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Guest Blog – What does a health economist do?

Hi again, Hannah here, and today I’m going to cover a question that I get asked a lot – but what is a health economist? I’m going to be giving a whistle stop tour into what health economics is, why it is important and what it means to be a dementia health economist in the United Kingdom.

So, first things first – what is health economics? Health economics is a discipline of economics applied to the topic of healthcare. Enough said… right? Just kidding… it is concerned with issues related to efficiency, effectiveness, values and behaviour in the production and consumption of health and healthcare. Just like ordinary economics, but the product is now health. But this makes it unlike other branches of economics – why? Because we are literally dealing with population health! As a result, there are a range of additional ethical, moral and legal considerations.

Here in the UK, we have our glorious National Health Service (NHS), which is primarily funded by the government from general taxation and from National Insurance contributions. Therefore, resources are finite – meaning, we can’t have access to every health technology, we cannot financially afford this, and with the majority of NHS services being free at the point of access, we need to ensure that what we commission interventions that are reliable, cost-effective and cover the needs of the entire population.


Health economics is about using resources efficiently to improve the population’s health. Health economic analysis and evaluation forms an integral part of the public health guidance development process.

So how do we do this? How do we estimate cost-effectiveness? Well, that’s where health economists come in! That’s literally (part of) our role, that’s right – that’s what we do! And we do this through economic evaluation, a tool used by policy and decision makers to maximise the achievable health gain from the available resources. It involves the comparison of the costs and benefits of alternative and competing treatments. There are different types, but the most commonly used here in the UK is cost-utility analysis, which uses units known as a QALY – a quality adjusted life year, as the measure of benefit. The QALY is a summary metric which combines the impact an intervention has upon both quality and length of life. What makes the QALY particularly useful is that it is a generic measure of health benefit. This makes it easy to compare the benefits of different interventions across disease areas.

An economic evaluation results in an incremental cost-effectiveness ratio (ICER), which is a summary measure of the comparative value of treatments. The ICER is a ratio of additional cost per additional unit of health benefit, so cost per QALY, and is calculated by dividing the difference in costs of the competing treatments by the difference in QALYs. There is an ICER threshold of £20,000-£30,000 per QALY, treatments with an ICER of less than £20,000 per QALY gained are considered cost-effective in the UK, however treatments above the range may still be considered subject to advisory body judgement. And there are special circumstances where this threshold is higher, for example paediatric and cancer treatments.

But why does this all matter? Why is this important? As touched on earlier, we have limited health care resources. Historically, treatment decisions were made solely by a patient’s physician, however an empowered consumer and new technology developments have led to the need for decisions to be made more equitably and openly. There is the need to organise and allocate health care resources in a fair way, so that the health of the entire population is maximised.

As a health economics researcher, the role involves a wide range of tasks, and truthfully economic evaluation is only one fraction of it. What we do is provide impartial, non-biased evidence for policy makers to use when making the tough financial decisions. There are so many different sectors within health economics, however they all share the same central goal of maximising health benefits. My role is within measuring and valuing quality of life for use in dementia economic evaluations – it is a super niche area, and it draws on a range of other expertise such as statistics, econometrics and psychometrics. And as health economics is a relatively new discipline, the area is ever changing, expanding and full of exciting new and ground-breaking research.

Being a dementia health economist is really important to me. As society is ageing, the number of very old (aged 85 years and over) is projected to double over the next 25 years. It is predicted that by the year 2035 there will be over one million people living with dementia in the UK alone. The average annual cost of dementia care in the UK is estimated at £34.7 billion a year. Dementia therefore presents as one of the largest current health and social care challenges. The impacts of dementia aren’t just limited to the person themselves. As a person with dementia’s condition progresses, their care needs become more complex as their ability to perform activities of daily living independently becomes increasingly difficult. With >60% of people with dementia estimated to be community dwelling (living in the community as opposed to being institutionalised), this leads to a greater reliance upon family and friends to provide ongoing support and care, which in severe cases may be required over a 24-hour period. Therefore, working toward finding effective, useful and affordable strategies for the care and management of dementia is not only my ambition, but a shared one between dementia health economists nationwide.

In my next blog, I will go into my PhD research topic in detail – where I will talk about the steps that led to my research questions, and what I hope my research will achieve. I hope that this blog was useful, if upon reading this you have any questions or even want to know more about careers in health economics or just how to get into it – please feel free to drop me a DM on twitter! And for any health economists that constantly get asked this question – you can now always direct them to this blog!

Thanks for tuning in, Hannah.


Author

Hannah Hussain

Hannah Hussain [1] is a PhD Student in Health Economics at The University of Sheffield. As a proud third generation  migrant and British-Asian, her career path has been linear and ever evolving, originally qualifying as a Pharmacist in Nottingham, then Health Economics in Birmingham. Her studies have opened a world into Psychology, Mental Health and other areas of health, and with that and personal influences she found her passion for dementia.

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