Health care input constraints and cost effectiveness analysis decision rules

Abstract

Results of cost effectiveness analyses (CEA) studies are most useful for decision makers if they face only one constraint: the health care budget. However, in practice, decision makers wishing to use the results of CEA studies may face multiple resource constraints relating to, for instance, constraints in health care inputs such as a shortage of skilled labour. The presence of multiple resource constraints influences the decision rules of CEA and limits the usefulness of traditional CEA studies for decision makers. The goal of this paper is to illustrate how results of CEA can be interpreted and used in case a decision maker faces a health care input constraint.We set up a theoretical model describing the optimal allocation of the health care budget in the presence of a health care input constraint. Insights derived from that model were used to analyse a stylized example based on a decision about a surgical robot as well as a published cost effectiveness study on eye care services in Zambia.Our theoretical model shows that applying default decision rules in the presence of a health care input constraint leads to suboptimal decisions but that there are ways of preserving the traditional decision rules of CEA by reweighing different cost categories. The examples illustrate how such adjustments can be made, and makes clear that optimal decisions depend crucially on such adjustments.We conclude that it is possible to use the results of cost effectiveness studies in the presence of health care input constraints if results are properly adjusted.

Costing and Cost-Effectiveness of a Mobile Health Intervention (ImTeCHO) in Improving Infant Mortality in Tribal Areas of Gujarat, India: Cluster Randomized Controlled Trial

“…A limitation of our analysis is that we did not assess the health care input cost or time spent by health workers in training, supportive supervision by medical officers, and other supervisors from the health system. As a standard cost-effectiveness analysis, it was implicitly assumed that opportunity costs were equal and that it does not matter from which health care input the resources were drawn [ 19 ]. The ImTeCHO trial was conducted in partnership with the local health government, and thus, the health care input cost was borne by the state to aid in potential scale up of the intervention.…”

An Educational Review About Using Cost Data for the Purpose of Cost-Effectiveness Analysis

“…However, unit costs may not represent the true value of a resource, with resources potentially being more constrained than others, and unit costs not adjusting immediately such that marginal productivity is equalised across healthcare resources. This raises issues for the aggregation of costs across different types of resource use to estimate a total healthcare cost [119,120]. Consideration may be given to the estimation of cost categories for more disaggregated resource use in such situations.…”

Informing Balanced Investment in Services and Health Systems: A Case Study of Priority Setting for Tuberculosis Interventions in South Africa

“…Nonfinancial constraints have consequences for the assessment of cost-effectiveness because they can influence the opportunity cost of new interventions and technologies. 1,2 Supply-side (or health systems) nonfinancial constraints occur when factors of production (inputs) are "fixed" in the short run, either owing to physical and external barriers (for example, it may take 5 years to train health professionals, there may be political barriers to immigration, or "sunk" costs in operating theaters may prevent use of funds to expand outpatient facilities), or owing to health sector actors deliberately constraining resource availability/flexibility through policy decisions (for example, accreditation systems restricting the supply of clinical labor, or budgeting and procurement practices). Whatever their nature, nonfinancial constraints ultimately impact the health sector's ability to react to technological change by "fixing" the levels and use of specific sets of inputs, and consequently, in the short run, new technologies dependent on these inputs may have higher opportunity costs than they would if all inputs were variable.…”

“…Van Baal and colleagues have previously presented both a theoretical and an empirical approach for estimating the extent to which nonfinancial constraints affect opportunity costs. 1 They characterize the decision under two separate constraints: one for the general budget and one for the constrained input; they recognize that the constrained input has a lower costeffectiveness threshold (k 1 ) than the unconstrained input (k 0 ), which reflects its higher opportunity cost, so that k 1 , k 0 . The traditional decision rule, comparing the incremental cost per unit of health produced by the intervention to the general opportunity cost threshold, can thus be modified by adjusting the opportunity cost of the constrained input by the ratio k 0 k 1 .…”