5.1 wrap up (t)

Craig Mitton & Francois Dionne | Priority Setting & Resource Allocation | 1

Workshop wrap-up


Summary of the situation regarding resource allocation in health care

• Some challenging issues exist: widespread perception amongst decision makers that there are not enough resources (very commonly there is not sufficient resources to carry on with current services as they are and add new services) and amongst the public that major changes are needed

• And there is uncertainty on the part of decision makers on how to address this need for changes


The goal in resource allocation

•Decision-makers need to determine:

• what health care services to provide

• for whom to provide services

• how to provide services

• where services should be provided

… in order to meet local and/ or system level objectives including access, health gain…


How is that typically done?Resource allocation decisions are typically based on:

• Historical patterns with incremental adjustment

• Politics and the ‘squeaky wheel’

• Needs assessment

• Core services

• economic evaluation (limited)


What is required?

A pragmatic decision-making approach that….– Aligns resources strategically with system goals and community

needs – Leads to publicly defensible decisions based on available evidence

and community values– Facilitates stakeholder engagement around improving benefit with

limited resources– Supports the public accountability of health care decision-makers

How do we move in this direction?


Elements of the solution

We need to draw from:

•Medicine

•Economics

•Ethics


Medicine

•Epidemiological information

• Information on interventions’ effectiveness

•System objectives


Economics: Relevant Economic Principles

• Opportunity cost– every time we choose to use resources to meet one need we give up

the "opportunity" to use those resources to meet some other need– aim of economics is to ensure that we undertake activities where

benefits outweigh opportunity cost

• The Margin – Marginal Cost = cost of one more unit of output/consumption– Marginal Benefit = benefit from one more unit of output/

consumption


Ethics: Role of ethics

•Provides moral compass to guide difficult value-based decisions about limited resources


Goals of legitimacy and fairness•Experience shows difficulty of agreeing on what

decisions should be made

• Competing goals/ mandates

• Incomplete data and information

• Conflicting stakeholder interests/values

• It is more likely agreement can be reached on how decisions should be made

•Social acceptability rests on real/ perceived legitimacy & fairness of decision process


How do we put all this together: a framework such as Program Budgeting and Marginal

Analysis (PBMA)

•PBMA is a formal framework to assist decision-makers in making resource allocations decisions

•Combines medicine, economics and ethics

•Used since the 1970’s in health care


PBMA: Practical Steps•Determine aim and scope of activity

•Identify and map resource use

•Form an advisory panel

•Define and weight decision making criteria

•Identify options for service growth and resource release

•Evaluate proposed investments and disinvestment

•Validate results, recommendations for (re)-allocation, communicate decisions

•Evaluation, refinement and ongoing revision

Peacock et al. 2006


Critical success factors•Strong leadership and Board endorsement•Solid project management•Internal and external buy-in•Physician involvement/ ownership

•Clear objectives and alignment with strategic goals•Clear roles and responsibilities•Clear institutional boundaries

•Explicit, validated criteria•Training and two way exchange of information•Change management processes – credible commitment

•Commitment to evaluation and improvement•Political overlay and expectation management


Benefits of PBMA implementation

Primary benefit:

Achieving resource allocation shifts that are consistent with strategic decision-making objectives

Secondary benefits

Evidence driven decisions

Ownership of planning process

Transparent and defensible decision making

Clinician engagement and partnership Gibson et al. JHSRP 2006Ruta et al. BMJ 2005


Resource allocation decisions = value-based decisions

How much priority to disease prevention?

Modest benefits for many vs. significant benefits for a few?

Best outcomes vs. fair chances?

What about values?

Urgent vs. likelihood of success?

Individual choice vs. collective good?


How are values integrated in resource allocation decisions?

• Priority setting processes (such as PBMA) are based on formal comparisons of possible courses of action e.g. investments or disinvestments

• These comparisons involve the application of evaluation criteria

• It is in the selection of these criteria and of their weights that values are reflected


What about Economic Evaluation as a resource allocation framework?

•Economic evaluation is a set of scientific methods to assist decision-makers in making choices between alternative interventions

•Concerned with efficiency not just effectiveness

•Based on principles of welfare economics

• maximise the well-being of the community

• ‘Fair’ choices require a systematic comparison of costs (resources) and consequences (outcomes or benefits) of alternative health programs


Limitations of Economic evaluation

Some technical limitations:

• Potential challenges to validity

• Does a low ICER mean that the new drug/ technology is ‘cost-effective’?

• What does an ICER actually mean in terms of budget impact?

Key issue:

• What about other factors affecting the decision, i.e. how do we integrate ethical considerations and multiple system objectives

Because of this issue, while in some cases, CEA is an ideal tool, in the broader context of typical resource allocation decisions, it plays a role but it is usually not sufficient, which brings us back to frameworks such as PBMA


ConclusionIrrespective of the specific framework adopted, proper prioritization requires:

•Alignment with multiple organizational objectives

•Explicit recognition of the role of evidence and values

•Engagement of stakeholders

•Public accountability

Technology

5.1 wrap up (t)