Health service staff attending a HMI meeting in Cork’s Erinville Hospital were told to assume they were Board Members of a health commissioning body who had to choose between a number of treatment options with different costs and outcomes for three groups of patients with a particular type of cancer. Maureen Browne reports.
They needed to agree and commission a patient pathway for the patient group, using economic concepts in their decision making, Dr. Augustine J. Pereira, Director of Public Health and Medical Officer of Health, HSE South, said.
Their learning objective would be to introduce some of the tools of economic appraisal, their strengths and limitations, and how to use them to make robust resource allocation decisions across pathways of care.
“Prioritizing between health interventions, whatever the health financing system, is an important first step to approaching an optimal allocation of resources in the health sector,” he said.
“We are looking at health interventions that will maximize the benefits to society, whilst also accounting for the distribution of these benefits and other equity concerns.
“Resource allocation of health interventions should be as efficient and equitable as possible.”
Dr. Pereira said their Board’s mission statement was to secure the most effective, equitable and efficient services for their population, within the resources entrusted to them.
“All three criteria are intrinsically worthy but there might have to be a trade off between them.
Health economics was not about being hard-hearted and saying ‘no.’ It was about trying to do the most good
“Which, in your view, should generally take precedence?
- He said the cancer from which the patients were suffering was:
- Universally rapidly fatal if not treated
- There was an incidence of 300 new cases every year
- There were three possible treatment packages – A, B and C.
- There was good trial evidence on typical outcomes and typical costs
- The budget for treating this type of cancer was €1,500,000 per year
- (All costs fall in first year, thereafter costs of care were no different from the population average)
He said the options per typical patient were:
- A – The current treatment which added three years of life @ €5,000 per patient.
- B which added five years of life @ €6,000 per patient.
- C which added six 6 years of life @ €15,000 per patient.
“On your first impression, make a choice.”
Dr. Pereira went on to tell them that there was an affordability issue. The budget was fixed but some of the treatments might exceed the Board’s capacity to pay for everyone.
They should see how many patients they could afford to put through the treatment programme with their €1,500,000 budget.
- The first treatment costing €5,000 per patient would allow them to treat 300 people.
- The second treatment costing €6,000 per patient would enable them to treat 250 people.
- The third treatment costing €15,000 per patient would enable them to treat 100 people.
“The first treatment is the only option that allows universal access to treatment for the 300 projected new cases per year. Now you have seen the “equity” trade off – make your choice.”
Dr. Pereira said they would now look at efficiency in terms of getting the greatest number of years of life from their budget
- The first treatment which added three added years of life for 300 people, yielded 900 life-years.
- The second treatment which added five years of life for 250 people, yielded 1,250 life-years.
- The third treatment, which added six years for 100 people, yielded 600 life-years.
“On the basis of these facts, choose your option again.
“To summarise, so far – the first treatment is the most equitable because everyone has access, the second treatment is the most efficient as it maximises total population health gain from a fixed budget, the third treatment is the most effective.
“The first two treatment satisfy the ‘utilitarian’ ethic – they are variations on the theme of ‘greatest good for the greatest number’.
“The third option satisfies the ‘Hippocratic’ ethic – doing the best that is technically possible, which is important to clinicians and individual patients.”
Dr. Pereira said there were no right answers in this scenario and no trick questions.
“Those who opt for the second or the third option have a further step to consider – how would you decide who got the treatment or who did not. Try to think of a few criteria you might use before moving on.”
Dr. Pereira said there were two popular misconceptions. Health economics was not about being hard-hearted and saying ‘no.’ It was about trying to do the most good.
“If we can’t afford to say ‘yes’ to every need and demand, we have to manage scarcity as fairly as possible. Health economics is not about ‘making economies.’ It is not about withholding money, but about getting it all spent, and doing so to best of our ability.”
Dr. Pereira said this scenario was sent to Prof Alain Enthoven, a respected American health economist and health care manager for his views:
This was his reply – “Your example really made me think. The typical American reaction would be that everybody should have treatment the third treatment and ‘we don’t accept that resources are limited.’ That got us to 13.5% of GDP and rising. Reflection would drive me back to the first treatment. It would just be too unfair to deny people any treatment at all in order to pay for a more effective treatment for some. But the attraction of the greater total life years is hard to pass up. I think I could face people and explain the choice of the first treatment, but not the others.”
Dr. Pereira said that they would now look at the quality of life for the patients, from 0 (worst possible quality of life) to 1 (best possible quality of life).
The trial data showed that, for our three treatments:
- Patients gave the first treatment a score of 0.7 QoL on average for the three years of added life
- Patients gave the second treatment (which was the more aggressive) a score of 0.5 QoL on average for the five years of added life
- Patients gave the third treatment (which was more expensive because of the support that came with it) a score of 0.8 QoL over the six years of added life.
This worked out as follows:
- The first treatment gave three added years at 0.7 QoL per year = 2.1 QALYs
- The second treatment gave five added years at 0.5 QoL per year = 2.5 QALYs
- The third treatment gave six added years at 0.8 QoL per year = 4.8 QALYs
“Efficiency is now measured as total QALYs purchased for the population from the given budget. Remember that cost has not changed, so affordability of treatment has not changed.
“Let’s assume that the chosen treatment for our cancer centre is the first treatment, if the present budget is fixed, but Board members want to explore a 20% uplift in this budget, ie an extra €300,000, with the suggestion that this comes from the chiropody budget because, it is suggested, ‘no-one dies from lack of foot care.’
“This meant some patients could now switch from the first treatment to the second or third treatment, so we must look at which of those gives the better return on investment. Or should the money be left in chiropody?
“If we take the money from chiropody, the benefit foregone is known as ‘opportunity cost.’ Using imaginary figures for the exercise, let’s say the cost per person per course of 10 sessions is €500. The added years – nil directly (but assume 10 more years of natural life expectancy in which to enjoy the benefit). So, we have a QoL gain of 0.05 per year – 0.05 QoL x 10 years = 0.5 QALYs per case.
“So in summary the gain from investing €300,000 in chiropody is 600 cases and 300 QALYs.
“The comparison of opportunity cost is as follows:
“If we spent the money on shifting patients from the first to the second treatment, we would treat 300 people and generate 120 QALYs.
“If we left the money in chiropody we would treat 600 people and generate 300 QALYs.
“Perhaps the money is best left in chiropody, but it is your call.”
Dr. Pereira said the take home lessons were:
There was a trade-off between effectiveness, efficiency and equity – finite resources and excess demand required us to confront these.
Economic considerations helped lay out the choices more explicitly, and be more rational, but did not tell us what to do.
We could improve efficiency by taking a more strategic approach when providing or buying health services, e.g. deciding which services to purchase based on information on the health needs of the population.
“There is no avoiding value judgements and other considerations, therefore commissioners need to consult with the public and providers,” he concluded.
Dr. Pereira acknowledged Dr. Peter Brambleby former Director of Public Health at Norwich, UK for the scenario which he adapted for the presentation.