836 Exam 1

SG utility

% of being healthy ex. 5% change in death is indifferent than utility is 0.95

Discount factor

(1/(1+r)# of years after initial year)

Incremental Cost Effectiveness Ratio (ICER)

(cost new - cost old)/(effect new - effect old) estimates how much it will cost to achieve one more unit of benefit beyond what the standard or baseline therapy provides Tells you how much cost is increased per unit of effectiveness gained when compared to the next best treatment option

Average CER

(costs/ outcomes) average CER would tell you how much it costs to achieve a unit of outcome with each treatment, does not provide information about comparative cost, typically not used because we want to compare treatments head to head and you can't do that with this

CBA differences

-CBA is broader in scope than CEA (since converts all costs and benefits to $$) -Using CBA, decisions about resource allocation can be made within AND between sectors of the economy (transportation, social services, etc. within federal and state budgets) -CBA address allocation efficiency (how to best utilize resources) -CBA does NOT address product efficiency (Maximizing outcomes like symptom free days of Life years, does not show which will give us benefit) -NOT always easy to assign $ values to non-monetary benefits- if different methods used between CBA analyses, can also make comparison of findings difficult

Traditional method of cost categories

-Direct medical -direct nonmedical -indirect - Intangible

Drummond proposed method

-Healthcare sector -other sectors -patient and family -productivity

Limitations of CEA

-ICER ratios are limited/ applicable to the single measure of benefit being used (it makes it difficult/ impossible to compare across treatments with different measures and certain primary measures miss out on other benefits like mortality doesn't capture morbidity) -ICER does not tell you by themselves whether the treatment is overall worth implementing, you need budget or WTP information to decide that -It is important to remember that most of these assessments involve using treatment effects that are population average effects, you do not always end up with the average value (there is risk) -Sometimes studies report/ use average CE ratios (total costs/ total effects) instead of ICERs, these tend to be misleading and do not inform resource allocation, so avoid using them

3 direct PPM measures

-rating scales (VAS) -Time trade off -standard gamble

Fives steps in CEA

1. Make a table of costs and effects, Sort options by total cost or effects for each option, Treatments have to be grouped by patient population where one treatment can be taken per patient 2. Eliminate first order (strictly dominated) treatments 3. Calculated incremental ratios for each successive treatment 4. Eliminate second order dominated (extended dominance) treatments 5. Calculate final ratios

Health Utilities Index (HUI)

15 questions, mark II- 7 dimensions, mark III8 dimensions, domains: vision, hearing, speech, ambulation, dexterity, emotion, cognition, pain, ease of administration, Canadian gold standard, scoring functions converted to PPMs, only instrument of vision, hearing, and speech (dimensions for senses)

Components of CBA

2 cost categories- direct and nondirect medical 3 benefits- direct, indirect, intangible

EQ-5D

5 questions, plus visual analog scale, demographics, domains: mobility, self care, usually activities, pain/ discomfort, anxiety/ depression, 245 health states, ease of administration, European goal standard

Cost-to-charge ratio

=medicare reimbursement/ covered charges the MEDPAR data from CMS includes, Medicare reimbursement (amount they actually pay), total charges (how much hospital bills), and covered charges (amount of charge that is covered)

Healthcare Cost and Utilization Project (HCUP)

A group of healthcare databases and related software tools developed through collaboration by the federal government, state governments, and industry to create a national information resource for patient-level healthcare data collected by AHRQ, hospital data (in and outpatient) and ED visits, longitudinal healthcare delivery and patient outcomes data at national, regional, state and community levels

SG advantages and disadvantages

Advantages- conceptually sound with utility theory, incorporates level of risk adversity of population Disadvantages- risk of death decisions are uncommon for most medical conditions, subjects may have cognitive difficulties understanding the trade-off between quality/ quantity of life

TTO advantages and disadvantages

Advantages- easy to explain, relatively quick to remember Disadvantages- values are not true utilities, because risk is not considered, respondents may get confused understanding the concept of trading time, unrealistic in most health care situations you don't have to choose to live fewer years

CBA vs CEA

CEA- emphasis is on minimizing costs to achieve optimal outcomes (hospitalizations averted) has specific outcome we want to achieve CEA does not provide information on whether a project/ intervention is worth investing the required resources- provides a relative measure ($10,000 to avoid an additional ED visit beyond what can be achieved by the comparator) CEA/CUA: can assist with the program decisions when outcomes are in similar units (life years or QALYs) CEA: addresses production efficiency (how to optimize outcomes, but NOT allocation efficiency)

NADAC (National Average Drug Acquisition Cost)

CMS monthly survey of outpatient drug acquisition costs for retail pharmacies (does NOT include discounts, rebates, price concessions) used as reference prices for state Medicaid plans

VAS advantages and disadvantages

Caveat: needs adjustments, based on responses from other direct PPM instruments to be considered a valid PPM Advantages- easy to explain, comparative to other rating scales, very quick Disadvantages- ordinal vs interval along scale, reliability may be suspect, impact of relatively trivial illness may be overstated, results are often lower than for other techniques

Budget vs. WTP

Fixed budget will often result in different treatments for different patients in the same group, but WTP approach will always lead to the adoption of the same treatment for all the patients in the same patient group, using WTP will implicitly yield a budget, using a fixed budget will lead to an implied WTP value for an additional unit of effectiveness

Program is not beneficial

NB<0 or B/C<1 (C/B>1) Caution may be needed with some B/C ratios, depends on degree to which some components have been considered as costs or cost savings- this is not a problem with net benefit

Program is neutral

NB=0 or B/C=1

Program is beneficial

NB>0 or B/C>1 (or C/B<1)

Discount equation

Present value= future cost x (1/(1+r)# of years after initial year)

Historical adjustment formula

Present value= historical cost x (1 + r)# of year after year estimated

Why measure QALY

Purpose of health care: gain the most "total health" for society give the resources available By comparing the HRQOL gains of different disease treatments, society can make good decisions for allocating resources, seek to maximize total amount of health state utilities by selecting treatment with the most gain and the least cost *underlying ethical goal=distributive justice*

Standardization example

Retrospective costs- you have hospital costs for 2009 ($8450) and need to adjust them to 2018, CPI for 2009= 375.613 and for 2018=484.707 2018 costs/ 8450= 484.707/375.613 =1.29 (costs have increase 29%) 2018 costs= 8450 x 1.29= $10,900 Alternative method uses average annual inflation rate across a time period

Rule of 72

The number of years it takes for a certain amount to double in value is equal to 72 divided by its annual rate of interest.

Limitations of CMA

Types of applications or interventions are limited, validity of CMA is contingent upon assumption of equivalent outcomes or benefits, cannot be used when there are important differences in outcomes of two health alternatives, tendency for inappropriate use

WTP and VSL

WTP based on value of statistical life (VSL), VSL does not estimate the value of life, it is an average estimate of what an individual (an so is based on a group assessment) is willing to pay to reduce a certain risk level or accept a risk level by not paying for the risk reduction

ICD

a comprehensive list of every disease and disease subtype

First order dominated

a program or treatment is more expensive, and provides less benefits/ effect than another program (is strongly dominated by another program), dominated programs will never be efficient, should be disregarded, do not want to spend and achieve less compared to another alternative, always remove dominated alternatives from consideration

Second order dominated

a program/ treatment is weakly dominated and subject to extended dominance if it has higher incremental ratio than the next treatment in the table, preference is to buy better outcomes at lowest cost per each additional outcome (*if you have not first sorted by either effect or cost and eliminated strongly dominated treatments your analysis will be wrong*)

PPM

a single number between 0 and 1.0 that reflects the economic concept of utility (value to society) of a health state, combines different domains of HRQOL, societal perspectives for health, can be measured for each person in a society regardless of severity of disease

Cost of Illness Analysis (COI)

a type of economic analysis that is used to estimate the total economic burden (including prevention, treatment, losses caused by morbidity and mortality) or a particular disease on society A method used to estimate the total economic burden (including prevention, treatment, losses because morbidity and mortality, and so on) of a particular disease on society.

Opportunity cost

according to the economic theory, considered to be the "true cost" of a resource, people care about cost because every effort/ expense means time/ money is not used for some other option the most desirable alternative given up as the result of a decision

CBA benefits

also called consequences or effects include cost savings or costs avoided, a reduction in costs because of an alternate program would usually be classified as a benefit -> a cost savings Example: reduce ED visits because of preventative care visits

CEA disadvantages

alternative being compared must be measured in same clinical outcome units, only *one* outcome can be compared at a time, difficult to consider intangible costs

Value of Statistical Life (VSL)

amount people are willing to pay to reduce risk so that on average one less person is expected to die from the risk extension (or reductions) in life expectancy are assigned a value for a statistical life-year, there is a large and controversial literature on the economic value of a life year, the FDA has consistently used values of $5.0-6.5 million in several of its rulemaking to monetize mortality risks, but is also uses a monetary value of the remaining life-years saved by alternative policies

cost effective analysis (CEA)

an analysis when inputs are measured in monetary values and outcomes (effectiveness measures) in natural health units that indicate an improvement in health, such as cures, lives saved, and blood pressure reductions, outcomes measured make a lot of sense for clinicians and general public, magic number 100,000 per quality Most prevalent pharmacoeconomic analysis found in pharmacy literature

Direct medical

associated with provision of healthcare goods and services, simplest to measure and the most objective, the costs associated with medical goods, examples: Rxs, OTC, doctor visits, labs, MRI, therapy

Direct nonmedical

associated with receiving healthcare goods and/ or services, but not medical in nature, costs associated with, but not part of medical goods or services received, examples: transportation, food, lodging, traveling, childcare costs

Key assumptions of CMA

benefits/ negative impacts of the treatments being compared are the same, not considered a "cost-effectiveness study), not utilized in real world, we cant assume outcomes are the same

Prevalence vs. Incidence COI

both methods give similar awareness for illness that last less than one year, long-term illness methods may give very different answers, prevalence based costs will be higher when incidence is declining, annual treatment costs are declining over time, annual treatment costs and disability losses increase as disease progresses

Medical Expenditure Panel Survey (MEPS)

collected by the AHRQ, a set of large-scale surveys of families and individuals, their medical providers, and employers across the US, useful in assessing overall cost of care for patients for medical data

QALY

combines both quantity and quality of life into one measure, how much you gain from treatment, quality of life over time HRQOL of a health state= patient preference measure (PPM) on a 0 (dead) to 1.0 scale Time spent at heath state in years *Tabulate changes in health related to quality of life (HRQOL) over time*

Common applications of CMA

comparison of two generics medications that are AB equivalent by the FDA, compare costs of receiving same medication in different setting

Society perspective

considers impact to all components: healthcare sectors, other, and patient/ family

Discounting

convert future costs to present value

Cost-Consequence Analysis (CCA)

cost effectiveness is not summarized in a single number for each treatment, but rather summaries for each component (costs and consequences) are provided -All costs together -All effects or outcomes together -In a table so you can see alternatives & choose

Inpatient care

cost per DRG or average for a given group of ICD diagnosis

Pharmacoeconomic equation

costs -> Rx -> Outcomes Compare the costs associated with providing a pharmacy product or service to the outcome of the product or service

Patient and family

costs to patient/ family members that are direct medical (co-pays, deductibles) or non-medical (child-care)

Incidence based COI

counts the number of individuals who become ill in a particular time period, and then estimates lifetime costs associated with that illness for those people, new cases/ new diagnosis in a given time period (ex. infectious disease) used to estimate potential averted costs if incident cases are prevented

Step 4 CBA

determine cost benefit (sum of benefits/ sum of costs)

TTO

developed specifically for use in health care, intended to give comparable scores to SG, subject offered two alternatives *both certain* Alternative 1= certain health state A for time t (life expectancy of individual with condition) Alternative 2= being healthy for time x (where x<t) then death Time x varied until subject is indifferent between them

Healthcare sector

direct medical costs borne by other than patient and family

Advantage of prevalence COI

draws attention to the current burden being borne by those with disease, policy decisions, provides information on the magnitude of specific costs categories

340B

drug pricing program that requires drug manufacturers to provide outpatient drugs at significantly reduced prices to eligible health care organizations and covered entities

WAC (Wholesale Acquisition Cost)

estimate of manufacturer's "sticker" or 'list price' to wholesalers, does not include discounts or rebates

AWP (Average Wholesale Price)

estimate of price paid by retail pharmacies to wholesale distributor, can be found in Micromedex, is an overestimate

Visual analog scale

have patient indicated on the scale how good or bad their health is today, has ceiling and floor effect, going from 0.1 to 0.2 could make a big impact on life where going from 0.8 to 0.9 might not have that much of an impact but since it is interval data it is shown by a 0.1 change

CEA advantages

health units are common outcomes routinely measured in clinical trials and outcomes studies, therefore familiar and acceptable to practitioners, outcomes do not need to be converted to monetary values (paying X to get a certain outcome)

PPM/QALY controversies

healthy populations vs patients with disease, sensitivity (responsiveness, may not capture differences in illness) or PPMs to disease changes/ treatment, simplicity vs. theoretical soundness, health states that do not fit between the two ends of the scales (0 to 1.0) a health state less than zero is a vegetative state

Dominated

higher cost/ lower effectiveness

factors contributing to risking health care costs

hospital costs, provider costs, medical technology, behaviors (non-adherence, alcohol/substance abuse, smoking, obesity, unhealthy life styles, increasing number of chronic diseases), aging population, skyrocketing drug spend

Healthcare institution perspective

hospital, pharmacy, clinic

Working individuals

human capital approach: estimated increases of actual earning/ productivity because of losses (absenteeism, presenteeism, disability, death) no longer occur, assess how much time is lost by looking at average wages

Choose a method for determining utilities

ideally ALL methods should be include a description of a path from baseline to death that includes one or more health states with specified time periods for states Main difference in methods- how question framed- whether the outcomes in the question are certain or uncertain

Step 3 in CBA

identify and value benefits (benefits= effects/ consequences) Benefits with an easily measured $ value: direct medical and nonmedical (cost savings) Benefits to which monetary value must be assigned (indirect and intangible) improved productivity and quality of life Indirect benefits- societal perspective, so patient/ family/ caregivers are the source of values for indirect benefits (productivity) Intangible- benefits not related to productivity, avoidance/ alleviation of intangible costs, captured by quality of life instruments

Step 2 in CBA

identify and value costs Direct medical and nonmedical, will this increase or decreases costs

Using budget as decision rule

if budget is the decision rule, choice of treatment depends on the size of budget, goal is to maximize health given a fixed budget, rules for fixed budget are based on two assumptions Patients use only one treatment: this means that the total possible treatment effect is related to the number of patients You can split budgets between treatments o 1. Put the non-dominated treatments in order of *effectiveness/ benefit* o 2. Given the budget, move to the highest level of total costs that you can among the non-dominated programs in order of their incremental costs (you may have to split funds between two programs in that case you use the two adjacent programs)

COI

illness results in consumption of resources (there are costs associated with having the illness), summarizes economic burden of an illness

Advantages of COI

informs us where/how our resources are being spent, informs us of the benefits of curing or preventing a particular illness (costs saved), provides information about which aspect of the illness, or treatment strategy is particularly costly, can be used to set priorities for health care policies, can be used by employers or payers to set reimbursement strategies, aids in determining market potential for new drug

DRG

inpatient classification scheme to incorporate case mix; groups require similar resources

PPM issues

interval measure: different from 0 to 0.1 is the same as 0.9 to 1, QALY scales are considered uniform between illnesses (0.1 gain in diabetes is same as 0.1 gain in congestive heart failure), people with lower quality of life may not get the same benefit as someone with high quality of life or vice versa

Payment card

list of options, frequently used, ceiling and floor affect

FSS (federal supply schedule)

list prices paid by VA and IHS for medications, closest value to what insurance pays

Indirect

lost work time or earnings potential due to an illness (productivity costs), costs resulting from loss or gain of productivity due to illness (morbidity) or death (premature or delay) examples: time off from work to receive treatment, missed work days, reduced productivity when at work (presenteeism)

Dominantes

lower cost/ higher effectiveness

WTP limitations

measurement biases may exist (respondents want to please interviewer, over/ under estimate WTP values), difficult to place dollar value on intangible, *in general WTP estimates are much higher than HC*

QALY controversies

measurement issues between instruments, populations, patients, use of PPMs in patients, bias against treating disease (individual adjust to their limitations, viewpoints change overtime), large variability indicates inadequacies of PPM measures

Cost minimization analysis (CMA)

measures and compares intervention/ treatment delivery costs when outcomes are assumed to be equivalent (hypothesis is one will be cost saving), focus on measuring the costs of the PE equation, outcomes are assumed to be the same

Health insurance payer perspective

medicare, Medicaid, commercial (predominant perspective)

CBA

method for comparing the value of all resources used (cost) for a program/ intervention with the value of outcomes achieved (benefits), everything put into $ value Key- costs and benefits are valued using the same monetary unit ($) Ideally benefits are more than just material costs savings: full healthcare CBA evaluations should include monetarization of indirect benefits (productivity gains) and ideally of intangible benefits If benefits exceed the costs, the program may be worthwhile

Hurdle rate

minimum acceptable rate of return the costs of acquiring capital (effective interest rate on loans, bonds) or rate that could be earned on other investment

Prevalence based approach for COI

most common, counts the number of individuals who currently have a particular illness, and aggregates all of the services being utilized for that illness for a specific time period (usually over one year), includes various stages of illness, includes the number of people with the disease during a given time period, used for chronic conditions

Micro-costing

most precise method, identifies, measures, and values each resource used, and adds them together, best used by organizations (hospitals, clinics as opposed to insurers)

Certainty

no unknowns, outcome will occur with certainty (in VAS and TTO)

other sectors

non-healthcare sector costs such as judicial system, schools

Limitations of COI

o Some costs are difficult to measure with current data, frequently intangible costs are neglected o indirect costs are often limited to morbidity and do not generally consider mortality (premature death) o Studies do not evaluate the current strategy of care (not effectiveness study), looking at a census

Uncertainty

one outcome has a probability of occurrence (in SG)

Human capital limitations

only considers time for employable persons, inequities due to degree of economic productivity (CEOs earn more than janitor), intangible benefits cannot be valued with this method

Close ended questions

only one question- take it or leave it

Medical provider analysis and review (MEDPAR)

overseen by CMS, medicare payments are listed by DRG

AAC (Actual Acquisition Cost)

paid by pharmacy to wholesaler or direct purchaser (usually proprietary)

Intangible

pain, suffering, anxiety, fatigue (difficult to put monetary value on), impacts to quality of life that are not already captured in other categories, difficult to measure, examples: pain, anxiety, hair loss, fatigue

Willingness to Pay (WTP)

pick an incremental value that you are willing to spend (pay) for a gain in benefit, then choose the option that covers the most costly treatment with an incremental ratio less than or equal to what you are willing to pay ICER<WTP

AMP (Average Manufacturer Price)

price manufacturers charge wholesalers or pharmacies after discounts, represents a more precise estimate of what pharmacies pay, but is proprietary for most drugs

SF-6D

provides means for using SF-36 and SF-12 (HRQOL instruments) in economic evaluations 6 dimensions= physical health, mental health, bodily pain, social functioning, role-limitations, vitality, describes 18,000 possible health states, preference weights were determined using SG

Key concepts of PPMs

public vs patient views of relative value (utility) of health status, values are developed from public perspective (use people that don't have illness and don't know disease burden), then applied at the patient perspective, persons experiencing the disease usually value the health state high than society (have a higher PPM value) Across society and health state, relative comparisons are theoretically valid within society (a rural NM resident vs. NY resident may not place equal value on a particular health state, but across all of society the relative PPM of the health state is measurable and comparable to other health states, difference exist between countries, each has different scaling

Internal Rate of Return (IRR)

rate of return where discounted benefits = discounted costs (don't want to borrow money to lose money, want to make more than interest rate)

Step 1 in CBA

reason for evaluation, many treatments provide additional clinical benefits but at an additional cost CBA can provide a more complete picture of the total value (what are the expected impacts? Are there monetary limits in providing program? (How disease progresses and where can we make an impact? What are the alternatives to the planned program? Not providing a program/ treatment, implementing for only selected patients (high risk, age 65 and older, women of childbearing age)

Hospital charges

represent the amounts that the hospital bills, NOT what is paid to the hospital for care (cost to payer/ patient),

Time trade off (TTO)

respondent makes choice about trading off years of life for better health for a shortened life span, potential choices are varied until subject is indifferent

Open ended questions

respondent provides amount, people don't have a frame of reference for cost of service

productivity

same as traditional, lost productivity

Pharmacoeconomics definition

scientific discipline that evaluates the clinical economic and humanistic aspects of pharmaceutical products, services, and programs (as well as other health care interventions), provides health care decision makers, providers and patients with valuable information for optimal outcomes and the allocation of health care resource, most impactful when making decisions about a population rather than an individual

Bidding game

several choices offered

Costs in economic evaluations

should be current estimates, current estimates are also used for estimates of future years (inflation not considered)

Direct measurement of PPMS

specific questions designed to determine PPMs · Specific description of health state is provided · Subjects may or may not have experiences the disease · Uniform conditions/ description to all subjects (administered the same way for everyone)

SG

subject offered two alternatives: one certain and one uncertain (gamble), alternative 1- certain outcome of a chronic disease for the rest of persons life, alternative 2- intervention that has probability of achieving normal health or probability of resulting in death, probability p varied until subject indifferent between two alternatives, useful for assessing utility for chronic conditions

Advantage of incidence COI

support for preventative initiatives (vaccines), demonstrating lifetime impact of disease and how management of disease may change

Identifying costs

take an impact inventory, look at the event pathway of your model (progression of disease) from getting sick to receiving healthcare to being cured or stabilized, identify and break down all costs that lead to the overall cost of each event, identifying small costs insures that no costs are missed (even if they are not used)

CBA costs

the costs side summarizes the costs involved with providing the treatment/ service (labor, equipment, operational expenses)

Considerations for indirect measurement of PPM

theoretical constructs (time trade-off, standard gamble, rating scales, visual analog scales), ease of administration, validity/ reliability, relevance to condition (responsiveness), *COST*

TTO utility

time in optimal health/ life expectancy

reasons to discount

time preference placed on future expenditures (this is not inflation adjustment), recommended rate is 3%, assumes costs occur in the middle of all years and 1st year costs are not discounted, cost estimates greater than a year should be discounted

Describe a health state

use concise language in describing health effects expected from the disease state condition, should include: amount of pain/ discomfort, any restriction on activities, time it may take for treatment, possible health perceptions (worry or concern), any mental changes

Direct medical costs

use gross cost data if not available do micro-costing and identify all the relevant resources that will be consumed, quantify the resources used, place a monetary value on resources used, might be based on diagnosis codes (ICD or DRG)

Willingness to pay

used for indirect and intangible Assesses amount individuals are willing to pay to reduce the chance of an adverse outcome, can be used to value both indirect and intangible benefits, incorporate preferences individuals presented with hypothetical scenario, benefits for an intervention/ treatment described, respondents asked to 'bid' or place value on the intervention/ treatment to prevent adverse outcomes

Human capital

used for indirect cost, ~70-80% of studies Pay-back value of health benefits= person's renewed or increased ability to be productive for society (work) Need wage rate and *time gained* (units= days, months, years) Wage rate is "fully loaded" includes leave, pension, benefits Self-report data for absences, presenteeism Published reports for industry

Cost effectiveness

used to describe a technology (new drug, surgery, etc.) that is both more expensive and better than the alternative being considered (the standard of care), and the added benefit of this technology is assessed to be worth the additional cost, also known as economic advantage

Cost saving

used to describe a technology that is less costly than the alternative to which it is being compared and outcomes are not a concern (assumed to be equivalent)

Standadization

using historical cost information, overtime monetary value usually decreases, to insure valuations are consistent historical costs are adjusted to current, costs collected greater than 1 year prior to current time need to be adjusted, usually use consumer price index (CPI) to estimate inflation rate

Standard gamble

utilities are preferences measured under uncertainty and involve risk, incorporate risk and uncertainty into the assessment, the percept of indifferent between the two alternatives is the PPM measure

QALY calculation

utility score x length of life/ time

VAS utility value

utility value from VAS converted to value between 0 and 1.0 (ex 65=0.65)

Indirect PPM measures

validated HRQOL survey, survey responses obtained alongside direct PPM measures, mathematically converted responses to values obtained from direct measures of PPM Validated, reliable survey instruments, responses collected as well as direct PPM in population, mathematical formulas are developed to covert responses on survey questions to PPMs Advantages-time, interviewer training, interview techniques, results within different domains of health Disadvantages- assumes the population vales are correct, relevant and appropriate

Rating scales

visual analog scale (VAS)- most common Anchors (ends of scale) 100= optimal or full health, 0= worst possible state or death How would you rate this description or your current health on this scale? Similar to other health rating scales

ASP (average selling price)

weight average of manufacturer's sales price for all purchasers, net price adjustments (discounts, rebates), used by CMS as a basis for reimbursement for Medicare Part B

Quality Well Being Scale (QWB)

weighted desirability of different health states, domains: symptoms/ problems plus mobility, physical activity, social activity, interview administered, 20 minutes, self-administered form available, weighted health state measures, used in Oregon Medicaid experiment

Gross costing

what is the average cost, use directly observed cost information (claims data), data can be obtained from a single data source; less time consuming, but isn't always available and can miss some costs

Perspectives

who is the decision maker, what are their concerns, an economic term that describes whose costs are relevant -health insurance payer -healthcare institution -society Perspectives being taken in any cost analysis is extremely important, some are too narrow and some are two wide, current recommendation is to also provide a societal perspective when perspective for decision maker is other than societal

If individual/ population not working

willingness to pay: estimate of how much someone willing to pay to not have an adverse outcome, more subjective

Pharmacoeconomics

· a multidisciplinary field including health economics, clinical and/or humanistic outcomes research, and pharmacy management, there is a tremendous growth in the cost of healthcare so economic evaluation is popular The study of economic factors impacting the cost of drug therapy.

Dominant

· used to describe a technology that is both less costly than the alternative to which it is being compared, and outcomes are better, new technology dominates the alternative

Cost

· value (time, money, labor) of resources associated with the production and/or delivery of a good or service, only costs related to illness, treatment, service evaluation should be counted, costs are not always monetary