Healthcare Sytems Policy and Economics 2024
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Questions and Answers

What are some advances in imaging technologies and surgical robots?

  • Increase administrative burdens
  • Minimally invasive procedures (correct)
  • Improve diagnoses (correct)
  • Increase hospital stays

    • Which of the following are barriers to healthcare for underserved populations? (Select all that apply)

  • Cultural barriers (correct)
  • Geographical barriers (correct)
  • Financial barriers (correct)
  • Increased insurance coverage

    • What are some challenges patients face regarding the cost of medicine?

  • Reduced adherence (correct)
  • Increased duration
  • Reduced initiation (correct)
  • Increased financial burden

    • What does PFAP stand for?

    <p>Patient Financial Assistance Programs</p> Signup and view all the answers

    What role do regulators play in healthcare access?

    <p>Regulators ensure equitable access by enforcing laws, mandating insurance coverage, and setting standards for services.</p> Signup and view all the answers

    PFAPs only address reimbursement costs.

    <p>False</p> Signup and view all the answers

    Patients are playing an increasing role in managing their own health.

    <p>True</p> Signup and view all the answers

    The primary focus of value-based care models is on ______.

    <p>outcomes</p> Signup and view all the answers

    PFAPs help patients by reducing their ______ burden.

    <p>financial</p> Signup and view all the answers

    What is the purpose of economic evaluation in healthcare?

    <p>To ensure that resources are used efficiently and that healthcare interventions provide the best value for money.</p> Signup and view all the answers

    Which of the following is a potential benefit of PFAPs?

    <p>Improved patient compliance</p> Signup and view all the answers

    Which factors influence drug pricing?

    <p>Government Policies</p> Signup and view all the answers

    What initiative is mentioned to address access and affordability?

    <p>Defeat Diabetes</p> Signup and view all the answers

    Cost is a product of a vector of quantities (Q) and a vector of unit prices (p): Cost = ______

    <p>Q * P</p> Signup and view all the answers

    Average cost is calculated as total cost divided by quantity produced.

    <p>True</p> Signup and view all the answers

    What are the key components of a healthcare system?

    <p>Technology &amp; Innovation, Financing, Access, Quality</p> Signup and view all the answers

    Which of the following entities are considered stakeholders in the healthcare system? (Select all that apply)

    <p>Patients</p> Signup and view all the answers

    Regulators influence healthcare costs and access.

    <p>True</p> Signup and view all the answers

    What is the objective of a healthcare system?

    <p>To ensure timely, accessible, and high-quality healthcare to improve population health.</p> Signup and view all the answers

    Match the following healthcare systems with their financing methods:

    <p>Universal Health System = Funded primarily by the government through taxes Private Health System = Provided through employers or purchased individually Public Insurance = Government-funded programs providing health coverage Out Of Pocket = Patients pay directly for healthcare services not covered by insurance</p> Signup and view all the answers

    The _____ introduced social insurance in Germany, which laid the groundwork for modern social health insurance systems.

    <p>Otto von Bismarck</p> Signup and view all the answers

    What is a pro of a Universal Health System?

    <p>Provides equal access to all individuals regardless of income</p> Signup and view all the answers

    Private Health Systems typically provide universal access to healthcare services.

    <p>False</p> Signup and view all the answers

    Patient safety and quality standards are a universal focus among regulatory bodies like the _____.

    <p>World Health Organization (WHO)</p> Signup and view all the answers

    What is the role of technology in healthcare?

    <p>Enhancing patient care and improving diagnostic and treatment precision.</p> Signup and view all the answers

    Which payment method reimburses providers for each service rendered?

    <p>Fee-for-Service</p> Signup and view all the answers

    What does the Time Trade-Off (TTO) method assess?

    <p>Quantity of life vs. Quality of Life</p> Signup and view all the answers

    What is the formula to measure utility in TTO?

    <p>U(Q,Y) = V(Q) * Y</p> Signup and view all the answers

    What does QALY stand for?

    <p>Quality Adjusted Life Years</p> Signup and view all the answers

    A QALY can be interpreted as one year of life with good health.

    <p>True</p> Signup and view all the answers

    The main outcome measured in Cost-Utility Analysis is expressed in terms of _____.

    <p>QALY</p> Signup and view all the answers

    What is the cost-effectiveness threshold in the context of QALYs?

    <p>40,000 per Healthy Life Year for EU25 countries</p> Signup and view all the answers

    Which of the following is NOT an alternative to QALY?

    <p>Cost-effectiveness Analysis (CEA)</p> Signup and view all the answers

    Match the following types of economic analysis:

    <p>Cost-effectiveness analysis (CEA) = Comparing costs relative to health outcomes Cost-utility analysis (CUA) = Measuring outcomes in QALYs Cost-benefit analysis (CBA) = Monetizing all outcomes and comparing with costs Cost-minimization analysis (CMA) = Determining the least expensive option with equivalent outcomes</p> Signup and view all the answers

    What is the significance of the Incremental Cost-Effectiveness Ratio (ICER)?

    <p>It measures the cost per additional unit of effectiveness achieved.</p> Signup and view all the answers

    What is one limitation of QALY?

    <p>Does not consider age differences</p> Signup and view all the answers

    The Human Capital approach views healthcare as an investment in _____.

    <p>human capital</p> Signup and view all the answers

    What challenge may patients face regarding their medicine costs?

    <p>Affordability</p> Signup and view all the answers

    What results from patients' affordability challenges?

    <p>Reduced initiation, reduced adherence, reduced duration.</p> Signup and view all the answers

    PFAPs are designed to help patients indirectly with their treatment costs.

    <p>False</p> Signup and view all the answers

    PFAPs can take different shapes, such as __________ discounts.

    <p>instance</p> Signup and view all the answers

    What is the overall purpose of PFAPs?

    <p>An overall increase in product uptake and volumes.</p> Signup and view all the answers

    What is the primary purpose of health technology assessment (HTA)?

    <p>Maximize health outcomes</p> Signup and view all the answers

    Economic evaluation helps avoid unnecessary spending on less effective interventions.

    <p>True</p> Signup and view all the answers

    What are the barriers to healthcare for underserved populations?

    <p>Financial, geographical, and cultural barriers.</p> Signup and view all the answers

    Which of the following focuses on outcomes while controlling costs?

    <p>Value-based care models</p> Signup and view all the answers

    Name one effort to address healthcare disparities.

    <p>Policy interventions, community outreach, or education and advocacy.</p> Signup and view all the answers

    The process of evaluating the benefits of healthcare interventions is known as _____.

    <p>economic evaluation</p> Signup and view all the answers

    Match the following healthcare concepts with their definitions:

    <p>Cost-effectiveness analysis (CEA) = Outcomes valued in non-monetary units. Cost-utility analysis (CUA) = Measures health benefits in terms of quality of life. Willingness to pay (WTP) = Consumer preferences for goods based on their values. Health benefits = Measured in biological units. Non-health benefits = Include improvements in productivity and QoL.</p> Signup and view all the answers

    AI and data analytics have no significant impact on healthcare diagnostics.

    <p>False</p> Signup and view all the answers

    What do economic evaluations help policymakers and healthcare providers do?

    <p>Make data-driven decisions.</p> Signup and view all the answers

    Who is the guest lecturer for the MSc in Pharma and Health Management?

    <p>Chadi Elias</p> Signup and view all the answers

    What is one of the key objectives of the course?

    <p>Understand basics of the Healthcare systems</p> Signup and view all the answers

    Which of the following is NOT a key component of the healthcare system?

    <p>Culture</p> Signup and view all the answers

    The World Health Organization (WHO) was founded in 1950.

    <p>False</p> Signup and view all the answers

    What is the main focus of the WHO?

    <p>Setting global health standards</p> Signup and view all the answers

    What type of healthcare system is funded primarily by the government?

    <p>Universal Health System</p> Signup and view all the answers

    Out-of-pocket payments are a common payment method in private healthcare systems.

    <p>True</p> Signup and view all the answers

    Which payment method encourages patient outcomes over the volume of services?

    <p>Value-Based Care</p> Signup and view all the answers

    Name one of the main responsibilities of regulators in the healthcare system.

    <p>Ensuring Quality and Compliance</p> Signup and view all the answers

    Hippocrates is known for laying the groundwork for clinical ______ and ethics.

    <p>observation</p> Signup and view all the answers

    Match the following healthcare systems with their characteristics:

    <p>Universal Health System = Funded primarily by the government Private Health System = Provided through employers or purchased individually Out-of-Pocket = Patients pay directly for services not covered by insurance Public Insurance = Government-funded programs</p> Signup and view all the answers

    What does the Time Trade-Off (TTO) concept measure?

    <p>The Quantity of life a person is willing to trade off for improvement in Quality of Life.</p> Signup and view all the answers

    What is QALY an acronym for?

    <p>Quality Adjusted Life Years.</p> Signup and view all the answers

    Which method is not used to measure QALY?

    <p>Cost-Benefit Analysis</p> Signup and view all the answers

    What does the Indifference level represent in the TTO example provided?

    <p>7.05</p> Signup and view all the answers

    The absence of incorporating the patient's willingness to pay presents a limitation in __________.

    <p>Cost-utility Analysis</p> Signup and view all the answers

    What does ICER stand for?

    <p>Incremental Cost-Effectiveness Ratio.</p> Signup and view all the answers

    In CUA, the outcomes are primarily measured in terms of __________.

    <p>QALY</p> Signup and view all the answers

    Which of the following is a limitation of Quality Adjusted Life Years (QALYs)?

    <p>Difficult to quantify specific health outcomes</p> Signup and view all the answers

    Diabetes-related complications decrease the QALY value.

    <p>True</p> Signup and view all the answers

    What is one alternative to QALY mentioned in the content?

    <p>Disability-Adjusted Life Years (DALYs).</p> Signup and view all the answers

    The WTP threshold refers to the maximum costs of gaining a __________.

    <p>QALY or Life Year Gained (LYG)</p> Signup and view all the answers

    Which of the following is not a type of Innovative Contracting (InCo)?

    <p>Fee-for-Service</p> Signup and view all the answers

    Pharmacoeconomics is synonymous with cost-containment.

    <p>False</p> Signup and view all the answers

    What economic concept does PFAP relate to?

    <p>Patient Financial Assistance Programs.</p> Signup and view all the answers

    Study Notes

    History of Healthcare Systems

    • Ancient Civilizations: Practices rooted in Egypt and Greece, with emphasis on herbal remedies, surgery, and rational medicine with Hippocrates.
    • Middle Ages: Healthcare heavily influenced by religion, with monasteries as centers for healing. This era saw limited medical knowledge.
    • Renaissance: Renewed interest in science and anatomy. Figures like Andreas Vesalius advanced the understanding of human anatomy.
    • 18th & 19th Centuries: Industrial Revolution brought hospitals and the professionalization of medicine. Public health initiatives emerged alongside the germ theory of disease.
    • 20th Century: Advancements in medical technology, pharmaceuticals, and delivery. Establishment of national health care systems providing universal access in many countries. The World Health Organization (WHO) was founded in 1948, and the National Health Service (NHS) established in the same year.

    Chadi Elias

    • Pharmacist and Health Economist.
    • Studied Pharmacy at University of Damascus and health Economics at University Pompeu Fabra.
    • Experienced professional in the Pharma Industry with expertise in Sales, Market Access, Government Affairs, and Health Economics.
    • Lives in Dubai, UAE.

    Healthcare Systems and Basics of Health Economics

    • Overview: Organization of people, institutions, and resources delivering healthcare services to a population.
    • Stakeholders:
      • Regulator: Government bodies and policy makers.
      • Provider: Hospitals, clinics, doctors, nurses, etc.
      • Payer: Public (government, insurance, and out-of-pocket payments).
    • Key Components:
      • Technology & Innovation.
      • Financing.
      • Access.
      • Quality.

    The Healthcare System - Stakeholders

    • Regulator: Government authorities establishing policies, setting standards, and overseeing the healthcare system.
    • Payer: Entities financing healthcare services, including government programs, insurance companies, and individuals paying out of pocket.
    • Providers: Healthcare professionals and institutions delivering medical services.
    • Patients: Individuals receiving healthcare services.

    Connection and Interaction

    • Regulators set rules and standards providers and payers must follow.
    • Payers finance healthcare services, negotiate costs, and influence type of care offered.
    • Providers deliver medical services to patients and depend on payers for reimbursement.
    • Patients receive care from providers and rely on payers to cover costs, while being protected under the oversight of regulators.
    • These relationships are cyclical and interdependent.

    Roles and Responsibilities

    • Regulator: Ensuring Quality and Compliance, Oversight of payers, Setting care standards.
    • Payers: Interact with providers on contract negotiations, reimbursement models, prior authorization, billing, and claims management, ensuring payer compliance with healthcare laws and standards.
    • Providers: Relationship with patients on how providers deliver care, communication, trust and shared decision making.

    Types of Healthcare Systems

    • Universal Health System: Funded primarily by the government through taxes (EU and Canada) or national resources in tax-free countries (GCC). Healthcare is available to all citizens (GCC) or citizens and residents.
    • Private Health System: Provided either through employers or purchased individually, where service coverage differs based on the plan.
    • Public Insurance: Government-funded programs like Medicare (US seniors), Medicaid (low-income individuals), and the National Health Services (e.g., NHS in the UK).
    • Out of Pocket: Patients pay directly for services not covered by insurance (e.g., co-pays, deductibles, or full service costs).

    Universal Healthcare System - Access and Finance

    • Pros: Equal access regardless of income, reduces health disparities, lower overall healthcare costs, reduces financial burden on individuals.
    • Cons: Bureaucracy, potential long wait times for non-emergency treatments, relatively low incentives for health care professionals, entrepreneurs, and innovation, possible resource constraints, funded by taxes that can lead to higher tax rates, potential for budget cuts affecting the quality or availability of care, subject to macroeconomics and political agendas.

    Private Healthcare System - Access and Finance

    • Pros: Faster access to services for those who can afford it, allows individuals to choose providers, more competitive and consumer-driven, high satisfaction among those who can afford it.
    • Cons: Limited access due to affordability, inequality in healthcare availability, high out-of-pocket expenses, high administrative and transactional costs, and complexity in billing and approval process.

    Private Healthcare System - Quality and Innovation

    • Pros: Boosts innovation and adoption of latest technologies, tailored services to individual patient needs with more variety, fast processing for treatment and more personalized care.
    • Cons: Prioritizing profit may lead to over-treatment/unnecessary procedures, inequality where innovation may not be accessible to all, frustration among the majority, higher burden to address complications due to inadequate attention for prevention, sociocultural consequences.

    Regulator Bodies and Standards

    • WHO (World Health Organization): Sets global health standards, monitors public health risks, and guides international health policy.
    • FDA (Food and Drug Administration) and EMEA (European Medicines Agency): Oversee the safety, efficacy, and quality of medicines.
    • Nationsl Health Authorities: Regulate healthcare systems ensuring compliance with local laws and policies.

    Common Regulatory Themes Across Countries

    • Patient safety and quality standards.
    • Data protection and privacy laws.
    • Access to Healthcare.

    Regulation and Compliance in Healthcare

    • Data Protection and Patient Privacy: Dedicated laws like HIPAA in the US and GDPR in Europe.
    • Ethical Practice and Code of Conduct: Ensuring ethical guidelines including patient rights, informed concent and non-discriminatory care.
    • Healthcare Quality: Ensuring providers meet standards for patient safety and effective treatments.
    • Financial Practices: Ensuring compliance in billing to prevent fraud over utilization and abuse.
    • Compliance is critical to: secure legal protection, anchor patient trust, and ensure operational efficiency.

    Payment Methods in Healthcare

    • Fee-for-Service (FFS): Payers reimburse providers for each service, traditional method but can incentivize volume over value.
    • Value-Based Care (VBC): Payment is linked to quality of care, encouraging patient outcomes.
    • Health Insurance: Private or Public.
    • Out-of-Pocket Payments: Patients pay directly for healthcare services not covered by insurance.
    • Capitation: Providers are paid a fixed amount per patient regardless of the number of services.
    • Bundled Payments: Covers all services related to a specific treatment or condition.

    The Role of Technology in Healthcare

    • Enhancing Patient Care: Electronic Health Records (EHRs), Telehealth.
    • Improving Diagnostic and Treatment Precision: AI & Machine Learning, Imaging & Robotics.
    • Boosting Efficiency and Reducing Costs: Reduces administrative burdens, wearable devices, and proactive care.
    • Fostering research and innovation: Big Data & Analytics.

    Access: Role, Barriers, and Efforts

    • Regulators ensure equitable access by enforcing laws, mandating insurance coverage, and setting standards for services.
    • Payers play a crucial role in financing care, expanding coverage options, and incentivizing value-based care to make healthcare more affordable and accessible.
    • Barriers to Healthcare for Underserved Populations: Financial barriers, geographical barriers, cultural barriers.
    • Efforts to Address Healthcare Disparities: Policy interventions, community outreach, education and advocacy.

    Empowering Patients in Healthcare

    • Patients are increasingly playing a role in managing their own health.
    • They are making informed decisions, following treatment, and adopting healthier lifestyles.

    Patient Empowerment

    • Patients can effectively track their health and communicate with healthcare providers using self-management tools with digital health.
    • Patient advocacy groups play a crucial role in ensuring patient rights, improving healthcare access, and driving research by raising awareness, providing support networks, and influencing healthcare policy.
    • Patient empowerment is achieved through education programs, clear communication, and digital health tools.
    • Empowering patients through education, advocacy, and technology improves healthcare outcomes and enhances the overall experience in healthcare.
    • Artificial intelligence and data analytics are transforming healthcare by enabling enhanced diagnostics, predicting patient outcomes, and improving clinical decision-making.
    • Precision medicine utilizes genomic data to predict individual response to treatment, leading to personalized therapies based on a patient's genetic, environmental, and lifestyle factors.
    • Value-based care models focus on outcomes while controlling costs, emphasizing collaboration between healthcare providers and payers and promoting preventive care.

    Health Economics

    • Health Technology Assessment (HTA) ensures that resources are used efficiently and healthcare interventions provide the best value for money.
    • Economic evaluation helps optimize healthcare resources by maximizing health outcomes, informing decision-making, containing costs, and promoting equity and access to healthcare services.
    • It allows for balancing quality, effectiveness, and affordability in healthcare systems.

    Why Consider Cost in Healthcare

    • The ultimate goal of healthcare is to maximize benefits and quality of life for the population.
    • All activities come at a cost, either direct or indirect, and healthcare resources are limited, making cost-effectiveness evaluation essential.

    Access to Medicines

    • Cost-effectiveness and budget impact, known as the 4th and 5th hurdles in pharmaceuticals, have gained importance in recent years concerning market access for medicines.

    Steps of Economic Evaluations

    • Defining the options, perspective of the study, choosing the method, analyzing results, and interpreting results are essential steps in economic evaluations.

    Defining the Technology/ Options

    • The technology under study and the evaluation processes should be clearly defined and described.
    • Separate analyses might be considered for differences in sub-groups.

    Perspective

    • The audience/target group (e.g. patient, institution, society) and viewpoint of the economic evaluation should be clearly defined.
    • The broadest possible perspective should be adopted.

    Method

    • The chosen method for economic evaluation depends on the nature of the analysis and the specific questions to be answered.
    • Three common methods are cost-benefit analysis, cost-effectiveness analysis, and cost-utility analysis.

    Analyzing Results - Uncertainty

    • Economic evaluations involve comparisons, requiring incremental calculations (e.g. additional cost per unit).
    • Identifying and incorporating sources of uncertainty into the model is crucial for analyzing results.

    Cost

    • Cost is a key element in economic evaluations, with challenges arising in accurately estimating long-term costs and savings, accounting for cost variations, and differentiating between fixed and variable costs.

    Estimating Cost

    • Cost includes resources from both healthcare and non-healthcare sectors, including direct costs (e.g. medical supplies) and indirect costs (e.g. lost productivity), as well as intangible costs.

    Drug Costs

    • Drug costs are only part of the overall cost equation for healthcare interventions, with other factors like supplies, primary care, and hospital costs playing significant roles.

    Discounting

    • Discounting is a technique used to account for the time value of money, reflecting the preference for receiving benefits sooner rather than later.
    • It involves applying a discount rate to future costs and benefits to determine their present value.

    Average Cost and Marginal Cost

    • Total cost (TC) represents the cost of producing a particular quantity of a product.
    • Fixed cost (FC) remains constant regardless of the quantity produced, while variable cost (VC) changes with the quantity.
    • Average cost (AC) is the mean cost per unit.
    • Marginal cost (MC) is the additional cost incurred for producing one more unit.

    Factors Influencing Pricing

    • Factors influencing drug pricing include patent protection, corporate philosophy, competition, level of innovation, government controls and policies, reimbursement landscape, product life cycle, and clinical and economic value.

    Effectiveness & Utility (CEA/CUA)

    • The first step in cost-effectiveness analysis (CEA) and cost-utility analysis (CUA) is identifying the benefits of the technology being evaluated, including both health and non-health benefits.
    • Benefits are measured in natural units in CEA and in quality-adjusted life years (QALYs) in CUA.

    Measuring Outcomes

    • Intermediate outcomes and surrogate indicators are used to measure effectiveness in health benefits, but limitations arise in comparing different diseases and aggregating multiple dimensions of health outcomes.

    QoL in Healthcare

    • Quality-of-life (QoL) scales are used to measure health programs without relying on monetary or natural units.
    • They are based on multi-dimensional psychometric techniques and closely related to individual preferences.

    Measuring Outcomes (WTP)

    • Willingness to pay (WTP) methods are used to estimate the value of goods and services, particularly in cases where no market exists.
    • Revealed preference methods utilize real-world data to estimate WTP, while stated preference methods gather information through surveys and other methods.

    Time Trade-Off

    • The time trade-off (TTO) method involves finding the quantity of life an individual is willing to trade for an improvement in quality of life.

    Measuring Utility (Trade Off)

    • The utility of a health state is determined by finding the point where an individual is indifferent between living with that state and living a shorter time in perfect health.

    QALY: Quality Adjusted Life Years

    • QALYs are a commonly used measure of health outcome that captures gains from reduced morbidity and mortality.
    • A QALY represents one year of life in perfect health.

    QALY: Quality Adjusted Life Years (2)

    • Methods for measuring QALYs include visual scale analogue, standard gamble, and time trade-off.

    Quality-Adjusted Life-Years (QALYs) (2)

    • The QALY is a measure of health outcome that reflects gains from reduced morbidity and mortality.
    • It is typically used in cost-utility analysis (CUA), and it is an interval scale ranging from 0 to 1, where 1 represents optimal health and 0 represents a health state equivalent to death.

    Cost-Utility Analysis (CUA)

    • Cost-utility analysis (CUA) focuses on the quality of health outcome produced, using QALYs as the primary measure of outcome.
    • It considers both the quantity and quality of life lived.

    Cost-Utility Analysis (CUA) (2)

    • CUA has limitations, such as not considering the patient's willingness to pay, difficulties in comparing QALYs across different ages, and challenges in quantifying specific health outcomes.

    Alternatives to QALYs

    • Disability-adjusted life years (DALYs)
    • Saved young life equivalents (SAVEs)
    • Healthy-year equivalents (HYEs)

    Incremental Cost-Effectiveness Ratio (ICER)

    • Measures the cost per additional unit of effectiveness achieved
    • Cost difference = net cost (= including possible savings/extras)
    • Some authors prefer ‘cost-utility’ analysis when effects are expressed in QALYs

    Decision-Making Quadrant

    • Increases costs on the y-axis
    • Decreases health benefits on the x-axis
    • The willingness-to-pay threshold (WTP) is a horizontal line
    • Common scenarios include increased health benefits and either lower or higher costs
    • Mortality ~ 0.000
    • Amputation ~ 0.505
    • Stroke ~ 0.621
    • Coronary insufficiency ~ 0.677
    • Blindness in one eye ~ 0.711
    • Diabetes without complications ~ 0,785
    • Perfect health ~ 1.000

    Cost-Effectiveness Threshold

    • Interventions or drugs which fall below the threshold represent value for money.
    • The cost-effectiveness threshold is the maximal cost of gaining a QALY or LYG
    • Desaigues et al (2007) developed a willingness to pay method of €40,000 per Healthy Life Year for EU25 countries

    Benchmarking

    • Cost-effectiveness of caring for a dialysis patient (Historically (USA) 50,000 $ per QALY)
    • WHO cost-effectiveness categories
      • Highly cost-effective (< GDP per capita)
      • Cost-effective (between one and three times GDP per capita)
      • USA = ~$56,000-167,000
      • Egypt = ~$3,700-11,000
      • UK, £30,000
      • The Netherlands, €20,000
      • GCC $30,000??

    Cost Benefit Analysis (CBA)

    • Measures outcomes and costs in monetary units.
    • Assesses net value of programs
    • Challenges emerge when not all benefits can be converted to monetary value.
    • Advantages
      • Same unit comparison
      • Transferability across areas and diseases
      • No interpretation needed for decision making.

    Pharmacoeconomics Evaluation

    • Different types distinguished by the way health program consequences are valued:
      • Cost-effectiveness analysis (CEA)
      • Cost-utility analysis (CUA)
      • Cost-benefit analysis (CBA)
      • Cost-minimisation analysis (CMA)

    Decisions Drivers Addressed by HE

    • Unmet Need
    • Affordability
    • Value for Money

    Barriers to the Use of EE in DM

    • Production of Economic Information
      • Population, Socioeconomic
      • Poor quality of evidence/bias of studies
      • Decision makers preference for locally relevant information
    • Decision Context-Related Barriers
      • Lack of understanding of economic evaluation
      • Politics
      • Philosophical & ethical considerations

    Misconceptions about PE

    • Cost-effective and cost-containment are not the same
    • Very few medical interventions are cost-savings
    • PE evaluation does not compromise clinical care.

    Innovative Contracting

    • InCo leverages HTA to transform traditional payment models to improve outcomes, reduce costs, and enhance flexibility for healthcare providers and payers.

    Types of INCo

    • Value-Based Contracts: Payment based on outcomes and quality rather than service volume
    • Risk Sharing: Both payers and providers share the financial risks of care, encouraging cost-effective treatment strategies
    • Bundled Payments: A single payment for all services related to a treatment episode, driving collaboration and efficiency
    • Collaborative Negotiation: Fosters long-term partnerships between stakeholders with shared goals of patient-centered care, cost control, and improved health outcomes.

    Benefits of INCo

    • Improves care quality
    • Controls healthcare spending
    • Fosters innovation and efficiency

    Payer Negotiations - 4 Step Approach

    • Know your payer
    • Know your product
    • Develop negotiation strategy
    • Conduct negotiations

    Uncertainty in Value Based Pricing

    • Contracting evolves from simple discounts to outcome-based, increasing complexity and risk.
    • Risk Sharing aims to link outcome with price and access
    • Risk is shared between the budget holder and the manufacturer

    PFAP

    • Patient Financial Assistance Programmes

    PFAF Summary

    • WHY:
      • A PFAP directly helps patients with their out-of-pocket payments.
      • It can increase initiation, improve adherence, and extend treatment duration.
      • It offers an opportunity to improve patient access and outcomes
    • WHAT:
      • PFAPs can be designed in different ways.
      • They can include discounts, co-pay coverage, or free services.
      • Design is dependent on local opportunities and constraints
    • HOW:
      • A framework can help determine whether a PFAP could be feasible in a market.
      • It guides affiliates in assessing affordability issues.
      • It assists them in selecting PFAP solutions and identifying barriers to overcome.
      • It supports roll-out, engages stakeholders and assesses risk.

    Affordability Challenge

    • Patients may find it hard to afford their share of the cost of medicine.
    • These challenges can lead to:
      • Reduced initiation
      • Reduced adherence
      • Reduced duration

    PFAPs

    • Addresses patients’ affordability issues directly
    • Can be implemented via reimbursement or out-of-pocket cost
    • Are not social responsibility initiatives
    • Are not patient support programmes

    PFAPs Impact

    • Patients experience a reduction in financial burden
    • Improved patient compliance, initiation, adherence, and duration
    • Increase in product uptake and volumes

    PFAPs Help: Patients and Business

    • Help the patients directly with their share of the treatment's cost
    • Can take different forms, such as discounts, free extra products, earning points
    • Are designed to fit opportunities and conditions in the local market

    Healthcare Systems Overview

    • The healthcare system is a complex ecosystem involving people, institutions, and resources delivering healthcare services to meet a population's health needs.
    • The goal is to ensure timely, accessible, and high-quality healthcare to improve population health.
    • Key stakeholders include regulators, providers, payers, and patients.

    Stakeholders and Their Interaction

    • Regulators set policies, standards, and oversee the healthcare system for safety, quality, and equity.
    • Payers include government programs, insurance companies, and individuals paying out-of-pocket, financing healthcare and influencing costs and access.
    • Providers are healthcare professionals and institutions who deliver services (doctors, nurses, hospitals, etc.).
    • Patients receive healthcare and are central to the system, contributing to healthcare demand.
    • These stakeholders are interconnected, with regulators setting rules, payers financing, providers delivering care, and patients receiving services.

    Types of Healthcare Systems

    • Universal Health System: Funded primarily by the government through taxes or national resources.
      • Examples: EU, Canada, GCC countries.
      • Access is generally available to all citizens or residents.
      • Pros: Equal access, reduces health disparities, lower overall costs, reduces financial burden for individuals.
      • Cons: Bureaucracy, potential long wait times, lower incentive for innovation, possible resource constraints, subject to macroeconomics and politics.
    • Private Health System: Services are either provided through employers or purchased individually, with coverage varying by plan.
      • Examples: US, some parts of Europe.
      • Access is determined by ability to pay or insurance coverage.
      • Pros: Faster access, more flexibility, higher patient satisfaction, encourages innovation and diverse service offerings.
      • Cons: Limited access based on affordability, inequality, high out-of-pocket expenses, high administrative costs, complexity in billing and approval.

    Regulatory Bodies and Standards

    • WHO (World Health Organization): Sets global health standards, monitors public health risks, and guides international health policy.
    • FDA (Food and Drug Administration) in the US and EMEA (European Medicines Agency) in Europe: Oversee drug safety, efficacy, and quality.
    • National Health Authorities: Ensure compliance with local laws and policies.
    • Common Regulatory Themes: Patient safety and quality standards, data protection and privacy laws, and equitable access to healthcare.

    Regulation and Compliance in Healthcare

    • Data Protection and Patient Privacy: Laws like HIPAA (US) and GDPR (EU) are in place to protect patient data confidentiality and privacy.
    • Ethical Practices and Code of Conduct: Ensure ethical guidelines including patient rights, informed consent, and non-discriminatory care.
    • Healthcare Quality: Ensure providers meet standards for patient safety, effective treatments, and transparency.
    • Financial Practices: Ensure compliance in billing to prevent fraud, over utilization, and abuse.

    Payment Methods in Healthcare

    • Fee-for-Service (FFS): Payers reimburse providers for each service, incentivizing volume.
    • Value-Based Care (VBC): Payment is linked to the quality of care, encouraging better patient outcomes.
    • Health Insurance: Private or public programs for coverage.
    • Out-of-Pocket Payments: Patients pay directly for services not covered by insurance.
    • Capitation: Providers are paid a fixed amount per patient, regardless of services.
    • Bundled Payments: A single payment covers all services related to a specific treatment.

    Technology's Role in Healthcare

    • Enhancing Patient Care:
      • Electronic Health Records (EHRs) for improved information sharing and coordination of care.
      • Telehealth for remote consultations and monitoring, increasing access.
    • Improving Diagnostic and Treatment Precision:
      • AI & Machine Learning for disease diagnosis, outcome prediction, and personalized care plans.
      • Imaging & Robotics for advanced diagnoses and minimally invasive procedures.
    • Boosting Efficiency and Reducing Costs:
      • Streamlining processes and reducing administrative burdens.
      • Wearable devices for tracking patients' health in real-time, promoting early detection and preventative care.
    • Fostering Research and Innovation:
      • Big Data & Analytics for identifying health trends and enhancing public health.

    Access: Role, Barriers, and Efforts

    • Regulators ensure equitable access through laws, insurance coverage mandates, and service standards.
    • Payers influence access by financing care, expanding coverage options, and incentivizing value-based care.
    • Barriers to Healthcare for Underserved Populations: Financial, geographical, and cultural.
    • Efforts to Address Disparities: Policy interventions, community outreach, and education.

    Empowering Patients in Healthcare

    • Patients are increasingly taking control of their own health by making informed decisions, following treatments, and adopting healthier lifestyles.

    Digital Health and Patient Empowerment

    • Digital health tools allow patients to monitor their health and communicate more effectively with healthcare providers.
    • Patient advocacy groups play a crucial role in advocating for patient rights, improving healthcare access, and driving research for new treatments.
    • Artificial Intelligence (AI) and data analytics are transforming diagnostics, predicting patient outcomes, and enhancing clinical decision-making.
    • Precision medicine uses genomic data to predict individual responses and personalize treatments based on genetic, environmental, and lifestyle factors.
    • Value-based care models emphasize outcomes and cost control, shifting away from the traditional fee-for-service model.

    The Basics of Health Economics

    • Health Technology Assessment (HTA) ensures the efficient allocation of healthcare resources.
    • Economic evaluations assist in maximizing health outcomes, informing decision-making, containing costs, and promoting equity in accessing healthcare services.
    • Clinicians, hospitals, payers, governments, and patients are all stakeholders in the healthcare system.

    Cost Considerations in Healthcare

    • The objective of healthcare is to maximize benefits and quality of life.
    • Cost is a factor that should be considered when evaluating the effectiveness of healthcare interventions.
    • Due to limited resources, it's essential to determine if the results are worth the cost and prioritize the most beneficial interventions.

    Access to Medicines

    • Cost-effectiveness and budget impact are crucial considerations in market access for pharmaceutical products, referred to as the 4th and 5th "hurdles."

    Economic Evaluation Steps

    • Economic evaluations (EE) aim to determine costs, benefits, implementation efficiency, and the value of healthcare interventions.
    • Steps in EE include defining the technology/options, perspective, method, analyzing results, and interpreting insights for informed decision-making.

    Perspective in Economic Evaluation

    • The perspective refers to the target group or viewpoint of the evaluation.
    • It can be from the perspective of the patient, particular institution, or society.
    • Analyses should ideally be performed from the broadest perspective possible.

    Methods in Economic Evaluation

    • Cost-benefit analysis (CBA) quantifies benefits in monetary units, allowing comparison with costs.
    • Cost-effectiveness analysis (CEA) values outcomes using non-monetary units, such as Quality-Adjusted Life Years (QALYs).
    • Cost-utility analysis (CUA) measures outcomes in terms of QALYs, combining quality and quantity of life.

    Understanding Cost in Economic Evaluation

    • Cost is conceptually easier to define than benefits, with standard monetary units used to measure the cost of resources.
    • Challenges arise when estimating long-term costs and savings, accounting for cost variations, and categorizing costs as fixed or variable.

    Drug Costs in Economic Evaluation

    • Drug costs only represent a portion of the total cost of healthcare interventions.
    • It's essential to consider other medication costs, supplies, primary care, hospital costs, and indirect costs like lost productivity.

    Discounting

    • The time preference concept acknowledges that present values are generally preferred over future values due to factors like limited time horizon, uncertainty, and the perception of getting richer with time.
    • The discounting procedure involves calculating the present value (PV) using a discount rate (r) to reflect the time value of money.

    Average Cost and Marginal Cost

    • Average cost (AC) represents the mean cost per unit produced.
    • Marginal cost (MC) refers to the additional cost incurred for producing one more unit.

    Factors Influencing Pricing

    • Factors influencing pricing include corporate philosophy, patent protection, the product life cycle, market positioning and competition, government controls and policies, clinical and economic value, reimbursement landscape, and the level of innovation.

    Effectiveness and Utility in CEA/CUA

    • Effectiveness is measured in natural units in CEA, as health outcomes lack a price.
    • Intermediate and surrogate indicators are used to measure effectiveness based on objective treatment targets.
    • Limitations of natural units include difficulties in quantifying individual preferences and comparing across different diseases.

    QoL in Healthcare

    • Quality-of-life (QoL) scales use multi-dimensional psychometric techniques to measure health programs without monetary units.
    • QoL scales reflect individual preferences and are closely connected to health outcomes.
    • HRQoL scales are essential for measuring health programs and evaluating benefits without using monetary units.

    Measuring Outcomes: WTP

    • Willingness to Pay (WTP) helps assess the value of goods, especially when there is no market, such as for improvements in QoL.
    • Revealed Preference Methods rely on market observations, including hedonic, travel, avoided, volunteer, and risk-risk trade-off methods.
    • Stated Preference Methods involve hypothetical markets, where individuals express their willingness to pay through surveys or simulations.

    Time Trade-Off

    • The Time Trade-Off (TTO) method determines the quantity of life a person would trade to improve their QoL.
    • TTO helps quantify the value of health states and derive utility scores.
    • QALY is a commonly used measure for combining quality and quantity of life, reflecting individual preferences and facilitating comparisons across different interventions.

    How to Measure Utility: Trade-Off

    • The trade-off approach involves comparing different health states and determining the indifference point, where individuals are equally satisfied with two options.
    • Utility scores are then derived based on the trade-offs.

    QALY: Quality Adjusted Life Years

    • QALY is a measure of health outcome that combines quality and quantity of life.
    • QALY values are represented on an interval scale from 0 to 1, with 1 representing optimal health and 0 representing a health state equivalent to death.

    Cost-Utility Analysis (CUA)

    • CUA focuses on the quality of health outcomes produced, expressed in terms of QALYs.
    • It employs a Time Trade-Off approach to measure utility.
    • CUA limitations include difficulties in incorporating patient willingness to pay and the non-fair comparison of QALYs across different age groups.

    Alternatives to QALY

    • Disability-adjusted life years (DALYs), saved young life equivalents (SAVEs), and healthy-year equivalents (HYEs) are all alternative metrics to quality-adjusted life years (QALYs) in health economics.

    ICER

    • The Incremental Cost-Effectiveness Ratio (ICER) measures the cost per additional unit of effectiveness achieved by a new treatment as compared to a standard of care.
    • It is calculated by subtracting the cost of the standard of care from the cost of the new treatment, and dividing this by the difference in effectiveness between the treatments.

    ICER Example

    • In the example provided, the ICER for the new treatment B is €20,000 per QALY gained.
    • This means that for every additional QALY gained by using treatment B instead of treatment A, the cost is €20,000.

    Decision-Making Quadrant

    • The Decision-Making Quadrant visualizes the relationship between costs and health benefits for different interventions.
    • It highlights scenarios where increased health benefits may lead to lower or higher costs, with a willingness to pay threshold (WTP) serving as a benchmark for value for money.
    • The text highlights the impact of diabetes-related complications on health, with a focus on the relative health status compared to a perfect health state (1.000) with a score of 0.785 for diabetes without complications.
    • Complications such as amputation, stroke, coronary insufficiency, and blindness in one eye further reduce the health status, illustrating the importance of managing diabetes effectively.

    Cost-Effectiveness Threshold

    • The Cost-Effectiveness Threshold represents the maximum cost per QALY willing to be paid for a particular intervention.
    • Interventions falling below this threshold are considered value for money.
    • The value of the threshold can vary depending on the country and socioeconomic context. For example, a study by Desaigues et al. (2007) estimated the willingness to pay in EU25 countries to be €40,000 per healthy life year.

    Cost-Benefit Analysis (CBA)

    • CBA measures outcomes and costs in monetary terms to determine the net value of a program.
    • While CBA offers benefits like unit comparison, transferability, and direct decision-making, it faces challenges in valuing all benefits monetarily.
    • Human capital theory, focusing on productivity gain, is often used to value life in CBA, but raises concerns about equity and fairness.

    Pharmacoeconomic Evaluation (PE)

    • PE evaluates the economic consequences of a health program based on different approaches such as cost-effectiveness analysis (CEA), cost-utility analysis (CUA), cost-benefit analysis (CBA), and cost-minimization analysis (CMA).
    • Each approach distinguishes itself by the way the consequences of a health program are valued.

    Decisions Drivers Addressed by Health Economics (HE)

    • HE addresses unmet needs, affordability challenges, and value for money through studies such as cost-of-illness studies, budget impact studies, cost-effectiveness studies, cost-benefit studies, cost-utility studies, and cost-minimization studies.

    Barriers to Economic Evaluation in Decision Making

    • Barriers to the use of economic evaluation in decision making can arise from production of economic information, like poor evidence quality or biased studies, and decision context-related factors such as lack of understanding of economic evaluation, political considerations, philosophical and ethical concerns, and prioritization challenges.

    Misconceptions about Pharmacoeconomics

    • Cost-effective and cost-containment are not synonymous, as cost-effective interventions may not necessarily be cost-saving but still offer value for money.
    • While many interventions are not cost-saving, some, like childhood immunization programs, can actually save overall health care costs.
    • PE evaluation does not compromise clinical care, but rather emphasizes that expensive health care is not always the best health care.

    Innovative Contracting

    • Innovative contracting leverages Health Technology Assessment (HTA) to transform traditional payment models, improving outcomes, reducing costs, and enhancing flexibility for healthcare providers and payers.

    InCo (Innovative Contracting)

    • InCo encompasses various types of contracts like value-based contracts, risk sharing, bundled payments, and collaborative negotiation, aimed at fostering patient-centered care, cost control, and improved health outcomes.

    Payer Negotiations

    • The 4-Step Approach to Payer Negotiations helps prepare and conduct negotiations.
    • It emphasizes understanding the payer and the product, developing negotiation strategies, and conducting effective negotiations using insights gained from the previous steps.

    Uncertainty in Value-Based Pricing

    • As contracting evolves from simple discounts to outcome-based models, complexity and risk increase.
    • Risk sharing aims to link outcome with price and access, sharing risk between the budget holder and manufacturer, moving towards a more advanced and frequent outcome-based risk sharing.

    Patient Financial Assistance Programmes (PFAPs)

    • PFAPs are designed to address affordability challenges for patients facing high out-of-pocket payments for treatments.
    • They can take various forms like discounts, co-pay coverage, or free service after a certain number of purchases.

    PFAP Summary

    • PFAPs aim to improve patient access and outcomes by addressing affordability challenges, leading to increased treatment initiation, better adherence, and longer treatment duration.
    • They can be designed in different ways depending on local opportunities and constraints, offering multiple options for different markets.
    • A global framework can help affiliates assess affordability issues, select suitable PFAP solutions, and identify barriers to overcome, supporting roll-out, risk analyses, and stakeholder engagement.

    Affordability Challenges

    • Many patients struggle to afford their share of treatment costs, leading to reduced initiation, adherence, and duration of treatment.

    PFAP Benefits

    • PFAPs directly help patients with their out-of-pocket payments, reducing financial burden.
    • This improves patient compliance, increasing treatment initiation, adherence, and duration.
    • Overall, PFAPs contribute to increased product uptake and volumes, benefiting both patients and businesses.

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    Description

    Explore the latest advances in imaging technologies and surgical robots, along with the challenges of healthcare access for underserved populations. This quiz also covers the economic evaluations of healthcare and the role of patients and regulators in managing health costs.

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