AND COST-BENEFIT ANALYSIS, HS 422F

INTRODUCTION TO COST-EFFECTIVENESS

AND COST-BENEFIT ANALYSIS, HS 422f

DRAFT SYLLABUS (updated Jan. 12, 2016, subject to revision)

Wednesday mornings, 9:00 pm to 11:50 pm, Spring semester Block I, Schneider Room G3

Teaching assistant group review: To be determined

Prof. Donald S. Shepard, Heller School, Brandeis University Office: Heller-Brown room 275, E-mail: , Tel: 1-781-736-3975 Web: http://www.brandeis.edu/~shepard

Teaching Assistant: Hadi Kahalzadeh (), tel: 510-520-8786

Cost-Effectiveness Advisor: Mayada Sadoon (), tel: 857 210-8784

Executive Assistant: Clare Hurley, E-mail: ; tel: 1-781-736-3983

Required course text: Drummond, M.F. et al. Methods for the Economic Evaluation of Health Care Programmes, 4th edition. New York: Oxford University Press (Paperback), 2015.

Overall Objective: This module addresses the application of the techniques of cost-effectiveness and cost-benefit analysis to evaluate a variety of programs, both in the US and in developing countries. Both theoretical foundations and applications of these techniques in economic appraisal will be presented. These techniques are critical for researchers and policy makers in many sectors. For example, health policymakers in both industrialized and developing countries use it to help plan health services, evaluate new technologies, programs, and procedures, or design health insurance benefits. Also, policymakers and non-government organizations can use the technique to allocate resources and evaluate programs in many sectors including conservation, women's education, and economic development. The module uses interactive discussions and computer exercises where students will learn to perform cost-benefit and cost-effectiveness analyses and apply the techniques to a problem of their choice. This course is appropriate for both Ph.D. and all master's students. The course requires, however, comfort with basic functions of Excel, such as creating and using functions, copying cells, summing, averaging, and graphing results. The instructor will require evidence of such proficiency through a brief quiz.

Approach: Real world relevant examples of cost-benefit and cost-effectiveness analyses, drawn from both the United States and developing countries, will be used to reinforce the lectures. To reinforce the techniques, students will be asked to solve a written, graded computer exercise using Excel approximately each week. Topics will include minimizing costs, estimating disease burden, and considering alternative crops. Exercises will be discussed in lab sections followed by class discussion. A list of optional readings follows at the end of this syllabus.

Evaluation: Students will be evaluated (on a written paper, 60% weight) and on approximately 6 homework exercises (40% weight). The written paper will require students to apply methods of cost-effectiveness or cost-benefit analysis to a problem or question of the student’s choice. The analysis should be based on real data where available, but may use assumptions, based insofar as possible, on experience or plausible judgments, where actual data are not available. The paper may be set in either the United States or another country, and may be based on any sector of interest to the student. Students are encouraged to work in pairs on the paper, as this approach permits obtaining more data, refining methods, and cross checking, while minimizing challenges of coordination. However, individually submitted papers are also acceptable. Students working in pairs should divide the work equally between them. The Final Project Paper for Module I is due Tuesday March 15th, 2016, at 11:55 pm for all students.

The exercises will entail using Excel to perform numerical calculations in economic evaluations. The exercises will include random number generators, so that each student will have an individualized assignment with a unique answer. Students are welcome to discuss with classmates, but each student must submit an individual answer and must answer the qualitative questions in his or her own words.

Disability: If you are a student with a documented disability on record at Brandeis University and wish to have a reasonable accommodation made for you in this class, please see the instructor immediately.

Session 1 (Wednesday, January 13th, 2016) – Principles of Cost-Benefit and Cost-Effectiveness Analysis

Objectives: The first session will begin with the concepts of cost-benefit and cost-effectiveness analysis, theoretical foundations current and potential uses, techniques, and basic steps in their implementation. A discussion of the approaches to the measurement of cost (the numerator in a cost-effectiveness ratio) in a health care setting will follow. The lecture will further describe how to identify, estimate, and value the costs associated with the current and future use of a health care intervention.

Preparation questions:

· How do we use cost-effectiveness analysis to find the least expensive alternative?

· What are the components of costs, and how are they measured?

· Review the refrigerator exercise, which must be submitted on Latte by 5 pm on Tuesday, January19th, 2016

Required Readings

Required text: Drummond, M.F. et al. Methods for the Economic Evaluation of Health Care Programmes, 4th edition. New York: Oxford University Press (Paperback), 2015. For class 1, please read Chapter1 (Introduction to economic evaluation), pp. 1-17 in the 4th edition, or Chapter 2(Basic types of economic evaluation), pp. 7-26 in the 3rd edition.

Shepard, D.S, and Thompson, M., "First Principles of Cost Effectiveness Analysis in Health,” Public Health Reports, 1979;93:535-543. (This article explains the five easy steps of cost-effectiveness analysis in health. The methods part of the article is more important than the examples.) Note: A scanned copy of this article is also available at

http://people.brandeis.edu/~shepard/public-health.doc.

A Better World by 2030: Post-2015 Development Agenda

View video (shown in class): web:

Sustainable development goals 2015.

Homework

HMWK 1. Refrigerator exercise - submit to Latte by Tuesday, January 19th, 2016 at 5 pm.

Supplemental readings

Weinstein, M.C., Siegel J.E., Gold, M.R., Kamlet, M.S., and Russell L.B. The Recommendations of the Panel of Cost-Effectiveness Analysis in Health and Medicine. JAMA 1996; 276:1253-1258..

Belli P et al 1998. - Handbook on Economic Analysis of Investment Operations. Contributors, World Bank. Operations Policy Dept., World Bank, Chapter 1.

[Note: No class on Wed. January 20th, 2016 due to Brandeis schedule related to Martin Luther King Jr. Holiday]

Session 2 (Wednesday, January 27th, 2016) -- Measurement of Costs

Objectives: The second session assesses the measurement of costs, both straightforward aspects, and special challenges such as donated inputs, capital costs and overhead costs. It also addresses the perspective of a cost analysis (i.e., between the household and the health care system), and the relationship among inflation, current prices, and constant prices.

Required readings

Drummond, M.F. et al. Methods for the Economic Evaluation of Health Care Programmes, 4th edition. New York: Oxford University Press (Paperback), 2015. For class 2, please read

Chapter 7 (Cost analysis), sections 7.1 through 7.3, pp. 219-250 in the 4th edition, or Chapter 4 (Cost analysis), pp. 55-102 in the 3rd edition.

Homework

HMWK 2. Oil Palm exercise - submit to Latte by Monday, February 1st, 2016 at 5 pm

Session 3 (Wednesday, February 3rd, 2016) – Applications of Cost-Effectiveness Analysis

Objectives: The third session addresses the applications of cost-effectiveness analysis. The examples will show, step by step, how a cost-effectiveness analysis is conducted, including the decisions made by the researcher. The reporting of the findings and limitations will be addressed. The examples also illustrate how a conceptual framework allows data to be assembled from multiple sources, such as the program, the literature, and national databases.

Review the disease burden exercise -- submit to Latte by 5 pm on Monday, February 8th, 2016.

Required readings

Drummond, M.F. et al. Methods for the Economic Evaluation of Health Care Programmes, 4th edition. New York: Oxford University Press (Paperback), 2015. For class 3, please read Chapter 4 (Principles of economic evaluation) pp. 77-118 in the 4th edition, or Chapter 5 (Cost-effectiveness), pp. 103-133 in the 3rd edition.

Ghana Health Assessment Project Team, "A Quantitative Method for Assessing the Health Impact of Different Diseases in Less Developed Countries," International Journal of Epidemiology, 1981, pp. 73-80. (This paper describes systematically the calculation of Potential Days of Life Lost, PDLLs. PDLLs are similar to Quality Adjusted Life Years, QALYs, except that time is measured in days rather than years, and future losses are not discounted. It is one of the first applications of quality adjustment and mortality with realistic data.)

Homework

HMWK 3. Burden of Disease exercise - submit to Latte by Monday, February 8th, 2016 at 5 pm.

Session 4 (Wednesday, February 10th, 2016) – Cost-Utility Analysis

Preparation questions and assignment:

· How were the observational data used to establish effectiveness of the Boston scleral lens, and what were the strengths and limitations?

· How was the impact translated into utility measurements and what were the strengths and limitations?

· How were non-monetary costs (e.g. volunteer labor, donations of equipment or space) valued, and was the approach credible?

· Was the economic valuation of consequences (i.e., conversion from cost-utility to cost-benefit) appropriate?

· What are the strengths and weaknesses of this evaluation?

Required readings

Shepard, D.S., Razavi, M., Stason, W.B. Jacobs, D.S., Suaya, J.A., Cohen, M., Rosenthal, P. Economic appraisal of the Boston ocular surface prosthesis. American Journal of Ophthalmology148(6):860-868, 2009.

Drummond, M.F. et al. Methods for the Economic Evaluation of Health Care Programmes, 4th edition. New York: Oxford University Press (Paperback), 2015. For class 4, please read Chapter 5 (Measuring and valuing effects: health gain) pp. 123-170 in the 4th edition, or the first part of Chapter 6 (Cost-utility analysis), sections 6.1 through 6.3, pp.137-154 in the 3rd edition.

Homework

HMWK 4. Concept note - submit to Latte by Monday, February 22nd, 2016 at 5 pm.

Concept note for final course paper

List members of your group:
Indicate preliminary title of your paper
Describe the topic or question that this paper will conduct a cost-effectiveness or cost benefit analysis of [specify service or intervention] compared to the status quo in [specify country or setting].
Describe primary source of data for costs of the intervention. Give links to articles, reports, data bases, or other sources wherever possible.
Describe primary source of data for the effectiveness or benefits of the intervention. Again, give links to articles, reports, data bases, or other sources wherever possible.
Briefly describe the planned analytical approach, any anticipated challenges, and approaches.

[Note: No class on Wed. February 17th, 2016 due to winter break]

Session 5 (Wednesday, February 24th, 2016) – Measuring Benefits and Effectiveness

Objectives: The fifth session addresses the measurement of benefits and outcomes. In health, these range from simple counts(e.g. numbers of children immunized) to complex utility measures such as Quality Adjusted Life Years (QALYs), now in use for over 40 years, and Disability Adjusted Life Years (DALYs). Use of the expert panels and patient preferences will be discussed. An exercise on disability weights measurement and quality of life, using data from the 2010 Global Burden of Disease project, will be discussed in class and assigned for homework.

Salomon, JA (2011). New quantitative tools for priority setting: Joshua Salomon, Harvard School of Public Health on new disability weights for the global burden of disease study. Online video.

Required readings

Drummond, M.F. et al. Methods for the Economic Evaluation of Health Care Programmes, 4th edition. New York: Oxford University Press (Paperback), 2015. For class 5, please read

Chapter 8 (Using clinical studies as vehicles for economic evaluation), sections 8.1 through 8.4, pp. 268-306 in the 4th edition, or the second part of Chapter 6 (Cost utility analysis), sections 6.4 through 6.5, pp.154-188 in the 3rd edition.

Salomon JA et al. Common values in assessing health outcomes from disease and injury. Lancet 2012; 380:2129-43.

Homework

HMWK 5. Best way to get to Brandeis: cost-effectiveness analysis. Submit to Latte by Monday February 29th, 2016 at 5 pm.

Supplemental Reading

Belli P. et al. 1998 - Handbook on Economic Analysis of Investment Operations. Contributors, World Bank. Operations Policy Dept, World Bank, Chapter 9. Economic evaluation of health projects, pp. 67-82.

Session 6 (Wednesday, March 2nd, 2016) – Principles of Cost-Benefit Analysis

Objectives: This lecture addresses principles of cost-benefit analysis and applies cost-benefit analysis to formal education and other social programs.

Preparation question and assignment:

How do we decide which costs and benefits to include?

How do we quantify the benefits, and translate them into economic terms?

Required readings

Drummond, M.F. et al. Methods for the Economic Evaluation of Health Care Programmes, 4th edition. New York: Oxford University Press (Paperback), 2015. For class 6, please read Chapter 9 (Economic evaluation using decision analytic modeling), sections 9.1 through 9.6, pp. 311-339 in the 4th edition, or Chapter 7(Cost-benefit analysis), sections 7.1 and 7.2, pp. 211-245 in the 3rd edition

Behrman J, Sengupta, P, Todd P. Progressing through PROGRESA: An impact assessment of a school subsidy experiment. Philadelphia, PA: University of Pennsylvania, 2001. [Note: Read primarily pp. 1-5 and 11-21 and associated tables and figures.]

Homework

HMWK 6 - School subsidy exercise -- submit to Latte by Monday, March 7th, 2016 at 5 pm

Session 7 (Wednesday, March 9th, 2016) -- Application to a current policy topic and discussion of final paper

Objectives: To illustrate the application of cost-effectiveness analysis to a current policy question, and provide guidance to students as they write their final papers. The Affordable Care Act expands coverage of preventive services. This class addresses an example of secondary prevention—seeking to slow or prevent the progression of heart disease.

Required reading:

Shepard, DS, Lwin, AK, Barnett, NP, et al., Cost-effectiveness of motivational intervention with significant others for patients with alcohol misuse. Addiction 2016, (in press).

Shepard, DS; Suaya, JA; Morrill, T; Ades, PA; Stason, WB. Cost-effectiveness of cardiac rehabilitation in older adults with coronary heart disease. (Unpublished manuscript).

Supplemental reading:

Suaya, J.A., Stason, W.B., Ades, P., Normand, S.-L.T., Shepard, D. S. Cardiac rehabilitation and survival in older coronary patients. Journal of the American College of Cardiology 54:25-33, 2009.

A few students will have the opportunity to present their proposed projects in class.

Final Project Paper for Module I is due Tuesday, March 15th, 2016 at 11:55 pm