Cost-consequence analysis , health care

The organizations that actually pay for medicines — governments, insurers and so on—have only recently started to use the power conferred by their expenditure. A consequence is that a drug company has not only to show that its new product is safe and works, but also that it is cost-effective. In Australia, this has been spelled out in legislation. Since 1993, any drug submitted for approval there must be accompanied not only by the results of clinical trials but also by an economic impact analysis. In 1999 the UK set up a National Institute 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 fuU cost-benefit studies. 

Expert opinion is a source, frequently elicited by survey, that is used to obtain information where no or few data are available. For example, in our experience with a multicountry evaluation of health care resource utilization in atrial fibrillation, very few country-specific published data were available on this subject. Thus the decision-analytic model was supplemented with data from a physician expert panel survey to determine initial management approach (rate control vs. cardioversion) first-, second-, and third-line agents doses and durations of therapy type and frequency of studies that would be performed to initiate and monitor therapy type and frequency of adverse events, by body system and the resources used to manage them place of treatment and adverse consequences of lack of atrial fibrillation control and cost of these consequences, for example, stroke, congestive heart failure. This method may also be used in testing the robustness of the analysis [30]. 

Cost-benefit analysis uses monetary valuations of the morbidity and mortality consequences of diseases or interventions. This allows estimation of the absolute and relative net social benefit of intervention, calculated as the monetary value of the consequences of an intervention minus the direct costs. Any health or social care intervention with a net social benefit greater than zero (i.e. the benefits are greater than the costs) is worth undertaking. Two approaches have typically been used to value outcomes in monetary values. The first is the human capital approach, where the monetary value of benefit represents the value of changes in the amount or type of work done or use of leisure time as... 

Economic studies should consider the costs of all the resources and services used in the process of care. In addition, the outcomes that are a consequence of the health or social care interventions evaluated need to be included. For dementia, these include the costs of hospital inpatient and out-patient care, primary and community-based health-care services, social welfare services, and care provided by voluntary agencies or by femily and friends. Ideally, a broad perspective reflecting the costs and outcomes to society should be adopted. As a minimum, the perspective of the analysis should include the costs and outcomes to key health and social care providers or funders and to patients and their families. 

In a cost-benefit analysis, both costs and consequences are valued in dollars and the ratio of cost to benefit (or more commonly benefit to cost) is computed. Cost-benefit analysis has been used for many years to assess the value of investing in a number of different opportunities, including investments (or expenditure) for health care services. Cost-effectiveness analysis attempts to overcome (or avoid) the difficulties in cost-benefit analysis of valuing health outcomes in dollars by using nonmonetary outcomes such as life-years saved or percentage change in biomarkers like serum cholesterol levels. Cost-minimization analysis is a special case of cost-effectiveness analysis in which the outcomes are considered to be identical or clinically equivalent. In this case, the analysis defaults to selecting the lowest-cost treatment alternative. Cost-utility analysis is another special case of cost-effectiveness analysis in which the value of the outcome is adjusted for differences in patients preferences (utilities) for the outcomes. Cost-utility analyses are most appropriate when quality of life is a very important consideration in the therapeutic decision. 

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. 

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). 

In many situations in chemical analysis, a full calibration curve is not prepared because of the complexity, time, or cost. In such situations, abbreviated external standard methods are often used. Under no circumstances can an abbreviated method be used if the raw signal response is nonlinear. Moreover, these methods are not generally appropriate for analyses in regulatory, forensic, or health care environments where the consequences can be far-reaching. 

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