QALY essay draft

Paragraphs

1. Yes use cost effectivenesss as a measure, yes use $50,000 k . outline the benefits as opposed to moral hazard, demand inducement, and different practices across doctors, regions etc. outline how it works using double blind randomized strategy

2. Talk about how I’d like the national health system to provide recommendations on what goods it will support and which it wont. Talk abou the political pressures which will happen

3. Problems with cost effectiveness ratings from my personal experience

4. Cost effectiveness measures as impersonal as a whole

5. cost effective ness compared to cost benefit and utility analysis, brief comparison

Dear Helen

I am an undergraduate student studying health economics. Recently I have learnt about various health systems and different approaches to health care rationing. As an economics student I understand that scarcity is a constraint under which all decisions are made, and government spending on health care is no different. As health spending is approximately 10% of the governments’ expenditure, there is a huge incentive to spend this money most effectively. I absolutely believe that a scientifically rational approach to spending requires an investigation of the cost effectiveness of treatment, and that health outcomes for the population overall would increase with a clear unified treatment recommendations from government health bodies. These recommendations should be based on efficacy randomized double blind studies that take into account not just the effectiveness of a treatment but its efficacy or cost effectiveness as well.

Some of the approaches available for measuring the results of health spending are CEA, cost benefit analysis CBA and utility analysis. A researcher and writer in the area, Dranove conjectures that there should be a cost effectiveness approach as well as a cost benefit approach taken. First of all, is this the most effective use of public money compared to the other healthcare treatments where need exist, and secondly, once it is determined to be cost effecitive, does the benefit of the treatment outweigh the cost. theres may be a cost effective treatment that has marginal benefits, or an expensive treatment that has large benefit is QALY years.

I am convinced that cost effectiveness and cost benefit analysis is the most appropriate way to measure whether a treatment should be made available. It came to my attention that health care is special. It is a privately consumed good that is largely funded with public money, especially in New Zealand. As such the approach taken must be similar principles for other public goods, that is maximisation of the possible benefits at least cost. I accept that health care will need to be rationed and should be, and because of the scarcity of funds, the more thorough and scientific the analysis can be the better. I accept that marginal treatments like acupuncture that I adore may fall below the funding threshold to treat me as a cancer patient, because I have faith in the cost/benefit approach, that it is fair way of allocating funding for treatment.

Reasons for funding only cost effective treatments. You reduce the inefficiencies caused by moral hazard, demand inducement and practice variations. This reduced the inequality in the system. All citizens should have equal opportunity to access health care, and be provided with the correct information.

My Essay Outline

Cost effectiveness must also be taken into account with cost benefit assessment as well.

I am convinced that cost benefit analysis is the most appropriate way to measure whether a treatment should be made available. It came to my attention that health care is special. It is a privately consumed good that is largely funded with public money, especially in New Zealand. As such the approach taken must be similar principles for other public goods, that is maximisation of the possible benefits at least cost. As Dranove mentioned there should be a cost effectiveness approach as well as a cost benefit approach taken. First of all, is this the most effective use of public money compared to the other healthcare treatments where need exist, and secondly, once it is determined to be cost effecitive, does the benefit of the treatment outweigh the cost. theres may be a cost effective treatment that has marginal benefits, or an expensive treatment that has large benefit is QALY years.

I accept that health care will need to be rationed and should be, and because of the scarcity of funds, the more thorough and scientific the analysis can be the better. I accept that marginal treatments like acupuncture that I adore may fall below the funding threshold to treat me as a cancer patient, because I have faith in the cost/benefit approach, that it is fair way of allocating funding for treatment.

• CEA and CBA. cea ranks alternative expenditures on the basis of bang for the buck. CBA directly asks whether the bang is worth the buck. . Used as the basis in Eng, Aus and Oregon.

• Costs- must be cost of providing service not what end payer pays

• NIH reports say diseases like diabetes and asthma may have higher indirect costs than direct costs. so need to take into account indirect costs.

• Question about where to stop anticipating costs. some researches believe that CBA CEA should take into account all future non medical costs. thats too far.

• Discounting- researchers discount the future costs of health care. Medical researchers usually give less weight to future costs than to current costs. if your willing to pay $5250 for a tv that next eyar that costs 5000 today, then your discount rate is 5%. Discouting futre benefits raises an interesting question, do we discount the value of future lives? yes, we have to, but debate over how much to discount the future life, usually about 5%.

• pharmaceutical industry-sponsored studies report benefit/cost ratios that are on average three times higher than benefit/cost ratios reported in govenrmrnt sponsored studies.

Rationing is essentially important to improve situation- incorrect spending moral hazard, demand inducement and differentpolicies.

• The problem is that we spend our healthcare dollars inefficiently, due to maoral hazard, demand inducement and practice variations.

Would like to see NZ advising like the UK Nice do but avoid the temptation to give in to social pressure on certain drugs etc like viagra

Australia and England blatantly use cost benefit discrimination to determine which treatments are recommended/approved for use. This has been seen as callous and politically can be a problem when social pressure mounts on certain issues. The situation is even worse when an advisory board gives in to the public pressure and reverses its stance, as shown in the cases of Viagra and Zyban. The PBAC struggled to contain spending on these two drugs while trying to keep the balance of social pressure from overflowing. These systems however are somewhat more successful in containing costs than the US. granted the US have a juggernaut

Using the relative scale, standard gamble approach and Time-Trade-Off approach, i came up with different valuations for each health state.

This says to me that i cannot reliably assess my own valuation of various states of health. If i cannot do it , how can I provide a guide to the health authorities by answering surveys. I find that the more information is before me about the health state, and it is negative information, then the smaller the QALY i assign to this state, but if the state is compared more explicitly with a chance of death then i will generally assign a higher QALY rating to the state. Further, the way i am feeling on the day will affect how i rate things. Mostly, it is incomprehensible for the human mind to hold and weigh all the physical discomfort and social, financial and relationship discomfort as well as all the emotional discomfort associated with all of this and make such a specific judgement. I cannot hold it all at one time, so in a survey situation, i am governed by where the information is leading me and my feelings at that time.

I found i was able to order health states with a little more success.

I found every person in my economics class came with their own beliefs and preferences that effect their ratings. health is a personal thing.

We also discussed that we cannot really rate a health state until we have experienced it.

The individuals preferences do not matter

• under All QALYs are equal AQAE, your access for treatment for a specific condition depends on what others think about the condition, your opinion does not count.

QALY possible faults.

1. individual concerns are not revevant

2. there is evidence that QALY disadvantage those who are elderley, or disabled. This is because

3. the way in which surverys are carried out. my personal experience. however, perhaps this issue has been so thoroughly looked at this if we use international standards and learn from all the QALY knowledge available, then we can move forward without this being mch of a problem.

Cost Benefit Analysis

Yes

1. Healthcare as a private good but publically funded, therefore, individual concerns are not the most important, but the fairest usage of the funding will have to be determined scientifically, objectively, based on medical research.

2. Differences in cost benefit analysis with discounting and looking over long time periods

3. cost benefit has to work with cost effectiveness