UNIT III:

HEALTH
ECONOMIC
EVALUATION
 UNIT III REPORTERS
1 Sarail, Fatima Shaina 6 Sala, Marjima

2 Tuban, Abdelrauf 7 Radjani, Sitti Nurhaliza

3 Tellis, Sheela Fiona 8 Paradji, Nerna

4 Taup, Chirrynai
9 Mustapha, Haniya

5 Tan, Kyla Mikhaella

 LEARNING OBJECTIVES

1 Discussing the types of Health Economic

Evaluation.

Explaining the process of conducting health

2
economic evaluation.

Discussing the facets of budget impact

3 analysis.

Discussing the rationale and importance of

4
Pharmacoeconomic analyses.
HEALTH ECONOMIC
EVALUATION

Health economic evaluation describes the

comparative assessment of costs and
outcomes of alternative health care
technologies or health strategies .
EXAMPLES OF HEALTH INTERVENTIONS:

● Vaccines
● Blood pressure medication
● Weight loss program
● Drugs for the prevention of disease
● Injury prevention
● Cancer screening program.
 1
TYPES OF HEALTH
ECONOMIC
EVALUATION
 TYPES OF HEALTH ECONOMIC EVALUATION

COST COST EFFECTIVENESS

MINIMISATION ANALYSIS (CEA)
ANALYSIS (CMA)
Refers to comparison of two
interventions or strategies which are Is a way to examine both the costs and
assumed to have the same outcome or health outcomes of one or more
effects to find out which of the two is interventions.
the least costly option.
 TYPES OF HEALTH ECONOMIC EVALUATION
COST-BENEFIT
EVALUATION
Cost benefit is a form of comparative
health economic analysis that evaluates
two or more policy alternatives in terms
of their relative costs and outcomes,
where both the costs and outcomes are
expressed in terms of monetary.
COST-UTILITY
EVALUATION
It is a form of comparative analysis in health
economic evaluation that evaluates two or more
policy alternatives in terms of their relative costs
and outcomes, where the outcomes are expressed
by a generic measure of health status that
considers both the effect of mortality and
morbidity.
 2
CONDUCTING
HEALTH
ECONOMIC
EVALUATION
 CONDUCTING HEALTH ECONOMIC EVALUATION
DEFINE THE RESEARCH QUESTION
● Identify the health intervention or
policy being evaluated and the target
population.
IDENTIFY THE ALTERNATIVES
● This step involves identifying the
different alternatives or interventions
that can be used to address the
research question. The alternatives
should be relevant and feasible to
implement.
 CONDUCTING HEALTH ECONOMIC EVALUATION
IDENTIFY THE OUTCOMES
● This step involves identifying the
outcomes or effects that are relevant
to the research question. The
outcomes should be measurable and
significant in terms of their impact on
the population.
MEASURE THE COSTS
● This step involves measuring the
costs associated with each alternative.
The costs should be comprehensive
and include both direct and indirect
costs.
 CONDUCTING HEALTH ECONOMIC EVALUATION
ANALYZE THE DATA
● This step involves analyzing the data
collected on the outcomes and costs
of each alternative. Different methods
of analysis can be used, depending on
the type of data collected.
INTERPRET THE RESULTS
● This step involves interpreting the
results of the analysis and drawing
conclusions. The results should be
presented in a clear and concise
manner that is understandable to
policymakers and stakeholders.
 CONDUCTING HEALTH ECONOMIC EVALUATION
ADVANTAGES
● Helps in resource allocation decisions
● Provides evidence-based information
for decision-making.
● Encourages efficient use of resources.
DISADVANTAGES
● Often time-consuming or require data
that is difficult to collect.
● Cannot consider all the possible
factors that might inform a particular
decision (e.g., patient’s rights,
equality etc).
● Dangerous when conducted poorly
may produce misleading results.
CHALLENGES IN CONDUCTING HEALTH
ECONOMIC EVALUATION

1. TRIAL-BASED ECONOMIC EVALUATION

- Are effective vehicles for generating unbiased economic evidence on the
cost-effectiveness of healthcare interventions.

2. HIGH-QUALITY ECONOMIC EVALUATION

- Alongside clinical studies are desirable because they can provide timely
and unbiased evidence with high internal and external validity.
 3
BUDGET IMPACT
ANALYSIS
 BUDGET IMPACT ANALYSIS

● A budget impact analysis (BIA) is an economic assessment

that estimates the financial consequences of adopting a new
intervention.
● A budget impact analysis evaluates whether the high-value
intervention is affordable.
 PURPOSE OF BUDGET IMPACT ANALYSIS

BIA is essential for budget and resource planning as it aids decision-making for
reimbursement authorities/budget holders/payers.
● Formulate a short term (typically 1 to 5 years) estimate of the changes in
expenditure, cost, and healthcare utilization after the adoption of a new
intervention.
● Predict the budget impact of a new intervention in the population.
● Predict the characteristics of the population and the healthcare system after
adoption of the new intervention.
 DIFFERENCE BETWEEN BIA Vs. CEA
BUDGET IMPACT ANALYSIS (BIA)
● BIA assesses the financial consequences of
a new intervention given the available
resources and budget.
● The time horizon is usually short (1 to 5
years).
● BIA estimates costs and changes in costs.
● The results are reported in cost per
member per month (PMPM).
COST-EFFECTIVE ANALYSIS (CEA)
● CEA evaluates the value of a new
intervention relative to current ones.
● The time horizon is long (can be a life-
time horizon).
● CEA estimates the cost per clinical
outcome, such as life years (LY) and
quality-adjusted life years (QALY) gained.
● The results are reported in incremental
cost-effectiveness ratio (ICER).
 4
RATIONALE AND
IMPORTANCE OF
PHARMACOECONOMIC
ANALYSES.
 DEFFINITION /TERMINOLOGY

PHARMACOECONOMICS COST OF DRUGS PRICES

It’s the branch of health economics that it's the total resources spent in It’s the amount a customer pays
deals with evaluation of the cost making drugs or drug for a product or services.
consequences of therapeutic decision preparation.
making.

QUALITY OF LIFE (QOL) TIME TRADE OFF DISCOUNTING

It’s a tool to help determine the It’s a method for time adjustment
An individual’s preparation of their
QOL of a patient. for costs where the future costs are
position in life in the context of the
culture and value system, in which brought to the present.
they live and in relation to their goals,
expectations, standards, and concerns.
PHARMACOECONOMIC
S WORKS UNDER
• Decision maker
• Analysts
• Clinical trial economics
• Patient
• Patient counselor
• HR
• Health economics
STEPS FOR CONDUCTING
PHARMACOECONOMIC ANALYSIS
• Define the Problem
• Identify the perspective and alternative
intervention to be compared.
• Identify and measure outcomes of each
alternative
• identify , measure and value cost of all
alternatives
• Use discounting and sensitivity analysis
when appropriate
 WHY IS IT IMPORTANT?

Pharmacoeconomics analysis is important for inclusion in formularies

or coverage by the drug insurance companies. It assesses therapeutic
advantages and disadvantages of the drug and cost-effectiveness of the drug
relative to accepted therapy.

Pharmacoeconomic analyses have to be conducted accurately to

provide valuable information to guide the choice of options representing the
best value for money without compromising the quality of care delivered.
IMPORTANCE OF PHARMACOECONOMICS

- Pharmacoeconomic analysis helps achieve maximum benefit in limited cost.

- Clinical doctors want their patients to receive the best care and outcome available.
- The payers want to manage rising costs.
- It combines objective both clinics and payers by estimating the value of patient outcomes
for the expenditure spent on the medications and other healthcare services.
- In today's healthcare settings, Pharmacoeconomic methods can be applied for effective
formulary management, individual patient treatment, medication policy determinations and
resources allocation.
“THANK YOU FOR
LISTENING.”