Assistant Director Public Health Science Hull Teaching PCT
2 s On Website
3 Decision Making in Pathways Development
Describe an Economic view of Decision Making in Health Care
Offer a potential approach
Describe simple approach
Pull together main recommendations
4 Economists Perspective
More Demands on resources than there are resources available
A view not always accepted by participants in NHS
Patients needs must come first!
Which patients needs come first
5 Economists Perspective2 key economic principles
Investing resources in one way or on one group of patients means that resources not available for another
About changes to the resource mix
If budget increases how to spend new resources
If budget decreases where to reduce resources
If budget stays constant how to reconfigure for improved service
6 Marginal Analysis
Aim to allocate resources to the point when no further change will result in a health gain
Without explicit adherence to the two economic principles resources will be unlikely to be allocated in the best possible configuration.
Opportunity Cost - The Margin
7 Program Budgeting Marginal Analysis (PBMA)
Approach used in UK Australia New Zealand and Canada
Hull is participant in National PBMA Pilot with York Observatory - Diabetes
Similar principles to economic evaluation but suggested to be more pragmatic and applicable to various levels through organisation
Key is to ensure that opportunity cost and the margin are used in decision making process
8 PBMA Steps
Determine aim and scope of decision process
Define budget (map current activity and spending)
Form marginal analysis advisory panel (representative)
Determine locally relevant decision criteria
input from decision makers board public etc
Advisory Panel identify
Areas for service growth
Areas for savings through using less resources for same service level
Areas for resource release through scaling back / stopping services
Advisory Panel make recommendations in terms of
Funding growth areas from new resources
Moving resources from 5b to 5a
Trade off decisions to move resources from 5c to 5a if considered to be an improvement
Validity checks with stakeholders
9 Determine Scope
Aims need to be clearly stated
To determine optimum investment across all programs within Trust (PCT or Provider)
To identify priorities for new technologies
Both important for Pathways Development
Map current activity and spending
Starting point for decisions
10 Advisory Panel (Pathways Group)
Representative group but not too large
Group dependent on question under consideration and scope of exercise
Necessary to restate economic principles
11 Decision Making Criteria
Need to clearly state dependent criteria and make explicit (some examples)
May be put into a decision making pro-forma to ensure fair consideration and avoid the loudest voice dominating
Or use Qualitative (Delphi) methods
12 Identify options for change
Stage 5 in the PBMA process
Prioritised list of service growth options
Examine current expenditure to improve operational efficiency
Identify options for service reductions or scaling back
13 Rating Options for Change
Part 6 in the PBMA process
Each planning group member to explicitly rate each option from stage 5 according to the pre-defined criteria
All decision matrix forms summed and total score averaged to give a score per option51121
14 Ranking and Decisions
If for example service growth items A B and C get scores of 900 800 and 700 and service reduction options X Y and Z get average scores of 850 750 and 650 respectively
Ranking of options is then A X B Y C Z
Service A should be financed from lowest ranked service reduction (Z) still getting funding
Continue comparing growth and service reduction until no further gains can be had by switching resources between options
15 Why and What Challenges
Notion of freeing resources through improving operational efficiency commonplace in health organisations
Challenge to obtain resource releases through service reductions / disinvestments
Need good information
16 Information and PBMA
Health technology assessments
DoH or other guidelines
Local utilisation data
Etc as relevant
17 Other Challenges
Data Requirements - Cost of Information
Need to make decisions when there is little evidence (Bounded rationality)
Identifying areas for resource release (sacred cows and protection of interests)
Might be better approached by informal consultation with key personnel or by anonymous questionnaire
How to incorporate patient views without distorting a rational or dispassionate view
18 Barriers and Facilitators
Lack of trust between facilitators
Physicians not on board
Advisory panel lacking in health economics and/or allocation experience
Politics preventing program evolution
Discontinuity of personnel
Too many admin demands leaving priority setting as a low priority activity
Senior level managerial/clinical champions
Culture to learn and change
Resources earmarked for PBMA process itself
Built in incentives for appropriate and efficient spending
19 Advantages of PBMA
Explicit recognition of opportunity cost and the margin
Enables public input
Can be coupled with an ethical framework to examine the fairness of the process
Improvement on common unstructured decision processes
20 Decision Tree Approach Square Decision Node Circle Chance Node with probability 21 Decision Trees1 Year Timescale in this case for simplicity Die A Live Decision Die B Live 22 Decision Trees ProbabilitiesMust Sum to 1 Die 0.05 A Live 0.95 Decision Die 0.1 B Live 0.9 23 Decision Trees OutcomesMeasured using HUI SF36 Euroqol etc Die 0 0.05 A Live 0.85 0.95 Decision Die 0 0.1 B Live 0.80 0.9 24 Decision Trees CostImportant in every Pathway Die 0 0.05 A Live 0.85 0.95 1000 Decision Die 0 0.1 100 B Live 0.80 0.9 25 Decision Trees OutcomesMeasured using HUI SF36 Euroqol etc Die 0 0.05 Outcome 0.81 A Live 0.85 0.95 1000 new treatment Decision Die 0 Existing treatment 0.1 100 B Live 0.80 Outcome 0.72 0.9 26 Decision Trees OutcomesMeasured using HUI SF36 Euroqol etc Die 0 0.05 Outcome 0.81 A Live 0.85 0.95 1000 Expensive Treatment Decision Cheap Treatment Die 0 0.1 100 B Live 0.80 Outcome 0.72 0.9 27 Decision Trees OutcomesMeasured using HUI SF36 Euroqol etc Die 0 0.05 Outcome 0.81 A Live 0.85 0.95 1000 Expensive Treatment 1 Patient Or 1000 Decision Die 0 Cheap Treatment 0.1 100 B Live 0.80 Outcome 0.72 0.9 28 What Next
Difference in Health Related Quality of Life Outcome 0.09 on scale (between 0 death and 1 full health
Cost difference 900
Cost per QALY
900 for 0.09 improvement in Quality of life
9999 cost per QALY
NIHCE Boundary 30000 per QALY
29 What Next Whats important
PBMA - Allows consideration and input of pathway for all members of group avoid dominance by any group
Finite Resources Probably shrinking in real terms due to increases in costs
Evidence Based From Studies and Measured Local Outcomes
Costed Essential but not always considered but relatively easy
Gold Standard Silver Standard or Bronze - Based on Maximisation of benefit to patients
30 What Next Whats important
Cost of Information Not always possible to meet all the important points but should attempt to find ways where we can
Innovation and Change Can it be accommodated in a tariff based system
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