Health Economics for Prescribers Richard Smith MED richard
Health Economics for Prescribers Richard Smith (MED) richard. smith@uea. ac. uk David Wright (CAP) d. j. wright@uea. ac. uk Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Learning outcomes n On completion of the unit the student will be able to: · Critically appraise pharmaco-economic evaluations · Prepare a business case for the introduction and evaluation of a novel pharmaceutical service designed to improve pharmaceutical care within the NHS; considering local health needs & inequalities, government targets and government strategies for health and pharmacy Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Delivery Workshops & Lectures n No directed study n Expectation of significant reading around topic n Reading list provided on Blackboard is exhaustive n Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Topics Pharmacoeconomics n Healthcare organisation n Managing the pharmaceutical budget n Procurement & influencing skills n Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Assessment n Critical appraisal of pharmaco-economic evaluation · Open book · Unseen paper · Use previously seen and tested checklist n Business case development (1, 500 words) · · · Coursework Based on PCT where born Local health needs assessment Description, including costs, of new pharmaceutical service Designed to meet government targets for health Proposed pharmaco-economic evaluation Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Lecture 1: Economics, Health and Health Economics What is economics? n What isn’t economics? n What is “Health”? n What is “Health Economics”? n Key Economic Concepts n · Opportunity cost · Efficiency Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economics is about … n Limited resources n Unlimited “wants” n Choosing between which ‘wants’ we can ‘afford’ given our resource ‘budget’ Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economics is about choice Good ‘B’ Good ‘A’ Budget Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Concept 1: opportunity cost “The value of forgone benefit which could be obtained from a resource in its next-best alternative use. ” Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Example of opportunity cost Possible Health Expenditure in a Year Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Implications of opportunity cost n Deciding to do A implies deciding not to do B (i. e. value of benefits from A>B). n Cost can be incurred without financial expenditure. n Value not necessarily determined by “the market”. Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economists view of the world. . . n Pessimist: bottle ½ empty n Optimist: n Economist: bottle ½ wasted bottle ½ full inefficient! Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Concept 2: efficiency n Efficiency = maximising benefit for resources used n Technical Efficiency = meeting a given objective at least cost (resources) n Allocative Efficiency = producing the pattern of output (supply) that matches the pattern of consumer want (demand) Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Efficiency and ‘the market’ Price/ Cost Supply Demand Quantity Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Efficiency and ‘the market’ Price/ Cost Supply Equilibrium Price PA A Demand QA Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics Quantity
Topic versus discipline Topic Discipline = = area of study conceptual apparatus Health economics is the discipline of economics applied to the topic of health. Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Some misconceptions n Economics is … · · concerned with money the same as accountancy only practised by economists objective Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economics and money n Economics is concerned with… · · n costs (resource use) benefits choice efficiency Money is… · store of value · means of exchange Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economics and accountancy n Economics is concerned with… · · n costs (resource use) benefits choice efficiency Accountancy is concerned with… · monitoring financial transactions Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
The ‘practice’ of economics n Economics is concerned with… · · n costs (resource use) benefits choice efficiency Everyone… · weighs the relative benefits of each course of action and choose the action which maximises well-being Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Economics and objectivity n All decisions are based on subjective value judgements (or judgements of subjective value!) n Economics makes these explicit Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
What is ‘health’? n World Health Organisation: · Health is a “state of complete physical, mental and social well-being” “Health Economics” is often “Health Care” Economics n Usually “health” in health economic (evaluation) is health status according to some measure n Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health status example: EQ-5 D Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Applying economics to health (care) Descriptive = quantification Predictive = identify impact of change Evaluative = relative preference over situations Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health economics ‘map’ H. Micro-Economic Appraisal B. What influences Health? (other than health care) C. Demand for Health Care G. Planning, budgeting, regulation mechanisms E. Market Analysis A. What is Health? What is it’s value? D. Supply of Health Care F. Macro. Economic Appraisal Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
A: Value of health Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health economics ‘map’ H. Micro-Economic Appraisal B. What influences Health? (other than health care) C. Demand for Health Care G. Planning, budgeting, regulation mechanisms E. Market Analysis A. What is Health? What is it’s value? D. Supply of Health Care F. Macro. Economic Appraisal Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
B: Demand for health (Grossman) Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health economics ‘map’ H. Micro-Economic Appraisal B. What influences Health? (other than health care) C. Demand for Health Care G. Planning, budgeting, regulation mechanisms E. Market Analysis A. What is Health? What is it’s value? D. Supply of Health Care F. Macro. Economic Appraisal Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
C/D/E: Supplier-induced demand Price/ Cost S D 2 D 1 Quantity Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health economics ‘map’ H. Micro-Economic Appraisal B. What influences Health? (other than health care) C. Demand for Health Care G. Planning, budgeting, regulation mechanisms E. Market Analysis A. What is Health? What is it’s value? D. Supply of Health Care F. Macro. Economic Appraisal Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
F: WHO ranking of health systems (top 20) 1 2 3 4 5 6 7 8 9 10 France 11 Norway Italy 12 Portugal San Marino 13 Monaco Andorra 14 Greece Malta 15 Iceland Singapore 16 Luxembourg Spain 17 Netherlands Oman 18 UK Austria 19 Ireland Japan 20 Switzerland Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
Health economics ‘map’ H. Micro-Economic Appraisal B. What influences Health? (other than health care) C. Demand for Health Care G. Planning, budgeting, regulation mechanisms E. Market Analysis A. What is Health? What is it’s value? D. Supply of Health Care F. Macro. Economic Appraisal Health Economics for Prescribers Lecture 1: Economics, Health and Health Economics
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