VALUE IN HEALTH REGIONAL ISSUES 9C (2016) 78–83

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journal homepage: www.elsevier.com/locate/vhri

Importance of Economic Evaluation in Health Care: An

Indian Perspective
Amit Dang, MDPharmacology1,*, Nishkarsh Likhar, MPharm1, Utkarsh Alok, MPharm2
1
MarksMan Healthcare Solutions, Navi Mumbai, Maharashtra, India; 2Tata Consultancy Services, Mumbai, Maharashtra, India

AB STR A CT

Health economic studies provide information to decision makers for
efficient use of available resources for maximizing health benefits.
Economic evaluation is one part of health economics, and it is a tool
for comparing costs and consequences of different interventions.
Health technology assessment is a technique for economic evaluation
that is well adapted by developed countries. The traditional classi-
fication of economic evaluation includes cost-minimization, cost-
effectiveness analysis, cost-utility analysis, and cost-benefit analysis.
There has been uncertainty in the conduct of such economic evalua-
tions in India, due to some hesitancy with respect to the adoption of
their guidelines. The biggest challenge in this evolutionary method is
lack of understanding of methods in current use by all those involved
in the provision and purchasing of health care. In some countries,
different methods of economic evaluation have been adopted for
decision making, most commonly to address the question of public
subsidies for the purchase of medicines. There is limited evidence on
the impact of health insurance on the health and economic well-being
of beneficiaries in developing countries. India is currently pursuing
several strategies to improve health services for its population, includ-
ing investing in government-provided services as well as purchasing
services from public and private providers through various schemes.
Prospects for future growth and development in this field are required
in India because rapid health care inflation, increasing rates of chronic
conditions, aging population, and increasing technology diffusion will
require greater economic efficiency into health care systems.
Keywords: economic evaluation, health economics, health technology
assessment.
Copyright & 2016, International Society for Pharmacoeconomics and
Outcomes Research (ISPOR). Published by Elsevier Inc.

Introduction
The Indian health care sector is one of the fastest growing
industries and is expected to grow at a compound annual growth
rate of 17% during the period 2011 to 2020 to touch US $280
billion. It is expected to rank among the top three health care
markets in terms of incremental growth by 2020 [1]. Spending on
health care in India was an estimated 5% of gross domestic
product in 2013 and is expected to remain at that level through
2016. Total health care spending in local currency terms is
projected to rise at an annual rate of more than 12%, from an
estimated $96.3 billion in 2013 to $195.7 billion in 2018. Although
this rapid growth rate will reflect high inflation, it will also
be driven by increasing public and private expenditures on
health [2].
As per the World Health Organization (WHO), in countries
such as India, people who pay for their health care services suffer
“catastrophic costs.” While millions suffer and die in absence of
access or inability to afford medical care, many others suffer
because they end up paying through debts, selling assets, and so
forth [3]. Citizens’ expectations for health care are becoming high
in developing countries such as India, where people are becom-
ing accustomed to better standards. People now demand latest
treatments, timely, affordable care, and a range of choices. They
are better informed than ever about their health and their
treatment options. They are prepared to take some responsibility
for their own health, but broadly they do not want to have to pay
a lot more than they already are for their health care [4].
However, the proportion of insurance in health care financing
in India is very low. The extent of coverage and the type of
coverage are key issues related to insurance penetration. Only
around 10% of the population is covered through health financing
schemes. Selection criteria by suppliers often restrict the poor
(and more likely to be ill) from affordable prepayment schemes.
Many patients in India have been forced below the poverty line
because of health care expenditure. Nearly 40% of Indians who
were hospitalized in 1995-1996 fell into debt on account of paying
for hospital expenditures, with nearly a quarter falling below the
poverty line as a result. The risk of falling into poverty when
hospitalized ranged from 17% in Kerala to double that in Uttar

Conflict of interest: The authors have indicated that they have no conflicts of interest with regard to the content of this article.
* Address correspondence to: Dr. Amit dang, MD Pharmacology, 1st Floor, Plot No. 6, Sector 12A, Kopar Khairane, Navi Mumbai,
Maharashtra - 400709, India.
E-mail: amit.d@marksmanhealthcare.com.
2212-1099$36.00 – see front matter Copyright & 2016, International Society for Pharmacoeconomics and Outcomes Research (ISPOR).
Published by Elsevier Inc.
http://dx.doi.org/10.1016/j.vhri.2015.11.005
 VALUE IN HEALTH REGIONAL ISSUES 9C (2016) 78–83
Pradesh and Bihar [5,6]. The voluntary health insurance market,
which is estimated at Rs 4 billion ($86.3 million) currently, is
growing fast. Industry estimates put the figure at Rs 130 billion
($2.8 billion) [7]. It is, therefore, a challenge for health care
providers to promote health using improved and cost-effective
modalities for the prevention, diagnosis, and therapy of various
diseases and aliments.
The goal of any health care intervention is to improve health
with available preventive measures, treatments, and medical
procedures [8]. The variation in health services provision across
the country, along with increasing health care expenditure,
accentuates the need for effective utilization of health care
resources. Although economics in general provides a framework
to allocate scarce resources among competing ends, health
economics specifically deals with the allocation of resources in
improving health. Health economics is a branch of economics
that examines as well as evaluates issues related to efficiency,
effectiveness, and value of resources in health and health care.
Potential uses of economic evaluation include the development
of public reimbursement lists, price negotiation, the development
of clinical practice guidelines, and communicating with prescrib-
ers [9]. Such evaluations are important in understanding eco-
nomic aspects of health and disease and limitations to the
procurement of adequate health care [10].
A health care service often relies on complex technologies
directed to serve medical and public health purposes. The
development and adoption of these technologies are costly,
which has led to increased health care costs. In addition, access
to health technology is one of the most distinct differences
between the rich and the poor [11]. The economic evaluation
embedded in health technology assessment (HTA) has become
increasingly important as a tool to assess and compare health
benefits and costs of different treatments [12]. HTA and outcomes
research are widely used to prioritize interventions that repre-
sent the most effective use of resources among many competing
options in the developed world.
Health Technology Assessment
Every new technology that is supposed to be implemented in
society usually goes through predefined phases of assessment to
prove its worth. For health care evaluation, HTA bodies have been
established to provide guidance on which technologies should be
used in societies with given resource constraints [13]. It has
emerged as a national-level formal process that does influence
priority setting and is now considered to be a successful mech-
anism to deal with health care priority issues [14]. The Interna-
tional Network for Agencies in Health Technology Assessment
has provided the following description of HTA: “technology
assessment in health care is a multidisciplinary field of policy
analysis. It studies the medical, social, ethical, and economic
implications of development, diffusion, and use of health tech-
nology” [15].
HTA consists of appraisals using well-established evaluative
techniques of systematic review, meta-analysis, clinical trials,
epidemiology, and economic evaluation including the application
of incremental cost-effectiveness ratios [16]. HTA is usually
undertaken by specialized agencies or national organizations. In
the United States, the Agency for Healthcare Research and
Quality and the United Kingdom's (UK) HTA program guided by
the National Institute for Health and Clinical Excellence (NICE)
[17]. In the United Kingdom, the National Institute for Health and
Care Excellence has been successful in going beyond HTA by
providing clinical guidance, care pathways, and implementation
plans in a legally binding manner [18].
79
Among low- and middle-income countries, there are estab-
lished HTA programs in several countries including Brazil, Mex-
ico, China, South Korea, and Thailand [19]. In India, states such as
Kerala began discussions with established HTA agencies such as
the National Institute for Health and Care Excellence from other
countries; however, there is to date no formal national HTA
program in India [20,21]. An initiative has been taken by the
Society of Pharmacoeconomics and Outcomes Research (ISPOR)
India to draft guidelines on the basis of a study of international
guidelines and ISPOR. A core committee with experts from
industry and academia was entrusted with the task to prepare
its first draft, to be circulated among the public for wider
consultations. Following this, the decision core group of experts
had several meetings and deliberations and decided to place the
guidelines on the ISPOR India Web site for further comment and
review.
The National Health Systems Resource Centre (NHSRC) was
established in 2007, under the National Rural Health Mission of
Government of India. The NHRSC eyes to improve health out-
comes by facilitating governance reform, health systems innova-
tions, and improved information sharing among all stake holders
at the national, state, district, and subdistrict levels through
specific capacity development and convergence models. The
NHSRC is also a WHO collaborating center for Priority Medical
Devices & Health Technology Policy. The NHSRC currently con-
sists of eight divisions—Community Processes, Public Health
Planning, Human Resources for Health, Quality Improvement in
Healthcare, Healthcare Financing, Healthcare Technology, Health
Informatics, and Public Health Administration. Public Health
Planning is one of the practice areas of the NHSRC encompassing
both health systems and health programs. The function of this
practice area includes developing health plans and programs
responsive to the needs of the population, but it is also vital for
budgeting and resource allocation in a systematic and equity-
sensitive manner. The first compendium of HTA—an evidence-
based approach to technology-related policy making for Indian
health care—was launched at the 4th International Health
Technology Assessment Fellowship in Chennai in August 2014.
The compendium highlights the most essential health technol-
ogies required today for responding to India’s disease burden.
This compendium of HTA was jointly developed by the NHSRC,
New Delhi, and the WHO Country Office for India. This HTA
compendium is an outcome of the fellowship program organized
by the NHSRC and WHO India in 2012-2013. This unique fellow-
ship brings together engineers, researchers, health care profes-
sionals, industry experts, and government to form a vibrant and
fertile innovative ecosystem for HTA. Over the last 2 years, more
than 200 professionals have been trained under the HTA fellow-
ship program. The compendium is a critical step toward identi-
fying and consequently filling the technology gaps in the public
health sector [22,23].
Techniques of Economic Evaluation
Health care can be seen as an immediate product, in the sense of
being a means to the end of improved health. To prioritize and
allocate scarce resources in an efficient way, an analytical tool is
required, which is able to put into perspective the costs and
benefits of implementing one project instead of another, thereby
creating a basis for decision making. Economic evaluation is such
an analytical tool for decision making because it involves both a
cost side and a benefit side, which are being evaluated against
each other. The cost side is composed of costs that are involved
in the establishment and implementation of the project in
question. In addition, in principle the marginal cost and not the
average cost is determined because it is the cost that arises
80 VALUE IN HEALTH REGIONAL ISSUES 9C (2016) 78–83
because of the production of one extra unit, that is, the cost at the
margin that is of interest. Regarding the benefit side, this is
composed of the “utility,” the value of the health outcome that
can be received for the single patient as well as, for example, the
patient’s relatives.
In publicly funded health care systems, limited resources
restrict the provision of every available intervention in every
situation for all who need or want it. Choices must be made
among effective health care interventions, and the decision to
fund one means that others cannot be funded. There is still a
paucity of health economic studies conducted in India by Indian
health care providers.
Economic evaluations in different types of decisions come
into play when the following decisions are to be taken: decisions
about drug treatments, other health care interventions/programs,
investments in new technology or research, and similarities and
differences between different types of decision making. Economic
evaluation is most useful when it is preceded by three other types
of evaluation, each of which is important:
 Efficacy: Can a health procedure or program work?
 Effectiveness: Does it work? This assesses its acceptance and
usefulness when it is offered.
 Availability: Is the program reaching those for whom it is
intended? [24].
For establishing the efficacy and safety of a drug, randomized
clinical trials are the criterion standard for showing the efficacy,
under ideal conditions, of a new drug. Cost-effectiveness analy-
ses (CEAs) provide the basis for defining affordability; they are
usually based on results of randomized clinical trials, although
these trials might not predict benefits. Such analyses should be
supplemented by cost analyses based on health outcomes data-
bases, so that resource utilization and longer-term toxicity are
better elucidated [24].
A more recent term used in pharmacoeconomics is compara-
tive effectiveness research (CER), which has been variably defined
by different agencies with certain common elements. CER would
aim to bring together randomized clinical trials and real-world
evidence to form an integral framework of comparative evidence
[25]. The perspective of a pharmacoeconomic study is important
because it determines the types of costs to be measured. A
number of methods can be used to conduct CER, including
systematic reviews, experimental studies such as pragmatic
clinical trials, and nonexperimental studies including retrospec-
tive and prospective studies, which leave the choice of treatment
to the patients and their health care providers [26].
Many countries have developed and implemented pharma-
coeconomic guidelines to aid pricing and reimbursement deci-
sion. These guidelines are a set of rules that outline the
requirement and information needed from manufacturers who
wish to have their product considered. Australia was the first
country to publish mandatory guidelines in 1992 followed by
Canada in 1993 [27]. Development of pharmacoeconomic guide-
lines by the government and requiring economic evaluations
before health policy decision making may help improve the
quality of future pharmacoeconomic research in India. India
has highly trained medical professionals as well as a large patient
pool. The country also has a large number of skilled professionals
in information technology. These available resources can work
together to create reliable electronic medical records and data-
bases needed to conduct CER. The market of generic drugs in
India stands as a global leader in present times. Hence, with
planning and coordination, it should be possible to conduct CER
and HTA of various patent and generic drugs in the country.
These studies would be of benefit, not only to the nation but also
to other countries with similar economies as India.
Health Outcomes
In general, it is suggested that an effectiveness measure could be
a final health output. Multidimensional health outcomes are
reduced to a single index using health utilities. Examples of such
utility measures are quality-adjusted life-years (QALYs) or
healthy years equivalents where a common unit is determined
by using a multidimensional measure of health status, which is
weighted according to individuals’ preferences [28]. Most of the
economic evaluation guidelines, such as that of the ISPOR and
the Dutch Health Care Insurance Board, are intended to be used
for clinical studies and focus on measuring health (i.e., QALYs) as
the main (or sometimes only) outcome measure of interest [29].
The QALY is a measure of the length of life (expressed in life-
years [LYs]) weighted by the health-related quality of life valued
by a preference-based score. QALYs are designed to aggregate the
total health improvement for a group of individuals in one single
measure. Torrance and Feeney [30] reviewed utilities and QALYs
and drew the conclusion that utilities were particularly appro-
priate for use as utility-adjustment weights for QALYs. Further-
more, Feeney and Torrance demonstrated that the utility
measurement approach could be viably incorporated into clinical
trials and used to assess quality-of-life outcomes. They con-
cluded that “when study-specific utility instruments are carefully
developed and deployed, they are reliable, valid, and responsive”
[31]. Once estimated, QALYs are compared with costs in the form
of an incremental cost-effectiveness ratio and comparisons
across interventions and disease areas can be made using cost
per QALY gained, thereby informing decisions as to whether an
intervention can be considered value for money [32].
Studies have been conducted in India depicting the QALY
within various therapeutic areas. A CEA at a tertiary care teach-
ing hospital of South India evaluated the clinical and economic
consequences of salmeterol/fluticasone, formoterol/budesonide,
and formoterol/fluticasone in patients with severe and very
severe chronic obstructive pulmonary disease. Results from the
study demonstrated that the recommended use of combined
inhaled corticosteroids and long-acting bronchodilators for the
treatment of patients with severe and very severe chronic
obstructive pulmonary disease, compared with current practice,
had the potential to improve clinical outcomes, and consequently
patients’ quality of life, without increasing health care costs [33].
A cost-effective analysis of universal childhood hepatitis B
using marginal cost of every LY and QALY gained was performed.
Universal immunization reduced the HB carrier rate by 71% and
increased the number of years and QALYs lived by a birth cohort
by 0.173 years (61.072 vs. 60.899 years) and 0.213 years (61.056 vs.
60.843 years), respectively. The analysis found universal HB
immunization to be highly cost-effective in India with intermedi-
ate endemicity rates [34].
The large population of cancer patients in India is grappling
with the prohibitive cost of cancer treatment. The disease has
wiped out entire life savings and even forced some people to sell
their homes. Although relatively cheaper than in the West,
cancer treatment is still unaffordable for poor and middle-class
Indians, who often do not have health insurance. A better
alternative to government-mandated price cuts would be to
estimate a final price on the basis of drug performance, cost-
effectiveness, and a country’s ability to pay. A multicentric study
that included India developed a global pricing index for new
cancer drugs in patients with metastatic colorectal cancer that
encompasses all these attributes. A decision model was imple-
mented in this CEA in which costs were obtained from both
public and private hospitals in India. The study found a QALY
gain with more than $200,000 to administer new treatment as
first-line for metastatic colorectal cancer [35]. In a similar study,
 VALUE IN HEALTH REGIONAL ISSUES 9C (2016) 78–83
decision analysis modeling was used to estimate a more afford-
able monthly cost in India for a hypothetical new cancer drug
that provides a 3-month survival benefit to Indian patients with
metastatic colorectal cancer. The base-case analysis suggested
that a price of $98.00 per dose would be considered cost-effective
from the Indian public health care perspective. If the drug were
able to improve patients’ quality of life above the standard of care
or survival from 3 to 6 months, the price per dose could increase
to $170 and $253, respectively, and offer the same value. It was
hence suggested that the use of the WHO criteria for estimating
the cost of a new drug on the basis of economic value for a
developing country such as India is feasible and can be used to
estimate a more affordable cost on the basis of societal value
thresholds [36].
Data used for economic evaluations are usually collected from
clinical trials, which include safety and efficacy data along with
supplementary data such as cost incurred during treatments.
However, it has been noticed that economic evaluations bring
relevant findings and findings of practical utility if the data
collection is limited to few outcomes including short follow-up
and less rigorous study designs. Besides these, another approach
is to confine the study to the measures of the care process, say,
cost per change in professional guidance adherence or patient
compliance to medication, instead of measuring actual health
outcomes. However, limiting data collection can have undesir-
able consequences, such as reducing confidence in the accuracy
of the conclusions drawn from the analysis [37]. After agreement
on the method to be used for economic evaluation, it becomes a
useful tool in the studying and planning of strategies for imple-
menting change in health care. In India, where fewer numbers of
patients are able to afford modern medicines, a reasonable level
of profit can be achieved if a drug were to become more
affordable to those under need.
Cost (Resource)
Costs are a function of resource quantities and their unit price.
Economic evaluations estimate costs related to any given health
technology as health care costs (direct medical and nonmedical
costs), patients’ costs, and production losses (indirect costs).
Direct costs are characterized as costs that can be directly
connected to the use of one or more resources needed to be able
to carry out an intervention. The term “indirect cost” is used in
health economics to refer to the productivity losses related to
illness or death [38]. In economic evaluation, direct costs arise
from resource usage, whereas indirect costs arise from loss of
productivity due to morbidity/mortality. The optimal use of a
technology would be achieved when the marginal cost is equal to
the marginal benefit.
Because cost estimates and income levels vary in different
countries, a CEA for one population may not necessarily be
applicable to other populations, especially those with very differ-
ent gross national products and per-capita incomes. However,
results of CEA primarily directed at the Indian population would
have a wider application in several developing countries that
have similar medical costs and per-capita gross national product
as India [39].
In Bengaluru, India, the Department of Neurosurgery of Sai
Institute of Higher Medical Sciences follows a robust costing
methodology for cost evaluation that includes all operating and
capital, fixed, and variable cost elements. At the Sai Institute of
Higher Medical Sciences, the decision on provision of health care
for a patient is ascertained on the basis of evidence-based
standards of care and is not biased by factors such as cost or
insurance status. Cost-containment initiatives in utilization
include in-house innovations such as the “stores module”—an
81
inventory management system to ensure optimal utilization of
resources wherever possible such as by avoidance of unnecessary
investigations, minimizing surgical unit time, rigid infection
control, and application of economies of scale—and decreasing
equipment-related “cost per unit” by maximal utilization of their
capacity. Since inception, its neurosurgery unit has operated on
around 18,000 patients, and, as such, has contributed Rs 5310
million ($88.5 million) to the society from an economic stand-
point [40]. This may be one example of optimal costing method-
ology that gives hope of effective costing and resourcing in health
care in India.
We need to acknowledge the fact that there are still many
challenges regarding cost consideration studies in India, majorly
the limited understanding of health care professionals with
respect to direct and indirect costs. Another important reforma-
tion, which is required in an Indian setting, is the implementa-
tion of a uniform health care policy and evaluation model to
generate consistent evidence from various independent eco-
nomic evaluation studies.
Analytic Models
Modeling or clinical decision analysis was initially developed as a
tool for clinicians to quantify expected risks, benefits, and
utilities (and sometimes costs) associated with alternative treat-
ment options for individual patients. It was later adopted for
structuring and analyzing collective decisions in health care [12].
The use of decision-analytic models is also a practical approach
to economic evaluation and efficiency improvement.
Clinical decision models have many more uses along these
lines. For example, they can provide estimates of the expected
value of information to form a basis for deciding whether addi-
tional data collection is necessary or not [41]. Modeling techni-
ques help to structure evidence on clinical and economic
outcomes. It also helps to inform decisions about clinical practi-
ces and health care resource allocations. The types of models
that have been used for economic evaluation in India include
decision-analytical model, Markov models, and, to a lesser
extent, discrete event simulation models. The choice of the use
of a model depends on the objective or the question being asked,
the clinical indication, and availability of data. Irrespective of the
modeling technique, all models should return the same results if
they are based on the same data. Decision trees are often used for
treatment algorithms, health care programs, and analysis of
results of short-term clinical trials for cost-effectiveness. Markov
models are useful when a decision problem involves risk that is
continuous over time, when the timing of events is important,
and when important events may occur more than once [42].
While doing the literature search, we found that most of the
studies from India are published in foreign journals and the
authors of most of these model-based studies are working out-
side India. For example, an economic evaluation was carried out
to investigate the cost-effectiveness of administering tranexamic
acid (TXA) for the treatment of significant hemorrhage following
trauma in India, Tanzania, and the United Kingdom. The LYs
gained were estimated from a simple Markov model. The study
showed that early administration of TXA to bleeding trauma
patients is likely to be highly cost-effective in low-, middle-, and
high-income settings. Early administration (within 3 hours) of
TXA would cost $66 per LY saved in India. However, it was
important to demonstrate that it was likely to be cost-effective in
countries with much more limited health care budgets, such as
Tanzania and India where because of the high number of trauma
victims this simple intervention can avert thousands of deaths
every year [43]. Similarly, a CEA in India compared serological
testing for tuberculosis with other strategies used for its
82 VALUE IN HEALTH REGIONAL ISSUES 9C (2016) 78–83
diagnosis. The decision-analytic model was used, and costs were
estimated using data from private laboratories in India. The study
showed that flexible and accessible analytic tools are needed for
decision makers to adapt large-sample cost-effectiveness data to
local conditions [44]. A study from South India used the Cost-
Effectiveness of Preventing AIDS Complications International
model, a computer-based, state transition model of HIV and TB
combined with data of a clinical trial from the National Institute
for Research in Tuberculosis. The analysis showed that a 3-
month course of isoniazid plus rifampin and a 6-month course
of isoniazid alone both decrease TB incidences in HIV patients.
The therapy also came out to be cost-effective by WHO criteria
[45].
Health Economics and HTA in India
In developed countries, health economics has typically been the
domain of microeconomists, who apply the tools of economic
theory to resource allocation in the health sector. However, in
developing countries such as India, there are lots of hurdles in
the development of effective HTA. The reasons include lack of
professional experts, noneffective reporting system, and low
budget allocation. In India there is no national health service;
hence, payment for medical care is mainly from out-of-pocket
spending for most of the population [46]. However, there are a
number of patients who are covered by state- or employer-
funded health care or personal health insurance. For example,
the Armed Forces Medical Services of India are unique in that
they provide comprehensive health care to their serving person-
nel and families. The Armed Forces Medical Services serve the
citizen even after retirement, with those with disabilities fol-
lowed for a long time. Thus, parameters such as overall survival
(the most important end point for any trial), progression-free
survival, time-to-next treatment, and quality of life (full employ-
ability or fitness) can all be evaluated because they have the
capacity to provide data on mortality, periods of hospitalizations,
low medical classifications, and employability.
For both groups of patients, insured and noninsured, HTA
would be required, given the constraints of budgets. India’s tryst
with health insurance programs goes back to the early 1950s,
with the launch of Employees State Insurance Scheme (in 1952)
and Central Government Health Scheme (in 1954). To meet the
need for tertiary care while providing financial security to people
with low incomes, several states in India have rolled out social
insurance programs that provide free tertiary care to households
below the poverty line [47]. The Vajpayee Arogyashree Scheme
was launched for this purpose in February 2010 in Karnataka,
Rajiv Aarogyasri in Andhra Pradesh, and Kalaignar’s Insurance
Scheme for Life Saving Treatment in Tamil Nadu.
Government and insurance providing agencies therefore are
expected to take decisions in all aspects of the health technology
to be considered. HTA can help, first, by determination of a
package price of cost-effective and safe interventions and hence
help in cost savings in the already resource-limited environment.
This would indirectly help strategic purchasing (negotiating price
from providers being in a large risk pool), achieving technical
efficiency (how much to buy), and allocative efficiency (which
services to buy). Second, HTA can provide evidence of effective-
ness of interventions, aid regulatory bodies to exercise better
regulatory control over insurance-implementing organizations,
and help standardization of rates of packages by third-party
administrators [48].
There are limited resources for carrying out robust economic
analysis in India. Along with a lack of trained professionals, there
are likely to be data collection and reporting deficiencies in the
early years of HTA. In a review of the quality of existing
pharmacoeconomic studies carried out in India [49]. recom-
mended a standardized set of guidelines for these studies and
improved pharmacoeconomic education to produce skilled pro-
fessionals who can produce high-quality research [50].
Conclusions
Economic assessment is a part of good quality medical research
and is required for technology assessment. In an ideal research
world, clinical and economic data are collected simultaneously.
Most reliable estimates of cost-effectiveness can be obtained
when good quality epidemiological and cost data are combined.
HTA can form the foundation of comparative research concern-
ing future investments in health care, in developing markets
such as India. HTA allows like-for-like comparison of medical,
surgical, and public health initiatives. The ultimate goal of health
economic evaluation is to support evidence-based policy deci-
sions. It is always essential that the research being produced be
of interest to decision makers. This can be made possible with a
combined effort of health institutions, researchers, and decision
makers. Little attention has been paid to the micro aspects of
health economics in India. A radical change in the approach of
the government is required to implement policies regarding the
efficient health care evaluation. Expenditure toward health care
must be raised, so that it could bring about a reduction in out-of-
pocket spending toward health care. Private voluntary health
insurance cover should be encouraged and made available for the
bulk of the employed population, and the model should be
replicated for community-based health insurance for citizens
working in the unorganized sector.
With appropriate adjustments made to take account of the
clinical and economic realities of Indian health care, as well as
the cultural, ethical, and philosophical considerations pertinent
to local policy making, these methodologies can form the basis of
decision making on pricing, reimbursement, and future invest-
ments in the Indian health care system.
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