What is economic evidence and why does it matter

1
What is economic evidence and why does it matter?

• Dr Elisabeth Fenwick
• Public Health and Health Policy
• University of Glasgow
• Healthier Lives, Wealthier Communities?
• Sept 30, 2009

2
Why present economic evidence?

• Resources are scarce
• Wants (needs) are infinite
• Choice is inevitable
• Opportunity cost
• the benefit obtained from employing resources
  in their best alternative use

3
Who might want to see economic evidence?And why?

• Funders
• trying to allocate funding between programme
  areas
• deciding whether to undertake a new initiative
• Programmes/Initiatives
• Impact - What are we doing?
• Efficiency - How are we doing it?
• Where should we focus our efforts/resources?
• Sponsors
• Not simply a cost-cutting exercise

4
What is economic evidence?
Programme
Cost savings
Health status
Resource use
Health outcome
Total cost
Comparison
5
Who might be able to present economic evidence?

• Different for different circumstances

6
What might economic evidence look like?

• Inputs
• Employees wages
• Volunteer time
• Stock

• Outputs
• ?fruit and vegetable consumption
• Potential outcomes
• ?Physical health (e.g. CVD, Colorectal cancer)
• ?Mental health
• (e.g. awareness)

Different for different circumstances
7
Where might I find economic evidence?

• Passive
• Drawers
• Official statistics
• Published literature
• Active
• New study
• Quantitative
• Qualitative

8
What does an economic perspective add?

• Objective is to inform difficult decisions about
  the best use of limited resources
• how to allocate funding between programme areas
• whether to undertake a new initiative
• Rational approach to link inputs ? outputs ?
  outcomes
• Determine if a programme is good use of scarce
  resources
• Not simply a cost-cutting exercise
• Important to balance inputs (resources/cost) and
  outcomes (health/wellbeing)

9
Possible approaches
?
?

• Costing/Cost minimisation
• Cost-consequences
• Economic evaluation
• Cost-effectiveness
• Cost-benefit
• Social Return on Investment

?
?
10
Cost-consequences I
11
Cost-consequences II
Mental health
Physical health
Self- esteem
Health behaviour
Social integration
12
Aiding comparisons
Mental health
Physical health
Self- esteem
Health behaviour
Social integration
13
Economic evaluation

• Balance costs with outcomes
• Identifying, measuring and valuing what is given
  up cost
• Identifying, measuring and valuing what is gained
  outcomes
• N.B. SRoI ? monetary costs and monetary outcomes

14
Conclusions

• Economic appraisal is concerned with informing
  decisions
• Economic approach adds a rational approach to
  address difficult issues about allocation of
  resources
• Economic evidence is not simply about costs
• Evidence should fit the circumstances