Health economics is the study of medical procedures, drugs, or devices, in
terms of cost and outcomes. Although there are many approaches, the most
common is cost effectiveness (CE). In this kind of study, the
introduction of a medical procedure, drug, or device is examined in
terms of its added cost in relation to an existing procedure, drug, or
device. Where possible the “gold standard” or accepted standard is
utilized. Likewise, the outcomes are compared between the new and old.
The cost of the “new” procedure, drug, or device can be less or more
than the accepted standard and outcomes can be better or worse. A
variation of cost-effectiveness is cost-benefit, in which the benefit is
spelled out in terms of some unit. For example, 30-day mortality could
be an outcome and the benefit could be lives saved every year. In wound
care, cost per ulcer-free month is a common cost benefit analysis. Cost
utility avoids awkward units and allows health economic studies to be
compared to each other in terms of cost per QALY (quality adjusted life
years) or other units. The chief disadvantage of cost utility is that
for patients with multiple comorbidities in which one is studying a
change in one of them it can be difficult to estimate the change in
utility, where utility is a scale of 0 (death) to 1 (perfect health).
In
health economics one seeks to look at the change in costs and
outcomes/benefits/utilities to make a policy decision. Any time one has
less cost and better outcomes this is very desirable situation, and it
is called dominated. Likewise, more cost and worse benefits are easy to
evaluate as undesirable. However, in cases of more cost but better
benefits or lower cost but less benefits, these results must be
evaluated by policy makers in the context of many other issues.
We
can perform all the traditional types of health economic studies
whether data comes from a study or clinical trial or data are extracted
from the literature. We can also perform simple cost effectiveness
analyses with or without bootstrapping (a technique that allows us to
better estimate the uncertainty of costs and outcomes), as well as CE or
Markov models with validation as specified by ISPOR.
To
start the consultation process, we need to know the procedure(s),
drug(s), or device(s) you are interested in comparing. We can then start
to put together a proposal for you.