Health Economics for Prescribers
Richard Smith (MED)
[email protected]David Wright (CAP)
[email protected]Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Learning outcomes
On completion of the unit the student will be able to:
Critically appraise pharmaco-economic evaluations Prepare a business case for the introduction and evaluation of a novel pharmaceutical service designed to improve pharmaceutical care within the NHS; considering local health needs & inequalities, government targets and government strategies for health and pharmacy
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Delivery
Workshops & Lectures No directed study Expectation of significant reading around topic Reading list provided on Blackboard is exhaustive
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Topics
Pharmacoeconomics Healthcare organisation Managing the pharmaceutical budget Procurement & influencing skills
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Assessment
Critical appraisal of pharmaco-economic evaluation
Open book Unseen paper Use previously seen and tested checklist
Business case development (1,500 words)
Coursework Based on PCT where born Local health needs assessment Description, including costs, of new pharmaceutical service Designed to meet government targets for health Proposed pharmaco-economic evaluation
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Lecture 1:
Economics, Health and Health Economics
What is economics? What isnt economics? What is Health? What is Health Economics? Key Economic Concepts
Opportunity cost Efficiency
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economics is about
Limited resources Unlimited wants Choosing between which wants we can afford given our resource budget
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economics is about choice
Good A
Good B
Budget
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Concept 1: opportunity cost
The value of forgone benefit which could be obtained from a resource in its nextbest alternative use.
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Example of opportunity cost
Possible Health Expenditure in a Year
Paediatric Care Care of Elderly Opportunity Cost (No Children (No of Elderly of Treating Treated in 000s) Treated in 000s) Children in Terms of Elderly Patients Forgone 0 30 0 1 28 2 2 24 6 3 18 12 4 10 20 5 0 30
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Implications of opportunity cost
Deciding to do A implies deciding not to do B (i.e. value of benefits from A>B). Cost can be incurred without financial expenditure. Value not necessarily determined by the market.
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economists view of the world...
Pessimist: bottle empty
Optimist: bottle full
Economist: bottle wasted
inefficient!
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Concept 2: efficiency
Efficiency Technical Efficiency Allocative Efficiency
= = =
maximising benefit for resources used meeting a given objective at least cost (resources) producing the pattern of output (supply) that matches the pattern of consumer want (demand)
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Efficiency and the market
Price/ Cost Supply
Demand Quantity
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Efficiency and the market
Price/ Cost Supply Equilibrium Price PA A
Demand QA
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Quantity
Topic versus discipline
Topic Discipline = = area of study conceptual apparatus
Health economics is the discipline of economics applied to the topic of health.
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Some misconceptions
Economics is
concerned with money the same as accountancy only practised by economists objective
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economics and money
Economics is concerned with
costs (resource use) benefits choice efficiency
Money is
store of value means of exchange
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economics and accountancy
Economics is concerned with
costs (resource use) benefits choice efficiency
Accountancy is concerned with
monitoring financial transactions
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
The practice of economics
Economics is concerned with
costs (resource use) benefits choice efficiency
Everyone
weighs the relative benefits of each course of action and choose the action which maximises well-being
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economics and objectivity
All decisions are based on subjective value judgements (or judgements of subjective value!) Economics makes these explicit
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
What is health?
World Health Organisation:
Health is a state of complete physical, mental and social well-being
Health Economics is often Health Care Economics Usually health in health economic (evaluation) is health status according to some measure
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health status example: EQ-5D
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Applying economics to health (care)
Descriptive Predictive = = quantification identify impact of change relative preference over situations
Evaluative
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health economics map
H. Micro-Economic Appraisal E. Market Analysis
B. What influences Health? (other than health care)
A. What is Health? What is its value?
C. Demand for Health Care
D. Supply of Health Care
G. Planning, budgeting, regulation mechanisms
F. MacroEconomic Appraisal Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
A: Value of health
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health economics map
H. Micro-Economic Appraisal E. Market Analysis
B. What influences Health? (other than health care)
A. What is Health? What is its value?
C. Demand for Health Care
D. Supply of Health Care
G. Planning, budgeting, regulation mechanisms
F. MacroEconomic Appraisal Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
B: Demand for health (Grossman)
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health economics map
H. Micro-Economic Appraisal E. Market Analysis
B. What influences Health? (other than health care)
A. What is Health? What is its value?
C. Demand for Health Care
D. Supply of Health Care
G. Planning, budgeting, regulation mechanisms
F. MacroEconomic Appraisal Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
C/D/E: Supplier-induced demand
Price/ Cost S
D2
D1 Quantity
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health economics map
H. Micro-Economic Appraisal E. Market Analysis
B. What influences Health? (other than health care)
A. What is Health? What is its value?
C. Demand for Health Care
D. Supply of Health Care
G. Planning, budgeting, regulation mechanisms
F. MacroEconomic Appraisal Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
F: WHO ranking of health systems (top 20)
1 2 3 4 5 6 7 8 9 10 France Italy San Marino Andorra Malta Singapore Spain Oman Austria Japan 11 12 13 14 15 16 17 18 19 20 Norway Portugal Monaco Greece Iceland Luxembourg Netherlands UK Ireland Switzerland
Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health economics map
H. Micro-Economic Appraisal E. Market Analysis
B. What influences Health? (other than health care)
A. What is Health? What is its value?
C. Demand for Health Care
D. Supply of Health Care
G. Planning, budgeting, regulation mechanisms
F. MacroEconomic Appraisal Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
