COST EFFECTIVENESS Sarita MSc nursing IInd yearCost * Cost can be defined as expenditure (actual or notional) incurred on or attribute + able to a given thing. + Costs are the values of all the measure of the value of all resources used in the intervention. The cost of the intervention is an important part of the decision to use one intervention over another.TYPES OF HEALTH COST Direct costs- defined as the values of all resources expended on design and implementation of the health intervention. Example- personnel lab, lab tests and facilities. Tt can be either direct health care cost or direct non health care cost. Indirect costs- Indirect costs or productivity losses are the income forgone because of changes in productivity as a result of health intervention or illness. Example- Cost of lost work due to absenteeism, early retirement.* Intangible costs~ Intangible costs are the non material costs. Intangible costs impose a major burden on a patient. Quantifying intangible costs is difficult and these costs are not included in the majority of the studies. Example- emotional anxiety, fear, pain and stigmatizationCost effectiveness + Cost effectiveness is the extent to which an organization or Program produces particular outputs + Cost effectiveness in the nursing is the effectiveness that is primarily relates to quality outcomes being achieved. Is concerned with doing the right things in provide the patients care with low cost and high quality.AIM & OBJECTIVES COST EFFECTIVENESS * Aim-To maximize the level of benefit health effect relative to the level of resources available. * Objective- To compare alternative programs with a common health outcome To assess the consequences of expending.PURPOSE + To identify the most cost effective intervention from a group of alternatives + To provide empirical justification of an program. * To identify and excluding program that is wasting resources. * To provide general information on the relative costs and health benefits of different alternatives * To evaluate the interventions in terms of efficacy, absolute health gain and affordability.STAGES OF COST EFFECTIVENESS * Cost awareness * Cost monitoring * Cost management + Cost avoidance * Cost incentives * Cost reduction + Cost control* Cost awareness: It focuses the employee attention on costs. It increase the organizational awareness of what cost are, how they can be managed and by whom. * Cost monitoring: It focuses on how much will be spent where, when and why.+ Cost management: It includes conceptual and physical acts to limit unnecessary spending through planned and practical use of personal, material and physical resources for maximum productivity. It focuses on what can be done by whom to contain costs. * Cost avoidance: It means not buying supplies, technology or services, the costs of them should be analyzed carefully and the most expensive and less effective items avoided. * Cost incentives: It motivate cost containment and reward desired behavior.* Cost reduction: It means spending less for goods and services, the amount of reduction depend on the size of the agency, previous, efficiency, skills of mangers and cooperation of employees. * Cost control: It is effective use of available resources through careful forecasting, planning, budget preparation, reporting and monitoringStrategies to control cost + Provider networks and selective provider: It contracting at a favorable reimbursement rate, this strategy restricts consumers choice of provider. * Payment methods with risk sharing: Reimbursement includes an incentive for providers to limit the cost care. * Gate keeping: The goal of this practice is to prevent unnecessary resource utilization. The strategies used+ Utilization review: This refers to a variety of practices that require appropriate use of resources by clinicians: preauthorization is the requirement that specified services, such as hospitalization or emergency room care be approved before they provide preauthorization. + Favorable selection of clients: one criticism of managed care organization is that many seek to enroll younger and healthier individuals who will require fewer resourcesBENEFITS + Easy to understand and more readily suited for decision making * Provide empirical results for the decision makers to compare the costs and consequences associated with alternative programs. * The analysis of cost effectiveness help to know the cause of failure to meet the objectives. * Adequacy of corrective action taken, and revisedCOST EFFECTIVE ANALYSIS + Cost effectiveness is an economic study design in which consequences of different interventions are measured using a single outcome, usually in natural units - National Institute of Health and Clinical Excellence The cost effectiveness analysis is a type of economic evaluation that examine both the costs and health outcomes of alternative intervention strategies.aa OLB Si caPURPOSES + To identify the most cost effective intervention from a group of alternatives * To provide empirical justification for a program * To identify and exclude programs that is wasting resources * To provide general information on the relative costs of health benefits of different alternatives. * To evaluate the interventions in terms of efficacySTEPS OF COST EFFECTIVE ANALYSIS + Defining the problem + Adopting a research strategy + Specify audience + Define perspective + Specify the time frame work + Prepare the analytic horizon * Decide the type of study designCONTINUE + Identify the outcome measures or variable + Search for available alternatives + Identify the types of costs to be included in CEA * AnalysisDRAWBACKS OF COST EFFECTIVENESS ANALYSIS + The data regarding direct costs such as doctors or nurses time and supplies used; indirect costs such as a portion of administrative cost, such as a portion of administrative costs, the cost of equipment are usually not readily available. + It does not facilitate comparison across different diseases when different outcome have been used. + Cost effectiveness is the only one criterion for judging whether an intervention effective or not