Gavin Roberts's presentation AES June 2015

1. Methodology for estimating the wider economic impacts of
health treatments
1. Changes in patient health have wider economic consequences
2. Patients’ wider economic impact: production net of consumption
3. Estimating net production as a function of patient health
4. Results – single patient net production rates (given health state)
Patient
Age: 64
Gen: M
(ICD:
QoL:
G)
60%
Net production
£500 pcm
Calculation
Mechanism
5. Results – treatment impacts (by ICD, and for marginal NHS £)

2. Methodology for estimating the wider economic impacts of
health treatments
1. Changes in patient health have wider economic consequences
2. Patients’ wider economic impact: production net of consumption
3. Estimating net production as a function of patient health
4. Results – single patient net production rates (given health state)
Patient
Age: 64
Gen: M
(ICD:
QoL:
G)
60%
Net production
£500 pcm
Calculation
Mechanism
5. Results – treatment impacts (by ICD, and for marginal NHS £)

3. Measuring the economic impact of health using net production
Health (and treatments) have impacts beyond the patient
Health
(QALYs)
Work more?
Pay more tax?
Need less benefits?
Costs
(£)
Need less social care?
Need less care by family?
Economic impact
on society
(i.e. other people)
Contribute to family finances?
Look after others?
+

4. 1. Changes in patient health have wider economic consequences
2. Patients’ wider economic impact: production net of consumption
3. Estimating net production as a function of patient health
4. Results – single patient net production rates (given health state)
Patient
Age: 64
Gen: M
(ICD:
QoL:
G)
60%
Net production
£500 pcm
Calculation
Mechanism
5. Results – treatment impacts (by ICD, and for marginal NHS £)
Methodology for estimating the wider economic impacts of
health treatments

5. Patient Effect on others
Family and
friends
Other
members of
society
Gross production,
or contribution of
resources (+)
Gross consumption,
or utilisation of
resources (-)
Net production
+£500pcm
+£1,500 pcm
-£1,000 pcm
Costs, eg spending on
nursing home
Family income
Domestic work
Need for informal care
by family
Govt costs, eg welfare,
social care
Govt tax revenues
Volunteer work
Any excess production (consumption) by patient means a benefit (cost) to someone else
=£500
pcm
Defining production and consumption effects
Net production = consumption for others

6. Defining production and consumption effects
Net production = consumption for others
Patient
Family and
friends
Other
members of
society
Gross production,
or contribution of
resources (+)
Gross consumption,
or utilisation of
resources (-)
+£1,500 pcm
-£1,000 pcm
Costs, eg spending on
nursing home
Family income
Domestic work
Need for informal care
by family
Govt costs, eg welfare,
social care
Govt tax revenues
Volunteer work
Any excess production (consumption) by patient means a benefit (cost) to someone else
=£500
pcm
Net production
+£500pcm

7. 1. Changes in patient health have wider economic consequences
2. Patients’ wider economic impact: production net of consumption
3. Estimating net production as a function of patient health
4. Results – single patient net production rates (given health state)
Patient
Age: 64
Gen: M
(ICD:
QoL:
G)
60%
Net production
£500 pcm
Calculation
Mechanism
5. Results – treatment impacts (by ICD, and for marginal NHS £)
Methodology for estimating the wider economic impacts of
health treatments

8. Illustrative
figures,
pcm
Gross production:
 paid labour
 unpaid labour
Gross consumption:
 formal care
 informal care
 personal paid cons.
 personal unpaid cons.
 government services
Patient
Net
production
£1,500
= £500 pcm
£1,000
Age: 64
Gen: M
ICD:
QoL:
G
60%
- £1,000
£1,500
International Classification of Disease (Chapter-level)
£600
£900
£80
£70
£420
£300
£130
Estimating production and consumption effects
Mechanism estimates production / cons as a function of health

9. Illustrative
figures,
pcm
Gross production:
 paid labour
 unpaid labour
Gross consumption:
 formal care
 informal care
 personal paid cons.
 personal unpaid cons.
 government services
Patient
Net
production
£1,500
= £500 pcm
£1,000
Age: 64
Gen: M
ICD:
QoL:
G
60%
- £1,000
£1,500
£600
£900
£80
£70
£420
£300
£130
Estimating production and consumption effects
Compare to production with treatment to give impact

10.  paid labour
 unpaid labour
Gross consumption:
 formal care
 informal care
 personal paid cons.
 personal unpaid cons.
 government services
Patient
Net
production
£1,500
= £500 pcm
£1,000
Age: 64
Gen: M
ICD:
QoL:
G
60%
- £1,000
£1,500
£1,600
= £700 pcm
£900
80%
- £900
£1,600
Raising this patient’s QoL from 60% to 80% generates £200pcm in net production
Treatment
improves QoL by
20%
£600
£900
£80
£70
£420
£300
£130
£950
£30
£20
£420
£300
£130
Gross production:
£650
Estimating production and consumption effects
Compare to production with treatment to give impact
Illustrative
figures,
pcm

11. Estimating production and consumption effects
Estimating elements as functions of AGIQ – eg paid labour
 paid labour
Patient
Age: 64
Gen: M
ICD:
QoL:
G
80%
 unpaid labour
Gross consumption:
 formal care
 informal care
 personal paid cons.
 personal unpaid cons.
 government services
Net
production
£1,500
= £500 pcm
£1,000
- £1,000
£1,500
£1,600
= £700 pcm
£900
- £900
£1,600
£900
£80
£70
£420
£300
£130
£950
£30
£20
£420
£300
£130
Gross production:
Illustrative
figures,
pcm£650

12. Estimating production and consumption effects
Estimating elements as functions of AGIQ – eg paid labour
 paid labour
Patient
Age: 64
Gen: M
ICD:
QoL:
G
80%
£650
Understanding Society
• “did you do paid work
last week?”
• SF16 health instrument
• age, gender etc
ScHARR model
• Map SF16 to EQ5D
(QoL)
• Estimate prob of
doing work as f(Age,
QoL)
ONS wages data
• Monthly wage, by
Age, Gender if in
work
-> £ paid labour pcm = f (Age, Gender, QoL)
+

13. Estimating production and consumption effects
Main current data sources
Paid labour
Unpaid labour
Formal care
Informal care
Personal paid
consumption
Personal unpaid
consumption
Government
services
AGQ
AGQ
A(I)Q
AGIQ
A
(const)
A
Element Dependent
variables
Main data sources
Annual Survey of Hours and Earnings (AG)
Understanding Society (AQ)
Time Use Survey (AG)
Sick rate, derived from Understanding Soc. (Q)
Adult Soc. Care Survey, GP Patient Survey, PSSRU
data
HoDAR
Living Costs and Food Survey
Time Use Survey
Public Expenditure Statistical Analysis

14. 1. Changes in patient health have wider economic consequences
2. Patients’ wider economic impact: production net of consumption
3. Estimating net production as a function of patient health
4. Results – single patient net production rates (given health state)
Patient
Age: 64
Gen: M
(ICD:
QoL:
G)
60%
Net production
£500 pcm
Calculation
Mechanism
5. Results – treatment impacts (by ICD, and for marginal NHS £)
Methodology for estimating the wider economic impacts of
health treatments

15. Results – paid production
£pcm paid production as a function of age and QoL
NB this is the rate in a given state – not a treatment impact
QoL
-500
0
500
1,000
1,500
2,000
2,500
10 20 30 40 50 60 70 80 90 100
Age
0
0.2
0.5
0.7
0.9
1.0
paid labour
 unpaid labour
Gross consumption:
 formal care
 informal care
 personal paid cons.
 personal unpaid cons.
 government services
Patient
Net
production (or
consumption)
Age: 64
Gen: M
ICD:
QoL:
G
60%80%
Gross production:

16. Results – unpaid production
£pcm as a function of age and QoL
QoL
NB this is the rate in a given state – not a treatment impact
0
500
1,000
1,500
2,000
2,500
10 20 30 40 50 60 70 80 90 100
Age
0
0.2
0.5
0.7
0.9
1.0
 paid labour
unpaid labour
Gross consumption:
 formal care
 informal care
 personal paid cons.
 personal unpaid cons.
 government services
Patient
Net
production (or
consumption)
Age: 64
Gen: M
ICD:
QoL:
G
60%80%
Gross production:

17. Results – unpaid production – general unpaid labour
Hours pcm in full health
• Data from Time Use Survey
• Diaries identify activity for each 10 min interval
0
50
100
150
200
250
300
350
0 10 20 30 40 50 60 70 80 90 100
Age
M - obs
F - obs
M -pred
F - pred
• ~3000 activities classified according to whether represent unpaid labour
 paid labour
unpaid labour
Gross consumption:
 formal care
 informal care
 personal paid cons.
 personal unpaid cons.
 government services
Patient
Net
production (or
consumption)
Age: 64
Gen: M
ICD:
QoL:
G
60%80%
Gross production:

18. Results – informal care consumption
£pcm as a function of age and QoL
QoL
NB this is the rate in a given state – not a treatment impact
0
500
1,000
1,500
2,000
2,500
10 20 30 40 50 60 70 80 90 100
Age
0
0.2
0.5
0.7
0.9
1.0
 paid labour
 unpaid labour
Gross consumption:
 formal care
informal care
 personal paid cons.
 personal unpaid cons.
 government services
Patient
Net
production (or
consumption)
Age: 64
Gen: M
ICD:
QoL:
G
60%80%
Gross production:

19. Results – formal care consumption
£pcm as a function of age and QoL
QoL
NB this is the rate in a given state – not a treatment impact
 paid labour
 unpaid labour
Gross consumption:
formal care
 informal care
 personal paid cons.
 personal unpaid cons.
 government services
Patient
Net
production (or
consumption)
Age: 64
Gen: M
ICD:
QoL:
G
60%80%
Gross production:

20. Results – private paid consumption
£pcm as a function of age and QoL
QoL
NB this is the rate in a given state – not a treatment impact
0
200
400
600
800
1,000
1,200
1,400
10 20 30 40 50 60 70 80 90 100
Age
0
0.2
0.5
0.7
0.9
1.0
 paid labour
 unpaid labour
Gross consumption:
 formal care
 informal care
personal paid cons.
 personal unpaid cons.
 government services
Patient
Net
production (or
consumption)
Age: 64
Gen: M
ICD:
QoL:
G
60%80%
Gross production:

21. Results – private unpaid consumption
£pcm as a function of age and QoL
QoL
NB this is the rate in a given state – not a treatment impact
 paid labour
 unpaid labour
Gross consumption:
 formal care
 informal care
 personal paid cons.
personal unpaid cons.
 government services
Patient
Net
production (or
consumption)
Age: 64
Gen: M
ICD:
QoL:
G
60%80%
Gross production:

22. Results – Government consumption
£pcm as a function of age and QoL
QoL
NB this is the rate in a given state – not a treatment impact
0
100
200
300
400
500
600
10 20 30 40 50 60 70 80 90 100
Age
0
0.2
0.5
0.7
0.9
1.0
 paid labour
 unpaid labour
Gross consumption:
 formal care
 informal care
 personal paid cons.
 personal unpaid cons.
government services
Patient
Net
production (or
consumption)
Age: 64
Gen: M
ICD:
QoL:
G
60%80%
Gross production:

23. Results – TOTAL NET PRODUCTION
£pcm as a function of age and QoL
QoL
NB this is the rate in a given state – not a treatment impact
-5,000
-4,000
-3,000
-2,000
-1,000
0
1,000
2,000
10 20 30 40 50 60 70 80 90 100
Age
0
0.2
0.5
0.7
0.9
1.0
 paid labour
Patient
Age: 64
Gen: M
ICD:
QoL:
G
80%
 unpaid labour
Gross consumption:
 formal care
 informal care
 personal paid cons.
 personal unpaid cons.
 government services
Net
production (or
consumption)
Gross production:

24. 1. Changes in patient health have wider economic consequences
2. Patients’ wider economic impact: production net of consumption
3. Estimating net production as a function of patient health
4. Results – single patient net production rates (given health state)
Patient
Age: 64
Gen: M
(ICD:
QoL:
G)
60%
Net production
£500 pcm
Calculation
Mechanism
5. Results – treatment impacts (by ICD, and for marginal NHS £)
Methodology for estimating the wider economic impacts of
health treatments

25. Calculating net production effects of health treatments
Principle: aggregate over time, like QoL (for QALYs)
QoL
Net
prod
(pa)
QALY gain
£1,000 + £2,000
1 2
Time, yrs
0.5
1.0
= 1.5 QALY
untreated
treated
1 2
Time, yrs
£2,000
untreated
treated
£1,000 = £3,000
0.5 + 1
Net production impact
In principle straightforward – map directly from QoL

26. Calculating net production effects of health treatments
Practical problem: net production non-linear, esp. over age
-5,000
-4,000
-3,000
-2,000
-1,000
0
1,000
2,000
10 20 30 40 50 60 70 80 90 100
Age
0
0.2
0.5
0.7
0.9
1.0
• Cannot use average patient ages
• Need to calculate across actual ages for affected population..
• ..or use reference estimates representing population age distribution

27. Reference Estimates (1281 ICDs)
ICD
-eg M06:
Rheumatoid
Arthritis
For each ICD: distrib. of patients (16 AG bins)
= £37,745
per QALY gained
£ net
production
+ enough data for each bin to calculate
all elements of net production
0%
5%
10%
15%
20%
25%
30%
35%
40%
0-4 5-14 15-29 30-44 45-59 60-69 70-79 80+
Patient population distribution
F
M
Age bins
Calculating net production effects of health treatments
One solution: use reference estimates
= £2.52
per £NHS*
* Assuming £15,000
marginal cost / QALY

28. Production and consumption effects of health treatments
M06 Rheumatoid arthritis: results by category, and key inputs
0%
5%
10%
15%
20%
25%
30%
35%
40%
0-4 5-14 15-29 30-44 45-59 60-69 70-79 80+
Patient population distribution
F
M
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0-4 5-14 15-29 30-44 45-59 60-69 70-79 80+
Distribution of QALY gain by QoL vs LoL
QoL
LoL
Total QoL gains LoL gains
Total production, £ 26,849 25,691 1,158
Paid production, £ 11,276 11,008 268
Unpaid production, £ 15,573 14,683 890
Total consumption, £ -10,896 -14,601 3,705
Formal care, £ -1,765 -2,293 528
Informal care, £ -13,157 -13,509 352
Private paid consumption, £ 1,492 489 1,003
Private unpaid consumption, £ 1,946 712 1,234
(Childcare consumption), £ 0 0 0
Govt consumption, £ 588 0 588
Net production (prod - cons), £ 37,745 40,292 -2,547

29. Production and consumption effects of health treatments
M06 Rheumatoid arthritis: paid labour impact

30. Production and consumption effects of health treatments
M06 Rheumatoid arthritis: informal care impact
0
2
4
6
8
10
12
14
0-4 5-14 15-29 30-44 45-59 60-69 70-79 80+ Ave
Informal care need pp, days pcm
Untreated
Treated

31. Results: net production impact of NHS treatments
Net production impact in select conditions
Code Disease £NP / QALY £NP / £NHS
F03 Dementia 40,068 2.67
M05 Rheumatoid arthritis 37,745 2.52
E11 Diabetes 30,969 2.06
M81 Osteoporosis 23,483 1.57
F30 Depression 22,826 1.52
F20 Schizophrenia 19,625 1.31
G20 Parkinson's disease 16,950 1.13
J45 Asthma 16,267 1.08
G40 Epilepsy 16,031 1.07
displ (average displaced QALY) 13,925 0.93
C53 Cervical cancer 11,248 0.75
E66 Obesity 8,524 0.57
C50 Breast cancer 8,072 0.54
I64 Stroke -1,350 -0.09
C18 Colon cancer -2,262 -0.15
I21 Acute myocardial infarction -8,223 -0.55
I26 Embolisms, fibrillation, thrombosis -10,705 -0.71
J10 Influenza -14,982 -1.00
C22 Liver cancer -25,867 -1.72
C34 Lung cancer -29,135 -1.94
C25 Pancreatic cancer -46,141 -3.08

32. Results: net production impact of NHS treatments
Description of NHS activity at the margin
16 A/G groups
F 0-5
F 6-15
F 16-30
F 31-45
F 46-59
F 60-69
F 70-79
F 80+
M 0-5
M 6-15
M 16-30
M 31-45
M 46-59
M 60-69
M 70-79
M 80+
F 0-5
Net prod. / £
-1.27
-1.32
-0.51
1.20
0.55
-0.85
-1.59
-2.31
-1.43
-1.52
-0.59
1.52
0.76
-0.90
-1.63
-2.18
-0.13
0.09
0.72
1.70
1.61
0.24
0.04
-0.01
-0.27
-0.12
0.32
1.83
1.51
-0.08
-0.41
-0.55
-0.15
£1
NHS
(margin) F 0-5
F 6-15
F 16-30
F 31-45
F 46-59
F 60-69
F 70-79
F 80+
M 0-5
M 6-15
M 16-30
M 31-45
M 46-59
M 60-69
M 70-79
M 80+
£
Net
Prod
(margin)
1,281 conditions
Abnormal blood-pressure reading, without diagnosis
Abnormal findings in cerebrospinal fluid
Abnormal findings in specimens from digestive organs & abdominal cavity
Abnormal findings in specimens from male genital organs
Abnormal findings in specimens from other organs, systems and tissues
Abnormal findings in specimens from respiratory organs and thorax
Abnormal findings on antenatal screening of mother
Abnormal findings on diagnostic imaging of breast
Abnormal findings on diagnostic imaging of central nervous system
Abnormal findings on diagnostic imaging of lung
Abnormal findings on diagnostic imaging of other body structures
Abnormal involuntary movements
Abnormal results of function studies
Abnormal serum enzyme levels
Abnormalities of breathing
Abnormalities of forces of labour
Abnormalities of gait and mobility
Abnormalities of heart beat
Abnormality of red blood cells
Abnormality of white blood cells, not elsewhere classified
…
Venous complications in pregnancy
Venous complications in the puerperium
Ventral hernia
Viral agents as the cause of disease classified to other chapters
Viral and other specified intestinal infections
Viral conjunctivitis
Viral infection of unspecified site
Viral meningitis
Viral pneumonia, not elsewhere classified
Viral warts
Visual disturbances
Vitamin A deficiency
Vitamin B12 deficiency anaemia
Vitamin D deficiency
Vitiligo
Voice disturbances
Volume depletion
Whooping cough
Yaws
Zoster [herpes zoster]
Zygomycosis

33. Results: net production impact of NHS treatments
Net production impact marginal £ spent in NHS
Net production, £ 0.93
Production, £ 1.51
Paid production, £ 0.63
Unpaid production, £ 0.89
Consumption, £ 0.59
Formal care consumption, £ -0.02
Informal care consumption, £ -0.17
Private paid consumption, £ 0.29
Private unpaid consumption, £ 0.34
Childcare consumption, £ 0.00
Government consumption, £ 0.14
Direct GDP impact
Impact on
informal carers
Total economic value
Total production
impact
£1
NHS
(margin)
NB this is additional to value of health itself

34. 1. Changes in patient health have wider economic consequences
2. Patients’ wider economic impact: production net of consumption
3. Estimating net production as a function of patient health
4. Results – single patient net production rates (given health state)
Patient
Age: 64
Gen: M
(ICD:
QoL:
G)
60%
Net production
£500 pcm
Calculation
Mechanism
5. Results – treatment impacts (by ICD, and for marginal NHS £)
Methodology for estimating the wider economic impacts of
health treatments