Economic analysis perspectives

Along the Y axis are four points of view, or perspectives, that one may take in carrying out an analysis. One may take the point of view of society in assessing the costs and benefits of a new medical therapy. Alternatively, one may take the point of view of the patient, the payer, or the provider. Along the third axis, the Z axis, are the types of costs and benefits that can be included in economic analysis of medical care. These costs and benefits, defined below, include direct costs and benefits, productivity costs and benefits, and intangible costs and benefits. 

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. 

In summary, economic analysis of medical technology or medical care evaluates a medical service by comparing its monetary cost with its monetary benefit (cost-benefit), by measuring its monetary cost in relation to its outcomes (cost-effectiveness), or simply by tabulating the costs involved (cost-identification). Direct costs are generated as services are provided. In addition, productivity costs should be considered, especially in determining the benefit of a service that decreases morbidity or mortality. Finally, the perspective of the study determines the costs and benefits that will be quantified in the analysis, and sensitivity analyses test the effects of changes in variable specifications for estimated measures on the results of the study. 

Therefore, an economic analysis must measure the quality of life of the patient to ensure that the value of the drug incorporates the patient s perspective. Quality of life is a concept that usually incorporates the physical, mental and social well-being of the patient. Initial doubts concerning the ability of schizophrenic patients to provide reliable and valid reports of their own quality of life led to the use of proxies for patient interviews. Caregivers and clinicians were consulted most often. However, recent research has shown that the use of proxies can produce very different results to those derived directly from the patient s responses. In addition, research now indicates that schizophrenic patients are able to provide stable, reliable and valid self-reports of their psychological well-being, health status and subjective evaluation of drug therapies (Awad et al., 1995). 

Wynen, E. 2002. Bio-dynamic and Conventional Irrigated Dairy Farming in Australia An Economic Analysis. Australasian Agribusiness Perspectives, Paper 50. University of Melbourne, Carlton. 

Question four addresses one of the most important issues in the critical assessment of economic analyses, that is, the issue of identification and inclusion/exclusion of resources. As discussed in the previous section, the actual scope of the resources included should match the (stated) perspective of the analysis. It is important to note that it is not always possible to measure and value all the costs and consequences of the alternatives however, a comprehensive list of the most important and relevant ones should be provided, along with justification for any major omissions. For example, a new drug has several side effects with similar rates of occurrence. One side effect results in a transient cough, another results in a Gl bleed. Given the scope of the total costs/resources involved, an economic analysis of this drug could probably justify non-inclusion of the treatment costs associated with the cough. However, because of the significant impact of even one hospitalisation, the costs associated with the Gl bleed must be included. 

For additional information and hands-on practice conducting a pharmacoeconomic evaluation in the real world, practitioners should consider a recently published case study. In 2003, Okamoto published a case smdy on conducting a pharmacoeconomic evaluation using 16 steps that readers also may Hnd useful. In this case, chn-icians are challenged to conduct a faux economic analysis from an MCO (provider) perspective to support a review of inhaled corticosteroids for formulary management purposes. 

From the perspective of integrated design the economic analysis of a project should be seen in the first place as an assessment of process profitability. This should not require the revision of the flowsheet stmcture and of the basic equipment items. If this happens, the conceptual design methodology was not properly applied. 

A thorough presentation of fundamentals of an economic analysis for process design can be found in the classical book of Peters and Timmerhaus (1991). In addition this book contains detailed information about the cost of chemical equipment. A concise but useful treatment can be found in Coulson Richardson volume 6 (1993). The part on economics in Douglas (1987) is particularly well written from the viewpoint of a designer. The chapter written by Holland Wilkinson for Perry s Handbook 7 edition (1997) contains an extended description of the modem concepts of profitability, a comprehensive estimation of manufacturing and fixed-capital costs, as well as an introduction in the accounting and cost control concepts. The economic evaluation of projects from the perspective of the Institution of Chemical Engineers-UK may be found in Allen (1991). 

The contributions in this book share the conviction that energy security is an important issue that should be addressed through economic analysis to yield policy-relevant conclusions. Although we believe in the necessity of solid economic theory, the book adopts a policy perspective. We refer to the underlying theoretical discussions in extensive references. This starts with the very definition of supply security the reader will find 27 different approaches to supply security in this book. A single, universal definition of supply security does not exist. 

W5men, E. (2000), Bio-d5mamic and conventional irrigated dairy farming in Australia an economic analysis , Agribusiness Perspectives, Paper 50 www.agribusiness.asn.au/Review/Perspectives/2002AVynen.htm. 

The paper is an attempt to introduce power, as an autonomous analytical dimension, for the analysis of food chains and networks. To that aim many theoretical perspectives of the study of power have been explored and have been eventually incorporated in a unified framework, keeping together standard economics, institutional perspectives, and network and managerial sciences. One result is that power is a kind of topic that fits the encompassing scope and methods quoted in the early research agenda drawn for the chain and network science (Omta et al, 2001). 

To assist the Department of Homeland Security (DHS) in its efforts to secure the Nation s infrastructure and economy against terrorist attack and other catastrophic loss, the NRC wiU ejtamine the public health, economic, and national security importance to the United States of key chemicals and chemical processes. A systems analysis perspective will be utilized to surest a methodology to prioritize risk, identify scenarios of concern, and determine investments intended to enhance the long-term stability of the Nation s chemical infrastructure. Within resources and information available, this review wiU ... 

This chapter adds the socio-economic dimension to the medical or technical perspectives of the proceeding contributions of this book. As its health economic terminology and approach might be unfamiliar to some readers, we start with a section on methodology. In particular, we present an overview of the concept of Cost-of-Illness (COI) and of relevant health economic evaluation techniques. In Sect. 2, we present the basic findings of a meta-analysis of the socio-economic costs of HIV/AIDS and of the socio-economic impact of antiviral intervention. The major findings are reflected in Sect. 3. The chapter closes with a speculation on long-term socio-economic costs of antiviral intervention. 

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. 

By establishing the role of money as a condition for expanded reproduction, a foundation is provided for exploring the circumstances under which there might be economic crisis. This monetary perspective has been largely neglected by official Marxian economics, with the main focus on real analysis (see Arnon 1994 355). For Pollin (1994 101), Marxian economics had until recently almost completely overlooked monetary and financial phenomena. Similarly, Hein (2002 1) argues that attempts to reconstruct Marx s theory of money and credit remained without major consequences for Marxian theories of accumulation and crisis . And for Crotty (1985 45),... 

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