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WHY WE NEED COST-EFFECTIVENESS ANALYSIS

WHY WE NEED COST-EFFECTIVENESS ANALYSIS. Dr. Gary Ginsberg. Day Care Prevention Surgery Topical FL Infectious Disceases Cancer. Hospitalisation Treatment Medication Public FL Non-Connuncable Diseases CVD. MAKE DECISIONS. NETWORKING. Pressure Groups Politics Disease Clubs.

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WHY WE NEED COST-EFFECTIVENESS ANALYSIS

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  1. WHY WE NEED COST-EFFECTIVENESS ANALYSIS Dr. Gary Ginsberg

  2. Day Care Prevention Surgery Topical FL Infectious Disceases Cancer Hospitalisation Treatment Medication Public FL Non-Connuncable Diseases CVD MAKE DECISIONS

  3. NETWORKING • Pressure Groups • Politics • Disease Clubs

  4. FALSE COMPARATIVE NEED • CERVICAL CANCER SCREENING GIVEN in ISRAEL DESPITE LOW INCIDENCE….. lobbists

  5. PRESSURE GROUPS • BETASERON (MS) • BREAST CANCER • CHILD CANCER (emotive)

  6. Fig 4: CBA LIFELONG BETASERON PER PERSON(BY DELAY IN REACHING WHEELCHAIRREQUIRING WHEELCHAIR)

  7. BETASERON FOR MS • WEAKENS RELAPSES…scans better • 3 days less hospitalization ($1,200) for cost of $20,000 annually • IN COURT: WHEELCHAIRED MS SUFFERER vs MINISTRY BUREAUCRAT who can’t explain opportunity costs • FDA looking at TEVA’s COPAXONE

  8. RILUZOLE (ALS) & PULMOZINE (CF) • GIVEN BECAUSE OF LOW DEMAND • " THE IMPORTANCE OF BEING UNIMPORTANT"

  9. AIDS • Huge Global Problem • ARV cost $800 per year (of less than optimal quality life…

  10. Country X in Africa • $8,000,000 from international foundation • Keep 10,000 people with AIDS alive for ONE year

  11. S.Pneumonia Vaccine • $10 per life year saved • Save 800,000 life years • 10,000 children alive for 80 years • By focussing on AIDS the country may lose 790,000 life years!

  12. AIDS – wider problems should be incorporated in CEA • Orphan problem……….. • Demise of Economies • Demise of Communities………………… • AIDS PREVENTION MAY BE BETTER STRATGY?

  13. PLANNING • relies on BUREAUCRACIES, HEALTH MINISTRIES, REGIONAL HEALTH CENTERS, HINDERED BY PRESSSURE GROUPSetc. • INEFFICIENT, suffers from NEPOTISM, POLITICAL INFLUENCES, OVERSTAFFING etc.

  14. USE FREE MARKET • No Bureaucracy • Consumers can choose to buy services • Providers will provide required services • THE INVISIBLE HAND (Adam Smith, Wealth of Nations).

  15. BUT BUYING HEALTH CARE IS NOT THE SAME AS BUYING FRUITS AND VEGETABLES!

  16. UNATTAINABLE UTOPIAS • Just as perfect COMMUNISM, based on CENTRALISED PLANNING, does not work for various reasons…. • So, perfect CAPITALISM based on the FREE MARKET does not work in health….because of MARKET FAILURES

  17. People with no INCOME Children Mentally Ill Unconsious INCOME MAINTENANCE PROGRAMES Adults decide Profession decides Next of Kin Small problems with Market

  18. MONOPOLYS/OLIGOPOLYS • Ideal market is based on MANY providers, perfect competition drives down prices. • HEALTH is full of MONOPOLYS or OLIGOPOLY (even market stall cartels) so suppliers can price FIX. • HOSPITAL IN RURAL AREA • HIGH-TECH, PET, LITHTRIPTOR etc

  19. MONOPOLYS/OLIGOPOLYS: • ADAM SMITH “THE WEALTH OF NATIONS” IN THE 18th Century. • “MEN OF THE SAME PROFESSION SELDOM GET TOGETHER, EXCEPT TO CONSPIRE TO RAISE PRICES”

  20. MARKET FAILURES # 1 AGENCY RELATIONSHIP IN THE FRUIT MARKET, the consumer has KNOWLEDGE (about the marginal utility or happiness points s/he will get from buying apples). IF s/he has money! Will calculate if Expected Marginal Utility > Marginal Disutility of money (or Price)

  21. MARKET FAILURES # 1 AGENCY RELATIONSHIP Will purchase 1,2 or 10 kilos of apples up to where MB=MC. Stall owner will run and serve him, even with peaches and bananas. CONSUMER SOVEREIGNTY “THE CONSUMER IS KING”

  22. MARKET FAILURES # 1 AGENCY RELATIONSHIP IN HEALTH, the patient LACKS KNOWLEDGE, the MD has studied for 5-12 years. MD ACTS AS AGENT FOR PATIENT BOTH SUPPLING & DEMANDING SERVICES

  23. MARKET FAILURES # 1 AGENCY RELATIONSHIP This gives MD tremendous POWER, which can be abused There is NO MARKET of consumer demanding and PRODUCER supplying MD has income maintainance/maximising incentive Leads to EXCESS PROVISION OF UNNECESSARY SERVICES

  24. PUBLIC + SALARIES PUBLIC + SALARIES PRE-PAID INSURANCE+SALARIES FFS + PART INSURANCE MORTALY ALSO HIGHER FFS + FULL INSURANCE

  25. BUNKER’s LAW • If there is an excess of physicians AND they are paid FEE-FOR-SERVICE then…………………………………………. • ”There will NOT be ONE FALLOPIAN TUBE, APPENDIX or WOMB left in the population”

  26. C-SECTIONS • MULTI-CAUSAL Defensive medicine Doctor’s convenience (before 4pm) Previous Section Income PROBABILITY = 1% x $INCOME/$1000 • 8%-12% necessary

  27. ? SALARIED FEE-FOR-SERVICE

  28. MARKET FAILURES #2 EXTERNALITIES FREE MARKET CONSUMER WEIGHS UP His/Her MB and MC, unless they are “righteous/saintly” they ignore BENEFITS TO OTHER members of society. Vaccine COSTS=$100 BENEFITS=$80 so DOES NOT PURCHASE vaccination

  29. MARKET FAILURES #2 EXTERNALITIES BUT VACCINE COULD GIVE 100 other persons benefit of $1 each SOCIETY: B=80+100>Costs=$100 SO vaccination should be done!

  30. MAJOR MARKET FAILURES AGENCY RELATIONSHIPCAUSES AN OVERSUPPLY OF UNESSENTIAL SERVICES EXTERNATITIES CAUSE AN UNDERSUPPLY OF ESSENTIAL SERVICES

  31. HAVE TO USE PLANNING IN HEALTH As we cannot rely on market to make decisions, we have to use PLANNING tools such as:- COST EFFECTIVENESS ANALYSIS COST-UTILITY ANALYSIS COST-BENEFIT ANALYSIS

  32. GOALS OF HEALTH SYSTEM • Health systems have multiple goals, but they fundamentally exist to improve health • Health systems with similar per capita expenditures show wide variations in population health outcomes, partly due to non-health system factors like education….

  33. POTENTIAL FOR IMPROVEMENTIN HEALTH STATUS: Medical Intervention for Broken Leg HSI 100 50 LIMP Natural Healing AGE 0 CULYER: (relates needs to output)

  34. POTENTIAL FOR AVOIDANCE OFREDUCTIONS IN HEALTH STATUS: Healthy Profile HSI 100 50 85 Epidemic Victim Victim 0 AGE INNOCULATION CULYER: (relates needs to output)

  35. WHY DIFFERENCES? • Partly explained by some systems devoting resources to expensive interventions with small effects on population health, while low cost interventions with potentially greater benefits are not fully implemented.

  36. WHY WE NEED CEA….. • CEA (including CUA) can be used to improve the performance of a health system. Indicates which interventions provide the highest "value for money", helping policymakers choose interventions which maximise health within the available resource constraint.

  37. CEA requires information on…. • The extent to which current and potential interventions improve population health, i.e. effectiveness. • The resources required to implement the interventions, i.e. costs.

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