Health economics and occupational therapy

I attended the Australian Occupational Therapy Conference last week, for the first time in nearly 15 years! I went to support some OT’s I’ve been working with on an economic evaluation, but it was lovely to catch up with friends and colleagues from my OT life before health economics. I also realised there wasn’t much health economics at the conference, and I got a few requests for some introductory resources about health economics. So, I’ve put together a brief summary of what health economics is and how it could apply to occupational therapy.

In general, health economics is about how we allocate our scarce health resources to maximise our health outcomes. There can be a misconception that economics is about cutting costs. But health economics is really about value, and therefore the benefits that can be achieved are just as important to a health economist as the costs of achieving them.

Everyone uses economic thinking in their daily lives – I recently bought a new laptop and had to work out which aspects of performance I would prioritise (memory, touch screen, processing power) to get a laptop within my budget (my constrained resources). For some great examples of how economic theory plays out in real life then I highly recommend the Freakonomics podcast! There are some episodes specific to health, such as Are you ready for a glorious sunset and How many Doctors does it take to start a healthcare revolution and How do we know what really works in healthcare, but all the episodes will teach you to think like an economist.

For a more formal reading, there is a paper by Kernick (2003) Introduction to health economics for the medical practitioner that gives a nice introduction to health economics, and the types of questions that health economists try to answer. If you want a bit more about some important economic concepts such as opportunity costs and marginal costs, then Goodacre & McCabe’s (2002) An introduction to economic evaluation and this Sanofi factsheet (2009) on What is health economics are other good resources.

You will notice that these papers talk in general about health economics, and then go straight into a discussion of economic evaluation. Economic evaluation is probably the most common method associated with health economics and is used world-wide (including by the PBS and MBS in Australia) to evaluate the cost-effectiveness of new interventions. An economic evaluation compares two (or more) interventions in terms of both the costs and the benefits.  Economic evaluations are typically trial-based (meaning they are embedded in a clinical trial) or modelled (meaning they are based on research from the literature), or a combination of both.

The previously mentioned readings are good introductions to economic evaluations, and also explain the difference between a cost-benefit, cost-effectiveness and cost-utility analysis. These terms are often used interchangeably, but in health economics they have specific meanings based on the outcome measure you are using.

If you’re interested in how you actually incorporate an economic evaluation into a clinical trial, then the factsheet Step by step guide to economic evaluation in cancer trials gives a guide and walks through an example (it is designed for cancer clinical trials, but the same steps would apply to an occupational therapy trial). If you want more detail then I would suggest the textbooks by Gray et al Applied methods of cost effectiveness in health care or Drummond et al Methods for the economic evaluation of health care programmes.

But… health economics is much more than economic evaluations. Health economists are interested in questions like: what influences health (other than healthcare), what is ‘health’ and how do we value it, how can we arrange the health workforce most efficiently, how does the way we pay doctors change their performance, how can we make health more equitable, and many more (see Alan William’s famous ‘Plumbing Diagram‘). Some of the questions I am using economic approaches to answer include:

  • How do we quantitatively measure patient preferences for health and health care (using discrete choice experiments)?
  • What aspects of quality of life are people with cancer willing to give up to increase their survival?
  • How long does it take people to return to work after a cancer diagnosis and treatment, and what makes it easier for them to do so?
  • When people stop working because of illness or injury, how can we measure the impact this has on the broader economy?
  • How do the costs of cancer treatment impact peoples emotional and physical well-being?

There are many opportunities for health economics to be used in occupational therapy, and I’ve included a list of examples at the end of this article. But three obvious areas would be: a) Economic evaluations, although a systematic review of economic evaluations in occupational therapy (Green & Lambert 2016) found only nine published economic evaluations (of varying quality), despite the increasing focus of health care systems on demonstrating cost effectiveness; b) Many occupational therapy interventions probably reduce future health resource use, so there are opportunities to use Medicare data (such as MBS and PBS payments) to examine the impact of occupational therapy (here is a good fact sheet on using Medicare data for research); and c) Discrete choice experiments (which quantitatively measure patient preferences) are an ideal method to examine people’s preferences for their health (e.g. which occupational domains they value most) and how they want their treatment delivered (e.g. what aspects of a rehab program make people most likely to adhere to a practice schedule).

Please feel free to get in touch if you have ideas or an interest in incorporating health economics into occupational therapy, of if there are other resources you’d like, or have found useful!

Examples of health economics in occupational therapy:

  • Hewitt et al (2018) An economic evaluation of the SUNBEAM programme: a falls-prevention randomized controlled trial in residential aged care [Link]
  • Kareem Brusco et al (2014) Are weekend inpatient rehabilitation services value for money? An economic evaluation alongside a randomized controlled trial with a 30 day follow up [Link]
  • Wales et al (2018). A trial based economic evaluation of occupational therapy discharge planning for older adults: the HOME randomized trial [Link]
  • Sampson et al (2014) An introduction to economic evaluation in occupational therapy: Cost-effectiveness of pre-discharge home visits after stroke [Link]
  • Laver et al (2012) Preferences for rehabilitation service delivery: A comparison of the views of patients, occupational therapists and other rehabilitation clinicians using a discrete choice experiment [Link]
  • Gallego et al (2018) Carers’ preferences for the delivery of therapy services for people with disability in rural Australia: evidence from a discrete choice experiment [Link]