Economic Evaluation: Benefits, Study Questions, Types, Costs, and Outcomes

This paper discusses the benefits, study questions, types, costs, and outcomes of economic evaluation in healthcare. It covers the different types of costs associated with economic evaluation and the techniques used to measure and value them. It also explores the different types of economic evaluation and their suitability for answering study questions. The paper concludes with a discussion of the different health outcomes that can be measured and valued in economic evaluation.

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ECONOMIC EVALUATION
By (Student’s Name)
Professor’s Name
College
Course
Date

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ECONOMIC EVALUATION
Introduction
This paper contains set of questions that deals with the economic evaluation. The paper
helps in the determination of the major features of the economic evaluations. It also states the
different ways of performing economic evaluation and the important steps in performing the
evaluation of the intervention in the healthcare. The paper also describes the various types of
costs associated with the economic evaluation and the procedure which are being taken in
valuing and measuring these costs. Finally, it analyzes the different techniques of providing
healthcare outcome.
Q1 Benefits of economic evaluation
Economic evaluation is used to offer information on value for money for the decision
makers about the distribution of limited resources (Coelho, Tang, Suddarth and Mamdani 2018).
It is being used to find the most suitable interventions useful in solving a particular problem.
Economic evaluation is required because it will help in the identification of the best
cause of action which should be taken to help solve the problem based on the available resources
(Drummond, Sculpher, Claxton, Stoddart and Torrance 2015). It will also help in managing
demand and contain costs. The demand of the people, in this case, is to improve sleep for the
adolescents to help reduce behavioral problems, improve grade and lowered mood. The costs
will be controlled by coming up with suitable strategies that will help in improving the sleep
among the population. An economic evaluation will help in making the decision on whether the

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intervention used will reimburse patients in case they use drugs. It will help in the determination
of the effectiveness of the intervention whether it is appropriate and bring value to the general
population (Majumdar, Lier, Hanley, Juby and Beaupre 2017). It will help in valuing all benefits
and costs in a single measurement. The economic evaluation will also help in minimizing the
benefits associated with the spending of both the Families of the patients and the healthcare.
Economic evaluation can also help in the provision of bargaining power with the decision on the
best medical care that should be used to control and solve the sleep problem which is facing the
population especially the adolescent. Evaluations can also be used together with other
approaches to assist in setting priorities, for example, budgeting of the program (Brazier,
Ratcliffe, Saloman and Tsuchiya 2017).
Q2 Essential Study Question
From the viewpoint of Department of healthcare does the new intervention
‘Sleep well’ a program for younger adolescents (aged 12-15) included in the study
are the general population who denotes ‘value for money’ in relation to QALYs.
Method/design
The selection of the participant will occur from randomly well-ordered list
of schools. Younger adolescents reported to have sleep problem by their parents
will be randomized to intervention groups or usual care. Train nurses will provide
the sleep well intervention. Follow up will take place after 12 months using the
teachers and parents surveys and younger adolescents face-to-face assessments.

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Q3 Type of Economic Evaluation Appropriate For Answering Study
Questions
The most suitable economic evaluation which should be used is the cost benefits analysis.
CBA is a tool which is being used in assessing the benefits and costs of a significant project. It
helps in maximizing all the benefits derived from the available resources. It means that the
expenses of the project should be less than the tangible benefits. Economic benefits analysis
should be used because it is the only type of economic evaluation that can be applied both
outside and inside health sector. This study will be conducted outside the health sector and there
is no need of using another type of economic evaluation techniques. CBA also enables the
assessment of intrinsic value for example in case a benefit is surpassing costs the intervention
should be used (Zhou, Clark, Recklitis, Obenchain and Loscalzo 2018).
Q4 Resources That Will Be Collected Under C1, C2, C3, and C4
The classification of the cost will depend on the distinction of all the resources consumed
in direct costs (production costs) and the indirect cost or other resources (Bock et al. 2015).
Direct costs mostly take into account all the production factors, for example, resources
used (services, time and goods) to produce the studied intervention. They are usually made up of
the consumption of outpatients care and hospital, transport, medical care, the time used by the
individuals who are undergoing the intervention or the institution of the healthcare program, as
well as the time, spent used by those who are taking care of them. Transition costs are usually
part of the direct cost (Klarenbach, Tonelli, Chui and Manns 2014).

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Direct costs- while direct cost represents the resources which are being required for the
production of interventions which are being used in the study, Indirect cost are the resources
which are unavailable due to the morbidity and/or mortality. Indirect cost includes the influence
of the interventions for one particular resource for example time used to work or the time taken
to leisure in the population which are being analyzed, for this case the population is the young
adolescent (Mitchell, Roberts, Barton and Coast 2015).
C1 represents Healthcare cost, C2 represents a cost of non-health care, and C3 represents
a cost of OOP and other resources used during the treatment and C4 Indicate productivity.
The direct cost of health care- the healthcare- value all services, goods and other
available resources used up in the provision of comparator and intervention. They are made up of
the time taken by patients indirectly accessing the services and the cost of professional resources.
Non-health care-C2
The cost associated with C2 include: community help and legal support
Direct costs of Non- Healthcare- C4 and C3 costs
Non-health care represents resources used which are related to intervention, but they are
not included in the production function of the same intervention. They are made up of the
following: community services.
C3 contains the following costs Patient’s time, home modification, expenses from out-of-
pocket.
Productivity (indirect) costs- C4 costs
Morbidity- lost economic productivity because of loss in leisure time, or ill health. The
cost involves both the cares and patients

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Q5 Data and Information Sources Used For Collecting Cost And
Resources Information
Varieties of information and data collection techniques that will be used include patient
self- report (for example questionnaires, interviews or diaries); use of available data (for example
general practitioner record and medical records); use of expert panels. Data can also be collected
from the Therapeutic guidelines, publications/old report (retrospective analysis), a survey of the
study population, Administrative data- Hospital/Health facility/Medicare records or any
combination of the above mentioned (Buntrock et al. 2017).
Measurement of costs
Measurement of resources uses comparator and intervention group in the form of natural
unit. It depends on whether you are macro costing or micro-costing. For example Units of blood,
the dose of a drug and the nurse labor time (Jommi 2017).
Micro-costing- this technique is use to approximate economic costs which are associated
with health interventions. This technique is more when there is no unit of cost. It includes the
unit of production (Glick, Doshi, Sonnad and Polsky 2014).
Costing an event: Macro (Gross) costs
These costs include the average cost of professional Doctor Visit
Q6 Value of Resources Inputs
Evaluation of costs needs measurement, valuation, and identification of the resources
which are used in the process of production which is close to the daily practice. Resources are

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being valued by use of production cost; tariffs can also be used in the valuation then of resources.
The documentation of indirect costs are being included in the additional analysis, they are not
included in the raising cost-effectiveness ratio (Gardiner, Ingleton, Ryan, Ward and Gott 2017).
Valuation of costs- in the valuation of cost, a market price is always used unless there is
no reflection of the price in the opportunity cost. Subsidies and Taxes are always deducted from
the market price.
Price versus cost
If cost =price then the competitive market has worked.
Prices affected by parents (technologies, drug), non-competitive markets (example
hospital), location
Capital
Existing equipment: use represent of equipment cost and use originally indexed of costs.
Medical cost
This can use (MBS) Medical Benefits Schedule.
Cost of hospitalization
It uses the actual price of the diagnosis linked group (DRG)
It is the price of all the hospital episode and involves pathology, medical and radiology
The determination of the DRG requires clinical input.
Indirect costs (productivity)
The two main ways of valuing and measuring productivity cost include:
Frictional cost approach and Human Capital Approach
HCA- the NPV of the extra stream of the individual life because of a health care program

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FCA- It gives more realistic approximate of true (MBPC) Market base production costs.
Q7 Valuation and Collection of health outcomes
The outcome measure is the change in the health of a group of people, individuals or the
general population of the studied intervention. Outcome mostly measures (readmission, mortality
and patient experience). In this case, the outcome will only measure whether the qualities of life
of the young adolescents are affected by the sleepless has improved after the care services (Ebert
et al. 2018).
These are how I will measure health outcome:
Mortality- this is the most important health outcome measure. I will monitor whether the
initiatives developed to improve the life of the study population and whether the sleepless
problem has been solved by the initiatives.
Patient experience- this measure will assess the patient’s perception and experience of
their healthcare. The information collected is more important in the provision of the satisfaction
of the patients. It can also help in improving the local services. The rapid response from those
affected (sleepless individuals) will help in the identification of the issues. The example is where
the patients are being requested to fill-up a satisfaction survey about the care they undergo
through.
The effectiveness of care- this measures will evaluate 2 things:
First is whether there is compliance with the care guidelines and achieved outcome
(improvement in sleep)

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It will be important to monitor the outcomes of treatment to each and every individual
affected by the sleepless in the study population.
I will also measure indirect benefits, for example, the quality of life of both the friends
and the family of the patients (affected group).
I will measure whether the intervention has improved the quality of life for all the
adolescents. In this case, the assessment will involve whether the students affected can now sleep
well and whether there are improvements in their grades in school.
Measurement of health status for all those who are affected by sleepless will also help in
the provision of additional information on the health outcome (Obreli et al. 2015).
Conclusion
Economic evaluation becomes essential in the daily practice due to the costs of the
limited resources and higher costs of healthcare (Dukhanin et al. 2018). It is important to
determine the type of economic evaluation to be performed. Determination of whether you want
to do the cost-benefit analysis, cost-minimization, or cost-benefit analysis. The different types of
economic evaluation use the same method to measure costs, the different only comes in the
measuring of the benefits and outcome (Edwards et al. 2017). The complex type of economic
evaluation of all is the cost-benefit analysis because of its use of the monetary terms for health
form of values. The health will only progress when there is an improvement in improving
management and planning and by improving economic evaluation. All those involved in the
provision of care should take into consideration the alternative cause of an action that maximizes
the benefits and reduces the cost of an event. This paper helps in the selection and identification

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of the health outcomes that are always used in the economic evaluation. The choice of a
particular health outcome reflects the perspective of the study.
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