Priority Setting in Health Care

Prioritization in Healthcare

Parent with Three Children

You see a parent. He has diabetes for which he takes medicines, on a diet, and exercise. He works at an office (junior management) and is the sole earning member of the family. They three children: one suffers from Chronic Asthma and needs regular medication, the secod has a congenital heart disease and will need surgery soon, and the third just got diagnosed with tonsillitis and the doctor wants him operated urgently.

What will be your advice to the parent to manage this?

Clinic Director

X has set up a clinic around Avonhead (an upscale yet recent immigrant dense neighbourhood). The population that the clinic serves is aging (60% above 65 years and 40% are young families (35 years average age with two kids). X wants to set up a suite of services to offer to this community but has resource limitations. What mix of services you will advise him?

Range of Services

Y is a consultant and wants to work in areas of public health and preventive health services at a rural township where a large farming community exists. The average age of the population is about 55 years, most are locally based farmers, or work in sheep shearing sheds, or have work with farming machineries.

With Limited Budget, what kind of services would you advise Y to plan for?

How to Play God

Z is a venture capitalist and just got an offer from the Bill and Melinda Gates foundation that he has 5 million dollars to spend but has to pick ONLY two disease control/prevention/public health issues in Canterbury. Z comes to you for advice.

What will you advise Z?

Sequence of This Presentation

• The Problem• Describe Priority Setting in Healthcare• Outline How Priority Setting in Healthcare Adds

Value• Outline the Challenges of Priority Setting in

Healthcare• Discuss the Processes, Approaches and Frameworks• Discuss How to Identify Who Lost• Revisit the Issues

Dilemma

• Imagine you have only $1000 to spare to pay for treatment

• Who will get treatment?

$1000 to Spend

Child with appendicitis needs an urgent surgery, overall cost $1000 out of your pocket

You need to get a root canal treatment done for a cavity in your tooth

Cosmetic surgery (skin grafting) to cover an old burn scar

Sustainability of healthcare systems is threatened by a growing demand for services and availability of

expensive innovative technologies.

How do We Find a Middle Path?

What is Priority Setting?

• Process of assigning rank orders• Individual disease or health states and

interventions or approaches• To mitigate specific health situations,• Based on their relative contribution to quality

of life, and cost effectiveness of interventions.• Complex calculations are complex and• Often fraught with controversies

Priority Setting — Concepts

• Precedence, established by order of importance or urgency.

• Establishment of the order of precedence• Rationing and Resource Allocation• Rationing - Taking care of existing demands

when the supply of resources constrained• Resource allocation — Limited resources

(time, money) invested systematically

Levels Where Priorities are Set

Individuals (Micro)

Health Agencies (Meso )

System Level (Macro)

Nature of Prioritization Exercises

• Core Issues are Political and Ethical• How Resources, Rights, and Responsibilities

are distributed.• Political considerations underpin why

implement validated technical interventions are difficult

Politics & Priority Setting

• Ever-expanding waiting lists for treatment —> political pressure for a system to prioritize patients on waiting lists (Norway)

• Press and Media as Watchdogs on cases where patients were denied services (UK)

• Reports of differential access in different parts of the country (UK)

• New legislation regarding health insurance created a need to decide what services should be provided (Holland, Israel)

Trip Up Points

• Multiplicity of priorities and• Lack of institutional mechanisms to

rationalize services and spending often results in

• Poor overall system performance,• Low coverage for highly cost-effective health

technologies

Alternatives to Prioritization

• Add More Resources• Take out Services

Why Prioritize When Adding Resources Might Work?

• Assure donors to maintain or increase the flow of funds• Prioritization can itself increase resources• Prioritization is needed if we are to know that

prioritization is insufficient• Most important when there is little money• Risk of Spending Too Much on Tertiary Care: Poor

Spending Pattern• Unfunded Primary Care —> Lethal in the poorest

countries

Challenges of Prioritization

• Resources are limited• Impossible to provide everyone with every

effective intervention• Limited resources and unlimited demands• Justice and efficiency• Lack of Consensus• Little interaction about priority setting

among decision makers

Controversies of Prioritization

• Process Affects Who, What, “How Much”, “When”, and at “What Cost”

• Donors want to see their investments incorporated into public budgets

• No simple or purely technical answers• Uncertainties around which values should

guide decisions about Prioritization

Adjudication in the Context of Prioritization Exercises

• Every Disease Condition is a Priority• Governments Cannot set policies in vacuum.• Between many relevant values and that• People (and disciplines) disagree which

values should dominate• There is no agreed upon normative approach

How to Conduct Priority Setting Exercises

• Collect information on the costs and benefits of all the interventions to be considered —> creating a common currency for measuring and comparing the benefits

• Use models and assessments, such as the burden of disease and cost-effectiveness, to create a package of services

Factors Considered for Priority Setting Exercises

• Burden of Disease• Cost effectiveness of Interventions• Equity• Existing Capacity to Deliver• Risk Pooling

Risk Pooling

• Some health conditions are rare and too costly for most uninsured individuals to pay out-of-pocket

Approaches to Priority Setting

• Using Formulae or Models• Using Guidelines or Technology Assessments• Utilize Explicit Criteria (NZ early 90s, UK, Holland,

Oregon)• Include community needs, community preferences, economic

evaluations of cost-effectiveness, public health considerations

• Basic package of services is provided or financed based on an agreed criteria list

• Social preferences can influence how the different benefits are combined and valued

Frameworks

• Frameworks Are Necessary• Explicit Processes != Haphazard Rationing• Ethical Issues Can be Addressed• Inevitable Policy and Implementation Issues

localized• Helps to Choose Among Alternative

Treatments

Available Frameworks

• A4R Framework• PBMA Framework• Sibbald’s Framework• “7+7 framework” seven principles and

processes

Accountability for Reasonableness Framework (A4R)

• Decision procedures for Rationing must have general features if they are to qualify as legitimate and fair

• They must provide publicly available rationale• Decisions about coverage of new technologies must be

publicly available• The rationale must follow a reasonable argument as to how

to meet the medical needs of a covered population• There must be mechanisms for considering challenges to the

decisions that are made• There should be voluntary or public regulation to see that

the above conditions are met

PBMA Framework

• Program budgeting and marginal analysis (PBMA) is an economic framework specifically designed to help local decision makers set health service priorities

• While making decisions between competing claims on scarce health service resources, economic tools and thinking have much to offer. In particular, decision making should explicitly consider opportunity cost and ‘the margin’. Recent evidence shows that decision makers both understand these economic principles and would like to use economic tools in setting priorities

• The intent of PBMA is to assist local decision makers in directing resources to maximize benefits from health services, considering both opportunity cost and resource shifts ‘at the margin’

Sibbald’s Framework

• Explicit Process• Consideration of Context and Values• Stakeholder Engagement• Transparency• Effective and Efficient Information Management• Revision or Appeals Mechanism• Positive Externalities• Externalities may include positive media coverage (which can contribute

to public dialogue, social learning, and improved decision making in subsequent iterations of priority setting), peer-emulation or health sector recognition (e.g. by other health care organizations, accreditation bodies, etc), changes in policies, and potentially changes to legislations or practice

7 by 7 Framework

• Priority setting should be scientifically rigorous, transparent, consistent, independent from vested interests, contestable, timely, and enforceable.

• Standardize Registration• Select and Scope Topics based on Evidence• Assess Budget Impacts• Allow for Appeals, Tracking, and Evaluation• Conduct Cost Effectiveness• Use Deliberative Processes• Decide Consistently

Best Practices

• Use recent data• Analysis should be country specific• Be based on a well functioning and representative set of

information systems• Rank Order by Burden and by population subgroup in order

to provide useful advocacy information for the different groups

• Build Flexibility in Budget• Build Linkages across services• Ensure Sufficient time and resources to deliver the

interventions

Role of Losers

• Group of people that inevitably will get less, in terms of benefits or services, than others

• Policy Attention Usually paid to the groups in society that make the loudest noise about their perceived needs.

• Those segments of society that have the least “voice” or political influence are likely to be the ones that receive the least attention

How to Identify the Losers in the System?

• Conduct a Benefit Incidence Assessment• Need Detailed household survey data• Identify Who are using the services• Estimate cost to the Payors of making the

services available• Assess Unit cost to the Payors

Steps of Benefit Incidence Analysis

• 1. Group users by socioeconomic category• 2. Determine service use by group• 3. Calculate the unit cost for the service• 4. Subtract the out-of-pocket fees from cost• 5. Multiply the net unit cost by the group

service use to determine group benefit

Conclusions and Comments

• Priority Setting As Balance Between Resources and Demands

• Necessary for Best Allocation of Resources• Frameworks Provide Good Structures to

Achieve Prioritization• Class Exercise• Discussions and Comments?