Cost Effectiveness

Cost Effectiveness • Jan J.V. Busschbach, Ph.D. • Viersprong Institute for studies on Personality Disorders VISPD • Jan.Busschbach@deviersprong.nl • Erasmus MC • Institute for Medical Psychology and Psychotherapy

(Health) Economics • Comparing different allocations • In health care: Should we spent our money on • Wheel chairs • Screening for cancer • Intervention in youth • Jail • Cure • Prevention

Assumptions • Agreement on the budget • Assumption of scarcity • Agreement on outcome • What are the intended effects • Possible to moves between budgets

Economics in policy • Economics in policy are often • Only Better effects for the same (or less) money • “Doelmatigheid” • Efficiency improvement • Budget impact

Car economics • Should we spend our money on a • Suzuki Alto 1.0 • BMW 316

Car economics • Cost effectiveness • Comparing costs • Comparing outcome • Relate costs to outcome • Cost per outcome • Cost per kilometer

League Table

Assumptions • Agreement on the budget • Assumption of scarcity • Possible to moves between budgets • We can buy a Suzkie or a BMW • Agreement on outcome • What are the intended effects • The effects is restricted to ‘movement’

Which costs included in CE youth intervention? • Costs of intervention • Costs of alternatives • Jail • Other treatment • Costs of crime • Material costs • Cost of law enforcement • Other savings • Broken education • Intangible costs

Intangible costs • What are the costs of • Death • Suffering • Rape • Fear • No clear methodology • Willingness to pay

Which outcomes in youth interventions? • What is the aim of youth interventions? • Costs per avoided crime • Costs per contact • Prevention

Effects expressed as costs • Cost Benefit analysis • Effects can now be subtracted from costs

Drivers in health economics • The effect of the intervention • The cost of the intervention • Intangible costs • Discounting

Changes of economics in youth interventions • The effect of the intervention • The cost of the intervention • Alternative is expensive: Jail • Intangible costs • The effects are warranted • Broken education • Discounting • Sometime immediate effects

Threats of economics in youth interventions • The effect of the intervention • Low quality evidence on the effectiveness • A randomized trials is now the standard • The cost of the intervention • Expensive labour-intensive • Intangible costs • No consensus about these costs • Discounting • Often effect are in the further: prevention

Examples • The Washington State Institute for Public Policy • Steve Aos, 2004 • Taxpayer perspective: cost benefit analysis • Intangible costs used as effects (sexual abuse = $ 94,506) • The monetary value of saving a high-risk youth • Cohen, 1998 • Intangible costs: lifetime costs criminal career

Little studies • Welsh & Farrington, 2000 • “[…] little is known about the economic efficiency of correctional intervention strategies. A review of the literature revealed only seven published studies that have presented information on monetary costs and benefits”. • Swaray et al, 2005 • Found only 10 studies • The norm ‘evidence based’ is not near • Research dominated by aetiology and epidemiology

Encouraging results • Reviews show favorable results • Cure is more cost effective than prevention • Targeted prevention works better • Cure more cost effective than incarceration • No Dutch evidence • Although The Netherlands is leading in health economics

Conclusion • Economics are lacking • Main obstacles • Convincible effect studies • The odds are favorable

Cost Effectiveness