02.Health Economics: Module 2 - Core Concepts in Health Economic Evaluation

This module is comprised of four units covering costs, benefits, the synthesis of costs and benefits, and uncertainty.

• Unit One is the Analysis of costs. This unit will:
  • examine both direct and indirect costs
  • separate costs into their resource use and unit price components
  • introduce time preferences and discounting
  • outline how to convert between price years and currencies

• Unit Two is the Analysis of benefits. This unit will:
  • consider process measures; and intermediate and final outcome measures
  • discuss condition-specific, generic health, and health preference benefit measures
  • introduce the Quality Adjusted Life Year (QALY)
  • outline how the standard gamble, time trade-off, and visual analogue scale methods can be used to value health states

• Unit Three is the Synthesis of costs and benefits. A distinctive aspect of health economics is its ability to provide an integrated view of costs and benefits. This unit will:
  • describe two types of partial economic evaluations—Cost Consequence Analysis and Cost Minimization Analysis. It will also describe three types of full health economic evaluations—Cost-Benefit Analysis, Cost-Effectiveness Analysis, and Cost-Utility Analysis
  • introduce the concepts of Dominance, Incremental Cost-Effectiveness Ratios, Net Benefit, and Willingness To Pay
  • outline preference elicitation techniques for deriving Willingness To Pay values
  • discuss selected national and international benchmark values for the thresholds at which healthcare projects can be considered cost-effective
  • demonstrate a graphical technique for representing a number of these concepts—the Cost-Effectiveness

• Module Two will conclude with Unit Four which is Uncertainty. Health outcomes are particularly uncertain, so this unit will:
  • describe the different types of uncertainty that health economists must contend with
  • introduce some statistical representations of uncertainty
  • discuss deterministic and probabilistic approaches to addressing some aspects of uncertainty
  • demonstrate a graphical representation of uncertainty about cost-effectiveness results—the cost-effectiveness acceptability curve

To download the module workbook, please click here.