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Flashcards in Health Economics: Introduction and Overview Deck (19)
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1
Q

What is the difference between a normative stance and a positive stance with regards to economic analyses?

A
  • A normative stance indicates which allocation decision should be followed if certain objectives are to be achieved.
  • A positive stance provides information on the likely costs and benefits associated with a particular alternative course of action.
2
Q

Define opportunity cost.

A

The value of the consequences forgone by choosing to deploy resources in one way rather than in their best alternative use.

3
Q

What is the ‘technical’ definition of efficiency?

A

Producing output in the best way possible, without wasting scarce resources.

4
Q

What is the ‘allocative’ definition of efficiency?

A

Producing the pattern of output that best satisfies the pattern of consumers’ wants and needs.

5
Q

What is the key objective of economic analyses with regards to healthcare?

A

To promote the efficient use of health care uses.

6
Q

Define economic evaluation.

A

A comparative analysis of alternative courses of action in terms of both costs and consequences.

7
Q

List 2 main types of economic evaluation in health economics.

A

1 - Cost effectiveness analyses.

2 - Cost utility analyses.

8
Q

What is the difference between a cost effectiveness analysis and a cost utility analysis?

A
  • A cost effectiveness analysis has ‘natural’ units, such as lives saved or increased survival, whereas a cost utility analysis does not.
  • A cost utility analysis can consider more than one outcome (usually survival and QALYs), whereas a cost effectiveness analysis has one single outcome.
9
Q

What is an incremental approach to economic evaluation?

A

An incremental economic evaluation answers the following question:

What is the difference in costs and consequences of option A compared to B?

10
Q

Define marginal benefit.

A

The increase in benefit as a result of increasing production by one additional unit.

11
Q

Define marginal cost.

Give an example of marginal cost.

A
  • The increase in cost as a result of increasing production by one additional unit.
  • E.g. to detect another cancer after the 6th test (where usually 99% of the cancers have already been identified) the marginal cost is $47m, as it becomes increasingly difficult to detect any more.
12
Q

Define incremental cost.

A

The difference in marginal cost between two different programmes that share the same outcome.

13
Q

How are the results of cost effectiveness analyses presented?

A

In terms of cost per unit effect.

14
Q

What type of efficiency question do cost effectiveness analyses address?

A

Technical efficiency questions.

15
Q

How is a decision ruled in cost effectiveness analyses?

A

By using an ICER (incremental cost effectiveness ratio).

16
Q

What is an incremental cost effectiveness ratio (ICER)?

How is an incremental cost effectiveness ratio calculated?

A
  • The cost per extra unit of benefit gained from an intervention as compared with another.
  • ICER = difference in costs / difference in consequences.
17
Q

How is a decision ruled in cost utility analyses?

A

By using a cost utility ratio (CUR).

18
Q

What is a cost utility ratio (CUR)?

How is a cost utility ratio calculated?

A
  • The cost per number of QALYs gained from an intervention as compared with another.
  • CUR = Difference in costs / difference in number of QALYs.
19
Q

According to NICE, what cost utility ratio is considered to be cost effective?

A
  • < £20,000 per QALY.

- Between £20,000 and £30,000 is a grey area and other factors are taken into account.