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Health Economics is best known for its
techniques of economic evaluation
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Pharmacoeconomics began in
1986
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The principle criterion used within economic evaluation is
efficiency
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Identifies, measures and compares the costs and consequences of use of pharmaceutical products and services
pharmacoeconomics
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Inputs
economic resources
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Outputs
Health and economic consequences
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Pharmacoeconomics is about determinit alternatives that provide
the best health care outcome per dollar spent
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Outcomes research is defined more broadly as
studies that attempt to identify, measure and evaluate the results of health care services in general
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Pharmacoeconomics is not a synonym of
outcomes research
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pharmacoeconomics is a division of
- outcomes research
- can be used to quantify the value of pharmaceutical products and services
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Distinquishes pharmacoeconomic evaluation methods from cost containment strategies
cost and consequences
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the value of resources consumed by a program or drug therapy of intrest
cost
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the effects, outputs or outcomes of the program of drug therapy of interest
consequences
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balancing costs and consequences with pharmacoeconomic evaluation
cost per unit of effect
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resources consumed int he prevention, detection or treatment of disease or illness
direct costs
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non-medical costs
transportation, child/family care expenses
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Morbidity costs incurred from missing work or mortality costs from premature death
Indirect costs
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Nonfinancial outcomes of disease
intangible costs
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additional cost that a program or treatment alternative impose over another
incremental costs
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value of a resource in its next best use
opportunity costs
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human capital method & willingness to pay method
Measure indirect and intangible benefits
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Human capital method
- wage rate calculation
- missed time because of illness
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Willingness to pay method
open ended or close ended questions asked
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outcome unit is dollars
cost-benefit analysis
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outcome unit is natural units (life-years gained, mmol/l blood glucose, mm Hg blood pressure)
cost-effectiveness
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outcome unit is assumed to be equivalent in comparitive groups
cost-minimization
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outcome unit is quality-adjusted life year or other utilities
cost-utility
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Evaluation method used if outcomes are measured but outcomes are not equivalent
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Economic evaluation used if outcomes are not being measured
Cost-analysis
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Full pharmacoeconomic evaluation
- assesses both costs and benefits
- CMA
- CEA
- CUA
- CBA
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Partial pharmacoeconomic evaluation
- examin only a portion of costs versus the consequences
- cost analysis
- cost of illness
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cost benefit analysis provides _________ efficiency information.
allocative
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cost utility analysis provide ________ efficiency information.
technical
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Ecaluations provide information to
assist in the decision making process
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more than one type of evaluation can be used simultaneously (T/F)
True
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Assessing the cost and consequences of products and service depends on the
perspective of the evaluation
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common perspectives for evaluations are
- patient
- provider
- payer
- society
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measures cost incurred due to illness or treatment
patient perspective
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measures primary costs of drugs, lab tests, supplies and salaries of health care professionals
provider perspective
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measures costs from insurance companies, government or employer perspective
payer perspecive
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considers benefit to society as a whole
societal perspective
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determines how sensitive the results are to variation or uncertainty
- sensitivity analysis
- tornado diagram
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when to utilize CEA
- treatment alternatives are not equivalent
- not desireable to express outcomes in monetary units
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compares the cost and consequences of two or more therapies to determine which has the best outcome and lowest cost
CEA
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allows researchers to summarize the health benefits and resources used by policy competing programs so that policy makers can choose among them
CEA
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CEA are presented as an ______ ratio of costs to outcomes
incremental
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Incremental cost effectivness ratio calculation
(cost 1 - cost 2) / (outcome 1 -outcome 2)
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Reflects the cost per benefit of a new strategy independent of other alternatives
ACER
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reflects cost per unit of benefit of switching treatmets
ICER
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a form of pharmacoeconomic evaluation that integrates both costs and consequences of health programs within the utility analysis framework
CUA
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CUA is often considered as an extension of
CEA
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CUA can compare ____, ____ and _____ for patient years
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results of CUA are most often expressed as
cost per QALY gained
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a full year of health in a disease fre patient would equal
1 qualy
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Scales for measuring QALY
- visual analogue scale
- Standard Gamble
- Time Trade off
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single index incorporating mortality and morbidity in health care
QALY
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VAS scale
rating from 0 (least) to 100 (most) desirable health state
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VAS
- most commonly used technique
- not a true measure of utility
- measures preferences under certainty (value)
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Standard Gamble
- involves uncertainty
- willingness to accept risks
- gold standard
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Time Trade off
quality of life vs quantity of life
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differences between CEA and CUA
- CUA is a special case of CEA
- patient preference in the denominator of the ratio
- CUA:QALY
- CEA:Natural units
- intermediate outcomes not used in CUA
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the most difficult and expensive method when compared to other types of evaluations
CUA
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CUA is recommended when:
quality of life is the important outcome
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CUA should be employed when
- the program affects both morbidity and mortality
- there is a common unit of outcome
- wide range of outcomes
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Categories of benefits for CBA
- personal health benefits
- medical resource benefits
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Advantages of CBA
- compare alternatives that do not have the same unit of effectivness
- determine program with highest net benefit
- ranks programs by priority
- stimulates research for alternatives
- points out inferior programs
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Disadvantages of CBA
- only when outcomes can be converted to dollars
- bias may occur in value of outcomes
- intangible costs are not measured
- must use sensitivity analysis
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projects with highest benefit:cost ratio should be used when
resources are limited
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use projects with B:C ratio greater than one when
funds allow
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first 5 guidlines for conducting pharmacoeconomic analysis
- 1. define problem
- 2. determine perspective
- 3. determine alternatives
- 4. select the method
- 5. select and measure costs and outcomes
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last 5 guidlines for conducting pharmacoeconomic analysis
- 6. identify resources
- 7. establish probabilities of outcome events
- 8. use decision analysis
- 9. discount costs and sensitivity analysis
- 10. present results
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