Health care economics cost-benefit analysis

Shah and Jenkins (2000) in a review of mental health economic studies from around the world identified 40 cost-of-illness studies, of which five covered all disorders, one neuroses, two panic disorders and one anxiety. All were from developed countries. There were numerous cost-effectiveness studies but none involving the anxiety disorders specifically. One study in the UK examined the cost-benefit analysis of a controlled trial of nurse therapy for neurosis in primary care (Ginsberg et al, 1984). 

Economic evaluation compares costs and consequences of alternative health care treatments or programs (Drummond et al. 2005). In one form of economic evaluation, cost-benefit analysis, all costs and consequences are valued in monetary terms. However, in health care it is much more common to use cost-effectiveness analysis, where the difference in cost between alternatives is compared with the difference in outcomes measured in units such as life years gained or quality-adjusted life years (QALYs) gained. 

Nowadays a drug company has not only to show its paymasters - governments, insurers and so on - that its new prodnct is safe and works, but also that it is cost-effective. In Anstralia, this has been spelled out in legislation. Since 1993, any drng submitted for approval must be accompanied not only by the resnlts of clinical trials bnt also by an economic impact analysis. In 1999, the United Kingdom set np a National Institnte for Clinical Excellence (NICE) to advise the National Health Service on the cost-effectiveness of health care technologies. Other countries ask formally or informally for pharmacoeconomic analysis. Economic impacts can be measured in a variety of ways, for example, cost-effectiveness, cost-utility or full cost-benefit stndies. 

Health economics is concerned with the cost and consequences of decisions made about the care of patients. It therefore involves the identification, measurement, and valuation of both the costs and the consequences. The process is complex and is an inexact science, The approaches to economic evaluation include (1) cost minimization, (2) cost benefit, (3) cost effectiveness, and (4) cost utility analysis (Table 13-2). 

As when evaluating the published medical literature, results from economic analyses should not be taken at face value . Reports should be detailed, clear and transparent. It is crucial that readers be able to follow exactly what was done (with justification) throughout the analysis. Care should also be taken to determine that the type of analysis performed (for example CEA, CBA) corresponds with the analytical technique purported to be used in the study. Zarnke and colleagues sampled the published literature to assess whether evaluations labelled as cost-benefit analyses met the contemporary definition using CBA methodology. They reported that 53% of the 95 studies assessed were reclassified as cost comparisons because health outcomes were not appraised. Several authors have developed checklists that are useful when evaluating the overall quality of an economic analysis. One of the best-known checklists is given in Box 20.1. 

Economic Analysis is vital to justify the implementation of new diagnostic tests into resource limited health-care systems. POCTs are often more expensive on a test-by-test basis due to the scaling and portability of devices and not benefiting from the efficiency of large-scale multiplex laboratory testing of multiple samples. However, POCT can have benefits further down the clinical pathway such as those described in Table 2.1. These indirect cost savings can only be established by performing a comparative evaluation of the clinical pathway with and without the test. 

The third axis in Fig. 1 is that of the perspective of an economic analysis of medical care. Costs and benefits can be calculated with respect to society s, the patient s, the payer s, and the provider s points of view. A study s perspective determines how costs and benefits are measured, and the economist s strict definition of costs (the consumption of a resource that could otherwise be used for another purpose) may no longer be appropriate when perspectives different from that of society as a whole are used. For example, a hospital s cost of providing a service may be less than its charge. From the hospital s perspective, then, the charge could be an overstatement of the resources consumed for some services. However, if the patient has to pay the full charge, it is an accurate reflection of the cost of the service to the patient. Alternatively, if the hospital decreases its costs by discharging patients early, the hospital s costs may decrease, but patients costs may increase because of the need for increased outpatient expenses that are not covered by their health insurance plan. 

Nevertheless, conducting economic analysis from other perspectives, in addition to the societal perspective, is important. This is because the costs of medical care may not be borne solely by the same parties who stand to benefit from it. Economic analysis of medical care often raises vexing ethical problems related to equity, distribution of resources, and responsibility for the health of society s members. Economic analysis from multiple perspectives shed light on the equity issues associated with new interventions. 

Access to self-medication options empowers consumers and enhances their desire to take control of their own health conditions. Some important reasons why consumers use non-prescription medications include convenience, cost, time, and their attitudes, values, and beliefs. Consumers turn to non-prescription medications for 38% of all health problems they experience. It is known that consumers in the United States use more non-prescription medications than anywhere else in the world, with the sale of these products exceeding 30 billion dollars annually. Sales of OTCs have increased steadily over the years. Table 3 provides a 5-yr trend analysis of OTC sales by cate-gory.f Yet for this vast volume, OTC medications still take up less than 2 cents of every healthcare dollar spent by an individual.In addition to the clinical and economic benefits of using non-prescription products, 92% of consumers report they are satisfied with the medications they have used for self-care. " ... 

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