PRIORITY SETTING Health Economic Course Series http://diankusuma.wordpress.com
Jan 06, 2016
PRIORITY SETTING
Health Economic Course Series
http://diankusuma.wordpress.com
• Economics = study of unlimited needs combined with limited resources
• Government intervention required where market fails
• Given limited resources and unlimited needs, how does government prioritize its interventions?
Mechanism to decide on Best Use of Resources
• Free Markets = price mechanism• Cooperative/community schemes = bottom up• Centralized rational planning (e.g.
communist/socialist countries) = top down
• Non of these is perfect– Equity?– Efficiency?
CombinationsImportance of clear criteria
Historical Allocation
Most widely used method= “give the same last year”
If needed adapted to budget changes, inflation etc
This avoids difficult choices,
BUT-what if needs change (e.g. epidemic)?-what if technology changes (e.g. cheaper provision)?-what if costs change (e.g. economies of scale)?
Criteria for Resource Allocation
• Technical Efficacy of intervention – researchers
• Operational Effectiveness of interventions – doctors
• Political desirability – politicians
• Feasibility – planners
• Fit within development agenda – donors
• Preferences – consumers
• Equity – all
• Burden of disease – epidemiologist
• Costs of interventions - economists
Priority setting framework WDR 93
Estimate ofGlobal Burden of Disease
in DALYs lost
Estimate of CE-nessof interventions in cost
per DALYs saved
Potential healthgains as percentageof BoD averted per $
Priority setting
Good buys:Essential clinical servicesPublic health interventions
Which interventions save most lives?
Burden of disease (BoD)= Total quantity of life years lost due to mortality and
morbidity, adjusted for the decreased quality of life experienced due to illness.
Measured in: Disability Adjusted Life Year (DALY)= quantitative indicator of burden of disease that reflects
the total amount of healthy life that would be lost, from premature mortality or from some degree of disability during a period of time, due to disease.
DALYs due to living with disability
82,5 years
NODISABILITY
DALYs due to early death(Black area measures DALYs; Black+White is a standard life)
82,5 years
NODISABILITY
DALYs due to disability and premature death combined
82,5 years
NODISABILITY
Choices behind DALYs
• Choice of standard life expectancy for men and women
• Severity weight for disabilities:– 1 is severely disabled or death, 0 is healthy
• Weight for age which disease occurs:– Children and old < adults
• Time preference:– Long term effects “discounted”,– i.e. future is valued less
Disability weights
Severity weights
Indicator conditions
1 .00 - .02 Vitiligo on face, wt for age>2 sds below normal
2 .02 - .12 Watery diarrhoea, severe sore throat, anaemia
3 .12 - .24 Radius fracture in cast, infertility, rheumatoid arth, angina
4 .24 - .36 Below knee amputation, deafness
5 .36 - .50 Rectovaginal fistula, mild mental retardation, Downs’ syndrome
6 .50 - .70 Unipolar major depression, blindness, paraplegia
7 .70 - 1.00 Active psychosis, dementia, severe migraine, quadriplegia
Example of DALY calculation
Girl, 5 years old, treated successfully for deafness, who lives until she is 82,5
Life82,5 – 5 = 77,5
Disabled lifeDeafness = 30% disability1 year of life = (1-30%) = 0,7 year
DALY if deaf77,5 x 0,7 = 54 year
DALY lost due to deafness or DALY gained due to treatment77,5 – (77,5 x 0,7) = 0,3 x 77,5=77,5 – 54 = 23,5
Priority setting framework WDR 93
Estimate ofGlobal Burden of Disease
in DALYs lost
Estimate of CE-nessof interventions in cost
per DALYs saved
Potential healthgains as percentageof BoD averted per $
Priority setting
Good buys:Essential clinical servicesPublic health interventions
Different types of economics evaluation
1. Cost effectivenessUsed to compare interventions on the basis of a specific health outcome (e.g. DALY saved)
2. Cost utilityUsed to compare interventions on the basis of a utility-weighted health outcome (e.g. QALY saved)
3. Cost benefitUsed to compare interventions on the basis of a monetary value of the health outcome (e.g. $ cost -- $ benefits)
Cost effectiveness of interventions
Cost-effectiveness ratio=Cost of interventionDALYs gained
Costs:= Direct service costs (fixed and variable) that could be
attributed to particular interventions.
Excluded: indirect and private costs (government perspective), intangible costs (pain & suffering)
Cost-effectiveness of interventions
• Relative concept:– More/less cost-effective interventions– Overall budget
• Measurement of costs limited
• Measurement of effectiveness limited
• Other criteria to prioritize
Priority setting framework WDR 93
Estimate ofGlobal Burden of Disease
in DALYs lost
Estimate of CE-nessof interventions in cost
per DALYs saved
Potential healthgains as percentageof BoD averted per $
Priority setting
Good buys:Essential clinical servicesPublic health interventions
Priority Setting
• Priority interventions are those that:– Address conditions that are a high burden of disease
(high DALY loss)– Can be delivered with low cost per DALY gained (cost
effective)
“League tables” of interventions:- Low to high cost effectiveness ratio ($/DALY gained)- More or less cost effective
Example: HIV/AIDSIntervention Yearly
costsYearly
infection averted
Average CE ratio
Yearly DALYs averted
Average CE ratio
$ millions Millions $/infection averted
millions $/DALY averted
Mass media 16 0,27 58 4,5 3
Peer education sex workers
70 1,04 68 14,3 4
Peer education and STI treatment sex workers
74 1,26 59 20,2 4
School based education 77 0,01 6704 0,2 376
VCT 406 0,31 1315 5 82
PMTCT 151 0,19 847 4,7 34
ART
First line 1507 0,04 34825 2,5 569
First and second line 6945 0,04 185396 3,5 1977
EDR 1993 Package of priority interventions
• Public Health– Immunization– School-base health services– IEC on nutrition and FP– Reduction tobacco and alcohol– Improvements of household environment– AIDS prevention
• Clinical Services– Maternal health– Family planning– TB– STDs– Child and infant health
$12 per capita
Macroeconomics and Health
2001Essential health services package, scaled up to reach 80-90% of the population by 2015.
= $14 per capita for the least developed countries.
Revision:- New interventions added (ART)- New evidence on effectiveness- Updated BoD since 1993- Country-specific costs- Costs of scaling-up included