Concepts and use in healthcare

Since economic evaluations are highly dependent on sources of information used, the validity of results varies accordingly. Stronger evaluations can’t be driven from one clinical study rather than its need for systematic approaches in data collection (Drummond et al. 2015). The evidence used in these studies follows the same hierarchy as other scientific researches, where Randomized Control Trials (RCTs), systematic reviews, and meta-analysis are found of top quality resources (Burns et al. 2011). However, it is good to mention that in the case of population approaches in prevention, RCTs, even if they’re good evidence for effectiveness, but they’re not applicable to be used. As usually, RCTs cannot last long enough for prevention studies. Therefore the use of modelling studies is needed. Modelling can combine information and data from different, multiple sources instead (Briggs et al. 2006).

In addition, an economic evaluation study describes a point in time, not a complete future scenario, therefore it is expected to have changes of results through time, based on input developments, and change of knowledge resources. There isn’t a perfect choice among all times, but the accumulation of information and continuous work is worthy for reaching better knowledge.

Perspective

In conducting economic evaluation in healthcare, one of the main principles is based on the scope of the evaluation or its perspective. It is the point of view adopted when deciding which types of costs and health benefits are to be included in an economic evaluation (Perspective.

2016). The question evaluation tries to answer can be of governmental, health sector, or societal related. These perspectives don’t only direct the purpose and interpretation of evaluation, but also will result in different information included in the analysis. Deciding on which perspective to be directed is based on the interaction of stakeholders with the project itself, benefits of the result, parties responsible for decision making, and those who will be affected by the decisions, whether they are receivers of intervention, or lacking other consequences because of it. They are all in consideration when assessing information needs but mainly the economic evaluation should aim for leading informed decision making on a specified scope among the others, in order to extrapolate its results (Drummond et al. 2015).

Several arguments are described for the advantages and disadvantages of using different perspectives in economic evaluations. The interest in health sector (or health services) perspective is backed up by its deep involvement in the costs, capacities, and people’s utilization of health services. In systems where the health sector is highly universal, this reflect a societal view within the health sector view since the whole population is involved in health services. However, it may still fail to prioritize the maximization of the welfare gains to society as a whole, and the discussion of a completely equitable universal health for all is often under debate even in systems following the highest standards (Byford & Raftery 1998).

On the other hand, societal perspective is argued to have better potential in including the impact on whole societies, not merely those interacting with healthcare services. It involves the direct costs on health sector as well as the productivity losses due to time lost from work because of illness outside the limited health perspective. Besides, through weighting the cost shifts between sectors, the societal approach takes into account the alternative use of resources outside the health sector that may impose bigger benefits to the society (Byford & Raftery 1998).

Both approaches do not necessarily consider the value of losses and consequences to the

non-working groups whether due to retirement or any other reasons if not studied particularly, thus may bias the results against these groups (Perspective. 2016). For this reason, as an example, the National Institute for Health and Care Excellence in the UK recommends the combination of personal, social, and National Health Service in assigning perspectives for economic evaluations (Perspective. 2016). So that specific treatment, services, and adverse events costs are included within the personal view even if missed in the other views. In general, an important consideration in specifying perspectives in studies is to explicitly state and explain the justification of choice no matter what information and challenges attributed to the decision eventually, so it helps keep the usage of results in a valid representative manner (Byford &

Raftery 1998).

Economic evaluation aims to inform decision making but more necessarily is how decisions are made on behalf of others. In this way economic evaluation raises accountability and shared responsibility, especially when there is lack of complete information, yet decisions have to be made anyway. Budget constraints, preferences, habits, etc. have all an impact on decision making. The social value of deciding what to do that will benefit some groups but will take benefit or limit it from others. In which, an economic evaluation tries to state the criteria for that clearly. Also, if these studies do not pay much attention to who will gain the health benefits and who will face the costs, that should be done in addition to economic evaluation.

The importance of perspective in economic evaluations relates also to the decision making that occurs based on the threshold of payment of the questioned authority, or if not set explicitly, then it’s the decision maker’s willingness to pay extra for the better effectiveness. Without a comparable threshold, results of studies cannot be directly reflected in real-world decisions, unless the willingness to pay is implied within society. Payment thresholds are associated with health authorities and governments in many countries. For example, the UK specifies 20,000£

and 30,000£ as cost-effectiveness threshold, which provide guidance on how resources are intended to be used for health interventions; in order to guide studies, and work on health projects (McCabe et al. 2008).

Alternatives

In order to provide full economic evaluation that can compare the cost and consequences of certain projects in health care, a clear statement of alternatives is needed. Alternatives are the

main pathways of comparison that economic evaluations rely on, and they compose the rationale of the need for decision making, as they create options to choose from. The identification of alternatives for interventions in healthcare needs critical assessment on the feasible, effective, and realistic choices. The selection of the other alternative of interest would directly affect how results are observed. And it should be the responsibility of the decision-maker, which means, choosing unrealistic alternatives may bias the results and encourage the decision towards the desired outcome. That’s why assessing alternatives is highly critical and can be developed based on the perspective to be studies and systemic data collection on best alternatives, its effectiveness and costing information (Drummond et al. 2015). But to make things clear, even if different alternatives have effects on different subgroups (with various history or reflections) but in the economic evaluation, we study the different alternatives on a single group only to help direct the efforts and create the full picture for decision making.

Costs and opportunity costs

A brief explanation of costs types in healthcare have been mentioned earlier in section 2.1.4 Economic burden of CVDs. However, it is relevant to state the concepts behind costs understanding, and more of its methodologies in economic evaluations. Briggs et al. discuss that individuals decide the potential value of benefits offered to them through services or products, then decide whether or not to pay based on market prices, therefore, the decision of cost is dependent on improving their welfare. Prices do not simply indicate what things ‘cost’

but they also represent the social value of the inputs and outputs of an alternative (Briggs et al.

2006).

The earlier discussion on perspective is highly connected with choices of costs in the economic evaluation, as it creates the resources frame and boundaries of decision for cost information to be included in the study. This results in a large frame of costs for societal perspective for example and a reduced limited boundaries frame for specific organisation or health sector perspectives (Raftery 2000).

Other implication of perspectives is to the stages of costing that involve three different concepts for costs: Identification, measurement, and valuation. First, by identifying costs in economic evaluations, scholars list all possible costs before excluding some of them based on the set framework. Measurement is concerned about how the cost information will be assessed, like

prices of drugs, time, working hours, and their weights, people involved, bed prices, and all kinds of measures related to direct and indirect cost of diseases. Finally, valuation stage is more related to economic theories of cost and societal value, and how the meaning of price varies between economy and health domains (Raftery 2000).

The cost of illness approach that defines direct and indirect cost of disease was formalized since the 1960s by the efforts of different scholars and several discussions supporting or opposing to the valuation and methodologies of costs in health economic studies have followed since then.

The most common approach includes in the direct costs all the medical and non-medical expenses that incurred because of illness. This involves medical care, travel costs, prevention, treatment, rehabilitation, and may add training, medical research, and other modifications due to illness. While the indirect cost of illness is mainly driven by the lost production because of reduced working time, it remained more complex in terms of measurement in economic evaluations and doesn’t have a unified understanding or guideline (WHO 2009). Average wages, unemployment rates, and the value of non-work-related productions are some of the matters discussed for this concept but this review limitations cannot take the terms’ discussion further.

The intangible costs of disease are a third type that usually isn’t utilized similarly in economic evaluation studies due to its difficulties of measurement and valuation as can be understood from its name. Intangible costs include the human suffering, pain, and grief of the patient and caregivers that usually fall out of the scheme of economic studies. Therefore, identification of evaluation scope, or perspective is rather important in all the previous costs understandings because it defines what matters in economic evaluation conclusions, and what crucial parts are identified outside of its boundaries but still take part in making decisions eventually (WHO 2009).

In a health perspective of cost understanding in economic evaluation, the same cost dedicated to a certain health intervention is usually withdrawn from other use. The missed use in other health project or different sectors describes what so-called “opportunity cost”. The opportunity cost of one alternative is defined as the benefit foregone from not being able to have the next best alternative (Kattan 2009). Opportunity cost depends on the nature of the health system. If health expenditure is restricted, it falls on the health sector, and if it’s not restricted, it will

affect public consumption. Generally, some opportunity cost would fall on both. Even when economic evaluations are not able to include these costs into account for direct calculation, at least identification of those groups who have the costs and consequences of alternatives relevant to them directly or indirectly in important (Drummond et al. 2015).

Health gain and types of economic evaluation

Measuring health gain in research and economic evaluations is rather argumentative. In general, any indicator should aim to describe health effects, whether they are improvements or side effects, and should depend on valid sources of knowledge. In comparison terms, QALYs have been frequently used due to its ability to describe a unified quantity for different health outcomes. Given than in QALY weighting: 1 value describes perfect health, and 0 value describes death or (no health), the variation of health outcomes in QALYs’ terms would include both morbidity and mortality. It aims to involve the value of “peace of mind” as well rather than other health indicators (Annemans 2017).

Others argue that as opposed to health effects, some studies are empathizing use of willingness-to-pay or monetary benefits due to the dissatisfaction of QALYs capability to reflect preferences and its poor reflection of all aspects of healthcare like compliance from increased convenience of screening and assurance. As well as the costs and effects that go beyond the health care budget (Drummond et al. 2015). However, even with the use of QALYs, when society’s perspective is chosen in publicly funded systems, all the relevant services and their costs should be included in economic evaluations, or at least considered as discussed earlier.

There are different types of economic evaluations in healthcare. They are classified based on consequences or health outcome measured. Each health outcome measure would influence how results can be compared to other studies and interventions. Also, the value put to health outcome is affected by the perspective in which an intervention is evaluated. While in all types, cost measure is always in monetary values, the main differences are seen in table 1 below between the consequences measurements.

Table 1. Types of economic evaluations, adapted from (Adhikari 2017).

Types of

analysis Costs Consequences Result

Cost- minimisation analysis (CMA)

Monetary

value Identical in all respects Least cost alternative Cost-benefit LYs, life years; QALYs, quality-adjusted life years; BP, blood pressure.

1- Cost-minimization analysis (CMA):

In this type of economic evaluations, two or more interventions are compared when they have identical outcomes, yet their costs varies. Investigation is applied through to identify the intervention with the lowest cost. It enables the assessment of technical efficiency of interventions and doesn’t require huge information needs in comparison to other types.

However, the assumption of identical health outcomes should be strong enough and do not impose differences attributable to disease studied (Klarenbach et al. 2014).

2- Cost-benefit analysis (CBA):

Both cost of the intervention and its benefit incurred are measured in monetary values in this method of economic evaluation, where the net benefit equals the subtraction of costs from direct intervention benefits. So that, when benefits exceed costs, it should be valid to continue with the intervention. The valuation of health outcomes in economic terms is the matter of discussion in this type (Adhikari 2017).

3- Cost-effectiveness analysis (CEA):

More commonly used in healthcare, the CEA uses natural units like life years gained, measured improvements in levels of risk factors like units of blood pressure or cholesterol to assess the

health outcomes, or effectiveness. Then, the cost is measured against the effectiveness of the intervention, and similar measures among interventions are compared where result is expressed as cost per unit of health. Although this type has often accessible data on health outcomes readily available from clinical trials, results may be difficult for interpretation. Comparison between populations and diseases is not possible due to the differences in health outcome measurements. For example, it is not logical to compare 1 life year gained with 30% reduction of smoking rate. Besides, effectiveness outcomes lack the ability to capture all relevant health outcomes around interventions, especially on the large scale like public health programs (Klarenbach et al. 2014).

4- Cost-utility analysis (CUA):

The utility term related to health measured as intervention consequence of this type refers to QALYs or DALYs that is more used when multiple objectives of programs are measured, and when both quality and quantity of life is important for the study. CUA is more common to make policy level decisions due to its capability of comparing outcomes between populations and different diseases, expressed as cost per QALYs for different interventions compared.

Also, the metric scale of QALY comprehensively measures health aiming to cover more dimensions than single health units. QALYs identification is usually based on population valuation of health outcomes from representative surveys, and do not involve personal view of health. With its components, this type of economic evaluation requires the most data among other types, and is highly demanding of resources (Klarenbach et al. 2014, Adhikari 2017).

Implementation:

In the matter of comparing results and interpreting economic evaluations, one important factor to be discussed is implementation. Different aspects are studied regarding implementation and economic evaluations of health interventions. There is the effect of different implementation strategies of health interventions on costs and effectiveness, thus, will change the information used for economic evaluations. And, the use of economic evaluation results in informing better practices of health interventions implementation, since cost-effectiveness is one of the factors needed for better implementation strategies. So, economic evaluations work interactively with implantations studies informing each other (Hoomans & Severens 2014).

There are more forms where both sciences interrelate, economic evaluations are basically

capable of informing decisions about the efficiency and allocation of resources used to the implementation itself (Hoomans & Severens 2014). Despite these shares of work, in this case, the concern is how economic evaluation can spotlight on implementation processes that described the intervention and led to different outcomes. Further work on the reasoning for these processes helps to identify the best implementation strategies based on circumstances.