Disadvantages and advantages of using QALYs in economic evaluation

Why does the United Kingdom have a national wellness service ( NHS ) and non a national nutrient service? ( 800 words maximal ) . The National Health Service is built on the Bentham ‘s construct of utilitarianism of maximizing ‘utility ‘ for greatest figure ( Lockwood,1988 ) , enabling hazard sharing across the full population by facing moral jeopardy and inauspicious choice. This demand for utilitarianism can be linked to the microeconomic theory of supply and demand ( Frank, 1994 ) . Supply and demand underlies the allotment of limited resources or trade goods used to accomplish maximal wellness end product. In this state of affairs, “ demand ” refers to both willingness and ability to pay for wellness, and “ supply ” is the willingness and ability of possible Sellerss to bring forth and sell a peculiar trade good ( Schafermeyer, 2000 ) . Consumers, capable to their single income restraints, maximize their single public-service corporation through their buying of peculiar goods ; wellness in this regard has both facets of an investing good and ingestion good.

The demand for wellness attention services is really different to that of nutrient. Health, unlike other resources, can non be traded over clip. It is a derived demand, in which consumers have a demand for wellness but can non straight buy it ( Ringel, 2002 ) . Like a capital good, wellness is capable of depreciation over clip and as such ; its demand is a time-dependent variable, which changes with exogenic and endogenous factors. Therefore, one could propose there is limitless wellness attention demand that will ever transcend limited supply due to the overall load of sick wellness being impossible to expect. As such, wellness attention in an of import determiner of wellness but the demand for it is frequently unpredictable ( timing, frequence, strength, costs ) and hence, expensive.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

Markets favour consumers with buying power. The nutrient industry is a free market, dictated by consumer pick and demand, the outgrowth of new providers and the issue of under executing providers. Within the nutrient market, snap is driven by the premiss of consumer sovereignty, in which consumers have information about every merchandise, hence can take an tremendous scope of options and precisely how much of any given thing we want to buy. In a free market, no one manufacturer can pull strings the market monetary value of a merchandise. Manufacturers are incentivised to fulfill consumer wants and bring forth expeditiously to derive maximal net income. Economic theory suggests a free market promotes the optimum result for consumers and suppliers. As such, equilibrium in monetary value and measure are finally met. While markets may be efficient, the allotment of resources by markets may non ensue in equity

Do we hold buying power as consumers in wellness attention? In simple footings, we can foretell when we will be hungry but we can non foretell when we are traveling to be sick and we know how to handle hungriness but non all the contingencies of sick wellness. It is likely that without a national insurance system like the NHS an oligopolistic market would be as there would be a few dominant Sellerss capable of act uponing the overall market monetary value of a trade good due to great market power.The cosmopolitan NHS exists to run into this variable demand and guarantee equity by supplying a comprehensive, high quality service available on the footing of clinical demand and non ability to pay ; guaranting persons are n’t victims of the market forces that could be derived from a market in which entree to services is driven by the jurisprudence of demand. It exists under a bid market with no competition guaranting ‘horizontal ‘ equity in distribution. In wellness attention, consumers do n’t hold the necessary information for driving a perfect market. To hold perfect information they would necessitate to cognize their current wellness position, prospective wellness position, available interventions and the cost of interventions. We rely upon physicians moving as agents ( principal-agent relationship ) or ‘gatekeepers ‘ to help in our determination devising and to buy health care based on their cognition. In the Grossman Model based on a human capital attack to wellness ( Grossman 1972 ; Grossman 2000 ) demand for wellness attention is derived from the demand for wellness. In this theoretical account, it is recognised that consumers have imperfect information about their wellness and therefore may be capable to inauspicious choice jobs. For a perfect market to be within Health Care Services there is a demand for prefect competition. For perfect competition to be, dissymmetry of information between consumers and manufacturers should non be, there should be uniformity in merchandise and manufacturers should be able to freely come in and go out the market. Rational buying determinations are frequently hard if non impossible to the non-medical population. Consumers are frequently unable to do an informed determination sing whether intervention is required and, if so, which therapies are most effectual. Markets in wellness attention are non efficient, chiefly because consumers do non hold good information.

In doing resource determinations, allotment efficiency is besides of import. The construct of allocative efficiency takes account the efficiency with which results are distributed among the community.

( WORDS: 789 )

Question 2

What are the disadvantages and advantages of utilizing quality adjusted life old ages ( QALYs ) in economic rating? ( 800 words upper limit )

Within the National Health Service, harmonizing to Morris, Devlin and Parkin ( 2007 ) , economic rating is used for the undermentioned grounds:

To maximize the benefits from wellness attention disbursement.

To get the better of regional fluctuations in entree.

To incorporate costs and manage demand.

To supply dickering power with providers of wellness attention merchandises.

QALYs are a type of wellness position index, based on population-level information that step wellness additions ( Spencer, 2003 p.1 ) to let for economic rating of different wellness intercessions. A individual QALY is the arithmetic merchandise of life anticipation, weighted by a step of the quality ( public-service corporation ) of the staying life-years to make a individual index value ( Prieto and Sacristan, 2003 ) . The public-service corporation value is 0 for ‘dead ‘ and values one twelvemonth of perfect-health life anticipation to be equal to one. These values are derived from graduated tables, viz. , the evaluation graduated table ; clip tradeoff ; or standard gamble. Each is capable to signifiers of prejudice. The QALY theoretical account offers consistence and bounds budgetary waste, leting for the greatest good to be achieved for the greatest figure, so called ‘distributive justness. ‘ It besides allows for direct comparing of intercessions in a common currency regardless of clinical subject. This is because the cost per QALY does non confabulate the monetary value of intervention but the monetary value of the result that consequences, may that be in old ages or quality gained or lost. Phillips and Thompson ( 2001 ) summarise this as an expensive intervention may hold a low cost per QALY if it brings important benefit to patients ; similarly, a cheaper intervention may hold a high cost per QALY if the grade of benefit is comparatively low. This means that QALYs are really utile to utilize in precedence scene.

There are nevertheless specific unfavorable judgments held as to the generalisability of this theoretical account, the deficiency of consideration for baseline wellness position and whether QALYs perpetuates the issue of wellness inequalities ( Wagstaff, 2002 ) . The usage of QALYs implicitly assumes that there are no other aims to wellness attention than wellness maximization. QALYs are well rough measurings, go forthing vulnerable the inquiry what precisely constituted the ‘quality ‘ for which life old ages are adjusted. The public-service corporation measuring instruments each clasp built-in prejudice as they are subjective collection of values. Persons do non put the same value on each twelvemonth of life. As such, the QALY theoretical account is inherently flawed as a wellness province public-service corporation of 0.6 is the same as three excess old ages of life at a wellness province public-service corporation of 0.2. As such, concerns have been expressed about the rightness of utilizing QALYs computations to inform resource allotment determinations ( Dolan et al, 2008 ) as they are trying to do subjective constructs explicit numerically when there truly is no consensus, go forthing ambiguity in measuring overall betterment or hurt in wellness. Criticism has been expressed about the prejudiced facets of the QALY theoretical account. The theoretical account favours those with more “ treatable conditions and those with greater potencies for health- be it in footings of operation or length of service ” ( Nord et al, 2009 ) .

Question 3

Outline the chief methods to compensate general practicians ( GPs ) in the United Kingdom. ( 300 words upper limit )

GPs are freelance suppliers, which under the 2004 GMC negotiated contract are paid by assorted payment wage, dwelling of salary based on leaden capitation, fixed allowances, QOF and fee for service. Individual GP patterns are allotted a pattern income under the contract, from which disbursals and staffing costs are funded. This payment, stand foring the largest portion of their income, is a capitation fee per enrolled patient adjusted for age, gender, morbidity and mortality, with extra fixed allowances for keeping peculiar services. GPs working in underserved geographic countries receive extra payments. Distribution to single GPs within a pattern is dependent upon senior status, pattern efficiency and care of operational costs through cost containment. GPs can besides have extra payments based on the quality of services provided in designated countries such as kid wellness, pregnancy, household planning, and chronic diseases as portion of a quality heightening model ( DH, 2004 ) . The Quality and Outcomes Framework ( QOF ) is a voluntary, evidence-based model crossing four spheres: clinical, organizational, patient experience and extra services ( DH, 2003 ) . GPs are challenge to run into a scope of evidence-based indexs within these spheres from which they can roll up points based on the comprehensiveness and deepness of quality. As a consequence, payments are awarded harmonizing to the degree of accomplishment. Practices receive about ?125 per point for an mean sized pattern with a upper limit of 1000 points available to them. QOF is frequently revised to reflect altering population precedences, clinical promotions and best grounds to stay a matter-of-fact support theoretical account. Third, patterns can come in into so called Enhanced Service understandings, based on the ‘fee for service ‘ theoretical account. In Enhanced Service understandings, payments are awarded for meeting targeted demands, such as grippe and childhood immunizations and supplying other specific services.

two ) Compare and contrast 2 of these methods sketching advantages and disadvantages of each. ( 300 words upper limit )

Different fiscal inducements given to GPs might impact their behavior and interventions programs for single patients. “ Fees for service ” compensation is awarded based on a service being given to an single patient. Care is clearly linked to payment and each service that is delivered has a specific payment rate. It has been argued that such a system of compensation induces GPs to set measure, over quality of attention in a command to acquire increasing Numberss of patients through their pattern door and allows for unneeded, potentially more moneymaking, interventions to be performed at a fiscal benefit to the GP.

This compares rather dramatically to the capitation system, which remunerates patterns based on the population human ecology, irrespective of the wellness position of the population. This means GPs have better budgeting capablenesss, as each payment is fixed irrespective of instance mix intending it is an just system for all patients. Capitation removes the demand for GPs to see a high volume of patients within an allotted clip frame but places inducements upon general practioners to inscribe big Numberss within their pattern. As such, capitation comes with the added hazard of the potency to hold a hard case-mix due to increased Numberss and allows for ‘cream planing ‘ to take topographic point in which GPs exercising the potency to take patients that are easier to care for, taking to wellness inequalities in certain demographics, i.e. the aged.

Outline the equity deduction of patient co-payments for primary attention services. ( 300 words upper limit )

Equity is an ethical construct built on the rule of distributive justness. In wellness attention, it is considered to be “ the absence of systematic disparities in wellness between groups with different degrees of underlying societal advantage/ disadvantage ” ( Braveman, 2003, p1 ) . Co-payments are level fees or agencies tested payments, based on the willingness to pay theoretical account that a patient pays for a named wellness attention service, such as a GP visit, dental intervention or prescription. They transfer the pooled hazard to the person, in both pecuniary footings and chance costs, which in bend agencies, the duty for understanding the cost of unwellness and doing a determination of cost-benefit of a attention tract lies with the patient. Basing wellness attention interventions on being able to pay is combative as co-payments have the possible to make a barrier to entree and widen the equality spread by detering or curtailing people from seeking of import interventions or coercing persons from lower socio-economic groups into doing determinations about their wellness attention based on monetary value non their demand. Equity assumes equal use ( usage ) for equal demand, if persons must do value opinions based on their income there is likely to be a disproportional relationship between consumption in lower socio-economic groups to more flush groups. Co-payments besides encourage sick usage of intervention, for illustration, wrong conformity to medicine regimens.

Braveman P & A ; Gruskin S. ( 2003 ) Dei¬?ning equity in wellness. Journal of Epidemiology and Community Health 57 pp. 254-58

Department of Health ( 2003 ) Investing in General Practice ; The New General Medical Services Contract, Department of Health, London

Department of Health ( 2004 ) Updated version of the QOF counsel and grounds base, Department of Health: London ; 2004.

Dolan, P ( 2008 ) . Developing methods that truly do value the ‘Q ‘ in the QALY. Health Economics, Policy & A ; Law ; 3 pp.69-77.

Dolan P. & A ; Kahneman D. ( 2008 ) . Interpretations of public-service corporation and their deductions for the rating of wellness. Economic Journal ; 118 pp. 215-234

Frank, R ( 1994 ) : Microeconomicss and Behavior. New York: W.W. Norton & A ; Company

Goddard M. & A ; Smith P ( 2003 ) Equity of entree to wellness attention services: Theory and grounds from the UK, Social Science & A ; Medicine 53 ( 9 ) pp. 1149-1162

Grossman, Michael ( 1972a ) , The Demand for Health-A theoretical and Empirical Investigation. New York: National Bureau of Economic Research.

Grossman, M. ( 1972b ) , On the Concept of Health Capital and the Demand for Health, The Journal of Political Economy, 80 ( 2 ) pp. 223-255.

Grossman, Michael. ( 2000 ) , “ The Human Capital Model ” , in Handbook of Health Economics, 1, pp. 347-408

Lockwood, M. ( 1988 ) . Quality of Life and Resource Allocation. Royal Institute of Philosophy Supplement, 23, pp 33-55

Morris S, Devlin N, Parkin D.A ( 2007 ) Economic analysis in wellness attention. John Wiley & A ; Sons, Ltd.

Pinto-Prades, JL. Loomes, G. & A ; Brey, R. ( 2009 ) Trying to gauge a pecuniary value for the QALY, Journal of Health Economics, 28 ( 3 ) pp. 553-562

Phillips, C. & A ; Thompson, G. ( 2001 ) “ What is a QALY? ” [ on-line ] at: hypertext transfer protocol: //www.evidence-based-medicine.co.uk/ebmfiles/WhatisaQALY.pdf

Prieto, L & A ; Sacristan, J.A. ( 2003 ) Problems and solutions in ciphering quality-adjusted life old ages ( QALYs ) Health Quality Life Outcomes ; 1 pp. 80

Ringel, J ( 2002 ) The snap of demand for wellness attention: a reappraisal of the literature and its application to the military wellness system, United States. Department of Defense, National Defense Research Institute ( U.S. )

Schafermeyer KW ( 2000 ) Health Economics I: Basic Economic Principles, Journal of Managed Care Pharmacy 43-50

Spencer, A. ( 2003 ) A trial of the QALY theoretical account when wellness varies over clip, Social Science & A ; Medicine ; 57, ( 9 ) pp. 1697-1706

Wagstaff, A ( 2002 ) Inequality antipathy, wellness inequalities and wellness accomplishment, A Journal of Health Economics, 21 ( 4 ) 627-641


I'm Petra

Would you like to get such a paper? How about receiving a customized one?

Check it out