Transcript Slide 1

Public Health Module
Venue
Date
Health Services Planning in the World Class
Commissioning Environment
Maximising Patient Care Within Available Resources
Author: David Murray BSc MSc FFPH
Operational Director, Consultant in Public Health &
Honorary Senior Lecturer, PHAST & Imperial College London
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Acknowledgements
Contributors:
– Dr Richard Fordham – Senior Lecturer/Deputy Associate
Dean, Health Economics Group, University of East Anglia
– Dr Peter Brambleby – Director of Public Health, North
Yorkshire & York PCT
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Aim
To explore the principles and practice of investment
decision-making to maximise population health within
available resources.
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Contents
1. The under-pinning concepts of health economics, including:
– The economics perspective
– Key economic principles – efficiency & equity
2. Information and evidence on costs and benefits:
– Measurement of costs & benefits
– Methods of economic evaluation – e.g. cost-effectiveness studies
& analyses
3. Practical methods of resource allocation/investment decision-making
in health, including:
– Resource allocation formulae
– Programme budgeting & marginal analysis (PBMA)
– Priority setting – e.g. multi-criteria analysis (MCA)
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1. Health Planning, Investment DecisionMaking, & Health Economics
Investing in health
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Health Planning & Investment
• Consideration of comprehensive range of health
improving interventions:
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Promotion of health
Prevention of disease
Screening
Diagnosis
Treatment/management
Rehabilitation
• Need - Demand - Supply
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Policy Context
• Policy context:
– WCC competence 6 – Prioritise investment according to local needs,
service requirements, & the values of the NHS.
– WCC competence 11 – Make sound financial investments to ensure
sustainable development & value for money.
– Care Quality Commission: PCT Commissioning standards – Domain 2:
Clinical & cost effectiveness
• Combined perspective – health planning & health economics
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"World Class Commissioning“ (2008)
• "Investment decisions will be made in an informed and
considered way, ensuring that improvements are delivered
within available resources"
(DH, 2007a)
•
PCTs will be able to: "Prioritise investment by having a
thorough understanding of the needs of different sections
of the local population ...
• Make confident choices about the services that they want
to be delivered, and acknowledge the impact that these
choices may have on current services and providers..."
(DH, 2007a)
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NHS Confederation Guidance to PCTs (2008)
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The 'primacy of prioritisation must
be a fundamental principle of
public sector resource allocation'.
A 'whole system' approach must
be taken which takes account of
and is applicable to all health
service delivery in a given area
Avoid unintended
consequences and opportunity
costs associated with narrower
priority setting or decision
making processes
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2. Health Economics Perspective
A room with a different view
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Source: Rupert Fawcett Cartoons
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Economics
Greek: oikonomos, "one who manages a
household" ..oikos, "house"
and nemein, "to manage"
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Group Discussion - Household Investment
Decision-making
• Think of 2 or 3 recent decisions you have taken to make a
substantial purchase in your household
• Discuss how you came to the decision to make the purchase &
how you chose the particular product
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Health Economics
• A framework for the systematic consideration of costs &
benefits across society in support of priority setting/ investment
decision-making
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Finance & economics
FINANCE/MONEY = measure & store of value, means of
exchange (usually reflected in price)
ECONOMICS = what is produced; how resources used up in
producing it; how these products are exchanged and by whom
MONEY is only a currency!
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What you already know about economics
(but might have been totally unaware of !)
• Humans are quite ‘rational’ economic beings
(most of the time) ..
• We all satisfy our own needs rationally… ‘maximise our own
personal ‘utility’ subject to a resource constraint’
• We want to maximise gain and minimise pain!
• But it’s not just about self-interest! eg. altruistic or
communal gifts
• Why should society be any different? – it’s only the sum of
its parts
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Health Economics Perspective 1
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Acceptance of resource/budget limitations
Scope – societal vs public sectors vs NHS
Long-run timeframe
Cost vs price
Opportunity cost – all investment choices & uses result in other
lost opportunities
• Demand = willingness & ability to pay at a given price
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Health Economics Perspective 2
• 2 concepts of efficiency:
– Technical: Doing things well/at least cost for a given output
at a given quality
– Allocative: Doing the right things to maximise benefit from
available resources
• Marginal analysis – measurement of costs/savings & benefits
additional to the current baseline
• Equity – consideration of the spread/allocation of fair/ethical
costs & benefits across society
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3. Costs & Benefits
Weighing it up
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Weighing up the input & outputs in
alternative uses of resources ...
?
Resources
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Outcomes
Group Discussion – Resources & Benefits
• Briefly discuss the ‘resources’ & ‘benefits’ we would need to
weigh-up in introducing a ‘hospital at home’ service
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Economic approach
• Weighing up the costs and the benefits of alternative courses
of action (Drummond, 1987)
• Costs (full resources) to whom?
• Benefits…to whom? Concern with equity.
• Divergence of personal and social costs
• Wider scope of benefits in public health
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Production Costs & prices
• Fixed cost – constant over a period of time regardless
of workload
• Semi-fixed/stepped cost – constant within given production
limits (e.g. additional staff)
• Variable cost – vary in proportion to workload
• Sunk cost – investment that cannot be re-invested
• Price = cost + profit/surplus
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Costs
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Total cost
Unit cost = 1 unit/patient
Average cost = total cost/N
Marginal cost = cost of producing one additional unit
Cost curves
Opportunity cost = foregone opportunity to produce the next
best alternative use of resources
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Economies of scale
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Constant returns to scale
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Diseconomies and economies
of scale
Costs
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Direct cost – e.g. health care staff time & consumables
Indirect costs – e.g. catering
Overhead costs – e.g. management, heating
Intangible costs – e.g. pain, inconvenience
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Health Benefits
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Survival/death
Treatment
Cure
Cases/infections prevented
Length of life
Quality of life
Function
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Societal Benefits
• Productivity:
– employment
– education
– caring
• Participation (e.g. politics, arts)
• Independence
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4. Efficiency & Equity
Doing the right things, well, & for all the right people
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Technical efficiency - Inputs and outputs
• Maximise output subject to budget/cost limit or minimum
• Minimise costs subject to a fixed or maximum level of output
• No resources wasted in production of a given product at an
accepted quality
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Productivity
• Measure of technical/productive efficiency
• Amount of output per unit input in producing a given
product e.g:
– Factory hours to make a product
– Number of products produced by a factory per day
– Patients treated per hour/per clinic
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Allocative efficiency
• Allocative efficiency is where organisation is producing a
combination of goods that maximises the overall level of
satisfaction or welfare of the population of interest
• Global efficiency – allocative efficiency across all productive
activities in society as whole e.g. education, health, welfare
benefits, industry, etc
• Where no further reallocation of resources at the margins of
production could improve social welfare function (=∑individual
welfare functions) – i.e. social welfare is maximised
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Pareto optimality
• The theoretical condition as a result of perfect global efficiency,
where it is impossible to make one person better off without
making someone else in society correspondingly worse off is
called a Pareto optimal allocation of resources
– How do we know when NHS organisation(eg. PCT) is
allocatively efficient?
– What type of market conditions are likely to lead to the
allocative efficiency?
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Ethics, equity, & economics
• Ethics - theories of social justice/fairness
• Equity - treatment according to need/access/ demand/use
• Economics – equity (distribution/shares of benefit) vs efficiency
(total benefit)
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Common equity dimensions
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Age
Gender
Sexuality
Geography
Socio-economic status
Ethnicity
Religion
Disease/condition
Severity/prognosis
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Equity not necessarily = equality
• Equity concerned with ‘fairness' ‘justice’ (i.e.ethical theories)
• May not necessarily be identical to equality (e.g.minimum
standards of care, ‘positive’ discrimination) due to taking
account of need
• However, equity usually synonymous with equality of
something (e.g. right to equal opportunity to access)
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‘Definitions’ of equity
• Equal ‘chance’ of treatment - lottery
• Equal expenditure per capita - geography
• Equal expenditure/resources for equal ‘need’ (i.e. weighted
capitation e.g.‘premature’ mortality)
• Equal access (opportunity to use) for equal need (e.g. equal
waiting time per ‘condition’) & physical/geographic access
• Equal utilisation for equal need (e.g. equal length of stay
per ‘condition’)
• Equal treatment rates for equal need
• Equal ‘health’
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Equity : Efficiency Trade-off
• Explicit equity weighting remains controversial unless
considering ‘total social welfare’ rather than economic
efficiency alone
• Access to primary/secondary/tertiary care (e.g. GP vs NICU)
• NICE willingness to pay Cost per QALY for treatments
prolonging life in terminal cancer conditions
• Targeted out-reach initiatives for ‘hard to reach’ groups
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5. Economic Evaluation
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Key Methods of Economic Evaluation
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Cost Consequence Analysis
Cost-Minimisation Analysis
Cost Effectiveness Analysis (CEA)
Cost-Utility Analysis (CUA)
Cost-Benefit Analysis (CBA)
Modelling
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Length & quality of life 1
• Length of life
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Mortality (numbers, rates, SMRs)
Life expectancy
Healthy life-years (eg. QALYs)
Disability-free life years (eg. DALYs)
Length & quality of life 2
• Measures of (Health-related) Quality of life:
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Numerous QoL measures (generic & disease specific)
SF-36
Nottingham Health Profile
Symptom Checklist
Hospital anxiety and depression scale
Quality Adjusted Life Years (QALYS)
Adjusts data on quantity of life years saved to reflect a valuation
of the quality of those years.
If healthy:
QoL = 1.0
If dead
QoL = 0
e.g. 5yrs survival gain at ½ QoL = 5 X 0.5 = 2.5 QALYs
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Disability Adjusted Life Years (DALYS)
• Measure of burden of disease adjusted for lost
function/productivity (WHO)
• World Bank, Global Burden of Disease (1996)
• Years of life lost due to premature death + years lived with
disability (mortality + morbidity)
• Better reflection of burden due to chronic disease rather than
due to common causes of death
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Issues in Economic Evaluation 1
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Taken up by research community, good journals, etc
Used nationally - e.g. NICE
Still ignored by local decision-makers
Suspicion from clinicians
Resistance from public
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Issues in Economic Evaluation 2
• Lack of good cost data to use
• May not capture all the benefit dimensions required by
decision makers
• Controversy about methods and values used
in techniques
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Steps in costing
1.
2.
3.
4.
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Defining the perspective/viewpoint
Identification of costs to include in
the appraisal
Measurement of the resources used (how much of
each item?)
Valuation of the resources used
(what does each item cost?)
Identifying costs
• A full identification of important and relevant costs should be
provided and any omissions justified
– Trade-off between time and effort involved in collection and potential
impact on results
– What are the key cost drivers likely to be?
• Include free costs e.g.volunteer and patients’ leisure time
and donated clinic space
• Not all costs that are identified have to be measured
and valued
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Measure how much of each item used?
• Number of medical visits, tablets consumed, hours of
staff time…
Sources include:
• Health insurance accounting systems
• Computerised hospital and primary care records
• Reports from health professionals, patients and carers
• Standards (guidelines, best practice)
- medical notes often assumed most accurate
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What does each item cost?
• Use existing market prices where appropriate
• Unit costs from local sources of national statistics:
- NHS reference costs and PbR tariff
- BNF drug costs
- PSSRU health and social care services
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Valuation
(Unit prices)
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Example: cost-effectiveness of
splinting and surgery for patients with
Carpal tunnel syndrome
Identification and measurement
*mean (standard deviation);
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Comparing costs
Korthals-de Bos et al, Surgery is more cost-effective than splinting for
carpal tunnel syndrome in the Netherlands: results of an economic evaluation
alongside a randomized controlled trial,
BMC Musculoskeletal Disorders 2006, 7:86
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Further methodological issues
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How long to track costs for?
Discounting
Annuitisation of capital assets
Purchasing power parity (not exchange rates)
Dealing with shared costs/overheads (light, heat)
Uncertainty and sensitivity analyses
Transfer payments
Drummond appraisal checklist
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Cost Minimisation Analysis
• Comparative costing of alternative treatments which are proven
or assumed to have equivalent outcome in order to identify the
least cost option
• No outcomes measurement
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Cost Consequence Analysis
• Collation of information of cost & outcome consequences of
alternative interventions, but without calculation of cost
effectiveness ratios
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Cost-consequences analysis
Coast J. 2004. ‘Is economic evaluation in touch with society’s health values?’ BMJ 329: 1233-12236
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Cost Effectiveness Analysis (CEA)
• Comparison of alternative interventions with same outcomes,
using non-monetary natural units of outcome measurement –
e.g. survival, life years gained, reductions in units of BP,
cardiac events prevented, tumour response
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Cost effectiveness of shared care and nurse
practitioner care
Nurse
Care
Shared
Care
Incremental costs
and benefits
5343
6319
6319-5343=976
No. Patients 202
benefit
220
220-202=18
Average
26.45
cost(5343/20
effectivenes 2)
s
28.72
(6319/22
0)
NHS Cost
(£)
Marginal CE
Torgerson and Spencer, BMJ 1996;312:35-36
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54.2(976/18)
Cost Utility Analysis (CUA)
• ‘Utility’ = positive well-being
• Comparison of alternative interventions, using generic nonmonetary valuation units of outcome measurement –
e.g. quality adjusted life years (QALYs)
• Requires research to establish value of outcomes.
• Allows comparison of interventions achieving different health
outcomes (e.g. prevention vs treatment, CHD vs cancer)
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Cost Benefit Analysis (CBA)
• Comparison of alternative investments where both costs &
benefits are measured in monetary terms, to calculate a net
cost : benefit sum
• Allows comparison across widest range of
investments/interventions beyond health –
e.g. education vs health
• Requires monetary valuation of all benefits
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Decision analytic model
Next three-month cycles
Initial three months
Death
Death
Death
WC75
WC75
WC75
WC50
WC50
No s witch
NC
WC50
NC
[+]
Switch to Standard Tx
Rufinamide (RUF)
Standard Tx
NC
Death
Death
NC
NC
Switch due to AE to Standard Tx
Topiram ate (TPM)[+]
Death
Death
Lam otrigine (LTG)
[+]
WC75
WC75
Standard Tx
WC50
NC
WC50
NC
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[+]
[+]
Death
W C75
W C50
NC
Practical Approaches to Resource Allocation
1.
2.
3.
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Population capitation formulae
Programme budgeting & marginal analysis
Priority setting/investment decision-making
NHS Capitation Funding
• Formula driven funding (based on PCT population)
• Weighted capitation (age, deprivation etc) (revised 2003)
• Gets PCTs onto a level playing field wrt. population need
(in theory!)
• ‘PCTs make decisions on investing these ‘cash’ resources
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The underlying principle
• The objectives of the weighted capitation formula are to
determine PCTs' target shares of available resources to enable
them to commission similar levels of healthcare for populations
with similar healthcare need, and to reduce avoidable health
inequalities (eg. cancer treatment)
See: Resource allocation: weighted
capitation formula (sixth edition) DH 2008
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Four elements are used to set PCTs’
actual allocations
a) PCT populations adjusted for:(i) their age distribution
(ii) additional need over and above that relating to age (ie. deprivation)
(iii) unavoidable geographical variations in the cost of providing services (the
market forces factor (MFF)
b) Recurrent baselines – which represent the actual current allocation which PCTs
receive
c) Distances from targets (DFTs) – which are the differences between (a) and (b)
d) Pace of change policy – which determines the level of increase which all PCTs
get to deliver on national and local priorities and the level of extra resources to
under target PCTs to move them closer to their weighted capitation targets.
NB. PCTs do not receive their target allocation immediately but are moved to it over a
number of years.
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Investment priority setting
Context
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Worldwide: WHO-CHOICE
‘CHOosing Interventions that are Cost Effective’
“Top 10” buys include:
• speed bumps to reduce traffic injuries;
• insecticide-treated bed nets to prevent malaria;
• increased taxes on tobacco
• Directly Observed Therapy short course (DOTS) for TB;
• birth attendants;
• salt fluoridation to prevent dental caries
See: http://www.who.int/choice/en/
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Cancer prioritisation and cost in UK
35 Cancer technologies appraisals by NICE to May 2005
Cost per QALY
NHS Budget Impact
< £20K
4
£20- £30K
3
> £30K
2 No additional
resources required
Cost per LYG
< £20K
£20- £30K
> £30K
Total
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Saving
8 Cost < £10m
4
1 Cost between £10-20m
22 Total
2
3
11
6
22
Potential resistance to economic
decision making!
Williams and Bryan (2007) identify the following reasons why policy makers do
not use economic studies:
• Transparency: policy makers simply do not understand the study or
methods used;
• Validity: policy makers do not believe the study outcomes;
• Relevance: the study does not provide information relevant to decisionmaking context, such as the impact on local budgets;
• Clarity: the presentational style is inaccessible (see 1);
• Comparability: variations in methods make comparing
Interventions difficult;
• Affordability: policy makers have insufficient budget to commission
economic studies;
• Objectivity: policy makers question the independence of those undertaking
the work;
• Philosophy: policy makers reject the principles underlying
economic evaluation
Williams I, Bryan S (2007) ‘Cost-effectiveness analysis and formulary decision making in
England: findings from research’, Social Science and Medicine 65: 2116–2129
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Disinvestment vs Always expecting more?
‘’a culture of expecting more resources rather
than having to make trade-off decisions and
reallocations’’
Mitton and Donaldson (2004)
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Experience of decommissioning
A recent survey has shown that the total value of services
decommissioned across the 60 PCTs that responded was £14m a tiny fraction of the £70bn PCTs spend each year.
The majority of Trusts (40 out of 60) said they had not
decommissioned anything!
(HSJ, October 2008)
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Process Benefits of Investment
Decision-making Tools
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Promoting the bigger picture
Soft intelligence
Clinical & expert advice
Clinical & organisational engagement
Ownership & commitment to implement agreed changes
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Programme Budgeting Marginal
Analysis (PBMA)
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PB vs Finance Information –
Alternative Dimensions
• Financial/accountancy - inputs:
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Functional/organisational (e.g. GPs vs hospital)
Funders
Debtors
Staff/employees
• PB – combining resource information with that on:
– Population needs/outcomes
– Strategic goals (e.g. prevention vs treatment)
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Questions to ask
•
Do you know where the NHS money in your local health economy goes
at present, by age group, disease group, prevention spend or
clinical specialty?
•
Do you have adequate data on patient outcomes and satisfaction, (ie what
good that investment of resources is doing, in these areas?)
•
Do you have any evidence (or even a gut feeling!) of where those same
resources could be moved from one area of activity to another to generate
greater health gain?
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Can you list, in priority order, where new investment should go first in order
to do the greatest good for the client group or population you look after?
•
Is it reasonable to try to engage your local clinicians, commissioners
and public in discussions about doing things differently without
such information?
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If your answer to any of these questions was “No”,
then Programme Budgeting and Marginal Analysis
(PBMA) may
be a technique that can help!
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Definitions
• Programme budgeting is a retrospective appraisal of
resource allocation broken down into meaningful programmes,
with a view to tracking future resource allocation in those
same programmes
• Marginal analysis is the appraisal of added benefits and
added costs when new investment is proposed (or lost benefits
and lower costs when disinvestment is proposed), in an
incremental way
Mooney G, et al, Choices for Health Care, MacMillan, 1986
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It is rocket science!
•
•
•
Its first major application was
not in health care but in the US
Department of Defence in
the 1960s.
Cost accounting tool that could
display, over time, the deployment
of resources that supported
specific military objectives, like
wars overseas, the support of
NATO or defence of the homeland,
rather than the conventional
budgetary approach of tanks,
missiles or diesel fuel.
Allocation of new resources, or
shifts between budgets, could
be judged on their relative
contribution to the main
objectives – a much more
meaningful way of
making decisions.
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Right for health?
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•
Outcome based funding Instead
of looking at the investment in a
particular hospital or drug budget,
the focus becomes “reducing heart
disease death rates”, “improving
indicators of child health”,
“reducing the burden on family
carers of patients with senile
dementia”, etc
The focus is on objectives maximising health gain by
deploying resources to best effect
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Marginal Analysis
• What would you do with 10 % more on your annual budget that
you can’t do now?
‘WISH LIST’
• What would you cease to do if you had to make do with
10% less?
‘HIT LIST’
• So those things on your HIT LIST have a lower MB at current
levels of activity than those things on your WISH LIST
• If you can’t think of anything with more benefit or prefer not to
give up anything currently to carry on what you’re doing then
you are probably allocatively efficient!
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PBMA: eight steps
1.
2.
3.
4.
5.
6.
7.
8.
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Choose a set of meaningful programmes to work with – perhaps age
groups, disease groups or clinical directorate groups
Identify current activity and expenditure in those programmes
(programme budgeting). Try to account for the total budget, to avoid
the risk of omissions but double-counting
Be creative - consider improvements and linkages in pathways and
patterns of care, within and between these programmes
Weigh up extra costs and increased benefits (or decreased benefits
and reduced costs) of the improvements you have thought of
(marginal analysis)
Consult widely - there may be options, trade-offs and value judgements
to explain
Decide - and make that decision public
Make the change happen! This is the essence of management
Evaluate progress - check that the anticipated costs, savings and
outcomes materialised in practice, then repeat the exercise
PBMA: CHD programme
• Population lifestyle social marketing programme
• General Practitioner Quality Outcome Framework Coronary
Heart Disease programme
• Statins
• Rapid access chest-pain clinics
• Revascularisation
• Cardiac rehab
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PB Tools & Resources
• DH PB tool: 2008/09 release
• NHS National Knowledge Centre – greater functionality
linking with need/epidemiology/PH area data
• YHPHO PCT Spend & Outcomes Factsheets & Tool (SPOT)
• DH. Programme budgeting guidance manual. Revised 23
May 2007
• Peter Brambleby, Andrew Jackson, J.A. Muir Gray
Programme-based decision- making for better value
healthcare: The 2nd annual population value review.
October 2008. NHS Knowledge Service/DH
• Ruta D et al. (2005) ‘Programme budgeting & marginal
analysis: bridging the divide between doctors &
managers’. BMJ 330: 1501-3
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DH National PB Project
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DH Programme Budgeting PCT
Benchmarking Tool 2008/09
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DH Programme Budgeting PCT
Benchmarking Tool 2008/09
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DH Programme Budgeting PCT
Benchmarking Tool 2008/09
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DH Programme Budgeting PCT
Benchmarking Tool 2008/09
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DH Programme Budgeting PCT
Benchmarking Tool 2008/09
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DH Programme Budgeting PCT
Benchmarking Tool 2008/09
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Spend & Outcome Factsheets & Tool (SPOT) –
Kirklees [YHPHO]
Spend and Outcome relative to other PCTs in England
Lower Spend,
Better Outcome
Higher Spend,
Better Outcome
2.5
2.0
Health Outcome Z Score
1.5
1.0
Trauma
0.5
MH
End
0.0
LD
Blood
Hear Musc
Vision
Soc
Neuro
Pois
Skin,Hlth
-0.5
Circ
Resp
Gastro
Canc
-1.0
Mat,Neo
Dent
Inf,GU
-1.5
-2.0
-2.5
-2.5
Lower Spend,
Worse Outcome
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-2.0
-1.5
-1.0
-0.5
0.0
Spend per head Z Score
0.5
1.0
1.5
2.0
2.5
Higher Spend,
Worse Outcome
Practical priority setting
Multi-criteria analysis
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Multi Criteria Analysis (MCA)
• Point scoring system that takes account of multiple criteria:
– Criteria are locally determined
– Weighted to give precedence to those of most relevance
– Allows alternative interventions/services/programmes to be scored
against these criteria
• Divide cost by point score to give ‘cost-effectiveness’
• Compile a ranking to guide decision making
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The Process
Define the
criteria
Weight the criteria
Score the options
Cost the options
Produce ranking in order of
cost-effectiveness
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Defining the Criteria
• Derived from objectives of service
• Generic not specific
• “Improves rehabilitation and after-care” rather than
“employs more district nurses”
• Should be identifiable and measurable
• E.g. life-years gained, effectiveness estimate
• Need to be “mutually preference independent”
• Able to assign preferences against one criterion
independently of preferences against other criteria
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Deriving the benefit criteria
What Do I Want in a New Car?
•
•
•
•
•
•
•
•
Safety
Style
Fuel economy
Space
Acceleration
Reliability
Comfort/accessories
Etc etc...
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Weight the Criteria
• Are some criteria more important than others?
• Safety
• Style
• Fuel economy
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50%
20%
30%
Score Each Car against Criteria
Score Weight Weighted Score
Safety
7
Style
Fuel economy
10
0.5
0.2
3.5
2.0
6
0.3
1.8
7.3
1.0
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...Then Divide by Net Lifetime Cost
£15,000
=
7.3
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£2,055
...Do the same for the alternative and rank
them by Cost-Effectiveness
Car
£ per point
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Volvo
£1,642
MX3
£2,055
VW
£5,340
Skoda
£14,310
Example Criteria Weights
1. Addressing inequalities
14
2. Whole person approach, choice
6
3. Fit with national/local objectives
10
4. Needs assessment
14
5. Size of population who will benefit
6. Effectiveness for patients and/or population
5
19
7. Sustainable benefits
7
8. Preventive, self-help
9
9. Accessibility
9
10. Feasibility
7
TOTAL
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100
Effectiveness, Efficiency, & Equity - Worked
Example (Brambleby) [1]
• Our mission is to secure the most effective,
equitable and efficient services for our population,
within the resources entrusted to us.”
DM/HK © 2010
Effectiveness, Efficiency, & Equity –
Worked Example (Brambleby) [2]
•
•
•
•
•
Cancer X - universally rapidly fatal if not treated
Incidence of “X” is 300 new cases per year
3 possible treatment packages, A, B & C
Good trial evidence on typical outcomes and typical costs
Newly enhanced budget is £1,500,000
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Effectiveness, Efficiency, & Equity –
Worked Example (Brambleby) [3]
• Treatment options:
– “A” adds 3 years of life @ £5,000(current treatment)
– “B”adds 5 years of life @ £6,000
– “C”adds 6 years of life @ £15,000
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Effectiveness, Efficiency, & Equity –
Worked Example (Brambleby) [4]
• Equity consideration – number of people with Cancer X in the
population benefiting from treatment:
– A @ £1,500,000/£5,000 = 300 people
– B @ £1,500,000/£6,000 = 250 people
– C @ £1,500,000/£15,000 = 100 people
DM/HK © 2010
Effectiveness, Efficiency, & Equity –
Worked Example (Brambleby) [5]
Therapy Cost
(£)
Effectiveness
(years added
per patient)
Equity
(patients
treated from
budget)
Efficiency (total
years gained from
budget)
300
900
A
5,000
3
B
6,000
5
250
1250
C
15,000
6
100
600
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Effectiveness, Efficiency, & Equity –
Worked Example (Brambleby) [6]
• A is the most equitable; everyone has access
• B is the most efficient; maximises total population health gain
from fixed budget
• C is the most effective
• A & B satisfy the “utilitarian” ethic
• C satisfies the “Hippocratic” ethic
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Quality of Life Adjustment (Brambleby) [7]
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Incorporating cost-utility (Brambleby) [8]
LoL x QoL
QALYs
Population Health
Gain (QALYs)
A
3 x 0.7
2.1
2.1 x 300 = 630
B
5 x 0.5
2.5
2.5 x 250 = 625
C
6 x 0.8
4.8
4.8 x 100 = 480
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Seven key organisational challenges to PBMA
& priority setting
•
•
•
•
•
•
•
Time (having enough of it!);
Good data;
Disinvestment incentives;
Identifiable programme budgets;
Outcome measurement;
Public involvement;
Organisational behaviour.
Mitton and Donaldson (2004)
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Organisational behaviour
• Formal v. informal process going on?
• ‘Transactions costs' to participants are critical to success of
PBMA (Jan, 2000)
• Individuals will only engage with PBMA if there are
opportunities to expand/protect their own budgets and/or
restrict the expansionary tactics of rival claimants!
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Priority setting - summary
• Prioritisation by order of cost-effectiveness ensures best
value for money from public funds
• Weighted benefit score captures all dimensions of ‘benefit’
in a single index
• Combining score with resource use data allows a crude
cost-effectiveness ratio to be calculated
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Participant Evaluation
• Lilac
=
What did you learn?
• Yellow
=
What worked well for you in the
workshop
• Blue
=
Is there anything you would do
differently, if so, what and how?
• Green
=
What are your future needs?
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