This week’s blog is brought to you by: Professor Sir Muir Gray
Full reference and title from the journal:
Uterus at a price: Disability insurance and hysterectomy Fan E. (et al) Journal of Health Economics 66 (2019) 1-17
Taiwanese Labor, Government Employee, and Farmer Insurance programs provide 5 to 6 months of salary to enrollees who undergo hysterectomies or oophorectomies before their 45th birthday. These programs create incentives for more and earlier treatments, …..Induced hysterectomies increase benefit payments and surgical costs, at about the cost of a mammogram and 5 pap smears per enrollee.
3V bottom line:
Expressing value in terms of other things that could be one with the same amount of resources, namely the opportunity cost, is very helpful and very uncommon.
3VH – Implications for value:
Cost benefit analysis and cost utility analysis are of great importance but expressing benefit in terms of the financial return or utility created is useful only in times when you have a big pot of money into which you can dip. We live in a world in which need and demand are increasing faster than resources and in population health management each sub group of the population, children, or people in the last year of life, or women needs to have responsibility for optimising value from the resources for their particular system. This requires researchers to report for people managing budgets for a sub group in this case the women’s health budget. The issue then is not the cost per QALY or the cost per DALY but what else could people in that sub group, women, get from those resources, the opportunity cost
“With resources always being limited, by choosing to implement one option, there is a benefit forgone as resources are then not available for other options. The lost benefit from the next best use of the resources is the opportunity cost.”
Source: Mitton, C., Donaldson, C. (2004) Priority setting toolkit. A guide to the use of economics in healthcare decision making. BMJ Publishing Group. (p.5-6)
“The value of the next best alternative forgone as a result of the decision made.”
Source: Wonderling, D., Gruen, R., Black, N. (2005) Introduction to Health Economics. Understanding Public Health. Open University Press. (p.7).
Another way of expressing this is that it is the opportunity value rather than the opportunity cost
“Imagine that a new drug comes along for the management of asthma. The key question is not the cost per QALY of that drug, although that is obviously important information. The first question is to ask if this new drug would give more value to people with asthma than some of existing services provided for that group of patients. People need to know the opportunity costs or, to put it another way, the opportunity value of a new intervention. Secondly, the decision maker would want to ask if some money should be moved from another budget, from the chronic obstructive pulmonary disease programme budget, for example, or perhaps from the budget for another patient group altogether, from the musculoskeletal budget or the cancer budget or the mental health budget. The opportunity value would need to be worked out.”
Source: Gray, M. and Porter T. (2009) Opportunity Value. Journal Health Services Research Policy, 14(3) (p.129- 30).
The key question is “what would the women covered by the insurance scheme chose?”