Dictionary of Health Economics

170 Pages·2018·34.911 MB·English

by  Earl-Slater, Alan

Dictionary of
Health Economics
Alan Earl-Slater
Boca Raton London New York
CRC Press is an imprint of the
Taylor & Francis Group, an informa business
First published 1999 by Radcliffe Publishing
Published 2018 by CRC Press
Taylor & Francis Group
6000 Broken Sound Parkway NW, Suite 300
Boca Raton, FL 33487-2742
© 1999 Alan Earl-Slater
CRC Press is an imprint of Taylor & Francis Group, an Informa business
No claim to original U.S. Government works
ISBN-13: 978-1-85775-337-0 (pbk)
This book contains information obtained from authentic and highly regarded sources. While
all reasonable efforts have been made to publish reliable data and information, neither the
author[s] nor the publisher can accept any legal responsibility or liability for any errors or
omissions that may be made. The publishers wish to make clear that any views or opinions
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do not necessarily reflect the views/opinions of the publishers. The information or guidance
contained in this book is intended for use by medical, scientific or health-care professionals
and is provided strictly as a supplement to the medical or other professional's own judgement,
their knowledge of the patient's medical history, relevant manufacturer's instructions and the
appropriate best practice guidelines. Because of the rapid advances in medical science, any
information or advice on dosages, procedures or diagnoses should be independently verified.
The reader is strongly urged to consult the relevant national drug formulary and the drug
companies' and device or material manufacturers' printed instructions, and their websites,
before administering or utilizing any of the drugs, devices or materials mentioned in this
book. This book does not indicate whether a particular treatment is appropriate or suitable for
a particular individual. Ultimately it is the sole responsibility of the medical professional to
make his or her own professional judgements, so as to advise and treat patients appropriately.
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Preface
Health economics is a rapidly growing discipline. This is due to the
increasing interest in finding ways to improve the use of scarce resources
that have alternative uses.
This book is very much a reflection of the common terms used in health
economics. It is, like the discipline, an important and evolutionary step.
The objectives of this book are to:
• introduce many of the terms used by health economists
• extend the range of terms used in the discipline
• make the terminology accessible and clear
• contribute to the standardisation of the terminology
• improve the understanding of the meaning of the terms.
This book will be useful to the types of people I have taught over the years:
doctors, community pharmacists, midwives, public health managers, hos­
pital pharmacists, nurses, pharmaceutical advisers, finance managers, in­
surance company personnel, practice managers, pharmaceutical company
sales executives, staff involved in R & D, government employees, consultants,
trainee teachers in health economics, postgraduate and undergraduate
students on courses in management, health, policy, social studies and busi­
ness studies.
How can you use this book? Here are some ideas.
• If you come across a term that may be used in health economics and
need clarification of its meaning, refer to this book.
• If you want to learn some of the tools of the trade of health economists,
refer to this book.
• If you want to use health economic terminology in your own work,
check with this book that you are using the correct term.
iv Dictionary of health economics
• Participate - send me a note if there is a term that you think should be
included in the next edition of the book or if you have good examples of
a term that a wider audience would appreciate seeing.
I have successfully taught health economics in various places and to vari­
ous audiences over the years. Examples include St John's Medical School,
Bangalore, India; Faculty of Health Sciences, Moi University, Kenya;
and at UK universities. I feel very fortunate to have taught health
economics to people from over 50 countries in the world. I remain grateful
for the wonderful enthusiasm, hospitality and insight that I have received
from those that I have taught and worked with. I am grateful to them for
encouraging me to write this book.
Alan Earl-Slater
www.2020oxfordpharma.org
March 1999
This book is dedicated to
Elaine, Emmanuela and Maria

A
Ability to pay
The capability of a person or organisation to pay for a healthcare product.
See Willingness to pay.
Absolute advantage
Occurs when one organisation produces a greater level of goods and
services than another from a set of resources, inputs. Table 1 shows two
hospitals, A and B, each of which produces two services, cataract operations
and hernia repairs, at the same cost. Hospital A can produce 80 cataract
operations or 90 hernia repairs. Hospital B can produce 100 hernia repairs
or 120 cataract operations. It follows that hospital B has an absolute ad­
vantage in both cataract operations and hernia repairs. It can produce more
of the two healthcare services. See Comparative advantage; Economies of
scale; Economies of scope.
Table I Absolute advantage
Hospital A Hospital B
Hernia repair 80 100
Cataract operations 90 120
Absolute poverty
A situation of destitution, penury or privation such that a person lacks at
least one of three basic factors required for survival, namely food, shelter
or clothing. It is a state of poverty that is not related to any average or
benchmark figure. See Carstairs' index of deprivation; Department of
Employment index for planning; Jarman's index of deprivation; Relative
poverty; Townsend's index of deprivation.
2 Dictionary of health economics
Absolute risk
The risk of an event occurring.
Table 2 Absolute risk
Outcome
Event Event does Total Risk of events
occurs not occur
New care or a(l) b (2) a + b = 3 X = a/(a + b)
exposure = 1/3
Usual care or c(3) d(4) c + d = 7 Y = c/(c + d)
not exposed = 3/7
Totals a + c = 4 b + d = 6 a + b + c + d= 10
Referring to Table 2, the absolute risk of the event occurring in the new care
or exposed group is:
The absolute risk of the event occurring in the usual care or non-exposed
group is:
Using data in Table 2 as an example:
which means the absolute risk of the event, e.g. stroke, occurring in the
new care or exposed group is 33%.
ARnotx = 3/(3 + 4) = 3/7 = 0.49
which means the absolute risk of the event, e.g. stroke, occurring in the
usual care or non-exposed group is 49%. See Absolute risk reduction;
Incidence; Likelihood ratio; Odds; Odds ratio; Relative risk; Relative
risk reduction.
Dictionary of health economics 3
Absolute risk reduction
The difference between the rates of events in two groups. The groups can
differ by the care regime they receive or their exposure to a risk factor.
Table 3 Absolute risk reduction
Outcome
Event Event does Total Risk of events
occurs not occur
New care or a(l) b(2) a + b = 3 X = a/(a + b)
exposure = 1/3
Usual care or c (3) d (4) c + d = 7 Y = c/(c + d)
not exposed = 3/7
Totals a + c = 4 b + d = 6 a + b + c + d= 10
More generally, then, using the notation in Table 3:
Suppose the numbers in Table 3 relate to obese patients on current (usual)
treatment or on a new treatment with the medication orlistat, in conjunction
with a specified hypocaloric diet and exercise programme. Suppose the
event is stroke and we are interested to see if the new care regime provides
better outcomes than the usual care regime organised by the primary care
group. Taking the numbers in Table 3 as an example, we have:
which means, for instance, the new care programme reduces the chance of
stroke by 10% compared to the existing programme. The reciprocal of the
ARR is the number needed to treat to achieve a result. See Absolute risk;
Likelihood ratio; Number needed to treat; Odds; Odds ratio; Relative
risk; Relative risk reduction.
Accountability
Arises when a person is answerable to another person or organisation for
an action or task they have taken or were supposed to have taken. See Due
process; Governance; Regulation; Transparency.