Martina Garau, Office of Health Economics

ISPOR Italy Rome Chapter Rome 12 April 2016

Are Wider Societal Effects Considered in Healthcare Decision-making? An

overview from other countries

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Agenda• Introduction

• Categorisation of wider effects • Economic burden of cancer across Europe

• Do health care decision makers consider wider effects?• Barriers to incorporating wider effects into decision

making• System fragmentation• Equity concerns

• Summary and discussion

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• Most of the points presented here are based on this study unless stated otherwise

• Acknowledgment to the other authors Koonal Shah and Adrian Towse

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Introduction – link between health and economic outcomes

Source: Garau et al. 2016

40% of total cost of Alzheimer’s is cost of social care

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Introduction – link between health and economic outcomes

Source: Garau et al. 2016

60% of the total cost of breast cancer is due to patients’ absence from work

38% of total cost of multiple sclerosis is due to early retirement

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Introduction – link between health and economic outcomes

Source: Garau et al. 2016*CVD: cardiovascular disease

10% increase in CVD* mortality reduces 1% of income growth per capita

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Economic burden of cancer in Europe• Production

losses are substantial in all cancers in most countries

• They range from €1.3 billion in Malta to €14 billion in Germany

Source: Luengo-Fernandez et al. 2013

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Do decision makers consider wider effects? (1)

Australia France Germany Italy Korea Poland Sweden UK

Considers wider effects regularly Considers wider effects in principle but rarely/never in practice

Does not consider wider effects within the HTA process or healthcare budget-setting decisions

Does not consider any economic /cost data

• With the exception of Sweden, no country considers wider effects on a regular basis

• In Australia, Poland, and UK although economic evaluations for HTA agencies can include wider effects this rarely happens

• In Germany there is no scope for including anything other than the direct costs to the healthcare sector

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Do decision makers consider wider effects? (2)At the Ministry of Finance level, decision makers are reluctant to consider wider effects when allocating resources across sectors:

• Some policy reports emphasise the importance of those effects (e.g. “Productivity Commission report” in Australia; “Innovation, Health and Wealth” in the UK) but this has not been put into policy practice

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Why are wider effects not considered?• System fragmentation• Methodological and data generation issues• Added complexity • Equity concerns • Weakness of evidence on the relationship

between health and economic growth

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Why are wider effects not considered? – System fragmentation• There is a general view that health care spend should

focus on improvement of citizens’ health

• Government budgets are kept separate so benefits spilling over across departments are not considered:

• In some countries (Poland, Australia), there are budget silos within the health care sector as well

• In some countries (UK, Sweden) for local commissioners total budget impact remain the key criterion for decision making

• There were a few examples of integrated decision making in the UK for non-medicine interventions

• E.g. needle exchange programs funded by NHS, cycle lanes funded by local authorities

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Why are wider effects not considered? – Equity concerns • Including indirect effects in the assessment of

interventions can have distributive effects between social groups

• will the inclusion of productivity effects favour treatments aimed at working age individuals over those who are unable to work (consumption exceeding production effects)?

Recent UK evidence shows that for every QALY gained in the health system £14,000 net benefits are generated in the wider economy (Roberts, 2015)

Consideration of productivity gains from patients’ unpaid work (voluntary work and supply of informal care) may offset the impact of productivity gains from paid work in biasing the impact towards working age people

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Summary and discussion• Evidence shows that health spending can generate economic benefits,

including improving patient productivity at work, reducing sickness absence, and generating savings in other public programmes (e.g. education, social care)

• Because of financial pressures, governments are reluctant to consider non-health effects when allocating resources to the health sector:• focus is on cost-containment measures with the risk of overlooking long term

benefits• there is an enduring separation of budgets within the public sector and, in

some cases, the health care sector preventing to capturing spillovers across sectors

• The inclusion of wider effects in HTA-type decision making process is still controversial and infrequent:• HTA agencies need to signal a willingness to consider them systematically• industry will then need to improve their evidence package to show existence

and magnitude of those effects for individual interventions.

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References

Garau, M., Shah, K.K., Sharma, P., Towse, A., 2016. Is the Link Between Health and Wealth Considered in Decision Making? Results from a Qualitative Study. International Journal of Technology Assessment in Health Care, 31(6), pp.1-8. Luengo-Fernandez, R., Leal, J., Gray, A., Sullivan, R., 2013. Economic burden of cancer across the European Union: a population-based cost analysis. Lancet Oncology; 14: 1165-74Roberts, G., (2015). “Methodology for estimating the wider economic impacts of health conditions and treatments”. Spanish Health Economics Association Annual Conference See more at: https://www.ohe.org/news/issues-panel-developing-cost-effectiveness-decision-making-what-can-be-learnt-%E2%80%9Cvalue-based

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Grazie per la vostra attenzione!

Martina GarauSenior EconomistThe Office of Health Economics Website: www.ohe.org | Blog: http://news.ohe.org/Email: mgarau@ohe.org