Health economics workshop

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Health economics workshop

• 11th annual meeting for UK contributors to the
  Cochrane Collaboration
• Weston room 2
• 16.15-17.45

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• Miranda Mugford
• Co-convenor (chair)
• Campbell-Cochrane Economics Methods Group
• m.mugford_at_uea.ac.uk
• v.knights_at_uea.ac.uk (admin coordination)
• http//www.cochrane.org/contact/mwgfield.htm32
• www.med.uea.ac.uk/research/research_econ/cochrane/
  cochrane_home.htm

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Aims of the joint CCEMG group

• Promote and support consideration of economics in
  the Collaborations
• Develop economic methods for reviews
• Undertake empirical research
• Link reviewers with economics specialists
• Review validity of economics methods
• Disseminate valid methods and good practice
• Relate to other methods groups

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NHS Economic evaluation database

• Pre-dated CCEMG
• Autonomous entity based in CRD York
• Included in Cochrane Library since 2000
• Research agenda
• links with Cochrane Reviews,
• uses of NHS EED abstracts..
• other topics ..

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In the next 90 minutes...

• Introduction and aim 10 mins
• Revision of economics concepts 15 mins
• Incorporating economics in reviews 10 mins
• Discussion of examples 45 mins
• Summing up 10 mins

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Aim of the session

• To help reviewers to decide
• whether and how to incorporate
• the economic dimension
• in their reviews.

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Who is here ?

• Names and Cochrane entities of those present

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Introduction to economic concepts and economic
evaluation
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(No Transcript)
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What needs to be known before adopting a
technology or new practice?

• Does it work?
• Is it worthwhile?

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Decision model health decision
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Costs and decisions
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Decision model economic decision
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Economic decision model

• Effectiveness Outcome 1 Outcome 2
• Incremental cost Cost 1- Cost 2
• Cost effectiveness (incremental cost) /
  (incremental effectiveness)

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Outcome measures matter for economic decisions

• Length and quality of life may be affected in
  opposite directions
• Economic decisions may require comparisons of
  interventions in different health sectors
• Health outcomes may not be the only benefits of
  health care people value other things too

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two key economic concepts

• marginal analysis
• opportunity cost

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opportunity cost

• Resources are scarce
• Choices must be made
• Every time choose to use resources to meet one
  need, we give up the "opportunity" to use those
  resources to meet some other need.
• The benefits associated with the best alternative
  use of the resources is the OPPORTUNITY COST
• The aim of economics is to ensure that we do
  those activities whose benefits outweigh their
  opportunity cost
• In other words, we try to do the most beneficial
  things with the resources at our disposal

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Screening for cancer of the colon if it works,
is more always better?

• marginal analysis

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Screening for cancer of the colon

• Cases detected and costs of screening with six
  sequential tests,10,000 screened
• No. of tests Cases found Total costs ()
  Av. cost ()
• 1 65.9469 77,511 1175
• 2 71.4424 107,690 1507
• 3 71.9003 130,199 1811
• 4 71.9385 148,116 2059
• 5 71.9417 163,141 2268
• 6 71.9420 176,331 2451

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Screening for cancer of the colon

• Incremental cases detected and incremental (and
  marginal) costs of screening with six sequential
  tests
• No. of tests Incremental Incremental
  Marginal
• cases detected costs ()
  costs ()
• 1 65.9469 77,511 1175
• 2 5.4956 30,179 5494
• 3 0.4580 22,509
  49,150
• 4 0.0382 17,917
  469,534
• 5 0.0032 15,024
  4,724,695
• 6 0.0003 13,190
  47,107,214

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Implications of opportunity cost and marginal
analysis

• to do more of some things, we have to take
  resources from elsewhere
• by doing the same things at less cost
• by taking resources from an effective area of
  care because a new intervention is more effective
  per spent
• need to measure costs and benefits of health care
• often about how much rather than whether

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Framework for decision making

• Any decision to change the way care is delivered
  will affect OUTCOME. This will
• increase A
• remain unchanged B
• decrease C
• not enough information D

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Framework for decision making

• Any decision to change the way care is delivered
  will impact on COST. This will
• decrease 1
• remain unchanged 2
• increase 3
• not enough information 4

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Matrix linking effectiveness and cost
EFFECTIVENESS decreasing
? recommend experimental treatment X
recommend control ?X neutral ? not enough
evidence judgement required
COST increasing
?

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Some examples

• Based on a systematic review
• chemical patches to reduce premature contractions
  in pregnancy (improves health, saves costs)
• Based on a randomised trial
• combined antiretroviral therapy for HIV/no
  therapy (10-23,000 per QALY)

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The uses of economic evaluation for decisions..

• Message?
• Cost-effectiveness doesnt mean it will
  (necessarily) cost less, and more money may still
  need to be found - someone may need to make a
  sacrifice...

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What is economic evaluation?

• Comparative analysis of alternative courses of
  action in terms of both their costs and
  consequences.
• Concerned with EFFICIENCY not just effectiveness
• doing the same things using less resource
  (technical efficiency)
• taking resources from an alternative effective
  use because a new use is more effective per
  spent (allocative efficiency - some people lose,
  the social economy gains)

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Costs and benefits three important steps

• Always
• ..identify
• ..measure
• ..value
• Have we included everything that is relevant?
• Have we counted it?
• Have we converted it to a common currency?

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Conclusions

• The production of health uses resources
• Both resource use and benefits are important
• The ideal economic evaluation uses the best
  available evidence on the costs and benefits of
  interventions but what is best evidence?

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Approaches to combining economic evaluation and
systematic review
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Approaches to combining economic evaluation and
systematic review

• Systematic review of economic evaluations
• Economic evaluation as part of the process of
  systematic review of effectiveness
• Building an economic model from an existing
  review of effectiveness

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An exercise on the feasibility of carrying out
secondary economic analyses

• Economists have not yet developed a formal
  methodology for reviewing and summing up evidence
  from individual economic evaluations ... or
  indeed for assessing whether systematic reviews
  are possible in this context
• Jefferson T, Mugford M, Gray A, Demicheli V.
  Health Economics 19965155-165

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• Reviewers should always be cautious about
  reaching conclusions about implications for
  practice and they should avoid making
  recommendations.
• Alderson P, Green S, Higgins JPT, editors.
  Cochrane Reviewers Handbook 4.2.1 updated
  December 2003. In The Cochrane Library, Issue
  1, 2004. Chichester, UK John Wiley Sons, Ltd.

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• CEAs tend to be riddled with bias and its not
  hard to see that money is the reason for this
• Given that there is no sensible alternative to
  CEA we need to improve the design, conduct,
  analysis and reporting of such analyses..
• The key to good reporting comes from recognising
  that CEAs are, in essence, reviews.
• Rennie 2001
• J Health Politics Policy and Law

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The quality of systematic reviews of economic
evaluations in healthcare and what they are
telling us it is time for action

• Vittorio Demicheli (1,2 )
• Tom Jefferson (1,2)
• Luke Vale (2)
• 1. Health Reviews Ltd, UK
• 2. Campbell and Cochrane Economics Methods Group
• JAMA 2001

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Evidence-based health economicsfrom
effectiveness to efficiency in health care

• Editors
• Cam Donaldson University of Calgary
• Miranda Mugford University of East Anglia
• Luke Vale, University of Aberdeen
• Contributors
• economists and reviewers involved in application
  of economic evaluation in providing and using
  evidence for health care decisions
• published by BMJ books, spring 2002

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Joan Robinson said in 1955

• The purpose of studying economics is not to
  acquire a set of ready-made answers to economic
  questions, but..
• .to learn how to avoid being deceived by
  economists.

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See handout
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Incorporating economics into reviews - groups

• Choose topic for group
• Follow flow chart and discuss how each element
  might be approached
• Agree (three) key areas where further expert
  view/methods guidance is required