Econ Exam 2
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Cost minimization analysis
- compare 2 or more alternatives are therapeutically equivalent
- only costs are compared
areas where CMA may expand
- mee too products
- generic competition
- changes in health care technology
analysis that presents costs and effects in a disaggregated format
Advantages of CCA
- transparency for decision makers
approaches to conducting pharmacoeconomic studies
- randomized controll trials
- decision analysis
- retrospective claims analysis
decision analysis trees
- decision analysis decision tree
- hypothetical decision tree
- three state markov model
3 types of nodes in a decison tree
- decision = square
- chance = circle
- end = triangle
11 questions to apprais study
- competing alternatives?
- were relevent costs properly identified?
- were relevent costs properly measured?
- were relevan costs properly valued?
- instruments to measure QoL validated?
- assumptions and limitations of study?
- adjusted for time periods?
- sensitivity analysis?
- appropriate generalizations?
do not vary when output changes
- Fixed cost
- sunk costs
vary directly with amount produced. increase as output increases
cost of holding a capital good for a specific period of time depends on
depreciation and opportunity costs
extra or additional cost of producing one extra unit of output
additional output from the successive increas of one input will eventually deminish when other inputs are held constant
law of diminishing return
Marginal cost graph
- falls at first then rises as output rises
- u shaped curve
- MC = AC
- profit is highest at this point
when MC is below AC
it pulls AC down
when mc is above ac
it pulls ac up
factors that creat need for close monitering of value of pharmaceuticals
- increased cost of drugs
- increased number of treatment alternatives
- growing demand for drugs
- intro of high cost bio-tech drugs
where is pharmacoeconomics used? (7)
- treatment guidlines
- disease management programs
- PA policies
- step-therapy programs
- benefit programs
- health policies
framework that guides approach to a range of activitiesin the HC field
Three levels of Health policy development
- health policy
- health care system
- point of health care delivery
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