Health economy – applications for Health economy – applications for balneotherapybalneotherapy

Health economy – applications for Health economy – applications for balneotherapybalneotherapy

Dr.Dr. LászlóLászló HodinkaHodinka

National Insitute of Rheumatology and PhysiotherapyNational Insitute of Rheumatology and Physiotherapy

IntroductionIntroduction

Health economics is of growing importance as costcontainment Health economics is of growing importance as costcontainment

policies worldwide force healthcare managers and doctors alike to policies worldwide force healthcare managers and doctors alike to

consider the cost of treatment as well as its clinical efficacy and consider the cost of treatment as well as its clinical efficacy and

safety. Those responsible for allocating healthcare resources need safety. Those responsible for allocating healthcare resources need

to prioritise so that maximum health gain can be obtained from to prioritise so that maximum health gain can be obtained from

any given budget. Economic evaluation provides a decision-any given budget. Economic evaluation provides a decision-

making framework that can be used to assist in these difficult making framework that can be used to assist in these difficult

decisions.decisions.

What is health economicsWhat is health economics

Health economics is the application of economic principles to the Health economics is the application of economic principles to the

problem of allocation of scarce healthcare resources. The basic problem of allocation of scarce healthcare resources. The basic

assumption in economic evaluation is that there are not, and never assumption in economic evaluation is that there are not, and never

will be, enough resources to satisfy all needs completely. will be, enough resources to satisfy all needs completely.

Accordingly trade-offs have to be made. By providing methods for Accordingly trade-offs have to be made. By providing methods for

assessing the relative costs and benefits or different treatments, assessing the relative costs and benefits or different treatments,

health economics enables difficult decisions on resource allocation health economics enables difficult decisions on resource allocation

to be made rationally.to be made rationally.

Introduction to health economy Introduction to health economy balneotherapy applicationsbalneotherapy applications

Validity Validity

Efficacy, effectiveness and efficiency Efficacy, effectiveness and efficiency

Types of analyses Types of analyses

Models for balneotherapyModels for balneotherapy

The concept of validity in research The concept of validity in research

Two distinct types are of relevance Two distinct types are of relevance

Internal validityInternal validity: the degree to which the results of a study are : the degree to which the results of a study are true for the group of subject who participated in the trial. true for the group of subject who participated in the trial. In essence, internal validity deals with the casual In essence, internal validity deals with the casual relationship between the intervention and the observed relationship between the intervention and the observed effect. effect.

External validityExternal validity: the extent to which the results of the study : the extent to which the results of the study are generalisable to individuals outside the study. are generalisable to individuals outside the study. Without internal validity the results of a study cannot be Without internal validity the results of a study cannot be believed, but without external validity the results cannot be believed, but without external validity the results cannot be generalised beyond the setting of that particular study.generalised beyond the setting of that particular study.

The validity balance of experimental The validity balance of experimental designsdesigns

Internal validity Internal validity

Controlled design Controlled design Subject homogeneity Subject homogeneity Double blind Double blind Placebo comparison Placebo comparison Forced compliance Forced compliance Fixed proceduresFixed procedures

External validity External validity

Naturalistic design Naturalistic design Representativeness Representativeness Open treatment Open treatment Usual care Usual care Real compliance Real compliance Flexible proceduresFlexible procedures

The design determines the extent of generalisabilityThe design determines the extent of generalisability

Efficacy, effectiveness and efficiencyEfficacy, effectiveness and efficiency

Traditionally, three issues were addressed in the evaluation of a drug or Traditionally, three issues were addressed in the evaluation of a drug or healthcare procedure: safety, efficacy and effectiveness. Economists have now healthcare procedure: safety, efficacy and effectiveness. Economists have now added a new dimension, the question of efficiency. added a new dimension, the question of efficiency.

The three ’E’s’ have very different and distinct meanings: The three ’E’s’ have very different and distinct meanings:

EfficacyEfficacy the clinical effect of a treatment the clinical effect of a treatment

EffectivenessEffectiveness the contribution a treatment or procedure makes to a patient’sthe contribution a treatment or procedure makes to a patient’sutility or welfare utility or welfare

EfficiencyEfficiency achievement of maximum possible benefit (health gain) for aachievement of maximum possible benefit (health gain) for agiven budgetgiven budget

Levels of health care evaluationLevels of health care evaluation

Efficiacy Efficiacy

Single clinical outcome Single clinical outcome

Time dependent Time dependent

Clinical trial setting Clinical trial setting

Effectiveness Effectiveness

Global outcome Global outcome

Time cumulative Time cumulative

Naturalistic setting Naturalistic setting

Efficiency Efficiency

Cost/effectiveness Cost/effectiveness

Time cumulative Time cumulative

Naturalistic settingNaturalistic setting

Direct costs Direct costs

Changes in resource utilisation Changes in resource utilisation that are required or attributable that are required or attributable to the intervention being studied. to the intervention being studied.

Includes both medical and non-Includes both medical and non-medical components.medical components.

Indirect costsIndirect costs

The monetary value of the changes The monetary value of the changes in productivity that a patient in productivity that a patient experiences as a result of experiences as a result of morbidity or mortality. morbidity or mortality.

Types of costsTypes of costs

BenefitsBenefits

The benefits of healthcare are more difficult to quantify than costs, The benefits of healthcare are more difficult to quantify than costs,

since they are frequently intangible (i.e. less pain, greater since they are frequently intangible (i.e. less pain, greater

happiness, improved quality of life etc.). In health economics, happiness, improved quality of life etc.). In health economics,

benefits are often considered in terms of the savings made by benefits are often considered in terms of the savings made by

effective treatment of the patient (i.e. savings in doctors’ and effective treatment of the patient (i.e. savings in doctors’ and

nurses’ time, savings in hospitalisation, lower sickness benefits).nurses’ time, savings in hospitalisation, lower sickness benefits).

Quality of life studiesQuality of life studies

Quality of life assessments are beginning to be included routinely in Quality of life assessments are beginning to be included routinely in

clinical trials. Disease-specific questionnaires are most often used to clinical trials. Disease-specific questionnaires are most often used to

determine quality of life. Quality of life can also be assessed with determine quality of life. Quality of life can also be assessed with

general health profiles, questionnaires which are less sensitive to general health profiles, questionnaires which are less sensitive to

change than diseaes-specific scales, but which enable the change than diseaes-specific scales, but which enable the

comparison of quality of life of patients suffering from different comparison of quality of life of patients suffering from different

diseases. Quality of life studies are descriptive, and do not provide diseases. Quality of life studies are descriptive, and do not provide

an objective health economic evaluation.an objective health economic evaluation.

EuroQoL weighted health status of arthrosis EuroQoL weighted health status of arthrosis patients compared to the general populationpatients compared to the general population

0.6340.517

0.4590.34 0.34

0.8750.813

0.736 0.705 0.675

0

0.2

0.4

0.6

0.8

1

40 50 60 70 80

Age

Ou

alit

y o

f L

ife

RA patients

General population

0.8620.777

0.7240.671 0.6390.688

0.4290.339

0.4150.359

0

0.2

0.4

0.6

0.8

1

40 50 60 70 80

Life Years

Hea

lth

sta

tus

GeneralpopulationArth patients

Cost-effectiveness analysisCost-effectiveness analysis

This analysis is used to compare treatment options with outcomes This analysis is used to compare treatment options with outcomes

that differ in size, but are measurable in the same units. Cost-that differ in size, but are measurable in the same units. Cost-

effectiveness studies avoid the problem of assessing a benefit such effectiveness studies avoid the problem of assessing a benefit such

as improved life expectancy in financial terms bymeasuring it in as improved life expectancy in financial terms bymeasuring it in

natural units e.g. years of life gained or patients successfully treated. natural units e.g. years of life gained or patients successfully treated.

The option with the lowest cost per natural unit gained is considered The option with the lowest cost per natural unit gained is considered

the most efficient treatment.the most efficient treatment.

Cost-utility analysisCost-utility analysis

This is a special form of cost-effectiveness analysis which attempts This is a special form of cost-effectiveness analysis which attempts to measure the intangible benefit of improved quality of life. Cost-to measure the intangible benefit of improved quality of life. Cost-utility analysis compares the costs of different procedures or utility analysis compares the costs of different procedures or treatments with their outcomes measured in ’utility-based’ units – treatments with their outcomes measured in ’utility-based’ units – units that relate to a person’s level of well being. units that relate to a person’s level of well being.

The most commonly used unit is the quality adjusted life year or The most commonly used unit is the quality adjusted life year or QALY. QALYs are calculated by estimating the total life years QALY. QALYs are calculated by estimating the total life years gained from a procedure and weighting each year to reflect the gained from a procedure and weighting each year to reflect the quality of life in that year. Obviously, one year of perfect health is quality of life in that year. Obviously, one year of perfect health is clearly more ’valuable’ to a patient than a year of impaired health. clearly more ’valuable’ to a patient than a year of impaired health. The treatment with the lowest cost per QALY is the most efficient The treatment with the lowest cost per QALY is the most efficient option.option.

I. Economic evaluation methods for I. Economic evaluation methods for comparing different treatment optionscomparing different treatment options

MethodMethod ApplicationApplication Costs measuredCosts measured Benefit unitsBenefit units

Cost-minimasationCost-minimasationOptions of differentOptions of differentcosts and identicalcosts and identicalbenefitsbenefits

Direct and/orDirect and/orindirect costsindirect costs

NoneNone

Cost-benefitCost-benefitOptions of differentOptions of differentcosts and differentcosts and differentbenefitsbenefits

Direct and/orDirect and/orindirect costsindirect costs

MonetaryMonetary

Cost- Cost- effectivenesseffectiveness

Options of differentOptions of differentcosts and differentcosts and differentbenefits, but similarbenefits, but similartypes of outcometypes of outcome

Direct and/orDirect and/orindirect costsindirect costs

NaturalNatural(e.g.: years of(e.g.: years oflife gainedlife gained

Cost-utilityCost-utilityOptions of differentOptions of differentcosts and differentcosts and differentbenefits benefits

Direct and/orDirect and/orindirect costsindirect costs

Natural, adjustedNatural, adjustedfor „quality of life”for „quality of life”

II.II.

MethodMethod AdvantagesAdvantages DisadvantagesDisadvantages

Cost-minimasationCost-minimasation Simplicity-lowest cost treatment is the Simplicity-lowest cost treatment is the most efficientmost efficient

Limited to special situation i.e. where all Limited to special situation i.e. where all alternatives leave identical outcomesalternatives leave identical outcomes

Cost-benefitCost-benefit Measures „profitability” Widely Measures „profitability” Widely applicable (e.g. compare health care and applicable (e.g. compare health care and education spending)education spending)

Difficult to express all benefits in monetary units- Difficult to express all benefits in monetary units-

e.g. average earnings vary by age, sex and social e.g. average earnings vary by age, sex and social classclass

Difficult to measure Intangible benefits Difficult to measure Intangible benefits

(although ’willingness-to-pay’ techniques being (although ’willingness-to-pay’ techniques being

developed)developed)

Cost- effectivenessCost- effectiveness Benefit units not subject to problems of Benefit units not subject to problems of expression in monetary termsexpression in monetary terms

Can compare alternatives with similar Can compare alternatives with similar outcomesoutcomes

Cannot measure ’profitabilityCannot measure ’profitability

Cannot measure intangible benefitsCannot measure intangible benefits

Cannot trade-off quality against length of lifeCannot trade-off quality against length of life

Cost-utilityCost-utility Benefits units not subject to problems of Benefits units not subject to problems of expression in monetary termsexpression in monetary terms

Measures intangible benefitsMeasures intangible benefits

Quality vs. length of life trade-offs (e.g. Quality vs. length of life trade-offs (e.g. palliative treatment, cancer chemotherapypalliative treatment, cancer chemotherapy

Cannot measure ’profitability’Cannot measure ’profitability’

Complex to performComplex to perform

League tables can suggest easy decisions which are League tables can suggest easy decisions which are not really therenot really there

Types of economic analysisTypes of economic analysis

Two distinct types are distinguishedTwo distinct types are distinguishedCaCa Cost related to ACost related to ACbCb Cost related to BCost related to BEaEa Effectiveness of AEffectiveness of AEbEb Effectiveness of BEffectiveness of B

Marginal analysisMarginal analysis Incremental analysisIncremental analysis  The additional cost of eachThe additional cost of each The additional cost forThe additional cost foradditional unit of output:additional unit of output: the total increment in output:the total increment in output:

Cn + 1 – CnCn + 1 – Cn Ca – CbCa – Cb En + 1 – EnEn + 1 – En Ea – EbEa – Eb

Ten questions to assess the value of a Ten questions to assess the value of a published health economic studypublished health economic study

Was the question well-defined, and posed in answerable form?Was the question well-defined, and posed in answerable form?

Was a comprehensive description of the competing alternatives given?Was a comprehensive description of the competing alternatives given?

Was three evidence of the alternatives’effectiveness?Was three evidence of the alternatives’effectiveness?

Were all important and relevant costs and benefits identified for each alternative?Were all important and relevant costs and benefits identified for each alternative?

Were all costs and benefits measured in appropriate units, prior to valuation?Were all costs and benefits measured in appropriate units, prior to valuation?

Were costs and benefits valued credibly?Were costs and benefits valued credibly?

Did costs and benefits occur with the same timings? If not, were adjustments made?Did costs and benefits occur with the same timings? If not, were adjustments made?

Was an incremental analysis of costs and benefits performed?Was an incremental analysis of costs and benefits performed?

Was a sensitivity analysis performed?Was a sensitivity analysis performed?

Were the results thoroughly discussed, including all issues of concern to the users?Were the results thoroughly discussed, including all issues of concern to the users?

Drummond 1985, 1992, 2002Drummond 1985, 1992, 2002

Model of a health utility analysis of Model of a health utility analysis of balneotherapy in osteoarthritisbalneotherapy in osteoarthritis

Study:Study: Tótkomlós thermal water cures in 67 patients with knee and hipTótkomlós thermal water cures in 67 patients with knee and hiposteoarthritis, 45-76 years, open setting 3 weeks cure in therml poolsosteoarthritis, 45-76 years, open setting 3 weeks cure in therml pools(18 baths), 3 month follow-up, 24 parameters based on WOMAC(18 baths), 3 month follow-up, 24 parameters based on WOMACelements, ROM, drug needs, etc.elements, ROM, drug needs, etc.(Dr. Miklós Csermely, Dr. János Tóth-Abonyi, 2004(Dr. Miklós Csermely, Dr. János Tóth-Abonyi, 2004))

Mean change in 3 mo:Mean change in 3 mo: 15,7 per cent of baseline15,7 per cent of baseline

Direct costs of a cure:Direct costs of a cure: 260 USD or 180 € (based on the reimbursement and260 USD or 180 € (based on the reimbursement andco-payment tariffs)co-payment tariffs)

Hungarian quality of life value for osteoarthritis: 0,394; 1 QUALY = 2,54 OAyHungarian quality of life value for osteoarthritis: 0,394; 1 QUALY = 2,54 OAy (EqoL5D, Bálint et al, EULAR 2000) (EqoL5D, Bálint et al, EULAR 2000)

Simplified incremental analysisSimplified incremental analysis

Key assumptions:Key assumptions:– change in parameters measured equals a change in QoL valuechange in parameters measured equals a change in QoL value– no change is resulted in the costs of the disease following the cureno change is resulted in the costs of the disease following the cure– 1 QALY= 1: 1 OA year x Hungarian OA QoL factor1 QALY= 1: 1 OA year x Hungarian OA QoL factor

Cost-effectiveness:Cost-effectiveness: cost of cure: change of health state (0-3 mo)cost of cure: change of health state (0-3 mo)260 USD or 180 € : 15,7 per cent260 USD or 180 € : 15,7 per cent

Cost-utility:Cost-utility: cost of cure: health gain in QALYcost of cure: health gain in QALY 260 USD or 180 € : 0,4 OA year (2,94-2,54 ie. 260 USD or 180 € : 0,4 OA year (2,94-2,54 ie.

postcure – baseline postcure – baseline QUALY)QUALY)

Cost of 1 gained QALY:Cost of 1 gained QALY: 650 USD or 450 €650 USD or 450 €

Comparative health utility valuesComparative health utility values

Internationally accepted limit:Internationally accepted limit: 50000 USD or 35000 €50000 USD or 35000 €

Recent OA value:Recent OA value: 650 USD or 450 €650 USD or 450 €

Biological therapy for RA:Biological therapy for RA: 2000-25000 USD2000-25000 USD

Osteoporosis/bisphosphonate:Osteoporosis/bisphosphonate: 18150 USD18150 USD

LBP periradicular steroid inj.:LBP periradicular steroid inj.: 12668 USD12668 USD

Antihypertensive drugs:Antihypertensive drugs: 25000 USD25000 USD

Hemodialysis:Hemodialysis: 55000 USD55000 USD

Lumbar stenosis decompression:Lumbar stenosis decompression: 70000 USD70000 USD

Multiple sclerosis / interferon:Multiple sclerosis / interferon: 11 000000 000 USD000 USD

ConclusionsConclusions

More detailed local data on costs are needed regarding the long term More detailed local data on costs are needed regarding the long term health care and social expenditures in the main target diseases of health care and social expenditures in the main target diseases of balneotherapy (OA, back pain, fibromyalgia, etc.).balneotherapy (OA, back pain, fibromyalgia, etc.).

Valid outcome parameters incl. QoL measures should be used in long Valid outcome parameters incl. QoL measures should be used in long term follow-up balneotherapy trials.term follow-up balneotherapy trials.

Detailed presentation of operational costs of hydro- and balneotherapy Detailed presentation of operational costs of hydro- and balneotherapy services (incl. investment and maintenance) is necessary.services (incl. investment and maintenance) is necessary.

Health economy argumentation may be essential in convincing of Health economy argumentation may be essential in convincing of providers.providers.