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PRIORITY SETTING Health Economic Course Series http://diankusuma.wordpress.com
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PRIORITY SETTING

Jan 06, 2016

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Page 1: PRIORITY SETTING

PRIORITY SETTING

Health Economic Course Series

http://diankusuma.wordpress.com

Page 2: PRIORITY SETTING

• 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?

Page 3: PRIORITY SETTING

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

Page 4: PRIORITY SETTING

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)?

Page 5: PRIORITY SETTING

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

Page 6: PRIORITY SETTING

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

Page 7: PRIORITY SETTING

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.

Page 8: PRIORITY SETTING

DALYs due to living with disability

82,5 years

NODISABILITY

Page 9: PRIORITY SETTING

DALYs due to early death(Black area measures DALYs; Black+White is a standard life)

82,5 years

NODISABILITY

Page 10: PRIORITY SETTING

DALYs due to disability and premature death combined

82,5 years

NODISABILITY

Page 11: PRIORITY SETTING

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

Page 12: PRIORITY SETTING

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

Page 13: PRIORITY SETTING

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

Page 14: PRIORITY SETTING

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

Page 15: PRIORITY SETTING

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)

Page 16: PRIORITY SETTING

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)

Page 17: PRIORITY SETTING

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

Page 18: PRIORITY SETTING

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

Page 19: PRIORITY SETTING

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

Page 20: PRIORITY SETTING

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

Page 21: PRIORITY SETTING

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

Page 22: PRIORITY SETTING

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

Page 23: PRIORITY SETTING