health services management econ final exam

budgeting

 an organization's plan for how it will accomplish its operational goals and objectives by earning revenue and spending funds during a specified time period

retrospective budgeting

•  evaluating past financial performance decisions

concurrent budgeting

• - overseeing daily financial operations

prospective budgeting 

• planning long-term financial direction and deciding future strategy 

management functions

• Planning - set priorities and performance targets

• Organizing - designate reporting relationships & responsibilities

• Staffing - recruit, develop, and retain workforce

• Controlling - monitor performance and take corrective action

• Directing - lead motivate and communicate with staff

• Decision making - weigh pros and cons of alternative actions 

revenue

• What the organization earns from providing services

• Money available to fund operations

expenses

 what it costs the organization to provide services

profit and PM

Profit (or loss) - total revenue minus total expenses 

Profit margin - profit divided by total revenue

990 statement of revenue 

• section 7

  • Program service revenue (insurance reimbursement)

    • Government grants 

    • Fundraising 

    • What the organization earns from providing services 

990 statement of functional expenses

section 9

• Salaries and wages

• Employee benefits 

• Fees (legal, accounting, fundraising expenses, etc)

• Advertising 

• Office expenses 

• What it costs the organization to provide services

990 reconciliation of net assets

section 11

• Total revenue less expenses 

• Organization’s profit (or loss)

organizational goals

 the outcomes expected from operations; usually qualitative; change over time; challenging but reasonably achievable 

organizational objectives

 the quantitative targets that the organization must meet to achieve its goals 

operating budgets

• Revenue and expenses

• Revenue minus expenses = profit  

• Monthly

assets

things the organization owns that can provide future economic benefits 

liabilities

•  what the organization owes (money to be paid or services to be performed) 

equity

Assets minus liabilities =

conventional/incremental budgeting

• Use previous budget as starting point 

• Make adjustments to reflect changes in circumstances (ex. inflation)

zero based budgeting 

• All line items start at zero 

• Justify each revenue or expense item based on expected service volume and costs 

volume forecasting

in private healthcare organizations (both for an non profits) most revenue comes from the direct provision of services

• How many clinic visits do we expect to provide this year? 

• What is the insurance reimbursement rate per visit?

budgeting allocates for:

• Programs and services to further the organizations mission

  • Direct care 

  • Nonredirect care

• Administrative activities to support mission-related programs and services 

  • Human resources

  • budgeting/finance

  • Information technology 

cost allocation

 determining the total cost of producing a particular healthcare service

cost centers

•  organizational sub-units that incur costs but do not directly generate revenues 

  • employees

profit centers

• - organizational subunits that generate revenues and costs

  • cafeterias?

direct costs

 traced to a particular product/service (ex. Supplies, salaries)

indirect costs

overhead (ex utilities, human resources staff) 

• You need to pay the electric bill, someone to bill insurance, pay rent 

full costs

 includes both direct and indirect costs

fixed costs

 stay the same regardless of changes in amount of services provided (rent, utilities)

variable costs

change as amount of services provided changes (supplies, hourly employees)

semi variable costs 

part fixed, part variable (Salaries are fixed until increase in number of patients warrants a new hire)

break even analysis

 determining the level of volume where the total costs of producing a good or service equals the total revenue generated from that good or service

• Above the break even point each additional unit produced contributes to profits, fixed costs are fully recovered and the only costs left to recover are variable costs 

• Below the break even point, services are being produced at a financial loss

job analysis 

• Identify responsibilities for each position

• Avoid task duplication and role conflicts 

workforce planning

• Identify current staff needs 

• Project future staff needs 

job descriptions

• Define required skills and training for each position 

• Specify how each job fits into organizational reporting structure

recruitment and hiring

• Identify candidates 

• Screen and interview candidates

• Negotiate job offers

• Orient new employees

employee relations and engagement 

• Identify needs and factors that increase job satisfaction

• Employee recognition programs

• Labor relations

training and development

• New technology and laws

• Continuing education

• Interpersonal communication and teamwork 

• Leadership development and succession planning 

compensation and benefits

• Job pricing

• incentives/bonuses based on performance goals

• Benefits

assessing employee performance

• Probationary period

• Annual performance appraisal 

factors affecting job pricing

• Specialized skills and knowledge

• Experience equity within the organization

• Competition with other employers/average wages in local job market

  • Lower wages may mean higher contributions to profits but risk attracting lower quality workforce

  • Higher wages may attract higher quality workforce, which can increase revenues and efficiency

• Nonexempt -

  • Paid hourly

  • Eligible for overtime

  • You cannot overwork your part time employees because you will have to pay them overtime 

• Exempt 

  • Salaried

  • Not eligible for overtime

benefits offered to employees 

• Insurance

  • Dental

  • Vision

  • Medical

  • Life 

• Tuition reimbursement 

  • Continuing education credits 

  • Loan forgiveness

• PTO

  • Mental health counseling 

  • Sick, vacation, holiday, bereavement, maternity

• 401k 

• Flexible schedules

• Signing bonuses

• Transportation

• Wellness 

• short/long term 

extrinsic rewards

• tangible 

• Money

• Benefits

• Flexible schedule

• Promotion

• feedback/recognition

intrinsic rewards

• subjective 

• Connection with workers

• Meaningful works 

• Skill development 

• choice/participation in decisions 

• Progress toward milestones

maslows hierarchy of needs

theory of motivation that organizes human needs into five categories, often represented as a pyramid: physiological needs (food, water), safety needs (security, stability), love and belonging needs (friendship, family), esteem needs (respect, status), and self-actualization needs (fulfilling one's potential). The theory posits that individuals must satisfy lower-level needs before they can move on to higher-level ones, though this progression is not always rigid.

theory x

• Employees are unmotivated and need managers direction (extrinsic rewards)

theory y

• Employees are industrious and managers to provide resources to facilitate work (intrinsic rewards) 

healthcare braking point

• Healthcare employees feel undervalued and unsatisfied - signalling that a profession built on providing care to others is running low on it themselves

• Only 37% are very satisfied 

• Only 32% feel valued by their current employer

• Only 3&% feel very loyal to their current employer 

• Healthcare professionals who feel valued by their organizations are 40% less likely to experience burnout 

• More than half say they'll look for new job opportunities 

  • Inadequate compensation

  • Burnout or emotional fatigue 

  • Lack of career advancement, personal development, or education opportunities 

  • Projected to have a shortage of nearly 700,000 critical healthcare workers 

predictors for well being

• High burnout

  • Work load

  • Work life balance

  • Professional growth

  • Age

  • Increased Moral distress

  • Meaningfullness

  • Recognition

  • Race ethnicity 

    • White non hispanic respondents are more likely to be burnt out compared to all other race/ethnic identities

  • Organizational tenure

  • Mission orientation

• High engagement 

  • Decreased Moral distress

  • Increased meaningfulness

  • Team 

  • Supportive HC processes

  • race/ethnicity

    • Hispanic, black non hispanic, white non hispanic are more likely to be engaged

  • Compensation benefits 

  • Worklife balance 

  • Organizational tenure 

  • Recognition

• Strong intention to stay 

  • Professional growth

  • Culture

  • Age

  • Worklife balance

  • Supervision

  • Meaningfullness

  • Compensation and benefits

  • Moral distress

  • Education 

  • Organizational tenure 

• High job satisfaction

  • Culture

  • Professional growth 

  • Decreased workload

  • Increased meaningfulness

  • Compensation and benefits 

  • Work life balance

  • Leadership

  • Age 

  • Supervision

  • Organizational tenure 

err is human

• Third party payment systems do not incentivise safety or quality

• Decentralized and fragmented healthcare delivery system contributes to unsafe conditions 

• 44000 to 98000 people per year were dying from preventable medical errors in the united states

• The scale decreases

  • Lost income/productivity

  • Patient trust

  • Provider morale 

  • Population health

• The scale increases

  • Disability

  • Healthcare costs

  • Hospital length of stay 

six domains of quality care

• Safe - avoid injuries to patients from care that is intended to help them 

• Timely - reduce waits and sometimes harmful delays for those who receive and give care

• Effective - avoid underuse (provide services based on scientific knowledge to all who could likely benefit) and overuse (do not provide services to those not likely to benefit)

• Efficient - avoid waste of equipment, supplies, ideas, and energy 

• Equitable - care quality does not vary to personal characteristics

• Patient centered - provide care that is respectful of and responsive to individual preferences, needs, and values, ensure patient values guide all clincal decisions 

IHI triple aim

• Better Experience of care 

• Better Population health 

• Lower Per capita costs

IHI quintuple aim

• Population health 

• Per capita costs

• Experience of care

• Workforce well-being and safety (required to sustain improvement)

• Health equity (explicit focus on underlying causes of inequity)

PPHEW

quality measurements

• Performance data = recognized standard 

• Population health measures 

  • Deaths 

  • Births

  • Incidence of chronic disease

  • Life expectancy at birth 

  • Infant mortality

  • Positives

    • Highly accurate

    • Can be adjusted for age, sex, race

  • Negatives 

    • Not suitable for analyzing individual health

    • Does not capture quality of life or the duration, severity, or consequences of disease

core objectives 

•  measurable high priority public health issues associated with evidence based interventions with 10 year targets

developmental objectives

• - high priority public health issues associated with evidence based interventions that lack reliable baseline data 

research objectives

•  public health issues with high health or economic burden or significant disparities between population groups that lack evidence based interventions 

subjective health measures

• Number of healthy days

• Number of disability days

• Morbidity (incidence of disease)

• Activities of daily living limitations 

• Positives

  • Can be used at individual and population levels

• Negatives

  • Depend on respondents interpretation of survey questions/self assessments

structure

• rganizations capacity and systems to provide high quality care (facilities, personnel, policies)

  • Whether the organization uses electronic medical records

  • Number or proportion of board certified physicians

  • Ratio of providers to patients

  • Helps facilitate care 

  • Non medical stuff that happens 

process

•  what the organization does to maintain or improve patient health (services consistent with clinical guidelines)

  • % of people receiving flu vaccines

  • % of people with diabetes 

outcome

•  impact of a healthcare service or intervention on patient health status 

  • % of patients who die as a result of surgery 

  • Rate of hospital acquired infections

patient experience

•  feedback on care experience 

  • $ of patients who say their provider explains treatment options in a way that is easy to understand 

  • Length of wait time for appointments 

health systems

• At least 1 non federal general acute care hospital 

• At least one group of physicians, providing comprehensive (primary and specialty care)

  • At least 50 total physicians 

  • At leat 10 primary care physicians 

• Connected through common ownership or joint management 

• As of 2021

  • 635 health systems 

  • 93% of hospital beds 

  • 52% of physicians 

horizontal market consoldiation

• 2 direct competitors merge or one direct competitor acquires another

• Example: 2 acute care hospitals 

vertical market consolidation

• Entities that are not direct competors but are in the same supply chain merge 

• Example: Hospital acquires physician practice 

cross market consolidation

• Entities from separate geographic areas merge,

• Example: facilities in upper midwest and facilities in southeast 

• impacts

  • Benefits

    • Developing est practices

    • Participating in complex value based payment programs 

    • Purchasing supplies in greater volume 

  • Drawbacks

    • Higher prices

    • Reduced access to care

    • Reduced spending on community benefits 

determining medicare hospital prices

• Flat base rate payment, set in advamce, adjusted for 

  • Patient health 

  • Service intensity 

  • Geographic location

  • Disproportionate share low income patients

  • Residency training

determining private insurance hospital prices

flat rate per stay - may scary by patient health/diagnosis

per diem - flat daily rate

discounted charges - % of hospitals list prices

prices set through negotiation to network contracts to commercial insurers prices 

spending on hospital care makeup

private insurance (37%), medicare (25%), and medicaid (19%)

factors influencing hospital prices

• providers market power 

  • Market concentration - mergers, barriers to entry

  • Reputation for quality care

  • Delivery of specialized services (limited market) 

  • Delivery of “unshoppable” services (ex, emergency) 

• Patients limited price sensitivity 

  • Lack of information about prices

  • Reliance on providers when deciding what to consume 

  • Difficulty comparing price with expected benefit 

  • Established relationships, hassle of switching 

  • Flat copays shield patients from price variation 

• Labor costs were the largest expense category for hospitals in 2023, followed by supply and pharmacy expenses 

  
  

requirements for nonprofit hospitals to obtain federal tax exemption

• Organizational and operational requirements

  • A hospital must be organized and operate to achieve a charitable purpose the promotion of health for the benefit of the community 

• Community benefits 

  • Operate an emergency room open to all, regardless of ability to pay

  • Maintain a board of directors drawn from the community

  • Maintain an open medical staff policy

  • Provide care to all patients able to pay, including those who do so through medicare and medicaid 

  • Use surplus funds to improve facilities, equipment, and patient care

  • Use surplus funds to advance medical training, education, and research 

• Patient protection and affordable care act (PRACA) requirements 

  • Hospitals must 

    • Conduct a community needs assessment 

    • Set a limit on charges 

    • Maintain a financial written assistance policy 

    • Set billing and collection limits 

  • IRS must review each tax-exempt hospital's community benefit activities at least once every three years

what is charity care?

• Free or discounted health services provided to people who

  • Meet the organization's eligibility criteria for financial assistance 

  • Are unable to pay for all or a portion of the services

• Services for which the organization does not seek reimbursement or payment 

health information technology

• The technology used to collect, store, and use health information/data 

• Three major purposes of health IT 

  • Clinical information systems - electronic health records

  • Administrative information systems - payments, billing, budgeting 

  • Decision support systems - medication alerts, best practices, notifications

electronic health record

• Real time digital version of a patient’s paper chart

  • Contains information from all healthcare providers involved with a patient’s care 

  • Can contain information such as: 

    • Medical history, vital signs, treatment plans, allergies, lab test results, diagnoses, medications, immunization records, radiology images

    • Billing data, patient demographics, progress notes

HITECH act of 2009

• 2011-2015 - providers were eligible for $35 billion in incentive payments if they demonstrated “meaningful use” of EHR 

• After 2015 - providers receive a reduction in their medicare payments if they fail to demonstrate “meaningful use” of EHR 

ransomware

• a type of malicious software that encrypts data on a computer, making it unusable 

• Data is stolen and held hostage until a ransom is paid 

• hospitals are most impacted 

  • Hospital mortality rises as doctors are unable to look up past care, communicate notes to colleagues or check patient allergies

  • Scheduled surgeries canceled

  • Ambulances are rerouted to other hospitals 

  • Lower care quality at nearby hospitals forced to take on additional patients 

strategic planning

• Inputs 

  • Mission and vision

  • Internal and external factors 

  • Priorities and resource allocation 

  • Competitive advantage 

• Outputs 

  • Desired future state 

• examples

  • Regional hospital adds free standing emergency department 

    • Rapid population growth on edge of service area 

    • 30 minute drive to emergency department 

  • Nursing hope reduces patient 

    • Revised staff scheduling to reflect patient demand 

    • Established recruitment partnership with nursing school

    • updated safety protocols, implemented by safety officers

  • Two health systems merge

    • Identified duplicative services and service gaps

    • Renegotiated insurance ocntracts

    • Developed common culture/identity

strategic planning process

Self assessment - who are we? Who do we want to be 

     Mission, vision, values 

     Current capabilities

     Financial stability

     Administrative capacity (staff, physical space, technology, board)

Environmental scan - what conditions affect us now? What about the future 

Impact evaluation - how will our possible futures be impacted 

Goal setting - what must we achieve for success? 

Action plan - what steps should we take? What are the measures of success? 

external factors

• Private and public insurers

• Competitors 

• law/regulations 

• Stakeholder demands 

• licensure/accreditation

• Community demographics/need

internal factors

• New service development 

• Technology acquisition

• Financial performance 

• Patient satisfaction

• Service quality

• Budgeting 

• Staffing 

environmental analysis

• Demographic trends 

• law/policy

• Reimbursement 

• Quality reporting 

• Economy 

• Workforce

Stakeholder input 

• Patients

• Staff

• Government 

• Other safety net providers 

• Others in health system 

Market assessment 

• Geographic service area 

• General population 

• Subpopulations

• Health indicators

• Population size and payer mix

• Market share

• Competitors 

• Unmet needs

swot analysis

 Strengths, weaknesses, opportunities and threats

environmental churn

bad for insurers because there’s more paperwork, bad for providers because of loss of revenue,  

characteristics of oligopoly

• A few sellers 

• Interdependence - any change in price or output by 1 firm directly affects other’s profits 

• Reliance on advertising to gain market share

• Product differentiation - slight discernable differences

• Sticky prices and stable profits (higher than perfect competition)

average monthly OOPC for insulin 

• In 2019 the average out of pocket cost was $58 and the average cost for uninsured people was $123 a month

• As of 2024, congress capped costs for medicare enrolled, and the three major manufacturers agreed to cut prices and cap out of pocket costs leading to a $35 a month cap for medicare enrollees

  • Voluntary, they could change their minds at any time 

• It costs about 2-4 dollars per vial 

California is manufacturing its own insulin because gavin said it was ridiculous

pharmacy benefit managers

• Four market pharmacy benefit managers (PBMs) controlled ⅔ of the market as of 2024

  • OptumRX - 22%

  • CVS health - 19%

  • Express scripts - 16%

  • Prime Therapeutics - 11% 

  • Other - 33%

• Why not make money by processing drug claims for them?

• Negotiating power to determine better prices and “discounts” 

  • Pit drug makers against each other for a seat on the formulary 

  • PBMs pocket money from the difference in payment 

• Draft formularies

• FTC said drug companies couldn't own PBMs 

• Rebates “better prices”

  • PBMs insist they pass most rebates to clients (lies), PBMs skimming off rebates

  • Little direct benefit for consumers

• Lawmakers in cali working on requiring transparency for rebates

  • How much of the rebate actually results in lower prices for patients?

• Insurers pay flat fee for PBMs to administer drug coverage for everyone in the insurance plan

• This is a mess, very complicated

formularies

• preferred list of Rx drugs 

• Lowest copay = generic drugs 

• Medium copay = preferred, brand name drugs 

• Higher copay = non-preferred, brand name drugs, specialty drugs

what happened with insulin prices

• Manufacturers drastically raised insulin list prices in the 2010s, reaching over 300$ per vial

• Manufacturers were increasing rebates (which were calculated as a % of the list price) they paid to PBMs to obtain preferential formulary placement 

• Increase in insulin prices set by manufacturers, decrease in manufacturers revenue

• In 2024 - the FTC sued PBMS for artificially inflating insulin prices

  • Abusing economic power by rigging pharmaceutical supply chain competition in their favor, forcing patients to pay more for life saving medication

  • Upside- down insulin market manufacturers 

  • Rebates should bring drug cost down but we are paying higher list prices and don't benefit at the point of sale 

GLP1 coverage for insurance 

• Pros

  • Lower long term costs due to lower disease burden 

  • Obesity reduction/type of prevention 

  • Effectiveness

    • Lose 10-20% of weight 

    • Lower risk of stroke or heart attack 

  • Increased employee productivity due to fewer missed day of work

  • Improve worker recruitment/retention

• Cons

  • Health plan may not see the savings 

  • Incredibly high cost

    • Remain on drugs lifelong 

    • Higher costs = higher premiums 

  • Potential savings uncertain for employer 

  • High potential demand 

options to control price in health plans

• Reduce price - increase cost sharing & copays

• Reduce quantity - require prior authorization, limit who qualifies to receive drug (disease severity), set quantity for dose limits 

• Substitute cheaper inputs - try another less expensive option first 

Restructure - end coverage

medicare drug negotiation

• Modified the medicare part D noninterference clause”

  • Original law - HHS secretary cannot interfere with negotiations between drug manufacturers and health plans or require a particular formulary or price structure for covered drugs

  • New law - HHS secretary must negotiate prices with manufacturers for a certain number of single-source brand names without generic competitors 

    • Drugs are eligible for price negotiation if they are among the top 50 in total medicare spending (9-13 years of FDA approval)

• Congressional budget office estimates

  • 98.5 billion in medicare savings from 2022-2031

  • Reduction of 1% in the number of new drugs coming to market in the next 30 years 

Medicare drug price negotiation factors 

• Manufacturer specific factors - 

  • Research and development costs and extent to which manufacturer has recouped costs 

  • Current unit costs of production and distribution 

  • Federal financial support for research and development

  • Pending and approved patent applications

  • US market data and revenue and sales volume 

• Therapeutic alternatives

  • Extent to which selected drug represents a therapeutic advance compared to existing therapeutic alternatives and their costs 

  • Prescribing information for the selected drug and its therapeutic alternatives

  • Comparative effectiveness of the selected drug and its therapeutic alternatives taking into account effects on specific populations, such as patients with disabilities, seniors, people who are terminally ill and children 

  • Extent to which the selected drug and its therapeutic alternatives address unmet needs for a condition that is not adequately addressed by available therapy 

estimated impact of 2026 Medicare price negotiation

• Cms estimates that medicare would have saved $6 billion (net savings of 22%) if the 2026 negotiated prices were in place in 2023

• CMS also estimates that medicare enrolees will save $1.5 billion when the 2026 negotiated prices take effect 

  • Lower medicare out of pocket costs will depend on the copayment amounts or coinsurance rates for a drug 

• Medicare enrollees could also have improved access to drugs, since part D plans must cover all drugs with negotiated prices for drugs not subject to price negotiation

• Plans generally can choose which drugs to include on their formularies (except the 6 protected drug classes)

  • Plans must also provide a clinical justification for more restrictive utilization management for drugs with negotiated prices compared to drugs in the same class

cost benefit analysis and cost effectiveness analysis

• Economic evaluation methods that assist decision making by weighing pros and cons of alternative interventions in a standardized way 

• Can be used to compare alternatives (for the same condition or two unrelated treatments) or identify programs that do or don't make good use of scarce resources 

• Do not address ethical dilemmas 

• Only as good as the data used/available 

• Do not recommend whether an intervention should be implemented or is actually needed 

cost benefit analysis

• convert health outcomes into dollar amounts and subtract treatment costs 

• Costs are measured in dollars 

• Benefits are measured in dollars

• exampleL does surgery add enough years of life expectancy to justify its cost? 

• Advantages

  • Able to compare monetary returns on investments in health with returns from investments in other areas of the economy 

  • Able to determine whether a particular treatment offers an overall monetary gain net to society 

• Disadvantages

  • Human capital approach - ethical objections to placing monetary values on human life 

  • Willingness to pay approach - amount people are willing to pay is often positively related to their level of income 

cost effectiveness analysis

• Costs are measured in dollars

• Outcomes are measured in health units 

• Example: which treatment alternative provides the most additional years of life expectancy per dollar spent

  • Early detection of cervical cancer through pap tests saved 3-7 years of life per 100 tests and cost 2874 per life year saved 

• Effectiveness can be measured in terms of: 

  • Cases treated appropriately 

  • Lives saved

  • Life years gained

  • Pain or symptom free days 

  • Cases successfully diagnosed

  • Complications avoided

cost utility analysis 

 a type of cost effectiveness analysis in which outcomes are measured in quality-adjusted life years (QALYs)

quality adjusted life year

• Quantity of life (duration of time in a particular health state) + Adjusted for quality of life (desirability of living in a particular health state) = qaly 

• Population level measure

• The value of a year of treatment is lowered by the degree to which a  health condition is perceived to harm the person's quality of life during that year

• Quality of life is assigned to a utility score ranging from 0 (death) to 1 (a year in perfect health) 

• An intervention is considered more cost effective if it has a lower cost per QALY compared to an alternative

steps in cost effectiveness analysis

• Identify the intervention to evaluate

  • Need 2 approaches to compare

  • Identify the target population

  • Identify the perspective (patient, provider, payer, societal)

• Identify, quantify, and standardize costs 

  • Clinical

  • Nonclinical (lost wages, transportation, childcare)

  • Time (travel, wait)

  • Calculate the value of future costs in present dollars, adjust data from past years for inflation 

  • Convert charges to costs 

• Determine QALY’s 

  • Adjust clinical health outcomes to reflect how much patients value being in one health state vs another

  • Intervention extends life two years but in constant pain 

  • You value 1 year in constant pain at 60% of a healthy year

  • QALY  1.2  b/c (2.0x0.6) 

• Calculate incremental cost effectiveness ratio 

  • (costprogram1 - costprogram2) / (effectivenessprogram1- effectivnessprogram2) 

how are health utility scores determined

• Questionnaires ask participants how much they would prefer to be in one health state vs another

• Health states represent the degree of impairment a person has certain categories of functioning 

• Time trade off: how many years of living with a certain disability would you trade for a shorter number of years in perfect health? 

• Standard gamble imaging having a disability, would you undergo a procedure that has a 50% chance of returning you to perfect health and a 20% chance of instant death 

eq-5d quality of life domains

• Mobility

• Self care

• Usual activities

• Pain and discomfort 

• Anxiety and depression 

• Offers five levels of ordinal measurement, includes a child friendly version

• Versatile enough to compare health across different types of patients and diseases

• Impact of who is surveyed

  • People without disabilities systematically underestimate the quality of life of people with disabilities 

    • Reduces the value of treatments that do not bring a person back to “perfect health” without a disability

  • People with disabilities tend to rate their quality of life higher than the general public’s perceptions

    • Increases value of treatment that extend life while reducing value of treatments that improve quality of life

QALY alternatives

• Cost benefit analysis - convert health outcomes into dollar amounts and subtract treatment costs 

• Equal value of life years gained -

  • Supplemental unweighted measure of number of years of life extended using a particular treatment 

  • Intended to show significant discrepancy between QALY vs evLYG

• Multi criteria decision analysis 

  • rank/weigh factors in terms of importance to decision maker (cost, clinical outcome, administrative burden)

  • Score each treatment fro each criterion and then generate single average weighted score to compare alternatives 

• Patient perspective value framework 

  • Patients with the condition being treated define which treatments are of highest value and what high value means 

  • Patients preferences/goals are used to weigh and score factors - treatment benefits drawbacks vs patient costs vs evidence of clinical effectiveness