Economic Analysis in Health Care


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Although we found that the overall annual cost was slightly higher for sub-centres with 2 ANMs, there were statistically insignificant difference in total annual and per person annual costs between the sub-centres with 1 or 2 ANMs. This could be as a result of two features.

Hence the marginal costs of hiring 2 nd ANM is not as high. Secondly, the presence of 2 nd ANM results in improvement in coverage, hence more persons are able to obtain service or more pregnant women reached out to provide full antenatal care.

As a result the unit costs do not rise. Finally, it also implies that the Government of India should also consider introducing some reforms in the way human resources for health are paid such that it improves the efficiency of the health system. These payment reforms could include a system in which part salary is paid as fixed amount while the remaining is paid as a performance based incentive. This has its own set of caveats and hence will require careful designing such that it does not crowd-out services which are not measured as part of performance assessment.

In view of this, our estimates suggest that the CHW platform in the 3 North Indian states is costing nearly 5. So there needs to be more investment in the CHW platform through sub-centres as the outcomes of such services delivered in an outreach mode have been found to be very equitable. In an earlier analysis published recently, we had reported the cost of delivery of child health services in two alternate scenarios — with and without IMNCI program [16]. Both the previous and current study found that salary of human resources is the single most important constituent of the overall cost of health care.

This finding about human resource cost is validated by a number of other costing studies worldwide [34]. Our study has some methodological limitations. Firstly, we adjusted all unit cost estimates in our study for capacity utilization using a single indicator, i. ANC coverage. While it might be appropriate to use specific indicators for capacity utilization for each service, the nature of services delivered by CHWs at sub-centre level preclude such opportunity. The services delivered by CHWs are heterogeneous. Any idle capacity from one service can be easily utilized by engaging in another activity.

In such a situation, ANC service coverage, which also happens to be one the mainstay activity, allows a reasonable opportunity to estimate the extent of capacity utilization. Secondly, we did not undertake a full economic evaluation. We report the benefits in terms of number of services delivered, i.

In an ideal scenario, it will be appropriate to compare the costs and benefits of the delivery of health services through CHWs with alternative methods of delivery or compare different cadre of CHWs , and report the benefits in terms of more accepted utility measures such as a disability adjusted life year DALY or a quality adjusted life year QALY. We also recognize that the mathematical specification of the model we report here, the log-log form, does not allow the identification of diseconomies of scale if they exist.

Thirdly, we acknowledge that there are wide variations in the districts in India, in terms of resources used at sub-centre level, type of services delivered and in the coverage of services delivered. In order to test the variability of our estimates, we undertook stratified analysis for total cost, per person per year cost, and unit costs for specific services by the type of state. Comparing the cost estimates separately for Haryana, Punjab and Himachal Pradesh, we found statistically insignificant difference across the states.

However, our estimates of cost may not be generalizable to All-India level. We concede not having measured the indirect costs of service utilization which were borne by the households in the form of any out-of-pocket costs or productivity losses. However, we believe that such costs even if they exist for preventive services, would be very minor. Finally, a measurement of long term outcomes such as a disability adjusted life year DALY would be more useful for making a robust conclusion on cost effectiveness which can also be used to make comparisons across programs.

We acknowledge that in the true sense, human resource costs goes into the calculation of the unit cost, and hence its inclusion as an independent predictor could be questioned. However, the case of costing at the sub-centre level is different. In case of sub-centres, number of CHWs is determined by norms. Hence for every sub-centre, an ANM is posted irrespective of the volume of output. Hence unlike any other health institution, human resource cost behaves as a fixed cost at the sub-centre level and does not vary with the volume of services which are delivered.

So we consider that its inclusion as one of the independent variables is justified.


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Overall, we conclude that community health workers offer a low-cost option for delivery of health care services. Our study provides important evidence on cost of delivery of CHW health services, which can be used for future full economic evaluations to assess the overall cost effectiveness of delivery of platform of services at CHW level; or estimating the cost effectiveness of different programs delivered by CHWs. We also provide the necessary evidence to plan for scale-up of CHW health worker programs which is the central strategy for meeting the MDGs in most low and middle income countries [5].

Evaluating the cost effectiveness of placing 2 nd ANM in sub-centres, using more long-term health outcomes such as DALYs averted is recommended as a future area of research.

Browse Subject Areas? Click through the PLOS taxonomy to find articles in your field. Methods We undertook an economic costing of health services delivered by CHWs, from a health system perspective. Results Annually it costs INR 1. Conclusion Our estimates would be useful in undertaking full economic evaluations or equity analysis of CHW programs.

Introduction Evidence on cost of health care delivered through community health workers CHWs is useful for public health planning, monitoring and evaluation. Cost Data Collection Economic cost of services was assessed from a health system perspective, using a bottom-up costing methodology [24] , [25].


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Cost Data Analysis Cost of building space was estimated by multiplying the floor area with the prevailing market rental price of land. The different models developed for standardization of parameter estimates were based on the equation mentioned below: 1 Human resource costs, population catered and ANC cases registered per CHW at sub-centre were taken as independent predictors.

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Results A total of 50 sub-centres were covered in the three districts i. Download: PPT. Figure 1. Proportional distribution of cost of health service delivery through community health worker. Table 1. Cost of delivering health care services at sub-centre level, India. Cost of delivering health care services at primary and secondary level by type and level of service and type of program, India.

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Table 4. Association of different parameters with cost per person at sub-centre level. Table 5. Discussion We undertook this study in North India to bridge a gap in existing literature on cost and cost effectiveness of community health workers. References 1. Bossert T Analyzing the decentralization of health systems in developing countries: decision space, innovation and performance.

Health Economics

Soc Sci Med — View Article Google Scholar 2. View Article Google Scholar 3. Bull World Health Organ —B.


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View Article Google Scholar 4. Bull World Health Organ View Article Google Scholar 5. New York: Prentice Hall Inc. However, the most comprehensive attempt to use this as a means of priority setting was in Oregon in the United States. Problems with Medicaid, the publicly funded programme for poor people led Oregon to set up a Health Services Commission to develop what became the Oregon Health Plan.

One aspect of this was a systematic and explicit basis for deciding which health services should be included, and which excluded, from the Medicaid benefit package list. They are funded in order of priority until the health budget is exhausted. Originally, the ranking was determined by cost-effectiveness, but this was so controversial that it was never used in practice.

Rankings were determined by five-year survival and improvement in symptoms and the type of service, whether curative or not, for example. This is entirely discretionary and there is no way to tell if it is applied consistently across interventions. It is a pragmatic approach to resource allocation that attempts to divide decision making about priorities into a manageable set of activities Mitton and Donaldson, One of the aims of PB is to focus the process of setting and using budgets on the outputs of health services, rather than the more traditional focus on the purchase of health care inputs.

PB involves assigning costs to health care programmes, defined in terms of the types of output produced, which in practice is often organised by client or disease groups. The first stage in PB is to describe current resource allocations in this way, by showing how much is spent in each programme. It is therefore possible to see what budgets are currently being used for, rather than simply the services that are purchased. The budgets include everything that is spent on the programme in a particular time period, usually a year, including both revenue and capital, wherever it is spent.

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PB may be undertaken at the macro level, which looks at the whole of expenditure, divided into large programmes, for example disease groups, or at the micro level looking at expenditure within these programmes, for example different care settings for a particular disease group, which involves a finer level of detail of information about services.

In theory, PB is part of a comprehensive planning system for decision making based on the intervention provided. However, in practice it refers only to the information that is provided, along with suggestions as to how that information might be used. PB has been used in many countries, at national and local level, and has also been used internationally by the WHO. All CCG expenditures on hospital, community and primary care services are mapped to 23 programmes of care based on medical conditions.

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