Health Economics
Health Economics
This section explains how the concepts of outcomes, health outcomes and health economics research relate to a benefit:risk program.
Introduction
Outcomes research links the care consumers receive to the outcomes they experience, and has become the key to developing better ways to monitor and improve quality of care. The success of a treatment can be measured through an improvement or stabilization of an illness, or by improvements in a consumer’s ability to lead a normal life. This is particularly important for consumers with long-term conditions that may have no cure, for whom quality of life (QoL) is an important factor. QoL is an important component of clinical outcome studies and deals with a consumer’s physical, functional, psychological, and social well-being and is typically assessed by using questionnaires.
What are Outcomes?
The term outcome is used to describe the results and value of a health care treatment. Health outcomes research studies the end results or outcomes of particular health care practices and treatments.7198 From a medical practitioner’s point of view, outcome is related to how a consumer responds to therapy, while health care payers and administrators are often interested in the costs of health care decisions. Consumers are most interested in decisions regarding their treatment and factors that influence QoL. Health care payers include insurance plans, Medicare and Medicaid providers, and managed care organizations such as health maintenance organizations (HMOs) and preferred provider organizations (PPOs).
What is the Role of Health Outcomes Research in Benefit:Risk Programs?
Benefit:Risk programs balance the benefits (clinical, nonclinical, and economic) provided by a treatment, against any potential risks (such as adverse events). Clinical benefits may include reductions or changes in death rates, symptoms, and adverse events. Nonclinical benefits may include improvements in physical and mental function, QoL, patient productivity and satisfaction, and a reduction in economic cost. Health outcomes research can provide much of this information.
What is Health Economics Research?
Health economics research is a type of health outcomes research which identifies, measures, and compares the costs and consequences of treatments or non-treatment decisions. Pharmacoeconomics is a part of health economics that deals with drugs and their cost (or potential cost-savings) to health care systems and society.7198
Health economics research has 2 major aims: to improve public health through rational decision-making, and to determine the relative values of different treatment options or of non-treatment decisions. Health economics research helps medical practitioners, consumers, payers, and policy makers in deciding how to allocate and pay for medical care resources efficiently.
Health economics studies provide medical practitioners, consumers, payers, and policy makers with a lot of useful information. This information can be used to:
Look at the economic burden (overall cost) of a specific illness.
Look at the economic impact (how much money is lost or saved) of a treatment.
Compare the economic effects of 2 or more treatments.
Develop new types of treatments.
Develop new medical practitioners’ guidelines.
What are Patient Reported Outcomes?
In health economics, different methods are used to compare economic outcomes with different types of clinical outcomes.7205
Patient-reported outcomes (PROs) measure “any aspect of a patient’s health status that comes directly from the patient.”11068 PROs include:
QoL and well-being
activities of daily living
symptoms and discomfort
productivity
patients’ preference
patients’ satisfaction
other patient-related outcomes (including symptoms and health-related behavior)
What are Costs?
Several types of costs are taken into consideration in health economics research. These cost types include:
Direct medical costs for prescription drugs, medical devices/supplies, laboratory tests, hospitalization, long-term care and rehabilitation facilities, nursing staff cost, and health care professional fees.
Direct nonmedical costs for transportation, lodging for family members during a consumer’s hospitalization, home or hospice care, disability payments by an employer, workman’s compensation, and impact on pension fund and social security contributions.
Indirect costs for days lost from work and reduced productivity of a consumer or caregiver.
Intangible costs for subjective items, such as pain and psychological distress. These are usually incorporated into QoL measurements and are not usually measured directly in health economics studies.
Health Insurance Copays
Medical costs also include the cost of health insurance. A copayment, or copay, is a set amount that each insured individual must pay their insurance company prior to receiving medical services. In turn, the insurance company pays for some share of the medical costs. Although copays may cause some people to use care more efficiently to avoid paying unnecessary copays, other individuals may be prevented from seeking care if the cost of the copay is too high.8075
This concludes the discussion of the topicHealth Economics. We encourage you to read other topics on the MEDVERSATIONTM website.
Content on this page was last changed on March 15, 2010.
References:| 7198. | Bootman JL, Townsend RJ, McGhan WF. Introduction to pharmacoeconomics. In: Bootman JL. Principles of Pharmacoeconomics . 3rd ed. Cincinnati, OH: Harvey Whitney Books Co; 2005:2-16. |
| 7205. | Morrison A, Wertheimer A. Pharmacoeconomics: A Primer for the Pharmaceutical Industry . Philadelphia, PA: Temple University Press; 2002. |
| 8075. | The Henry J. Kaiser Family Foundation. The role of consumer copayments for health care: lessons from the RAND health insurance experiment and beyond. The Henry J. Kaiser Family Foundation website. www.kff.org . Accessed April 28, 2008. |
| 11068. | FDA. Patient-reported outcome measures: use in medical product development to support labeling claims [guidance for industry]. FDA website. http://www.fda.gov/ohrms/dockets/dockets/06d0044/06D-0044-EC30-Attach-1.pdf . Accessed January 6, 2010. |