|Medicine - Epidemiology (ECHO - NOHA - Network on Humanitarian Assistance) (European Commission Humanitarian Office, 1994, 120 p.)|
|Chapter 2: Health Care Planning|
Planning involves determining, with respect to a particular system, precise objectives, and implementing the necessary resources to achieve them within the time allowed.It provides a rational basis for decision-making.
The notion of PRIORITIES and OBJECTIVES (once again) raises the question of whether health planning is really justified. Why plan?
A - Economic rationale
Resources are (relatively) scarce and the needs (relatively) great > necessity for choices. Hence the concern for (economic) efficiency in the use of resources.
Possible objection: the market could take care of these choices. "Orthodox" (i.e. liberal) economic theory seeks to demonstrate that the allocation of scarce resources in order to satisfy numerous needs is best achieved by giving free rein to the forces of supply and demand. "Market equilibrium" will thus be attained through pricing, providing that is:
- free competition is allowed to operate (in this particular instance, providing there is no monopoly over the supply of health care and no State intervention in order to regulate the price of health care services)
- the participants in the exchange (supply and demand) are fully informed about the state of the market.
B - Political (or social) rationale
This implies the reference to value judgements such as:
- "access to health care (or even just "health") is the
fundamental right of every individual"
- "health is one of the essential goals of social development"
- "health is a means of progress" (by increasing the productivity of labour).
These value judgements are fairly widely accepted, irrespective of political systems, civilisations and cultures.
The mechanisms of the market however (where supply partially creates its own demand, where demand is only ever solvent demand, where perfect information does not exist, etc.) are not capable of fulfilling the requirements contained in these value judgements. Hence the (social/ political) concern for the equitable distribution of health care services and opportunities to enjoy good health.
C - Scientific/technical (or public health) rationale
In the health care sphere, there is always a slight mismatch between supply/demand/needs (Cf. diagram below). This is true of many other goods or services (e.g. education, housing, food, clothing, insurance) but the health care sphere is special in that the information required to form some idea of
- the significance of the distinction between (stated) demand and
- the match between demand and the available supply (= health care)
Normally eludes the individual or community concerned and / or is beyond their powers of judgement. This is because in the health care sphere
- there is a very powerful "emotional charge":the focus is on the body, suffering, vitality, appetite for life, in other words "goods" with regard to which, the general public and individuals alike, can be both very demanding and highly irrational
- the "demander" (i.e. the patient or anyone seeking some form of medical care) is invariably in an inferior position in relation to the "seller" (the health care system):handling information is hard enough for someone in good health, and illness further diminishes their ability to determine whether supply, demand and needs are suitably matched
- needs can be defined in a very precise manner by a particular authority (medical science) generally recognised as being impartial and unconnected with the "health care market".
In the health sphere more so than in the case of other goods and services, we are thus a very long way from the theoretical model of political economy, which posits a "supplier" and a "demander" who are perfectly informed about the state of the market and behave in a rational manner. Hence the (public-health) concern for voluntarist improvements to the existing health care system:greater efficiency (by matching supply to needs), high-quality care, etc.
These three types of rationale remain equally valid if you believe that health care policy should be much more comprehensive than simply organising the medical profession and care.Thus,
- as regards the availability and quality of food,
- dietary habits,
- environmental health,
- drinking water supplies,
- safety (road, domestic),
- general hygiene,
- working conditions, etc.
there are no "markets" as such, where trade in goods or services could ensure a proper match between supply, demand and needs.
Diagram:Supply, demand and needs in the health sector
Important - In public health, in order to avoid lengthy debates about the concept of "need", the accepted definition is an operational (practical) definition, rather than a conceptual (theoretical) one:needs are anything defined as such by members of the health care profession in the light of the available knowledge.
Example - Health care needs = "the estimated manpower and quantity of services required, in the opinion of professionals and according to the state of the art in medical science, in order to provide an optimal level of health care" (T. Hall).
However hard the various authors of public health manuals may try to get away from this operational concept of needs, in everyday practice it is invariably the latter which prevails.
Faced with these arguments, the question naturally arises of why we plan so little, particularly in Western countries.
A - Technical factor - Lack of data
In some cases, the most basic statistics, health cards, levels of coverage per service, etc. are quite simply lacking.
B - Economic factor - The illusions fostered by the affluent society
In those countries which have experienced "the affluent society", the relative abundance of resources obscured the need for planning:what was the point of planning when, to all appearances, the full range of needs could (or would eventually) be met?
Why bother about priorities when it seemed, all of the existing needs could be satisfied? Hence, with the present budgetary constraints weighing heavily on welfare expenditure, the need for a sort of "retrograde (or retrospective) planning", is perceived by those involved in the health care sector as a policy of belt-tightening and rationing.
C - Institutional factor - The interests of institutions
Because of their organised structure and lobbying power, the interests of institutions (hospitals, peripatetic or stationary preventive medicine services, etc.) and professional associations (doctors, nurses, physiotherapists, etc.) carry more weight than any analysis of the needs and level of demand of the community concerned.In the health care sphere, the latter is still largely unorganised:the "patients" or "potential beneficiaries of preventive measures" do not constitute a force capable of deploying itself on the socialfront.Those who claim to speak on their behalf (politicians, doctors, trade unions, mutual associations) are themselves suspect because governed by their own institutional mentality.
D - Cultural factor - The "culture" (or lack thereof) of the medical world
The failure to train and educate doctors and paramedics in the aspects of evaluation, self-evaluation, resource management etc. of public health is a legacy of the liberal practice of medicine in most Western countries (postulates of liberal medicine = complete freedom for the patient to choose his or her doctor, complete freedom for doctors to choose the form of treatment, and where they wish to work, complete freedom as regards setting their fees, on-the-spot payment for treatment).
In the former colonies, by contrast, the modern health service, after the pattern of the civil service and armed forces, was instituted from the outset in the form of a public service, the move towards privatisation being a recent phenomenon. Since resources were much scarcer than in the industrialised countries, receptiveness to the notion of health care planning tends to be more immediate (although not necessarily effective!). The Implications for planning :
1) Emphasis on inputs
The deep-seated reluctance to think of health care systems, medical professions or medical services in terms of results (outputs) (= effectiveness) and yield (output / cost) (= efficiency) breeds a tendency to focus purely on the inputs, whether financial, human, material or technical:"Since you force me to plan, tell me what my budget allocation is and leave me to get on with my job".
2) Tendency to operate in isolation
Each component of the health care system tends to operate in isolation, with precious little regard for the quality of the relations between the various components: GPs / specialists / hospitals / school medicine / industrial medicine / multiple preventive services / administration.
3) Too much emphasis is placed on the two-way doctor-patient relationship
Treating illnesses in the patient's own home takes precedence over promoting health in the community at large.
4) Pathological fear of any "political meddling"
The liberal practice tradition inclines one to see any voluntarist and concerted attempt to reorganise the health care system as unwarranted political interference in the "art of healing".
All of this results in various impediments to planning:
> the proliferation of fragmented views of problems
> contradictory or redundant "plans" and policies
> tendency to latch onto false problems.
Under such circumstances:
a) health planning can never be anything more than
- a sporadic activity, lurching from one crisis or fashion to the next (AIDS, home-based health care)
- a partial activity, confined to a handful of problems leading to a more balanced form of lobbying rather than the fulfilment of needs (e.g. the former "hospital planning" scheme in Belgium)
- an activity which has no impact on the way the system operates.
b) there is no sense of direction, in other words
- what are the priorities?
- how much is the health care system going to cost and what will it deliver in return?
- which areas need to be evaluated and improved?
A - The preconditions
* political will or impetus
* legal framework / health care policy
* consult and inform the socio-professional groups concerned, with a view to:
> at the very least, harmonising their opinions (over and above
the various sectoral viewpoints)
> if possible, motivating them
> at best, getting them to work together
* administrative capacity
* initial census of "problem sectors"
In many countries (including our own), any form of general planning is doomed from the outset... owing to lack of political will or impetus.
When the political will is there, getting the relevant socio-professional groups involved can sometimes pose an insurmountable obstacle, inasmuch as institutional interests tend to prevail over considerations of public health.
In some cases (as in certain Third World countries) it is the administrative capacity which is lacking.
B - Identifying needs/problems
Remark - Different authors do not always use the same terms in the same way.Pineault and Daveluy for instance, interpret the term "health problem" as meaning a "problem such as it is perceived by the population", as opposed to need.
Identifying needs and problems hinges on the COLLECTION and ANALYSIS of data.
a) approach based on indicators (Cf. "Community diagnostics")
- socio-demographic indicators:mortality rate, birth rate, age
- health indicators:prevalence, incidence, attributable risk, etc.
- takeup of health care services
Often the data is too sketchy to justify this indicator-based approach, in which case one must use:
b) a survey-based approach
c) a dead-reckoning approach (scientific literature)
d) a comparative approach (i.e. compare two neighbouring areas one of which is better known)
e) a consensus-seeking approach
- key informers
- Delphi method
- nominal group
- community forum
- community's impressions
f) inventory of health care resources and their use
Surprisingly often, one ends up with a surfeit of data, in which case the big mistake can be to think they all have to be used. No planner can process everything.He must be able to pick out the relevant data.
This raises, among other things, the question of the quality of the data available.
- are sometimes designed, presented and processed in such a bureaucratic manner that the health officer in charge of recording them will tend to enter any old figure rather than leave a particular column blank (he knows that no-one will bother to check falsified figures, whereas he will get into trouble if all the columns are not completed!)
- even when they are "reliable", still only represent the diagnosed sickness ratio (section 1 of the figure below).
The Diagnosable sickness ratio represents a broader measure (section 2) : diagnosis errors and forgetting to record all of the cases account for the difference. Sometimes, however, Diagnosed sickness can tend to overstate a particular problem (too many fevers in tropical regions for example, are labelled "malaria").
Actual sickness is even broader: it requires in effect that those who are ill realise they are ill, think to contact the health service for treatment and are actually able to do so (notion of geographical, cultural and financial accessibility of health services).
Finally too, one cannot overlook the fact that the current trend towards training peripheral, auxiliary staff in Third World health services on the basis of "specific problems to be solved" (often using decision trees) is not conducive to data collection based on "cases of clearly defined pathologies". One needs to be quite clear however, what it is one wants: to place data collection in the service of basic practitioners or vice versa... There is no reason why we should not have a data collection systembased on "specific problems to be solved", although it may mean entrusting the in-depth analysis of the prevalence and incidence of particular pathologies to more selective epidemiological studies.
C - Establishing priorities
1) To begin with, one requires a precise definition of the health problem concerned, which must be clearly delimited. Thus for example, rather than "combatting malaria" , the problem will be defined as "combatting infant mortality due to malaria" or as "combatting sickness in pregnant women due to malaria".This makes it possible to plan and organise the different stages more effectively.
2) The golden rule is as follows:
Any given health problem constitutes a "priority" from the point of view of planning health care measures, if it is important and if it is vulnerable.
The importance of any given problem depends on the weighting assigned to the following three components:
- its importance / urgency for the community in question
This urgency can be due to a correct appraisal of the situation by the public at large or can be the "distorted" result of inadequate treatment of a particular issue by the media.In this latter instance, health care planners can make this very area of better public information, one of their goals.
- its intrinsic seriousness (as measured by the specific sickness
ratio and death rate)
- its frequency (as measured by prevalence and incidence)
To disregard the public perception of the problem is to lay oneself open to a technocratic concept of planning, of the sort practised by the promoters of so-called "selective" primary health care (cf. details of this debate elsewhere). On the other hand, focusing too exclusively on people's requirements - as in the case of Western liberal medicine -leads to a medical profession which merely responds to demand without considering the needs, and without reorganising its offerings in the light of those needs; in other words, without establishing priorities.
The vulnerability of any given problem can be broken down into a number of elements :
- its technical vulnerability:is there an effective method (preventive or curative) of combatting this problem?
- The degree of certainty, in medicine, concerning the validity of any given method of prevention or treatment, hinges, in descending order of reliability, on:
- the randomised controlled trial
- case-control study
- the studies prior to/after or with/without the given programme
- experts' opinion
- personal experience, etc.
- its operational vulnerability (= practical vulnerability, in the field), sometimes referred to as feasibility, which in turn depends :
- on the operational possibilities (infrastructures, personnel, climatic conditions, means of transport, etc.)
- on the costs, in terms of : costs for the individuals / for a third party who foots the bill immediate / recurrent costs absolute / relative costs (cost-effectiveness, cost-benefit)
- what result am I getting and at what cost ?
- what am I saving in another sector of the health service if I plan such and such an activity (e.g. curative health care costs saved by a prevention programme) ?
- what will I have to forgo if I devote my resources to such and such an activity (notion of opportunity cost) ?
The relative costs study (using the notions of cost-effectiveness and in some cases, cost-benefit) throws up Several choices and thus paves the way for options in planning.
- on the acceptability of the activities envisaged (legal, political, cultural, ethical acceptability).
3) How do we select priority problems ?
One could start by subjecting all of the problems listed in point 4.2. to the following test :
Please note - that what we are dealing with here are priority measures and not exclusive measures. That is to say, a problem which is deemed to be "unimportant" and "non-vulnerable" should not necessarily be excluded from any health care measure.It is just that since it is not a priority, it can only warrant a small share of the available resources.If one were to exclude the vast majority of "minor complaints" from health care measures however, one would end up with a technocratic and indeed inhuman health service, which would rapidly alienate those it purported to serve.
Even if he follows the steps outlined above, the planner will still find himself faced with a daunting list of priorities. How can we grade these priorities further?
D - Establishing objectives
1) Defining possible alternative forms of action
No planning process is complete without examining alternative solutions for each chosen objective
This is done by :
- basing oneself on the data contained in scientific literature
(compared with the practical feasibility)
- and/or using the same techniques as those used to select problems (4.2.)
2) Defining the target group, at whom the project is aimed
The entire population? A particular age group? A particular high-risk group? Etc.
3) Defining the general objectives
Example : to reduce the incidence of tetanus by x% within such and such a time-limit the number of deaths due to tetanus by z% within such and such a time-limit or, more specifically, umbilical tetanus, or tetanus in children, or adults, etc.
4) Defining the operational objectives
vaccinate --% of the target population with 3 injections
inform --% of the overall population
train --% of midwives
retrain --% of auxiliary staff
ensure that --% of sufferers contact the health service.
E - Determining the activities
The idea at this stage is to determine the type and number of specific activities which need to be undertaken: e.g. number of vaccines, method of conveyance, the freezer chain, information medium, etc.
This stage is more than just an administrative one. Not just because success on the ground depends on the practical organisation, but mainly because this stage requires us to answer two important questions:
1 ) Preventive or curative measures ?
- primary prevention: any measure aimed at reducing the incidence
of illness in the community
- secondary prevention: any measure aimed at reducing the prevalence of illness in the community
- tertiary prevention: any measure aimed at mitigating the consequences of illness in the community (in terms of permanent disability, loss of independence, etc.)
Early detection of illnesses (via screening or case research) generally comes under secondary prevention (the illness is already present but at a preclinical stage: detecting it with a view to treatment thus reduces the prevalence).Detection comes under primary prevention when it concerns a particular risk factor or a precursory stage of the illness (the illness has not yet developed: detection has the effect of reducing its incidence).
In short, a preventive measure is only justified if one can answer "yes" to the following five questions :
1_ Is the illness sufficiently frequent and serious to warrant early intervention (= is it a priority)?
2_ Does the illness have a sufficiently long preclinical phase to allow early intervention?
3_ Is there a valid, reliable test for identifying the illness at the preclinical phase?
4_ Is there some form of intervention (treatment) which is more useful or more effective when it is applied following detection than when it is applied following a diagnosis formed under the usual circumstances?
5_ Is the community at large well-disposed towards screening and does it accept the relevant modes of application?
2) Vertical or horizontal strategy?
The choice of intervention strategy is of cardinal importance: it determines the type of medicine that will eventually be offered to the population concerned.
The first type of strategy involves organising a vertical action programme : from the Department of Health right down to grassroots level (be it a New York district, a station in the Tanzanian bush or a village in the Bolivian Altiplano), the planners organise everything (staff, vehicles, equipment, pay, managerial structure, information flows, etc.) in the form of an independent, self-sufficient channel, separate from the rest of the health service. The thinking behind this vertical planning is as follows: given a particular health problem, what service needs to be organised in order to deploy the methods/ activities provided to combat it?
The second type of strategy involves incorporating health care and programmes into existing services (or services which may be set up or revised on this occasion).Rather than introducing some new activity (i.e. the programme) from the top down, one endeavours to reorganise the existing services in order that they may take on the activities envisaged by the planners. The thinking behind this horizontal format is as follows: given a particular health service, how can we organise it so as to incorporate the solution of priority problems into the existing range of activities, which require a comprehensive, integrated and consistent approach to health care?
Each of the two strategies has its pros and cons.
Opting for one or other has fundamental repercussions on the overall functioning of a country's health service. The vertical approach tends to overlook this latter aspect: the "priorities" are taken care of by the vertical programmes and there is a danger that those in charge will regard the actual functioning of the permanent health services as being outside their province. Yet it is to these permanent services that the community turns on a daily basis for all its problems, "priority" or otherwise.
In the Third World, the debate is even keener. Organising primary health care involves integrating care at a peripheral level; the attitudes of the major aid and intervention agencies (who often advocate selective primary health care) encourages countries to adopt a series of vertical programmes.
"Selective" primary health care classes as "priorities" those problems where the sickness ratio/ death rate is high and where effective prevention or treatment can be readily implemented. The opinion of the communities themselves is unimportant. Non-priority problems are discounted. In practice, this leads to the selection, depending on the location, of fewer than ten or so priority measures, most of which are geared towards pregnant mothers and young children.
At the end of the day, it is a question of opting for the type of health care one prefers. For proponents of vertical planning, the key question is: "Which illnesses ought to be combatted first?" whereas the horizontal structure hinges on the question of "What type of medicine should we offer the population?" (Cf. D. Grodos et X. de Bune, Les Soins de santrimaires sctifs: un pi pour les politiques de santu Tiers Monde, Soc Sc Med, Vol. 26, N_9, pp 879-889, 1988).
F - Deploying and co-ordinating resources
The focus shifts here to the management of the actual programme.
This often neglected stage is nonetheless essential. It alone can highlight the sort of questions which will help correct any measures taken in future:
- were the objectives aptly chosen?
- were the results what we expected?
- are the methods used the most suitable?
- were the resources deployed the most appropriate?
A - Nature of economic evaluation
These notes summarise the introductory chapters of the work : MichaelF. Drummond, Greg L. Stoddart and George W. Torrance, Methods for the Economic Evaluation of Health Care Programmes, Oxford Medical Publications, Oxford University Press, 1987 (181 p).
The underlying concept of economic analysis is that of opportunity cost. The decisions taken by economic players (the employer who hires or invests, the consumer who saves or buys) hang on choices which reflect these players' preferences when faced with multiple needs and limited resources. Choosing one thing means sacrificing something else: allocating 1000 francs to the purchase of compact discs means forgoing a 1000 franc meal at a restaurant, for example. Similarly, in the health care sphere, the real cost of a particular health care programme is not the number of francs shown in the programme budget, but rather the "value" of the results in health terms of any other programme passed over in favour of the first programme. It is this "opportunity cost" which economic evaluation endeavours to measure and compare with the results of the programme assessed.
- Is a particular service, programme or activity worth setting up compared with what we could obtain otherwise, with the same resources?
- Is the way in which a particular service, programme or activity operates satisfactory compared with some other mode of operation?
- Should all hospitals be equipped with tomodensitometers or should preference be given to the geriatric departments?
This latter type of question highlights the fact that the answer is seldom "yes" or "no" but more often "to what extent"?
Economic analysis will endeavour to:
- relate the costs (inputs) to the effects or consequences (outputs)
- evaluate the possible choices in relation to each other or to make implicit choices explicit (many medical activities are performed out of habit and have never given rise to an economic evaluation).
Economic evaluation is an analysis of the alternative forms of action in terms of costs (inputs) and consequences (outputs), which must be identified, measured and where appropriate, optimised.
B - Types of economic evaluation
Remarque - For the purposes of this report, we will use the term "programme" to refer not just to health care programmes in the proper sense, but also services, activities, schemes, institutions, procedures, methods, etc.)
These apparently clear distinctions are not always evident in scientific literature.
The widespread confusion concerning the terms used and the description of the type of approach employed has prompted the suggestion that we classify economic evaluations as follows:
A cost study is purely concerned with costs. If it compares several programmes with different costs, the preferred term is cost-minimization analysis.
A cost-effectiveness study relates the effects of a given programme, measured in physical units (life-years gained, number of accurate diagnoses, number of cases detected) to their cost. Ordinarily, such a study does not consider the fact that these effects may not be worth pursuing; they are assumed to be desirable.
A cost-utility study relates the effects of a given programme, measured in quality-adjusted life-years (QALYs) to their cost. It is therefore a type of cost-effectiveness analysis, which is particularly useful for programmes where it is the result in terms of sickness ratio which matters, or in terms of life-years gained. These extra life-years are "modulated" or "adjusted" according to the quality of life afforded: sound health is rated 1, death 0, a minor handicap (side-effects of chronic treatment, etc.) 0.2 (for example) and a major handicap (impotence, incontinence, etc.) 0.7 (for example).The "utility" thus weights the life-years gained by the quality of the remaining life.
A cost-advantage study or cost-benefit study (synonymous) relates the effects of a given programme, measured in monetary terms (francs, dollars, etc.) to their cost. In theory, this ought to be the broadest and most sophisticated form of economic evaluation, in so far as one compares all of the costs with all of the advantages, translated into monetary value. In practice however, translating all of the effects into monetary terms is difficult and cost-benefit studies often confine themselves to that which can be easily assessed in this manner. In many cases therefore, it constitutes a more limited approach than a cost-effectiveness analysis.
Broadly speaking, economic analysis establishes the connection between costs and effects: it is an evaluation of yield or efficiency (synonymous).
2) Classification Criteria:
- Is a particular situation compared (i.e. is some attempt made to examine one or more alternatives) or simply described ?
- Are the costs (inputs) AND the consequences (outputs) of the different alternatives examined ?
"Partial" does not mean pointless!It does mean, however, that there is no attempt to address the issue of efficiency, making it possible to choose between several options.
In cases 1A, 1B and 2, there is no comparison between various alternative solutions: what we have is a straightforward description rather than an economic analysis:
- description of effects in 1A
- description of costs in 1B
- description of cost-effectiveness in 2.
Please note - This latter type of study is sometimes mistakenly referred to in literature as "cost-benefit analysis". E.g. Reynell PC and Reynell MC, The cost-benefit analysis of a coronary care unit, Br. Heart J. 34, 897-900, 1972. The authors present data on the costs of a coronary care unit and the number of lives saved. They do not compare the costs and effects of a coronary care unit with the costs and benefits of some alternative solution however. What is more, there is no attempt to convert the effects into monetary value.
Cases 3A and 3B offer comparative analyses, but never of both costs and effects at the same time.
Case 3A is obviously that of randomised controlled clinical trials relating to a new treatment (or screening procedure)
A cost analysis (case 3B) will compare, for instance, the respective cost of two vaccination strategies, but without considering their effectiveness.
Full economic evaluation
This is represented by case 4.There are basically four types of analysis.
a) Cost-minimization analysis
Cost-minimization analysis compares the costs of two programmes whose effects are identical.
Cost-minimization analysis differs from straightforward cost analysis (case 3B) in that it forms part of a study (often a randomised controlled trial) which proves that the two programmes are equally effective (e.g. conventional surgery and ambulatory surgery for one and the same pathology).Cost analysis often postulates or does not even seek to discover whether the treatments differ in terms of their results.
b) Cost-effectiveness analysis
The cost-effectiveness analysis compares the effects and costs of two or more programmes. E.g.: life extension following a kidney transplant or dialysis. One calculates:
- a cost per life-year gained
- or the number of life-years gained per franc spent.
A cost-effectiveness analysis does not necessarily compare two programmes applied to the same health problem: one might very well compare the number of life-years gained as a result of heart surgery, kidney transplants and wearing a safety belt. What matters is that the effects of the activities compared can be measured using the same criterion (life-years gained, number of days unfit for work avoided, etc.).
Furthermore, the effect does not have to be a treatment result, but may very well be a diagnosis or detection result: cost per case detected according to a particular procedure; cost per case diagnosed according to a particular diagnostic strategy. E.g.: Hull R et al., Cost-effectiveness of clinical diagnosis, venography and noninvasive testing in patients with symptomatic deep-vein thrombosis, N. Engl. J. Med., 304, 1561-7, 1981.
c) Cost-benefit analysis
Often it is not possible to measure one particular effect of several alternative solutions. Either the effects are of a different nature, or they are multiple. How in that case, can we reducemultiple or different effects to a common denominator?
Examples: compare home-based dialysis, hospital dialysis and kidney transplants not only in terms of life-years gained but also in terms of frequency of medical complications (multiple effects); compare high blood pressure screening in terms of life-years gained and anti-flu vaccination in terms of days unfit for work avoided (different types of effects).
In these instances, one has to go beyond the actual effect itself and assign a monetary value to the various effects being compared. This is basically a cost-benefit analysis.
The result can be presented in the form of a ratio (cost in $ / benefits in $) or a difference (net benefit of a particular programme - net benefit of some other programme... or of having no programme at all).
Translating life-years gained, days of unfit for work avoided and medical complications avoided or entailed into francs is no easy task. Which is why we sometimes quantify just some of the costs, namely those which can be easily measured.
Sometimes too, we measure costs and benefits from a particular point of view: from the point of view of the Nation as a community, or the social security system, the State, households, companies, etc. The differences can be considerable (e.g. cost-benefit of vaccinating workers in the catering industry against hepatitis A: the costs and benefits will vary markedly depending on your point of view).
d) Cost-utility analysis
Cost-utility analysis also attaches a value to the effects obtained but rather than being expressed in monetary terms, this value is measured in terms of the degree of utility of the effects obtained. That one and the same state of health (or illness) can be of varying utility depending on the individuals concerned can be seen from the following simple example: twins, one of whom is a bank clerk and the other a violinist, break their second finger on their left hand; although both are in the same state, if we ask each to rate on a scale of 0 to 10 the inconvenience of not having the use of their second finger (hence the utility of the treatment), we will receive very different replies.
This notion of utility allows us to take account of the quality of life afforded by different effects and at the same time provides a common denominator for comparing the costs and effects of different programmes.
This common denominator is normally expressed in "days of good health" or in "quality-adjusted life years" (QALYs).The number of life-years gained is weighted by an index expressing the degree of utility attached to the state of survival. Such an index must form the subject of opinion polls (conducted among patients or the general public) if it is to be valid.
C - Choosing a type of analysis
1) There is no fixed order of preference for these four types of economic evaluation.
2) Often, the researcher does not know in advance exactly what type of analysis he can apply; it may depend on the results of a clinical study associated with the evaluation: two treatments which ultimately prove to be equivalent will reduce a cost-minimization analysis to a cost-effectiveness description. Or a cost-benefit analysis may be combined with a cost-utility analysis, for particularly tricky problems (e.g. neonatal care).
3) The most important thing is to ascertain whether the complexity of the analysis is really commensurate with the question posed:
a) cost-benefit or cost-utility analyses primarily seek to determine whether a particular programme is "worth the trouble" compared with some other programme.
b) cost-minimization or cost-effectiveness analyses tacitly assume that the effect of the programme concerned is "worth the trouble".
4) Economic evaluation does not exempt us from having to think. It simply highlights the options or renders explicit certain options which have been ill-discerned or accepted without discussion. Whether or not economic considerations should prevail in the final decision is a matter for the decision-maker.
D - Types of cost and effects
- to the patient (and those close to him):cost of the treatment,
of travelling, etc.
- to the health service (in terms of staff, premises, equipment, running costs):
- variable costs: these vary in proportion to the volume of activity
- fixed costs: these do not vary (or do so only by leaps and bounds, by thresholds) according to the volume of activity.
Indirect costs (to the patient):
- loss of productivity (time wasted) in so far as it results from
participation in the programme
- psychological costs (loss of quality of life)
Externalities (external costs)
These are the costs occasioned by the programme beyond the scope of the health care system and the patient (or his family) - and tend to be fairly imponderable.
1_ Therapeutic effects (effectiveness, measured objectively, without any value judgements):reduction in the sickness ratio, reduction in the death rate, etc.
2_ Direct and indirect benefits (benefits, advantages)
Direct benefits for the health service: resources saved (although
this benefit can sometimes be a "negative" one: helping people to live longer
can increase the amount of use made of the health service!) Direct benefits for
the patient: resources saved (in terms of money or leisure time)
Indirect benefits for the patient: production gains (much debated area).
3_ Quality of life (utility):needs to be assessed separately.
E - Three important concepts
1) Marginal cost, marginal benefit, marginal effectiveness
This notion is defined here with regard to costs; it may equally be applied to benefits and effectiveness.
Average cost: total costs divided by total units of operation (patients, persons screened, vaccinated, etc.).
Marginal cost: additional cost entailed by one extra unit of operation.
Famous example: cost per detected case of cancer of the colon by looking for blood in the stools. The cost per case detected (average cost) obviously increases with the number of tests, but the cost per case detected thanks to the 6th test (marginal cost) was estimated at 47 million dollars in 1975!A prime example of how economic evaluation can clarify the cost of a particular option and make decision-makers aware of it.
2) Timescale adjustments to costs and benefits: "Present-worthing"
Quite apart from the effects of inflation, 100 francs available today is "worth" more than 100 francs available in one year's time: it is always preferable to obtain a particular benefit immediately and to defer the costs until later. The concept of "time preference" as used in economics, is a subjective one, which can vary from one society to another.
Estimating the present value of future costs and future benefits is done by means of a "present-worthing" (or discounting) procedure.
Discounting (in economics) is an operation whereby someone (normally a bank) advances the amount of a negotiable instrument ahead of its maturity date, less a deduction (discount rate), in return for ownership of this instrument.
The interest rate on loans operates according to the same mechanism; it "compensates" for the "loss of value" due to the "time preference". Thus, today's franc (F) will be worth more in n years (F') according to the equation:
F' = F (1 + r)n
where r is the "present-worthing" rate, the discount rate or the interest rate (the same formula applies for compound interest).
Conversely, the present value (F) of a franc in n years (F') is equal to:
F = F' / (1 + r)n
Since the time preference is not an exclusively financial concept, "present-worthing" also needs to be applied in cost -effectiveness and cost-utility studies (even though the effects here are not measured in monetary terms).The techniques for doing this can be examined elsewhere.
Some countries, in order to calculate the cost of the various programmes envisaged (health care, public works, etc.) officially recommend using a specific discount rate.
Reminder: the discounting procedure must be strictly distinguished from adjusting costs for inflation.
3) Sensitivity test
Economic evaluations can vary according to the degree of uncertainty, inaccuracy or controversy over the methods employed.
- the number of attacks due to a flu epidemic can vary from one year to another and cause the effects of a vaccination programme to vary
- the costs of hospitalisation can change rapidly
- various discount rates may be applied
- the indirect costs and benefits may be included or excluded from the analysis
- certain parameters are only roughly known and assumptions must be made as to their true value.
A sensitivity analysis will test the variation in the results (effects and costs) by simulating different variations in the parameters considered.
If a major variation in the parameters has little effect on the outcome of the analysis, the latter is said to be sound. Otherwise, some attempt will have to be made to discover the true value of the parameters by means of a validation procedure (test the working hypothesis under actual conditions, in the field).