Health economics

If Australia wants better results from its annual $180 billion dollars healthcare services expenditure, health economists must play a key role in decision making to improve the efficiency of local hospitals and health networks.

Greater input from health economists could provide better solutions to such key healthcare problems as Emergency Department (ED) ramping, according to new Flinders University research.

Professor Jonathan Karnon, from Flinders University’s College of Medicine and Public Health, says health economists – “who are located at hospital sites rather than sitting in ivory towers” – are better able to play a direct part in decision making processes that result in better health outcomes.

“It takes a healthy population to build a thriving economy and governments have long been challenged by how best to provide care for people and deliver more sustainable health systems and solutions,” he says.

“Economic evaluation aims to provide decision-makers with information on the relative costs and benefits of alternative spending options, but hospitals are so complex that it has proven difficult to provide decision-makers with timely and relevant information.

Led by Professor Karnon, health economists from Flinders University were embedded in the South Adelaide Local Health Network (SALHN) for two years.  Newly published research papers reveal the learnings and benefits of embedding academic health economists into hospitals working directly with clinicians to analyse and interpret data that can improve budget decisions.

“In Australia, local health services with allocated budgets manage public hospital services for defined geographical areas. Whilst we were embedded in SALHN we undertook local level economic evaluations to add value to local decision-making around the development of new interventions, alongside the implementation of significant new interventions and to the prioritisation of clinical areas with the greatest capacity for improvement.

“Our general approach involved the use of local health systems data and published data and engagement with local clinicians to interpret this information in the local context. Using this approach, we evaluated a range of different intervention options to inform decisions on how best to reduce the number of patients experiencing complications during an admission to hospital.

“We also evaluated significant new programs that have been developed to tackle major issues such as the ED ramping in South Australia.

“The reported findings provide a basis for engagement around an impactful and sustainable approach to the use of health economics across local health services in Australia, and beyond.

“We are currently developing training programs and resources to promote the broader uptake of economic evaluation in hospitals and local health services.

“We want to see education and economist-in-residence programs whereby researchers actively engage with the health service to ultimately impact on patients through the best possible evidence informing health services decisions,” Professor Karnon adds.

Local Level Economic Evaluation: What is it? What is its value? Is it Sustainable? by Jonathan Karnon, Andrew Partington, Jodi Gray, Aubyn Pincombe and Timothy Schultz was published in Applied Health Economics and Health Policy. DOI: 10.1007/s40258-023-00847-z

A framework for local-level economic evaluation to inform implementation decisions: health service interventions to prevent hospital-acquired hypoglycemia by Jodi Gray, Tilenka R. Thynne, Vaughn Eaton, Brianna Reade, Rebecca Larcombe, Linda Baldacchino, Jessica Gehlert, Paul Hakendorf , Jonathan Karnon and the Southern Adelaide Local Health Network’s (SALHN) Hypoglycaemia Clinical Working Group was published in International Journal of Technology Assessment in Health Care.