health economics as applied in mexico
DESCRIPTION
Rafael Santana, MD Presented during the 2013 3M Global I.V. Leadership SummitTRANSCRIPT
MAKING THE CASE
HEALTH ECONOMICS AS APPLIED IN MEXICO
Rafael Santana, MD
1
TALK OVERVIEW
• Some data from Mexico.
• Review of Health Economics.
• Cost Effectiveness Analysis and Cost Utility Analysis
• The role of CEA and CUA in Mexico
• The barriers for implementing Economic Evaluation
• Conclusion
2
SOME DATA FROM MEXICO
Total population (2010) 112,336,538
Life expectancy at birth m/f (years) 72/78
Gross domestic income per capita (2011) $16,588
Probability of dying under five (per 1 000 live births) 16
Probability of dying between 15 and 60 years m/f (per 1 000 population)
177/95
Total expenditure on health per capita (2010) $ 959
Total expenditure on health as % of GDP (2010) 6.3
Population covered by Social Security (2010) 64.5 %
For 2009 unless indicated. Source: Global Health Observatory and INEGI
3
Demographic Transition in Mexico
Men Women
Millions
7 6 5 4 3 2 1 0 1 2 3 4 5 6 77 6 5 4 3 2 1 0 1 2 3 4 5 6 7
1975 2000 2025
Annual growth rate65 years and older: 3.8%Under 5 years old: -1.3%
85 +80-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-14
5-90-4
4
DISTRIBUTION OF CAUSES OF DEATH IN MEXICO, 1955-2030
0
10
20
30
40
50
60
70
80
90
100
1955 1960 1970 1980 1990 2000 2006 2030
PER
CEN
TAG
E
Communicable diseases, reproductive and malnutrition related diseases.
Non communicable diseasesInjuries
5
Epidemiological Transition in Mexico, 1955-2005
Source: INEGI/Sec Salud. Mortality Database
Ill-defined
Diabetes
Congenital Abnorm..
Maternal Cond.
Neuropsychiatric Cond
Genitourinary Dis.
Chronic Respiratory Dis.
Malignant Neoplasms
Malnutrition
InjuriesCardiovascular Diseases.
Perinatal Dis.
Respiratory Inf.
Diarrheal Dis.
Infectious and Parasitic
35% 25% 15% 5% 5% 15% 25% 35%0%
20051955
Epidemiological backlog
Emerging problems
Ill-defined
6
MEXICAN HEALTH CARE SYSTEM
1. Governmental organizations: providing services for the uninsured population (Ministry of Health, IMSS-Oportunidades and Popular Insurance)
2. Social Security: covering workers in the formal private sector of the economy, state and federal workers, the armed forces and employees of the national oil company (IMSS, ISSSTE, ISSFAM and PEMEX)
3. Private sector: made up of an unorganized hospitals and clinics on a for-profit basis
7
CHALLENGES TO THE HEALTH CARE SYSTEM
Increasing costs to treat older people and chronic diseases (Cancer, diabetes, cardiovascular and mental diseases)
Continue to deal with infectious diseases, emerging and re-emerging diseases (TB, Influenza Pandemic, HIV, etc)
Fragmentation and lack of coordination with inequity in access to care
Low expenditure on health (6% GDP)
High cost of new drugs and technologies
8
TALK OVERVIEW
• Some data from Mexico.
• Review of Health Economics.
• Cost Effectiveness Analysis and Cost Utility Analysis
• The role of CEA and CUA in Mexico
• The barriers for implementing Economic Evaluation
• Conclusion
9
REVIEW OF HEALTH ECONOMICS.• Economics is the science that deals
with the consequences of resources scarcity.
• Economics needs to identify the best way to use of scarce resources to satisfy human wants and needs.
• Economics needs to Choose between which ‘wants’ and which ‘affords’, given our resource ‘budget’
10
ECONOMICS IS ABOUT CHOICE
Budget
Good ‘A’ Good ‘B’
11
HEALTH ECONOMICS
• Production of health care (doctors, nurses, hospitals …).
• Distribution of health care across the country.• How much money should the government spend
on healthcare?• Economic evaluation for new drugs and
technologies
Health economics is the study of how (scarce) resources are allocated to and within the health economy.
12
1. Could it work (efficacy)?
2. Does it work (effectiveness)?
3. Does it work well (efficiency)?
ECONOMIC EVALUATION13
TALK OVERVIEW
• Some data from Mexico.
• Review of Health Economics.
• Cost Effectiveness Analysis and Cost Utility Analysis
• The role of CEA and CUA in Mexico
• The barriers for implementing Economic Evaluation
• Conclusion
14
COST-EFFECTIVENESS ANALYSIS (CEA)
Compare treatments.Measure all costs.Identify all outcomesIn long term treatment, discount cost and outcomes to reflect lower value associated with delay
15
COST EFFECTIVNESS ANALYSIS
DRUG A
DRUG B
BENEFITS
BENEFITS
COST
COST
TIME
16
COST-UTILITY ANALYSIS (CUA)
Compare treatments.Measure all costs.Identify all outcomesDiscount cost and outcomes to reflect lower value
associated with delayMeasure the improvement on health
17
HEALTH BENEFITS
• Quality-adjusted life years (QALYs) and Disability-adjusted life years (DALYs)
• Combine mortality with morbidity in single numerical units.
• Allows to account for mortality and morbidity
• Value given to various states from 0 (worst) to 1 (<healthy>)
18
19
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0 10 20 30 40 50 60 70 80 90
Life years
Ad
jusm
ent
fact
or
DALY
QALY
QALYs and DALYs20
B
C
A
D
more costly
increase in health effects
decrease in health effects
Intervention is more costly and less effective
Intervention is more effective but more costly
Intervention is less effective but less costly
Intervention is less costlyand more effective
less costly
Cost-effectiveness plane21
NeedsEvaluation
Superior
More costly
Less costly
More effective Less effective
B
D
NeedsEvaluation
D
Inferior
C
Extra benefits compensate additional cost?
Cost-effectiveness plane
A
22
The more effective, less costly treatment dominates or if they are equal cost, the more effective or if they are equally effective, the less costly.
• In the absence of dominance, find the Incremental Cost-Effectiveness Ratio (ICER)
ECONOMIC EVALUATION23
INCREMENTAL COST – EFFECTIVENESS RATE (ICER)
A
B
Effectiveness
Cost
EA EB
CA
CB
Costs B Effects B
Costs A Effects A
Costs B - Costs A Effects B - Effects
A
Incremental Cost Effectiveness Ratio:
Cost Effectiveness Ratios:
24
EconomicEvaluation
B
We reject
Cost +
Cost -
Effectiveness +Effectiveness -
A
D
EconomicEvaluation We accept
C
Uncertainty Zone
Uncertainty Zone
Acce
ptat
ion
Zone
Acceptation
Zone
Cost-effectiveness plane25
Cost +
Cost -
Effectiveness +Effectiveness -
Uncertainty Zone
Uncertainty Zone
Cost-effectiveness plane25
3 GDP
1 GDP
1 QALY/DALY
TALK OVERVIEW
• Some data from Mexico.
• Review of Health Economics.
• Cost Effectiveness Analysis and Cost Utility Analysis
• The role of CEA and CUA in Mexico
• The barriers for implementing Economic Evaluation
• Conclusion
26
In 2008 was published the first GUIDE FOR ECONOMIC EVALUATION of new drugs and technologies. It was modified in 2011. http://www.csg.salud.gob.mx/descargas/pdfs/cuadro_basico/guia_eval_insumos11052011.pdf
Clear standards
Transparency
Step 1: Check and value the applicationsStep 2: Evaluation of evidence.Step 3: Decision
ECONOMIC EVALUATION IN MEXICO27
WHAT IS IMPORTANT FOR THE GENERAL HEALTH COUNCIL?
• Who paid for the study?• What actually went into the study?• How does the context of the study resemble and differ from our
context?• What is driving the model?• What is likely to change• Uncertainty… sensitivity of results to input parameters in model
28
REQUIREMENTS OF CEA IN MEXICO
• Provide cost and outcomes disaggregated.
• Provide key assumption, data sources, table with ingredients for model, clinical pathways explicit.
• Sensitivity analysis: impact of variation of input parameters on results.
• Describe relevant population and its size.
• Budget impact analysis (BIA) applied to health care.
• 5% discount in cost and benefits
• Only 1 GDP per capita
29
Theoretical values (in US$/DALY) for cost-effectiveness based on the “three times Gross Domestic Product per capita” approach proposed in the World Health Organization Report 2002 (WHO 2002).
**DALY, Disability-Adjusted Life-Year.
* 1 GDP
Country 3 GDP threshold
(US$/DALY) **
Luxembourg 266,391
U.S.A. 144,336
Australia 125,992
Canada 121,260
Germany 118,368
UK 106,794
France 105,714
Japan 101,004
Italy 98,016
Spain 96,261
New Zealand 93,246
MEXICO* 16,588 Source: World Bank 2011
30
‘DRUMMOND’ CHECKLIST
1. Was a well-defined question posed in answerable form?
2. Was a comprehensive description of alternatives given?
3. Was there evidence that effectiveness had been established?
4. Were all the important and relevant costs and consequences for each alternative identified?
5. Were costs and consequences measured accurately/appropriately?
31
‘DRUMMOND’ CHECKLIST
6. Were costs and consequences valued credibly?
7. Were costs and consequences adjusted for differential timing?
8. Was an incremental analysis performed?
9. Was allowance made for uncertainty?
10.Did presentation/discussion of results include all issues of concern?
32
TALK OVERVIEW
• Some data from Mexico.
• Review of Health Economics.
• Cost Effectiveness Analysis and Cost Utility Analysis
• The role of CEA and CUA in Mexico
• The barriers for implementing Economic Evaluation
• Conclusion
33
BARRIERS
• Lack of understanding of Economic Evaluation
• Lack of trust in cost effectiveness analysis methods
• There are no QALYs or DALYs in Mexico
• Lack of confidence in extrapolation (modeling)
• Weakness of evidence
34.-
BARRIERS
• Short-term horizon.
• Long-term horizon.
• Industry perspective, not societal perspective
• Concern about sponsorship bias
35
BARRIERSIS THE EVIDENCE SUFFICIENT?
• We might need more evidence
• Costs of getting more evidence
36
IS THE EVIDENCE SUFFICIENT?
• Value of evidence (information)
• How uncertain is the decision?
• Consequences of getting the decision wrong
• Number of patients who could benefit
37
TALK OVERVIEW
• Some data Mexico from.
• Review of Health Economics.
• Cost Effectiveness Analysis and Cost Utility Analysis
• The role of CEA and CUA in Mexico
• The barriers for implementing Economic Evaluation
• Conclusion
38
PRESSURE ON HEALTH SYSTEM
• Demographic pressure:
• Epidemiological
• Financial
39
ECONOMIC EVALUATION
• Economic Evaluation for new drugs and technologies is required but needs to be carefully conducted.
• Actual use of Economic Evaluation is quite limited in relation to potentials
• Not possible to undertake economic evaluation for all decisions.
40
ECONOMIC EVALUATION
• Efficacy vs. effectiveness.
• Prevention vs. cure
• Other factors such as social, political, ethical, feasibility, human resources, context , etc.
41
THANKS
42