A randomized controlled trial assessing the health economics of realtime teledermatology compared with conventional care: an urban versus rural perspective

A randomized controlled trial was carried out to measure the cost-effectiveness of realtime teledermatology compared with conventional outpatient dermatology care for patients from urban and rural areas. One urban and one rural health centre were linked to a regional hospital in Northern Ireland by ISDN at 128 kbit/s. Over two years, 274 patients required a hospital outpatient dermatology referral -126 patients (46%) were randomized to a telemedicine consultation and 148 (54%) to a conventional hospital outpatient consultation. Of those seen by telemedicine, 61% were registered with an urban practice, compared with 71% of those seen conventionally. The clinical outcomes of the two types of consultation were similar - almost half the patients were managed after a single consultation with the dermatologist. The observed marginal cost per patient of the initial realtime teledermatology consultation was f52.85 for those in urban areas and f59.93 per patient for those from rural areas. The observed marginal cost of the initial conventional consultation was f47.13 for urban patients and f48.77 for rural patients. The total observed costs of teledermatology were higher than the costs of conventional care in both urban and rural areas, mainly because of the fixed equipment costs. Sensitivity analysis using a real-world scenario showed that in urban areas the average costs of the telemedicine and conventional consultations were about equal, while in rural areas the average cost of the telemedicine consultation was less than that of the conventional consultation.

Economics and health promotion

Health promotion activities consume a growing proportion of health sector spending in most developed countries. Yet, there is still considerable debate in the non-economic literature about exactly what health promotion constitutes and precisely how its role is to be conceived. This paper provides one economic answer to such questions. It sets out an argument that health promotion may be viewed, through the lens of traditional welfare economics, as a response to problems of market failure. A Grossman-type health investment model is invoked to analyse individual deviations from equilibrium and the possible instruments and targets of health promotion policy. The paper concludes by suggesting some of the alternative conceptual approaches that might be brought to bear, as well as some ideas for empirical research.

The role of economic evaluation in mental health care

Objective: A consequence of the integration of psychiatry into acute and public health medicine is that psychiatrists are being asked to evaluate their services. There is pressure on mental health-care systems because it is recognized that funds should be directed where they can provide the best health outcomes, and also because there are resource constraints which limit our capacity to meet all demands for health care. This pressure can be responded to by evaluation which demonstrates the effectiveness and efficiency of psychiatric treatment. This paper seeks to remind psychiatrists of the fundamental principles of economic evaluation in the hope that these will enable psychiatrists to understand the methods used in evaluation and to work comfortably with evaluators. Method: The paper reviews the basic principles behind economic evaluation, illustrating these with reference to case studies. It describes: (i) the cost of the burden of illness and treatment, and how these costs are measured; (ii) the measurement of treatment outcomes, both as changes in health status and as resources saved; and (iii) the various types of economic evaluation, including cost-minimization, cost-effectiveness, cost-utility and cost-benefit analysis. Results: The advice in the paper provides psychiatrists with the necessary background to work closely with evaluators. A checklist of the critical questions to be addressed is provided as a guide for those undertaking economic evaluations. Conclusions: If psychiatrists are willing to learn the basic principles of economic evaluation and to apply these, they can respond to the challenges of evaluation.

Evidence and information for health policy: a decade of change

Over the past decade or so, there has been increasing demand for greater clarity about the major causes of disease and injury, how these differentially affect populations, and how they are changing. In part, this demand has been motivated by resource constraints and a realisation that better health is possible with more informed allocation of resources. At the same time, there has been a change in the way population health and its determinants are quantified, with a much closer integration of the quantitative population sciences (such as epidemiology, demography and health economics) to strengthen and broaden the evidence base for healthcare policy.

Equity weights in the allocation of health care: the rank-dependent QALY model

This paper introduces the rank-dependent quality-adjusted life-years (QALY) model, a new method to aggregate QALYs in economic evaluations of health care. The rank-dependent QALY model permits the formalization of influential concepts of equity in the allocation of health care, such as the fair innings approach, and it includes as special cases many of the social welfare functions that have been proposed in the literature. An important advantage of the rank-dependent QALY model is that it offers a straightforward procedure to estimate equity weights for QALYs. We characterize the rank-dependent QALY model and argue that its central condition has normative appeal. (C) 2003 Elsevier B.V. All rights reserved.

Lifetime Subsidies in Australian Private Health Insurance Markets with Community Rating

This paper considers the problem of inducing low-risk individuals of all ages to buy private health insurance in Australia. Our proposed subsidy scheme improves upon the age-based penalty scheme under the current "Australian Lifetime Cover" (LTC) scheme. We generate an alternative subsidy profile that obviates adverse selection in private health insurance markets with mandated, age-based, community rating. Our proposal is novel in that we generate subsidies that are both risk- and age-specific, based upon actual risk probabilities. The approach we take may prove useful in other jurisdictions where the extant law mandates community rating in private health insurance markets. Furthermore, our approach is useful in jurisdictions that seek to maintain private insurance to complement existing universal public systems.