service Design CUA Outcome measures SF-36; QALY
21 Group Activity
22 The Cost Effectiveness Plane
23 COST E.g. 20,000 per QALY Alternative less effective and more costly E B Alternative more effective but more costly D A BENEFIT/EFFECTIVENESS Alternative cheaper but less effective C Alternative more effective and less costly
24 Summary and Conclusions Health economics is the application of economic principles to the analysis of healthcare decision-making. Healthcare resources are scarce and demand for these resources are unlimited due to increasing life expectancy, economic constraints, innovation, and pressure to reduce costs and justify value for money. Health economics provides information to inform and improve decision-making. It is about maximising social benefits obtained from scarce healthcare resources.
25 References Chote R. Emmerson C. Frayne C. Love S. (2004). Challenges for the 2004 spending Review. Briefing Note No. 50. London: Institute for Fiscal Studies Cylus, J., and G. F. Anderson. (2007). Multinational Comparisons of Health Systems Data, The Commonwealth Fund. [Online information; accessed 20/01/15] Fuchs V. (2005). Health care spending re examined. Annals of Internal Medicine, 143; pp Morris, S., Develin, N. and Parkin, D. (2005) Economic Analysis in Health Care. Glasgow: John Wiley & Sons Ltd. Truog, R.D., Brock, D.W., Cook, D.J., Danis, M. Luce, J.M., Rubenfeld, G.D. and Levy, M.M. (2006) Rationing in the intensive care unit. Critcal Care Medicine, 34: Olsen, J.A. (2009) Principles in health economics and policy. Oxford: Oxford University Press Organisation for Economic Co-operation and Development. (2007). Health at a Glance 2007: OECD Indicators. [Online information; accessed 27/01/15] puck.sourceoecd.org/vl= /cl=14/nw=1/rpsv/health2007/g htm. Persad, G., Wertheimer, A. and Emmanuel, E. (2009) Principles for allocation of scarce medical interventions. The Lancet, 31: Reinhart U. Hussey P. and Anderson G. (2002). Cross national comparisons of health care systems using OECD data Health Affairs. 21; pp Wonderling, D. Gruen, R. and Black, N. (2005) Introduction to Health Economics (Understanding Public Health). New York: Open University Press.
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