Antony Martin

Research Fellow in Health Economics at Liverpool Health Economics

Author of: What is health economics? and What is cost-minimisation analysis?

Antony completed his BSc in Economics at the University of Liverpool and his MSc in Health Economics at City University London, funded by a scholarship from the National Institute for Health Research. Previously, he worked for a leading health economics and outcomes research consultancy company, gaining experience in cost-effectiveness model adaptations, budget impact models, systematic literature reviews and health technology assessment reports. In addition, Antony has experience working within a range of health areas such as alcoholism, hepatitis C, HIV/AIDS, pre-term birth, and has developed a keen interest in health policy debate. He has also developed an international profile after spending extended periods of time studying and working abroad in Brazil, Hong Kong and Peru.

www.liverpoolhealtheconomics.org

Summary: What is health economics?

  • Economics is the science of scarcity and prioritisation. The application of health economics reflects a universal desire to obtain maximum value for money by ensuring not only the clinical effectiveness, but also the cost-effectiveness of healthcare provision.
  • Achieving ‘value for money’ implies either a desire to achieve a predetermined objective at least cost or a desire to maximise the benefit to the population of patients served from a limited amount of resources. This requires services to be evaluated for ‘cost-effectiveness’.
  • An associated concept is that of efficiency, which measures how well resources are used in order to achieve a desired outcome.
  • Opportunity cost represents an invaluable mode of thought in health economics, as it makes clear the explicit trade-offs that underlie resource use in the health services. The true cost of using scarce healthcare resources in one manner is their unavailability to fund alternative beneficial services.
  • All economic evaluations have a common structure that involves explicit measurement of inputs (‘costs’) and outcomes (‘benefits’).
  • Health economics can help to inform and improve decision-making through the systematic and objective application of ‘applied common sense’.
  • Such ‘applied common sense’, which symmetrically balances costs and benefits, represents a valuable mode of thinking for decision-makers, irrespective of whether a formal economic evaluation is undertaken.

Summary: What is cost-minimisation?

  • Achieving ‘value for money’ implies either a desire to achieve a predetermined objective at least cost or a desire to maximise the benefit to the population of patients served from a limited amount of resources. Cost-minimisation analysis (CMA) relates to the first of these objectives.
  • Assumptions of clinical equivalence in CMA should only be made if claims of equivalence can be supported by clinical evidence; that is, where measured outcomes have been shown to be equivalent; where this is not possible, a CMA should not be conducted.
  • What are the main arguments deployed against the use of this technique of economic evaluation?
  • What steps can be taken to improve the quality and appropriateness of CMAs and in what circumstances is it appropriate to use CMA as a methodology in the economic evaluation of healthcare technologies?
  • To what extent should healthcare professionals rely on CMAs to inform their decision-making?
  • How do we measure ‘clinical equivalence’ and what are the implications of potential sources of misinterpretation of clinical data within the framework of CMA?
  • How can we enhance the reputation and value of CMA as a method of health economic analysis to inform healthcare decision-making?
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