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Economic evaluation of interventions in health care NS768 McFarland A (2014) Economic evaluation of interventions in health care. Nursing Standard. 29, 10, 49-58. Date of submission: July 14 2014; date of acceptance: August 29 2014.

Aims and intended learning outcomes

Abstract Economic evaluation is rapidly becoming an invaluable tool for healthcare decision making, especially in light of current pressures on health services to reduce costs and increase expenditure on health care. This article provides an overview of the main methods used for the economic evaluation of healthcare interventions, and their applications and limitations. It is intended as an introduction to the topic for readers with no background in economics, and can be used to review the basic concepts of economic evaluation in healthcare provision.

Author Agi McFarland Lecturer, School of Health and Life Sciences, Glasgow Caledonian University, Glasgow. Correspondence to: [email protected]

Keywords Costs and costs analysis, cost-benefit analysis, cost-effectiveness analysis, cost-minimisation analysis, cost-utility analysis, economic evaluation, healthcare spending

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This article provides an introduction to the main methods used for the economic evaluation of interventions in health care. After reading this article and completing the time out activities you should be able to: Explain the need for economic evaluation in a healthcare context. Describe the current trends in healthcare spending and the principle of scarcity. Discuss the main methods used for economic evaluation of healthcare interventions. Outline some important applications and limitations of these methodologies. Worked examples are presented throughout this article to contextualise the economic theories discussed. These examples are for illustrative purposes only, and are not intended as an endorsement for any particular intervention or treatment plan.

Introduction The provision of health care and how to pay for it are major economic concerns for most nations. The UK is consistently in the top half of spenders on health care in the Organisation for Economic Co-operation and Development (OECD) list of countries (Anderson et al 2005, OECD 2013). It has been calculated that NHS expenditure totalled £121 billion in the 2010/11 financial year. Historical comparisons show spending on the NHS is increasing. NHS spending represented 3.5% of the UK’s gross domestic product (GDP) in 1950/51. It rose to 8.2% of the UK’s GDP by 2010/11. The King’s Fund estimates that the UK will be spending almost

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CPD economic evaluation 20% of its entire wealth on health and social care provision in 50 years’ time if this trend continues (Appleby 2013). Between 1999/2000 and 2009/10, expenditure on the NHS in real terms (expenditure taking into account price changes resulting from inflation) rose by 92% (Harker 2012). The reasons for the increasing expenditure included: rising population numbers, growing national wealth and increases in the cost of healthcare provision caused by wage rises, and the development of medical technology. The ageing population may in part explain rising NHS spending, but this is a factor that is less influential than previously thought (Felder et al 2000, Reinhardt 2003, Seshamani and Gray 2004). Healthcare spending rises exponentially in the last few months of life (Hogan et al 2001). The effect of an ageing population might therefore be to delay, rather than increase, healthcare expenditure. Health systems are notoriously inefficient. The World Health Organization (2010) states that most countries fail to exploit fully the potential benefits of their healthcare spending. Thus, society as a whole is spending more on health – at an increasing rate that is unsustainable in the long term – and it is spending it using an inefficient system with the result that some people miss out. Identifying areas in the healthcare system in which efficiency gains may be made could help address these challenges: containing rising costs and extending coverage of services. The science of health economics addresses how to allocate scarce resources in the most efficient manner, getting the ‘biggest bang for your buck’ or best value for money. Economic evaluation is therefore an important analytical tool in health economics – it can help when choices must be made between several possible courses of action.

1 Consider what you have read so far about allocation of scarce resources. What potential benefits would a more efficient NHS offer? Look at the statements in Table 1 about the role of economic evaluation in health care, and decide if they are true or false.

Economic evaluation in health care The goal of the NHS is outlined in the NHS Constitution (Department of Health 2013) – ‘to improve the health and wellbeing of patients, communities and its staff’ – and this aligns with every healthcare system worldwide. A sum of £109 billion, the overall NHS budget for 2012-13, is a significant one in absolute terms, but scarcity of resources is relative. The ability of international health systems to improve health and wellbeing consistently outstrips their budget allocations (Smee 1997). This suggests that the same is true of the UK’s NHS and that its ability to provide healthcare and wellbeing services is limited by its £109 billion budget. High demand for NHS services continues, despite some efforts to control demand, such as limiting ‘non-urgent’ surgery (Hawkes 2012). Thus the demand for resources – the needs, wants and expectations of the population from the NHS – outstrips the supply of resources available, and a situation of scarcity is created in the NHS. In situations where there is scarcity, not all demands will be met. Decision makers therefore must set their priorities and decide which services best meet their overall objectives (Shiell et al 2002). In the context of the NHS, these decisions involve identifying those areas of healthcare spending that will achieve the maximum amount of health gain and wellbeing for the population as a whole. Complete time out activity 1 Economic evaluation provides a framework to help and inform decision making in many areas, including those highlighted in Table 1. It is most useful once questions concerning the effectiveness and availability of an intervention have been resolved (Cunningham 2001). Economic evaluation helps answer two main questions (Drummond et al 2005):

TABLE 1 True or false? Economic evaluation of health care can help decision makers by:  Identifying regional variations in access to health care and services.

True

False

 Showing which courses of action would result in the greatest benefits for a given spend.

True

False

 Providing bargaining power for purchasers of health care with suppliers of medical and healthcare products.

True

False

 Containing costs and managing demand for health care.

True

False

(Adapted from Morris et al 2007)

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Is it worth deploying this procedure, intervention or service rather than another, which we could do with the same money? Are we satisfied this is the best way to spend this money and that another way would not be better? Systematic identification and analysis of all relevant alternatives is integral to effective decision making. Economic evaluation can provide a robust decision-making framework to inform resource allocation decisions, rather than relying on previous resource allocation decisions or ‘gut feeling’ (Drummond et al 2005). Economic evaluation is especially important in the context of the NHS, where resources are ‘spent’ on helping people to achieve health and wellbeing. Complete time out activities 2 and 3

Types of economic evaluation In time out activity 3, knowing what was in both packages and how much each one cost would have helped you to make a decision with which you were more comfortable. Thus, knowing both the cost (the price) and the consequence (the contents) of each choice under comparison will help with decision making when planning how to allocate scarce resources (in time out 3, the £10 you had to spend). The underlying premise of any economic evaluation is a comparison of cost

TABLE 2 Illustration of economic decision making Package 1

Package 2

Contents: unknown

Contents: clearly described

Price: £10

Price: unknown

(Adapted from Drummond et al 2005)

and consequence for each relevant alternative. There is little variation in how costs are measured, but the consequences of health care may differ for different interventions and these may be measured or valued in many ways (Drummond et al 2005) (Figure 1). Several approaches to economic evaluation in health care have evolved as a result. These can be identified as: Cost-minimisation analysis. Cost-effectiveness analysis. Cost-utility analysis. Cost-benefit analysis.

Cost-minimisation analysis

Cost-minimisation analysis is undertaken when the interventions or programmes being compared have been shown to have equal or similar outcomes (Robinson 1993a). When this occurs, the only difference between the two is cost. Therefore the purpose of the evaluation becomes identification of the cheapest option. An outline of a simplified cost-minimisation analysis can be seen in Figure 2. Complete time out activity 4 Cost-minimisation analysis would be an appropriate framework to use to help you make up your mind, when considering your £10 spend for the two packages in time out 3, if you knew definitively that the contents of each package were the same. When you are certain about this, the question becomes: ‘Which is cheaper?’ The rational consumer would purchase the least costly option and have money left over from the initial budget to spend on other things. This method appears simple and is easily understood by those without an economics background: ‘If two treatments have the same outcome, then the lowest-cost treatment is the treatment of choice’ (Briggs and O’Brien 2001).

FIGURE 1 Simplified overview of economic evaluation of healthcare interventions

Option 1: Cost

Consequence:  Health state changed.  Resources gained.  Other value created.

Option 2: Cost

Consequence:  Health state changed.  Resources gained.  Other value created.

Choice

(Adapted from Drummond et al 2005)

2 Reflect on any resource allocation decisions in your area of practice. Have they resulted in new ways of working, new services or new treatments? How were these decisions made? How would you feel if these decisions were made using gut feeling or an ‘educated guess’? 3 You have £10 and are going to spend it on one of the two packages shown in Table 2. Consider which you would like to buy. Is there any further information that you would like before you make your decision? 4 Consider your decision on how to spend your £10 on the packages in time out 3. What extra supportive information would you need to make a decision about your spend, using a cost-minimisation analysis framework?

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CPD economic evaluation However, this is an over-simplification and hides an important consideration: what do we mean by ‘the same outcome’? This is a difficult question to answer taking into account all of the variables and perspectives you have to consider when comparing healthcare interventions. The gold standard for evaluating if, and how well, an intervention works is a randomised controlled trial (RCT) (Centre for Reviews and Dissemination 2009). Early work by health economists recommended that if an RCT found no statistically significant differences in effectiveness between the interventions being compared, then cost-minimisation analysis would be an appropriate method to use for economic evaluation (Drummond et al 1987). However, several problems have since been identified with this approach. RCTs are designed to identify any differences in clinical outcome, and statistical tests in these trials are used to determine the likelihood of any observed differences in these outcomes happening by chance. Different statistical tests and study designs are required when RCTs are exploring whether the interventions are equivalent. Whether or not the interventions being compared are equivalent can be established only from a particular subset of RCTs: the non-inferiority trial. Non-inferiority

trials must include much larger sample sizes than standard RCTs. Therefore they tend to be more cumbersome and expensive, and are rarely conducted. Nonetheless, non-inferiority trials are the only valid way to determine whether two interventions have the same outcome (Dakin and Wordsworth 2013). Another problem with determining ‘the same outcome’ is consideration of perspective: ‘For whom is the outcome the same?’. Is the outcome of the intervention the same for the clinician, patient or society? Altering your perspective may change your determination of whether or not the outcomes are equivalent (Haycox 2009). The practical remit of cost-minimisation analysis is therefore limited. Economic evaluation methods have evolved, and current thinking no longer advocates this approach (Dakin and Wordsworth 2013). Therefore cost-minimisation analysis studies found in the literature will be older or more recent studies designed to analyse economic healthcare data in the specific context of non-inferiority studies. Complete time out activity 5

Cost-effectiveness analysis

In time out 5, although the methods (medication) used to achieve the desired outcome are different,

FIGURE 2 Cost-minimisation analysis Option 1: Cost Which option is cheaper?

5 Post-operative nausea and vomiting (PONV) may be prevented by suitable prophylactic antiemetic therapy. Consider the information in Table 3 and choose which medication would be the most cost-effective option.

Same consequence or outcome produced regardless of option. Option 2: Cost

TABLE 3 Cost-effectiveness comparison between two drugs with the same indication Medication 1

Medication 2

Ondansetron 4mg

Droperidol 1.25mg

Price: $118.97 (approximately £74)

Price: $104.94 (approximately £65.27)

Consequence: PONV was prevented in 39% of patients

Consequence: PONV was prevented in 50% of patients

PONV = post-operative nausea and vomiting Currency conversion calculation on October 10 2014 (Adapted from Hill et al 2000)

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the actual outcome could be expressed in a single dimension: the prevention of PONV. Thus we have a choice between two situations in which cost and consequences are different, but we can measure both situations using common measures to enable a valid comparison. In such situations, cost-effectiveness analysis (Figure 3) is the most appropriate form of economic evaluation (Cunningham 2001). Measures of effectiveness should be common to all of the interventions being compared, and should be expressed in natural units such as life years gained, lives saved, level of reduction in blood pressure or from time out 5, the number of patients experiencing no PONV. Data on the effectiveness of an intervention should be gained from clinical trials in which a cost-effectiveness analysis has been conducted alongside the main body of research. Where this is not available or feasible (possibly because of the high costs of running such trials), data may be used from published literature. Problems may then arise as a result of unavailability of data or transferability to contexts outside those of the original trial (Robinson 1993b). The results of cost-effectiveness analyses are expressed as ratios. Cost-effectiveness analysis is used where decisions have to be made between alternative courses of action – such as different treatment regimens – for the same condition. In this context, the decision maker needs to know which additional benefits will be gained from the alternative courses of action and how much these will cost (Phillips 2009). Incremental cost-effectiveness ratios (ICERs) of the interventions being compared can help to answer this and are calculated as follows: ICER =

Cost of option 1 - cost of option 2

Units of desired effect for option 1 - units of desired effect for option 2

The ICER outcomes of the cost-effectiveness analysis can be considered diagrammatically using a cost-effectiveness plane (Figure 4). If the ratio of the new intervention shows it to be cheaper and more effective (Quadrant C), then the decision is simple. Equally, if the ICER shows the new intervention to be more expensive and less effective (Quadrant A), the decision is straightforward. Complexities arise when interventions are more effective but more costly (Quadrant B). The decision maker then needs to establish how much he or she is willing or able to spend on the increased effectiveness of the new intervention, given the budget (Black 1990). However, an important issue to remember is the problem of scarcity: if spending is increased in one area, it is decreased in another. Decisions about whether to invest in new technologies or developments, which may result in foregoing health benefits in other areas of the NHS, are an essential part of the role of the National Institute for Health and Care Excellence (NICE) (Claxton et al 2013). An example of a cost-effectiveness analysis is shown in Figure 5. Complete time out activity 6

Cost-utility analysis

A cost-effectiveness analysis is the methodology of choice when the outcomes of the interventions under comparison can be expressed using a common unit of effectiveness. However, its limitations are evident when the effectiveness of the interventions being compared cannot be measured using a common unit. Furthermore, a cost-effectiveness analysis might examine interventions in terms of ‘the cost of life years gained’, but the quality of those life years is not considered. Cost-utility analysis can help address these limitations (Palmer et al 1999). A cost-utility analysis may be thought of as a specific form of cost-effectiveness analysis in which the effectiveness of an intervention

6 Consider what you have read about different types of economic evaluation so far. Can you see any potential limitations of cost-effectiveness analysis? How might quality be valued using the methodologies discussed so far?

FIGURE 3 Cost-effectiveness analysis

Which option is more effective both in terms of cost and clinical outcome?

Option 1: Cost (input)

Consequence (output): Number of units of desired effect (such as ‘life years gained’ or ‘pain free days’).

Option 2: Cost (input)

Consequence (output): Number of units of desired effect (such as ‘life years gained’ or ‘pain free days’).

Comparison: Option 1: cost/effectiveness (input/output) versus Option 2: cost/effectiveness (input/output)

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CPD economic evaluation is measured through utility. Utility may be thought of as a valuation of health, with 0 being death and 1 being perfect health. Different health states may be valued using direct measurement methods such as rating scales or time trade-offs, where an individual is asked directly to consider how many years of life they would trade to be relieved of their disease burden, or indirectly using generic health state questionnaires (Tolley 2009) such as the EQ-5D (EuroQoL 2014). The health state valuation is then multiplied by the time the person spends in that health state, to give a measure of the quality-adjusted life years (QALYs) associated with the outcomes of each treatment under comparison. In this way, not only is the increase in the length of life accounted for, but also the quality of that extended life. If the decision maker is faced with the two options in Table 4, for example, using a cost-effectiveness analysis approach would look only at the costs and consequences of each intervention in terms of life years gained

(five years versus ten years). Using a cost-utility analysis approach, however, would also allow for information about the quality of these extra years to be taken into consideration. Thus, a treatment that maintains perfect health for five years would be weighted equally with a treatment that extended life for ten years, but at only 50% health. For these reasons, cost-utility analysis is recommended as the economic evaluation method of choice when quality of life is either an important outcome or is the primary outcome of interest (Cunningham 2001). Alternatives to the QALY, including the disability-adjusted life year (DALY) and healthy years equivalent (HYE), are also used in the literature (Drummond et al 2005), although the underlying principles of weighting time with the disease burden are common to them all. The valuation of health states, in itself, comes with many considerations. It is important not only to measure the relevant health dimensions but also to ensure these are measured using the correct method and the relevant population

FIGURE 4 Cost-effectiveness plane Cost increasing

Quadrant A

Quadrant B

New intervention is less effective and more costly than existing intervention.

New intervention is more effective and more costly than existing intervention.

Effect decreasing

Effect increasing

Quadrant D

Quadrant C

New intervention is less effective and less costly than existing intervention.

New intervention is more effective and less costly than existing intervention.

Cost decreasing (Adapted from Black 1990)

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(Tolley 2009). The use of different methods may elicit different valuations for the same health state (Dolan et al 1996). Equally, obtaining valuations by asking patients experiencing a particular health state will lead to different results from those obtained asking the general public to imagine that health state (Brazier et al 2005). Nonetheless, cost-utility analysis has an important role in resource allocation decisions in health care because of its ability to account for quality in health outcomes (Robinson 1993c). An example of a cost-utility analysis is shown in Figure 6.

Cost-benefit analysis

Cost-effectiveness and cost-utility analyses concern maximising benefit or value from an existing and limited budget, such as your £10 from time out activity 3. But what if the decision is whether to expand the budget, potentially to increase your £10 spend? In this situation you would want to spend any increased budget on things that would bring more benefit or value. To do this, you need to establish what the total set of benefits or values would be from investing your increased budget in each alternative option, and then compare them. Rather than focusing on a single

outcome of interest (as in cost-effectiveness analysis), or the utility offered by each option (as in cost-utility analysis), cost-benefit analysis enables the comparison of outcomes using a common denominator of value. Money is the most commonly used and understood measure of value, therefore cost-benefit analysis compares the consequences in monetary terms (Drummond et al 2005). In simple terms, we can think of cost-benefit analysis as comparing both the costs and consequences of a service or programme of health care in terms of monetary gains and losses (Figure 7). Let us consider your £10 spend in time out activity 3. A cost-benefit analysis would involve the decision potentially to increase your budget. In economics, rational consumers know what they want and intend to get the most for what they have. As a rational consumer you want to spend your extra money on getting as much as possible. Performing a cost-benefit analysis on the cost and consequences of the packages in time out activity 3 would enable you to know how much each package would cost (the inputs), and also what monetary value could be gained from the contents (the outputs). This information would enable you to see the monetary gains

FIGURE 5 Example of a cost-effectiveness analysis

Which of collagenase enzymatic debridement or hydrogel autolytic debridement is more effective for the treatment of pressure ulcers in a long-term care setting, both in terms of cost and clinical outcome?

Option 1 – collagenase enzymatic debridement: Cost of treatment (clinical and resource inputs) taken from previous randomised controlled trial.

Consequence (output): Expected number of days the wound was closed over one year.

Option 2 – hydrogel autolytic debridement: Cost of treatment (clinical and resource inputs) taken from previous randomised controlled trial.

Consequence (output): Expected number of days the wound was closed over one year.

Cost per patient

Days wound was closed

Cost-effectiveness ratio (cost per closed wound day)

Option 1

$2,003

317 days

$6 (approximately £3.70) per closed wound day

Option 2

$5,480

218 days

$25 (approximately £15.50) per closed wound day

Conclusion: Collagenase enzymatic debridement (option 1) was the more cost-effective option. The initial cost of the collagenase ointment dressing was higher ($179.13 versus $19.61), but the improved clinical effectiveness (measured in number of days the wound was closed) in speeding up the wound healing process offset the higher initial cost. Currency converstion calculation on October 10 2014. (Waycaster and Milne 2013)

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CPD economic evaluation of the investment in each package to help you maximise your gain or benefit from your extra spend. In such a way, decision makers may use cost-benefit analysis to inform their comparisons of increased spending on health

TABLE 4 Two examples of quality-adjusted life years (QALY) calculations Option 1

Option 2

Health state valuation = 1.0

Health state valuation = 0.5

Time spent in state = 5 years

Time spent in state = 10 years

QALY = 1.0 x 5 = 5 QALYs

QALY = 0.5 x 10 = 5 QALYs

services compared with using extra funds in other areas of the economy. Programmes or services may be evaluated to assess their overall effect: to determine whether spending on a new programme or service of health care will offer monetary gains or losses to society as whole (Robinson 1993d). Complete time out activity 7 Although cost-benefit analysis is considered to be the most economically sound (adhering to the basic principles of economics) of all the evaluation techniques discussed, the practicality of valuing healthcare benefits

FIGURE 6 Example of a cost-utility analysis

What are the costs and effects* of scalp cooling, compared with usual care? *Effects in preventing chemotherapy induced alopecia in patients receiving the same chemotherapy regimens. Cost utility assessed using quality-adjusted life years (QALYs)

Option 1 – scalp cooling (input): Costs were collected as part of the clinical trial running alongside the economic evaluation. Hospital and patient costs (for purchasing wigs and head coverings) also included.

Consequence (output) – QALY:  Patients self-report their health-related quality of life on a scale from 0 (as bad as death) to 1 (perfect health).  Weighted by the amount of time spent in that health state.

Option 2 – usual care, no scalp cooling (input): Costs were collected as part of the clinical trial running alongside the economic evaluation. Hospital and patient costs (for purchasing wigs and head coverings) also included.

Consequence (output) – QALY:  Patients self-report their health-related quality of life on a scale from 0 (as bad as death) to 1 (perfect health).  Weighted by the amount of time spent in that health state.

Conclusion: The study found that scalp cooling resulted in an additional 0.04 QALY gain over no scalp cooling and it cost €269 (approximately £212) to gain this extra benefit. The authors concluded that the cost utility of scalp cooling was dependent on how much society was willing to pay for each additional QALY gained. Therefore, to gain a single QALY would cost €6,725 (25 x 0.04 QALYs at €269). In the study setting of the Netherlands, where the threshold of willingness to pay for one additional QALY gained is between €20,000 and €40,000, the results would support scalp cooling as a cost-effective intervention. Currency converstion calculation on October 10 2014. (van den Hurk et al 2014)

FIGURE 7 Cost-benefit analysis

Which option provides the best monetary return on investment?

Option 1: Cost (input)

Consequence (output): Monetary resources gained.

Option 2: Cost (input)

Consequence (output): Monetary resources gained.

Comparison: Option 1: total cost (input + output) versus Option 2: total cost (input + output)

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in terms of money presents great challenges and problems (McIntosh et al 1999). Three main approaches have evolved in the literature: human capital, revealed preferences and stated preferences (Baker et al 2014). The human capital approach attempts to value the effect of health care by viewing a person’s value through their potential to earn money in employment. The cost of sickness can be calculated by multiplying any time missed from work because of sickness by the wage rate or the value of work foregone because of premature death from illness (Zarnke et al 1997). In this way, the benefits of health care can be valued in terms of money that the person would otherwise have missed out on because of sickness (or premature death) as a result of not having the healthcare input. However, there are clear disadvantages of this method, including discrimination against those who are not in employment, for example students or people who are retired, and lack of consideration for

the value or quality of life (Johannesson and Jönsson 1991). The revealed preferences approach uses observation of individuals’ actual behaviours to establish implicit personal valuations of health (Robinson 1993d). For example, some people accept higher risk or hazardous jobs that may affect their health for an increased rate of pay. The rate of the wage increase required to compensate for this increased health risk can then be used to reveal their monetary valuations of health (Drummond et al 2005). This approach has several limitations but the main problem is the limited availability of situations in which attitudes to risk can be observed (Robinson 1993d). Researchers have developed the use of hypothetical scenarios to elicit individuals’ health valuations, as a result of this limitation. Contingent valuation studies allow participants to state their preferences to hypothetical outcomes of a chosen programme or service under consideration (Drummond

7 How would you place a monetary value on the outcome of a health service input such as improved health? Consider which approaches, if any, you think would be feasible and reliable. Do you envisage any potential problems with doing this?

References Anderson GF, Hussey PS, Frogner BK, Waters HR (2005) Health spending in the United States and the rest of the industrialized world. Health Affairs. 24, 4, 903-914. Appleby J (2013) Spending on Health and Social Care over the Next 50 Years. Why Think Long Term? The King’s Fund, London. Baker R, Donaldson C, Mason H (2014) Willingness to pay for health. In Culyer AJ (Ed) Encyclopedia of Health Economics. Elsevier, London, 495-501. Bala MV, Mauskopf JA, Wood LL (1999) Willingness to pay as a measure of health benefits. Pharmacoeconomics. 15, 1, 9-18. Black WC (1990) The CE plane: a graphic representation of cost-effectiveness. Medical Decision Making. 10, 3, 212-214.

Brazier J, Akelhurst R, Brennan A et al (2005) Should patients have a greater role in valuing health states? Applied Health Economics and Health Policy. 4, 4, 201-208. Briggs AH, O’Brien BJ (2001) The death of cost-minimization analysis? Health Economics. 10, 2, 179-184. Centre for Reviews and Dissemination (2009) Systematic Reviews: CRD’s Guidance for Undertaking Reviews in Health Care. Third edition. www.york.ac.uk/inst/ crd/pdf/Systematic_Reviews.pdf (Last accessed: October 6 2014.) Claxton K, Martin S, Soares M et al (2013) Methods for the Estimation of the NICE Cost Effectiveness Threshold. Final Report. CHE Research Paper 81. tinyurl. com/n83dxvs (Last accessed: October 6 2014.) Cunningham SJ (2001) An introduction to economic

evaluation of healthcare. Journal of Orthodontics. 28, 3, 246-250.

Economic Evaluation of Healthcare Programmes. Third edition. Oxford University Press, Oxford.

Dakin H, Wordsworth S (2013) Cost-minimisation analysis versus cost-effectiveness analysis, revisited. Health Economics. 22, 1, 22-34.

EuroQol (2014) What is EQ-5D. www.euroqol.org (Last accessed: October 6 2014.)

Department of Health (2013) The Handbook to the NHS Constitution. The Stationery Office, London.

Felder S, Meier M, Schmitt H (2000) Healthcare expenditure in the last months of life. Journal of Health Economics. 19, 5, 679-695.

Dolan P, Gudex C, Kind P, Williams A (1996) Valuing health states: a comparison of methods. Journal of Health Economics. 15, 2, 209-231. Drummond MF, Stoddart GL, Torrance GW (1987) Methods for the Economic Evaluation of Healthcare Programmes. First edition. Oxford University Press, Oxford. Drummond MF, Sculpher MJ, Torrance GW, O’Brien BJ, Stoddart GL (2005) Methods for the

Harker R (2012) NHS Funding and Expenditure. www.nhshistory.net/ parlymoney.pdf (Last accessed: October 6 2014.) Hawkes N (2012) Nine in 10 primary care trusts are rationing access to four procedures. British Medical Journal. 344, e4258. Haycox A (2009) What is Cost-Minimisation Analysis? www.tinyurl.com/q5spgz4 (Last accessed: October 6 2014.)

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CPD economic evaluation

8 Now that you have completed the article, you might like to write a reflective account. Guidelines to help you are on page 62.

et al 2005). One of the most established methods used in the stated preferences approach is willingness to pay. Willingness to pay attempts to value health by asking people how much they would be willing to pay (or accept in compensation) to avoid the effect of illness or to obtain the benefits (or forego them) resultant from receiving health care (Bala et al 1999). By using the same unit of value (money), cost-benefit analysis allows researchers to compare the outcome of alternative healthcare interventions or programmes even if they differ, for example vaccination programmes compared with interventions for hypertension (Cunningham 2001). Although cost-benefit analysis is the only evaluation method to provide information on the absolute effects of healthcare programmes (Drummond et al 2005), methodological difficulties with attributing monetary valuations to health limit the practical application of this approach. Researchers continue to evolve methods used

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OECD (2013) Health at a Glance 2013: OECD Indicators. www.oecd.org/els/health-systems/ Health-at-a-Glance-2013.pdf (Last accessed: October 6 2014.) Palmer S, Byford S, Raftery J (1999) Economics notes: types of economic evaluation. British Medical Journal. 318, 7194, 1349. Phillips C (2009). What is Cost-Effectiveness? www.medicine. ox.ac.uk/bandolier/painres/ download/whatis/Cost-effect.pdf (Last accessed: October 6 2014.) Reinhardt UE (2003) Does the aging of the population really drive the demand for healthcare? Health Affairs. 22, 6, 27-39. Robinson R (1993a) Costs and cost-minimisation analysis. British Medical Journal. 307, 6906, 726-728. Robinson R (1993b) Cost-effectiveness analysis. British Medical Journal. 307, 6907, 793-795.

in cost-benefit analysis, in an attempt to find reliable, practical solutions to the identified problems (McIntosh et al 1999).

Conclusion This article provides the reader with an introduction to the main methods used for the economic evaluation of interventions in healthcare. Economic evaluations have been used extensively in other areas of the economy, but their application in a healthcare context can be controversial. The focus on economic evaluations of healthcare interventions is likely to increase, given the current pressures on healthcare budgets resulting from the global economic downturn, coupled with increasing expenditure on health care. Nurses should be fully informed about this emerging body of knowledge if they are to maintain an important role in healthcare decision making and in delivering evidence-based care NS Complete time out activity 8

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van den Hurk CJ, van den Akker-van Marle ME, Breed WP, van de Poll-Franse LV, Nortier JW, Coebergh JW (2014) Cost-effectiveness analysis of scalp cooling to reduce chemotherapy-induced alopecia. Acta Oncologica. 53, 1, 80-87. Waycaster C, Milne CT (2013) Clinical and economic benefit of enzymatic debridement of pressure ulcers compared to autolytic debridement with a hydrogel dressing. Journal of Medical Economics. 16, 7, 976-986. World Health Organization (2010) Health Systems Financing: The Path to Universal Coverage. World Health Report 2010. www.who. int/whr/2010/en (Last accessed: October 6 2014.) Zarnke KB, Levine MA, O’Brien BJ (1997) Cost-benefit analyses in the health-care literature: don’t judge a study by its label. Journal of Clinical Epidemiology. 50, 7, 813-822.

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Economic evaluation of interventions in health care.

Economic evaluation is rapidly becoming an invaluable tool for healthcare decision making, especially in light of current pressures on health services...
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