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The Role of Economic Evaluation and Cost-Effectiveness in Program Science
Aslam H. Anis, PhD, FCAHS
CAHR Ancillary Program Science SessionThursday, April 20, 2015
2:30 pm – 3:00 pmMetro Toronto Convention Centre, Toronto, Ontario
Economic Evaluation: Rationale
• Scarcity of resources– Not enough people, time, facilities or dollars
to satisfy all wants or implement all beneficial health activities.
• Maximize Benefits– Must use health resources efficiently to
maximize benefits from health activities
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Incremental Cost-Effectiveness Ratio
Compares a specific (new) intervention to a stated alternative (old) intervention
(Costnew – Costold )/(Effectsnew –Effectsold)
Incremental resources required by the intervention
Incremental health effects gained by using the intervention
C/EUsually based on single interventions or treatments
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What if health activity is multifaceted?
• Involves the application of acquired scientific knowledge to improve– program design and delivery– system level logistics including complex systems– implementation of guidelines and best practices
• Requires estimation of both program level and system level costs and externalities
• Allocative and distributional efficiency i.e. equity
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In the context of HIV
• Involves approaches to maximize return on investments in HIV prevention efforts (World Bank):– Where do new HIV infections come from?
• Identifying at risk populations, targeted testing
– What interventions do we have?• beyond treatment to improve adherence and
effectiveness
– How do we implement, monitor and evaluate these interventions?
Alternative Expressions
• Project Appraisal• Program Evaluation• Health Technology Assessment• Systematic review and Implementation• Program Science
Making Informed Decisions
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If proven to work, how could it be implemented. Requires a Program Science approach and more importantly requires partnerships with funders and policy makers
Complex systems
• In the 1970’s, Disney started using complex models to understand how guests flowed.
• Question: With 5 monorail trains and long waits, what do you think their simulation model suggested?
Complexity in healthcare
• Our healthcare systems are complex:– Many patients– Multiple resources– Different “paths”– Numerous variables
• We can learn from Disney, from other industries, and from other healthcare systems
Resource planning in the DTES
Network (queueing) model tracks patient flow through services and examines different scenarios.
Werker, Puterman, & Krausz
Resource planning in the DTES
Werker, Puterman, & Krausz
• Outcome:– Proof of concept model– High level policy ideas:
• Increased capacity is cost-effective in some areas but not in others
• Reductions in crime are associated with the largest improvements
• Outcomes are sensitive to assumptions about population size, crime costs, and several other parameters
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PBMA: Program Budgeting Marginal Analysis
• Budgeting in government often a zero sum game• PBMA is an adaptation of decision analytic
techniques to consider both disinvestment or contraction from low benefit services and reinvestment or expansion into higher benefit ones
• Marginal analysis that can evaluate incremental changes in outcomes e.g. costs, benefits, other when resources within a program are increased, decreased or deployed in different ways
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Mental Health in Norfolk
Ball H, Kemp L & Fordham RJ. 2009 ‘Road testing PBMA in three English regions: the Norfolk Mental Health PBMA Pilot’ The Psychiatric Bulletin Psychiatric Bulletin 33(4) 141-4 (April).
Adopted from slides by Rick Fordham @ EAU
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MCDA: Multi-Criteria Decision Analysis
• MCDA– Based on economics, operations research, or other
quantitative decision making approaches– Seeks to improve/optimize more than one measure, e.g.,
• Cost ↓• Quality ↑• Room/bed/resource utilization ↓• Patient satisfaction ↑
• Practical approach that reflects relative priorities • The process can be open, inclusive and deliberative
by engaging key stakeholders
Alternative Expressions
• Project Appraisal• Program Evaluation• Health Technology Assessment• Systematic review and Implementation• Program Science• PBMA• MCDA
Making Informed Decisions
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Concluding remarks• Have covered a lot of ground
– System comparisons in terms of outcomes– Performance of health system– Access issues
• Systems Change• Health Care Quality• Program Science is an approach that calls on all of the
above tools• Lots of opportunity to collaborate amongst disciplines • Unlike typical Economist – purveyors of the dismal
science, I feel optimistic about Program Science!
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