Cost-Utility Analysis in Healthcare in Province A - Coursework Example

Using cost utility analysis for province A Introduction Country x is a middle-income country that suffers from anumber of health related issues. For this country with such a huge life expectancy and high number of individuals over the age of 60, it is important to evaluate the health concerns that these individuals face. Therefore, for the health finance planning for province A of country X the most appropriate mode of economic planning is the cost-utility analysis. This method involves assessment of the value of the costs to the quality of life. Background Potential problems of province A Province A suffers from many problems owing to its financial status. First, there is likely to a shortage of health care facilities. This is because the central government controls the health facilities. With such a low gross domestic income, the country may not be able to set up adequate health facilities to serve the public. WHO recommends that the health facilities should be at least five kilometres from where people live, in this case, this may not be possible making the health care centres inaccessible (Torrance, 2009, p. 34). As a result, the health care in this country can be described as poor Secondly, there is a shortage of health workforce team. Since the government is the sole employer, with the meager resources it is earning, it may fail to employ adequate staff to attend to people. As a result, there will be pooling of people at the hospitals without adequate staff to attend to them. Besides, with this shortage the workers can prefer to work in the private sector where the salary is promising. This will make the few workers at the hospital to be overworked and unable to deliver the services. With the majority of the workers without proper orientation on how to manage the health care finances, they may fail to meet the demands of the government and that of the citizens. Citizens as the consumers of health care suffer from the poor health care. First, they do not have adequate finance to pay for the health care services. This is because first they do not have access to insurance that would have made it easy to pay for the health care bills. For the few who can pay from their pocket in the private market or hospitals, the services are given based on the user fees. This will make the users not to get adequate health. Secondly, the health insurance that is provided by the private sector is not accessible to all. This is because only a few can afford the said insurance either because it is expensive or inaccessible. Besides, there is no mandatory insurance scheme. Without any cost sharing, there is likely to be a major, health concern related to the inability of the citizens to get proper health care. The mandatory insurance is very critical to citizens in the developing countries as it ensures that they get access to necessary medical care. Finally, there is likely to be an issue in financing the old. According to statistics, over 10 percent of the public are above 60 years of age. The people of which the majority is of the retired age will need the government to help in financing their health care. As people age their health risks increases, this coupled with the quality of the health care service that is offered in the public hospitals that are affordable makes the needs of these people to be wanting. Therefore, there is a problem to deal with these old retirees. In addition, there should be devised a method to look after their health concerns that the majority cannot be offered at the hospital set up. The effect of economic planning for province A This health plan is likely to help the citizens of province A to get access to health services. By utilizing the problems of these citizens, the plan will bring up better solutions aimed to improve the quality of health care in this province. By proper utilization of recourses and allocation, this planning is going to cater for the needs of all the age groups that reside within this nation. In this, the health service budgeting will be tailored to represent the preferences of the consumers. This is because the citizens are the sole consumers of these services. Specifically, the economic program in planning of the delivery of health care will reduce the burden of paying the user fees. The plan will address issues like mandatory insurance and come up with better ways to supplement the citizen user fees at the hospitals. Many countries have achieved this like China, South Africa United Arab Emirates among others (Siegel et al., 2013 p. 35). With this, the citizens will get the services at a relatively cheaper cost thus this will encourage the health-seeking behaviour. Besides, with this modality the citizens will get the improved care as opposed to the previous care. In addition, the health care will ensure the private and public insurances are accessible by citizens, and they are affordable to residents. Besides, these mechanisms will provide for alternative methods for those that are not able to get the insurance cover. This should include the cost sharing and exception in the public institutions In addition, the batter-planned services will cater for the old. The planning will allocate finances to the old in such a way that they will not become a burden to the growing economy. In, this the economic planning will set the category of people to benefit and design a method that they will use to ensure that hose people who are not able to pay for their health due to their age get access to the aid. In addition, there will be an institution of appropriate measures to promote service delivery to the specific age cohort. Many countries have also achieved; these include countries like Japan China and United States (Milton C. Weinstein, 2009, p. 76). Similarly, they have a role in ensuring that health care is made accessible to all people. In this, they will economically plan in such a way that the fund are availed to people to developed adequate infrastructure near the people. With proper planning, the economic planning will ensure that the city dwellers of province A have access to health facilities. This should be in line with the WHO requirement of about a distance of 5 kilometres from where people live. This planning will also ensure that he health care centres are well staffed, and the staffs are appropriately trained to cater to the needs of the citizens. This has been achieved in many developed and developing countries like Egypt Qatar and South Africa (Siegel, 1996, p. 23). Methods Economic evaluation methods Cost identification analysis This seeks to assess the value attributed to particular health program or service. Therefore, this method attempts to choose those approaches with the lowest cost option (Drummond and McGuire, 2001, p. 34). To achieve this, the method assumes that health outcomes are similar to the two programs it seeks to compare (Haddix et al., 2003, p. 45). Besides, it overlooks the health outcomes or benefits Cost effectiveness analysis This approach is effective both costs and the outcomes. The cost-effectiveness analysis is calculated as the chance in cost over the change in outcome (Johannesson and Jönsson, 2013, p. 43). In this, the price reflects the cost effectiveness value and the result can reflect how better health care is given, for instance, the number of people discharged from the hospital. This can be utilized to evaluate health outcomes as a comparison between the government-run hospital and the private run hospitals. In this method, cheaper interventions or management strategy that is more effective dominates the other (Milton C. Weinstein, 2009, p. 54). On contrary expensive interventions or interventions will only be justifiable if the benefit justifies the additional cost even if they are effective (Drummond, 1988, p. 87). Cost benefit analysis This method of economic analysis method seeks to find out if the benefits accrued in health are worth the investment (Briggs et al., 1994, p. 34). This puts into consideration of all things. It involves asking the citizens of country x if the services they pay for are worth the services they earn. This method is broader than that of cost-effective analysis, and it has more insight in the evaluation of the effectiveness of investments (Briggs et al., 1994, p. 55). Cost-utility method The most appropriate method to use in province A is the cost-utility approach. There are many reasons for this. First, this method in the improvement of the cost effective method thus it is better that the rather (Johannesson and Jönsson, 2013, p. 78). The country has a life expectancy of 78 years, but it has destitute health service delivery with the most of the services being offered by the government. In addition, over 10 percent of people are over 60 in age. The economy assessment method there should seek to identify if the quality of live is worth living that well (Siegel, 1996, p. 56). Besides, the process should attempt to find out if the cost of health care would be able to substantiate a quality life (Torrance, 2012 p. 45). In the cost-utility approach, the economic analysis measures the effectiveness as the number of quality-adjusted life years (QALYs). Therefore, this is most appropriate considering other factors like this is urban center, do the people just survive or live a life that is of quality. In this approach, QALYs measure both the length of life that is average of 78 in this country and the health related value of life. It is concerned with the cost per QULY. Besides, it is concerned with the raise in the cost effectiveness. Using this approach, therefore, the interventions that are below the cost effectiveness are funded and those that are above they are not as they are sufficient. In the province, cost utility will form the basis of decision-making by comparing the value of the alternative interventions of different health benefits and facilitate these comparisons without resourcing the financial values different health state. Further, this approach specifies the value attached to the particular state of health. Therefore, it will increase transparency in the resource allocation process. Therefore, this method is significant in province A since it can be used to compare the health care delivery in the private and public sector The cost-utility approach addresses the issue of cost effectiveness. This means that the health delivered matches with the cost. This will ensure maximum patient satisfaction. Besides, the planning should be citizen-centered (Drummond and McGuire, 2001, p. 34). This approach analyses what quality of service that the consumer will get. The quality of service to the citizens will be te key components in this project. Methods of increasing health funds In this country, many methods that can be applied to improve the government finance given to health projects. First, the government should increase the share that is allocated to the health sector. This is likely to increase revenues that the health sector gets. Siegel (1996, p. 34) describes the government grants to be the primary source of income for the health sector. The government should, therefore, value the health of its citizens and provide adequate measures to ensure that the citizen’s values and health concerns are addressed. Besides, the health care centres should attract the donors in the medical industry. This will form a good source of income for the hospitals and the health sectors at large. Since the hospitals are government sponsored, the government should struggle to invest and put up good terms that will attract the investors. Finally, the government can engage citizens in meeting their cost of health care. In this, the citizens can meet part of their health care pay paying cash or through a compulsory insurance scheme. This is likely to contribute substantially to hospital income. In engaging the citizens, also other citizens can be included by community initiatives like contributions and remissions. Discussions In economic approaches, evaluation of the market can utilize various methods. However, all the methods measure the cost and outcome. Milton C. Weinstein (2009, p. 45) describes these methods as gauge opportunity that has highest value and not necessary valued. Therefore, they consider if the value of health care given meets the value of the money charged. They conceptualize based on the logical implication of choice. For example, people will go where the prices are low yet the quality of services given is high. On the other hand, the people can leave a low paying service for high priced service if the quality of the service is high. However, this method is limited where resources are limited. In this case, the choice is irrelevant as there is no alternative. It is true that the cost of health care reflect value. In case of uniform reduction of in value, most of the option will be indicative of the availability of lower use (Johannesson and Jonson, 2013, p. 34). Eventually, this reduces the cost as the valued choices are now valued. For instance in province A since the cost are perceived to be low the value will be low. In this case, the cost of resource use is lower than the value of its use. Besides, in country x the cost in the health economy has its basis on the revealed market value (Haddix et al., 2003, p. 45). Normally it should be the same as the amount bid by the highest bidder. This will make the value of the amount of available resources in particular class use in contrast to supply (Milton C. Weinstein, 2009, p. 23). In the use of the cost as a tool in analysis, the financial needs to appreciate few aspects. However, the most common is the net present value or worth (Drummond and McGuire, 2001, p. 34). This are the costs that are added or deducted from the system inform of incoming and outgoing cash from the health care system. The cost-utility approach needs constant inputs into the system from various entry points for the health care to continue to be of quality (Drummond and McGuire, 2001, p. 34). Either, this is what will be showing if the budgeting process benefits the citizens of Province A., It also determines the budget that is available now and sustainability of the project in the end. Haddix et al. (2003, p. 45) argues that, when the citizens and the budgeting team know about the available funds, they can predict the amount to pay later and budget for respectively. To counteract the adversities of the net present value, the budgeting should plan for a higher internal rate of return. This will predict the sustainability of the project and eventually its growth. Advantages and disadvantages of this approach The approach of cost-utility analysis addresses the problem of conventional analysis of cost effectiveness. Therefore, this method allows for those who make the decisions to compare the value attached to health problems. This means that before assigning a monetary value to different health problems or life, they are compared to the outcome they will have and the ethical and technical issues they will have. Secondly, Cost–utility analysis captures the worth of improvements in health care delivery. These the diminished mortality and morbidity levels are a clear indication of this. This makes the utilities obtainable from validated and standardized health status, which makes the evidence required to be cheap and straightforward. Besides, this approach as compared to the others enables people to understand the value that the community attaches to a health issue. This will promote transparency thus involving the stakeholders in making their decision on health care especially about the accuracy of the utilities. Eventually, this will cause an increase in resource allocation process. There are concerns about the cost-utility approach. First, the challenge to this approach is the effectiveness of QALYs adequately to capture the quality of life as attributed by the society. Even though this undermines the sufficiency of utilization of this approach in resource allocation, this approach is better as compared to other methods. Besides, this approach tends to overlook milder conditions in planning. Whereas the tools and utilities used can isolate the chronic issues, they are blind to the most of that of the acute milder issues because of their short duration. Similarly, the subsequent and preceding seem not to affect the utility of the particular state of health more so where disability accumulates slowly. In addition, it is not all the time that this approach attaches health to some characteristics. For instances, a person may not value the hospital in the initial days but in severe illness this is an issue. Therefore, these individuals are likely to be excluded. Limitations and implications of this approach The utilization of this method has two main limitations. First, on the decision making the person responsible for decision-making has to in arriving at a decision, the decision-maker will have to view indirectly different effects and then relate them to the costs. It is after this the decision maker will decide on the interventions that represent the best value. Siegel (1996, p. 34) describes this process to be taking place in a vacuum of the head of the decision maker, which may lack transparency. This implies that if this is the best method the person needs to evaluate the best approaches to follow, as decisions need to be tabulated in open for transparency (Haddix et al., 2003, p. 45). Furthermore, the driving values of this decision reflect the owner, i.e. the decision maker. Therefore, they cannot reflect the society. Secondly, this approach requires voluminous information channelled to the decision maker; such information is so vast that the decision maker can reliably analyze and process (Drummond and McGuire, 2001, p. 45). Besides, in these circumstances people seem to use shortcuts that are not consistent with set objectives. This increases the risk of poor decision-making Conclusions and recommendations People of province A have a responsibility to collaborate with their government to meet their health needs. To improve the health quality in their region, they need to form part in various ways and indeed be involved in the management health centres in their area. The following are recommendations to the government and people of province A 1. The government should establish nurture and promote for a mandatory health insurance scheme to cater for the financial needs of the citizens this should form a basis of pooling of risks that affect the citizens. 2. The government needs to establish a social welfare kit for the old people to cater for their needs in such a way that this will contribute to the quality of life after retirement 3. Either the people should be willing to participate in the voluntary insurance policy or the cheap government runs insurance to be able to meet their health needs. 4. The citizens should contribute to the social kit as a remedy for better life in old age 5. People should participate in contribution to better lifestyles by attending to the health centers and provision of adequate care to the aging. 6. In cases of severe poverty the government, hospital management and the individual citizens need to share the hospital costs References Briggs, A., Sculpher, M., Buxton, M., 1994. Uncertainty in the economic evaluation of health care technologies: the role of sensitivity analysis. Health Economics 3, 95–104. Drummond, M.F., 1988. Methods for the$\backslash$ q& Economic Evaluation of Health Care Programmes. Oxford University. Drummond, M.F., McGuire, A., 2001. Economic evaluation in health care: merging theory with practice. Oxford University Press. Haddix, A.C., Teutsch, S.M., Corso, P.S., 2003. Prevention effectiveness: a guide to decision analysis and economic evaluation. Oxford University Press. Johannesson, M., Jönsson, B., 2013. Economic evaluation in health care: is there a role for cost-benefit analysis? Health policy 17, 1–23. Milton C. Weinstein, 2009. The role of cost-effectiveness analysis in health and medicine. Jama 276, 11–1177. Siegel, J.E., 1996. Recommendations for reporting cost-effectiveness analyses. Jama 276, 1339–1341. Torrance, G.W., 2012. Measurement of health state utilities for economic appraisal: a review. Journal of health economics 5, 1–300. Read More