APPENDIX D

Economic Analysis

GUIDELINES FOR ECONOMIC ANALYSIS OF COMMUNITY MENTAL HEALTH CARE PROGRAMS IN LOW-INCOME COUNTRIES

From: Integration of Mental Health Care into Primary Care: Demonstration Cost-Outcome Study in India and Pakistan

D. Chisholm, K. Sekar, K.K. Kumar, K. Saeed, S. James, M. Mubbashar, and R.S. Murthy

Reprinted with permission from the Royal College of Psychiatrists ©2000

The guidelines have been drawn up in order to provide an overview of issues, principles and procedures related to the economic analysis of mental health care programs in low-income countries; are aimed at mental health workers who have an interest in incorporating an economic perspective into their evaluative research activities; are largely based on the principles and methods used in the United States and United Kingdom, but also reflect an additional set of features associated with the implementation of these methods in the context of low-income countries; and do not attempt to be comprehensive, and it is recommended that a local health economist or closest equivalent is consulted in their application.

THE RATIONALE FOR AN ECONOMIC PERSPECTIVE

The increasing recognition of mental health as a significant public health issue globally has led to additional demands for resources that are already stretched. There is therefore a requirement to demonstrate that investment of resources into mental health care and prevention is needed and worthwhile. This



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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World APPENDIX D Economic Analysis GUIDELINES FOR ECONOMIC ANALYSIS OF COMMUNITY MENTAL HEALTH CARE PROGRAMS IN LOW-INCOME COUNTRIES From: Integration of Mental Health Care into Primary Care: Demonstration Cost-Outcome Study in India and Pakistan D. Chisholm, K. Sekar, K.K. Kumar, K. Saeed, S. James, M. Mubbashar, and R.S. Murthy Reprinted with permission from the Royal College of Psychiatrists ©2000 The guidelines have been drawn up in order to provide an overview of issues, principles and procedures related to the economic analysis of mental health care programs in low-income countries; are aimed at mental health workers who have an interest in incorporating an economic perspective into their evaluative research activities; are largely based on the principles and methods used in the United States and United Kingdom, but also reflect an additional set of features associated with the implementation of these methods in the context of low-income countries; and do not attempt to be comprehensive, and it is recommended that a local health economist or closest equivalent is consulted in their application. THE RATIONALE FOR AN ECONOMIC PERSPECTIVE The increasing recognition of mental health as a significant public health issue globally has led to additional demands for resources that are already stretched. There is therefore a requirement to demonstrate that investment of resources into mental health care and prevention is needed and worthwhile. This

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World translates into generating evidence on affordable and cost-effective mental health care and prevention strategies. Economic evaluation provides a methodology that allows policy makers, managers and clinicians to make choices between differing treatments, settings and illnesses in order to facilitate the judicious use of scarce resources. The current lack of mental health economic evaluative studies in low-income countries is a significant stumbling block to the investment of resources in mental health by governments and international agencies. PRINCIPLES OF ECONOMIC ANALYSIS Key to the understanding of an economic approach towards mental disorder is the notion of resource scarcity, since this necessarily prompts the requirement to make choices between different courses of possible action or investment. Making a choice implies in turn the sacrifice or foregoing of the alternative action or investment. The economic approach therefore attempts to value the worth of a particular resource, decision or strategy with reference to its “opportunity cost,” namely the value attached to the next best alternative. To give an example, the opportunity cost of an acute psychiatric bed is derived with reference to the alternative use with which those resources could be put to, such as within another medical speciality, outside medicine completely, or investment into an interest-bearing savings account. A further important principle of economic analysis is that it takes a broad, societal perspective, such that account is taken of costs falling to all relevant parties; for example, allowance should be made for inputs of unpaid volunteers/family carers as well as formal care inputs. PLANNING AND DESIGNING AN ECONOMIC STUDY For an appropriate economic evaluation of a mental health care intervention, program or strategy, a number of study design features need to be considered. Since economic evaluations often take place alongside clinical evaluations or trials, the design of the study will typically need to be agreed to in conjunction with other evaluators. The most desirable design requirements for the economic evaluation of a mental health care intervention revolve around the presence of a control group (against which to draw comparisons with the intervention group), and the prospective follow-up of these two groups over time (one year would be sufficient for most studies). This “experimental ” study design is the “gold standard” of clinical and economic evaluation, since it is able to demonstrate most clearly that changes in selected measures are attributable to the intervention, as opposed to other possible explanatory factors (“confounding” variables). Where it is not possible or practicable to carry out an experimental study, an observational study design can be used; this design may have better external validity—preserving the context in which care is provided—but shifts the focus of the analysis towards identifying associations between the intervention and changes

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World in costs or outcomes (as opposed to attributing a causal relationship). A further desirable is recruitment of a sufficient sample of patients and/or centers to show statistically significant changes between groups (at least 100–200 subjects per group is probably required); the sample size necessary to show a significant economic difference may be greater than that necessary to show a clinical difference between study groups. Alongside decisions regarding the most appropriate study design, consideration must also be given to the mode of economic evaluation (i.e., the manner in which costs and outcomes data are to be combined). The simplest of cost evaluations is commonly referred to as cost-minimization analysis, but this is only appropriate if it is known that outcomes are identical (very unlikely), in which case the task is merely to establish the least cost method of achieving these outcomes. A much more common mode of economic evaluation in the field of mental health care is cost-effectiveness analysis, which assesses not only the costs but also the outcome of an intervention, expressed in terms of cost per reduction in symptom level, cost per life saved, etc. Where there is more than a single measure of outcome being investigated, as is often the case in psychiatry and related fields (see “Outcomes ” below), it is more correct to label this type of study as a cost-consequences analysis. This mode of evaluation is likely to represent the default choice in most contexts, and has the advantage of presenting an array of outcome findings to decision-makers. A further mode of evaluation is cost-utility analysis, which has considerable appeal for decision-makers since it generates equivalent and therefore comparable study data (“utilities,” expressed by a combined index of the mortality and quality of life or disability effects of an intervention), upon which priorities can then be based. However, there are technical difficulties in using this approach, and where it has been used in psychiatry, it has not performed very well to date. The final option is cost-benefit analysis, which refers to a form of evaluation in which all costs and outcomes are valued in monetary units, thereby allowing assessment of whether a particular course of action is worthwhile, based on a simple decision rule that benefits must exceed costs. This approach is difficult to undertake because of the requirement to quantify outcomes in monetary terms, and consequently is found very rarely in mental health care evaluation. One other key decision to make at the design stage of the study is the scope or perspective of the evaluation. This refers to the viewpoint from which the analysis is being taken, which, in ascending order of comprehensiveness, might be that of a particular agency or government department (e.g., ministry of health), the statutory/formal sector as a whole (e.g., including social services), or a societal perspective which assesses the impact of the intervention on all agencies, including patients themselves as well as their carers or households. The choice of viewpoint, which will influence what costs and outcomes are to be measured, should be determined according to whether the intervention under study is expected to exert a differential impact on these various agencies/sectors.

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World In summary, it is possible to list a number of stages which typically comprise the conduct of an economic evaluation, all of which need to be considered and carried out in order to obtain a valid and reliable set of findings: definition of the alternative interventions to be evaluated (design); identification of the costs and outcomes to be included in the study (scope); quantification of these identified costs and outcomes (valuation); comparison of costs and outcomes (analysis); revision of findings in the light of risk, uncertainty and sensitivity (qualification); and examination of distributional effects (equity implications). DATA COLLECTION Resource Utilization The collection of service utilization data at the level of the individual patient enables the generation of detailed information on the consumption of a wide range of resources. Opportunity cost estimates can be applied subsequently to these data in order to calculate the overall economic costs associated with an individual's care, or at a more aggregated level, a particular intervention or strategy. An initial stage in the recording of resource utilization data is the identification of relevant components of potential service receipt by users, such as contacts with primary care physicians and other health workers, community-based private or voluntary sector providers and hospital inpatient and outpatient care (both psychiatric and general). Services to include will differ with respect to a number of evaluative concerns, including the scope, objectives and setting of the study, as well as the particular service needs of the client group(s). For example, users with more severe or enduring mental disorders, such as persons with a diagnosis of schizophrenia, often need a wider range of service supports than people with common mental disorders such as depression and anxiety (e.g., day care services and residential care). For economic analyses carried out alongside clinical evaluations (the expected norm in this context), the most convenient means of data collection is often via an interviewer-administered service receipt schedule, which can record service use over defined retrospective periods at the various assessment points of the study. It is also important to ensure that data is available or collected on the socio-demographic and socio-economic characteristics of the individuals, including lost opportunities to work (this latter category may be an important economic outcome). Resource Costs For each item of resource utilization, a unit cost estimate is required, such as a cost per inpatient day, or cost per contact with a primary care worker. It will

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World be necessary to compute these estimates using a range of data sources, including national/local government statistics, health authority figures and specific facility or organization revenue accounts. The broad perspective to be employed in the costing of services is an economic one, such that in principle service costs are derived by reference to their marginal long-term opportunity costs. In practice, derivation of costs in this way is difficult. It is therefore common to use short-term average costs as a proxy for long-run marginal costs. The main categories of cost that need to be quantified for each service are: Salaries/wages of staff employed in the direct care and management of patients. Salary costs can be obtained from local or national pay scales. The ideal salary value to use is a weighted average of all grades on a pay scale. Supplementary (fringe) benefits, bonuses and allowances should be included. Also include employer contributions to local/national taxes, pension or health insurance schemes, etc., which can be given as a percentage add-o to the salary/wage. Facility operating costs where the service is provided (cleaning, catering, consumables, water, electricity etc.). This covers the costs associated with running the establishment where the professional is employed, for example, a rural health center. This can be worked out by dividing pro rata the total running costs of the establishment (excluding capital costs or rent) by the total number of “full-time equivalent” staff. For government facilities, these costs can usually be obtained from the finance or planning departments of local or federal government. Any overhead costs relating to the service (personnel, finance, etc.). Costs associated with service management and administration, such as finance and personnel functions, are often difficult to identify with accuracy, and it may only be possible to establish a percentage add-on to known revenue (operating) costs. The capital costs of the facility where the service is provided (land, buildings, etc.). The (opportunity) cost of capital is calculated as the annuity (the constant stream of payments arising from interest, taken to be the best alternative use for the capital) which will deplete the lump sum value over the lifetime of the capital. The lump sum value can be obtained from government contracts for similar buildings. The lifetime of land and buildings is best set at 20 years, and the lifetime of equipment (including furniture and vehicles) can be set at 5 years. The other determining feature of the annuity factor is the prevailing discount rate for public and/or private capital assets (this should be available through local government offices). For example, using the 5% discount rate, a hospital worth $500,000 would have an annual capital cost of $40,122. In order to reach a unit cost of contact time, the aggregate of these cost components needs to be divided by the typical availability of the service or the working time of the professional (for example, 35 hours per week, with 4 weeks holiday per year and 1 week sickness leave allowance).

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World It should be emphasized that economic or opportunity costs are not the same as market prices, charges, fees or per diems. Profit motives, varying accounting and reimbursement practices mean that the use of per diems and hospital charges may not represent a good proxy of opportunity cost. For example, a private, for-profit company may charge a fee above what it actually costs to provide care. Where used, this should be clearly stated and, if possible, adjusted to reflect the real economic cost. Outcomes There is an important distinction to be made between indicators of intermediate outcomes and final outcomes. The former category, which can also be referred to as process indicators, should not ideally be the focus of the analysis, since positive changes in, for example, attendance or detection rates may not in fact result in improved patient welfare or mental health. Thus, while process indicators are undoubtedly an important source of differentiation between study samples at the institutional level, their use as indicators of improved patient welfare needs to be treated with caution. Final outcomes, on the other hand, are concerned with detecting changes in the physical, psychological or social well-being of individuals, and commonly revolve around the measurement of symptoms, functioning and disability, quality of life and service satisfaction. Local Service Structures The take up and subsequent effectiveness of services is determined to a significant extent by the access, availability and quality of mental health services. Without comparable and standardized descriptions of the structure and content of service systems, analysis of the role of organizational characteristics in evaluating costs and outcomes is severely compromised. It is therefore vital to have an understanding of the features that characterize each site's local service system. Data is needed at a local area level in two domains: sociodemography, to include the age, sex, education and employment profiles of the population; and primary and secondary health services, to include the structure, organization and financing of both general medical and mental health services, plus the availability of/access to these services to/by the population(s) under study. DATA ANALYSIS AND PRESENTATION Economic evaluation provides a means of comparing the costs and outcomes of a mental health care intervention or program together in an explicit framework. This in turn enables decision-makers to assess the extent to which the intervention or strategy offers a good use of (scarce) resources. An analysis of costs alone, or indeed of outcomes alone, does not provide such information.

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World In analytical terms, there are a number of scenarios that can be considered when assessing whether an intervention represents a worthwhile use of resources: If statistical analyses of cost and outcome data show that the new intervention is both significantly less costly and more beneficial than the control group (usual care), then one can immediately conclude that the intervention is preferable. Likewise, usual care is the preferred choice when it is cheaper and more effective. If the costs and outcomes are found to be equivalent, then either is acceptable. If only cost is equivalent, then the more effective intervention is preferable, and if only outcome is equivalent, then the cheaper intervention is preferable. When the evidence shows that one of the two (or more) interventions is both more costly and more effective, it is necessary to assess whether the additional costs are worth the greater effectiveness. This can be established by calculating a cost-effectiveness ratio (the difference in cost over the difference in outcome between the experimental intervention and the control or comparison group). The ratio is positive when one of the groups both costs more and produces a superior outcome. For example, an intervention that costs an extra Rupees 1,000 over a year and produces an additional improvement of 5 points on a social functioning measure compared to usual care, would result in a positive ratio of Rupees 200, interpreted as the increased average cost necessary to gain an average of 1 point of improvement per year. The cost-effectiveness ratio is negative when the innovative intervention costs less but has superior outcomes (i.e., cost saving), or when the innovation costs more but produces worse outcomes (i.e., a bad investment). In any of these circumstances, the usefulness of these estimates depends on the validity and credibility of the evidence about the sampled populations of the study, and this is never perfect. A key activity of the analysis stage of an economic evaluation is therefore to carry out a sensitivity analysis, which involves the introduction of alternative values to key study parameters (e.g., the cost per inpatient day, or the rate at which capital costs have been discounted) with a view to assessing whether overall conclusions are robust to these plausible changes to values or whether in fact results are very sensitive to such changes. While the addition of economic analysis to mental health care evaluations introduces an extra dimension that offers a wider assessment of the implications of new or existing courses of action, it is important to mention some of the limitations of the approach. Many economic evaluations fall short of the ideal, whether that be in terms of sample size, or comprehensiveness of cost and outcome measurement. Conclusions based on a small trial with less than 50 subjects per arm can often only be tentative, while the failure to measure the indirect consequences associated with two alternative treatments (e.g., lost opportunities for work) may give rise to misleading results. There are also a number of ongoing methodological debates with respect to certain aspects of economic evaluation, such as the alternative techniques available for measuring health state preferences (essential for both cost–utility and cost–benefit analy-

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World sis). In this context, it is worth noting that economic evaluation is no panacea for making difficult allocative and policy decisions; rather, it is one additional tool that together with clinical and social dimensions can facilitate explicit, evidence-based decision-making. CONTACT POINT If you have any queries regarding these guidelines, please contact: Daniel Chisholm, Economist Classification, Assessment and Surveys (CAS) World Health Organization 1211 Geneva 27 Switzerland e-mail: ChisholmD@who.int FURTHER READING Drummond MF, O'Brien B, Stoddart GL, Torrance GW (1997). Methods for the Economic Evaluation of Health Care Programmes. Second edition. Oxford Medical Publications, Oxford. Hargreaves W, Shumway M, Hu T, and Cuffel B (1998). Cost-Outcome Methods for Mental Health. Academic Press. Knapp MRJ (1995). The Economic Evaluation of Mental Health Care. Ashgate, Aldershot. Shah A and Jenkins R (1999). Mental health economic studies from developing countries reviewed in the context of those from developed countries. Acta Psychiatrica Scandinavica, 100, 1–18.

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World MONEY MATTERS IN EPILEPSY S.V. Thomas Department of Neurology Sree Chitra Institute for Medical Sciences and Technology Trivadrum-695 011, India Reprinted with permission from Neurology India © December 2000 INTRODUCTION Epilepsy is the most common neurological disorder in the world. There have been remarkable advancements in clinical epidemiology in the recent past. Many new anti-epileptic drugs (AED) have been marketed in this decade. Epilepsy surgery has established itself as a safe and effective option for intractable epilepsy. Cognitive, psychosocial and gender issues have gained more attention, with the result that quality of life has become the central focus of epilepsy care. Progress in epilepsy care has inevitably escalated its cost as well. Recently, there had been much debate on the economic aspects of newer modalities of treatment of epilepsy [1,2]. The International League Against Epilepsy (ILAE) Commission on economic aspects, in a recent report, has highlighted the need for thorough appraisal of the economic aspects of epilepsy [3]. Thorough economic appraisal of newer strategies in epilepsy care, be it newer AEDs or epilepsy surgery, would enable the clinician to make judicious decisions in patient care. Most clinicians have little exposure to health economics, as it is a relatively new discipline in health sciences. In the future, as third party payment of medical bills becomes more prevalent, there will be greater pressure for cost containment without compromising on quality of services. In this article, the broad principles of estimating the cost of epilepsy and standard techniques of making economic evaluation of treatment protocols are reviewed. COST In socioeconomic evaluation, costs are the resources expended to obtain a desired state of health. All resource exenditures (medical and non-medical services) incurred for the prevention, diagnosis, treatment and rehabilitation of a particular disease are included under cost (Table 1). Traditionally, resource expenditure is estimated under the direct and indirect cost. A third component of intangible cost compromised of the money equivalents for the social stigma, psychological stress and pain is also computed in some cases (Table 2).

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World TABLE 1 Resources That Are Frequently Expended in a Medical Encounter The physician's time; Activities of physician's ancillary staff; Use of medical office space; Laboratory services; Cost of medicines and its storage; Pharmacist's time; Patient's time away from work; and Cost of patient transportation to office. Direct cost Direct cost can be further divided into medical costs related to the prevention, diagnosis, treament and rehabilitation of epilepsy and non-medical costs related to travel expenditure, etc. Most of the out-of-pocket expenses for the patients and their families come under this category. However, the actual cost of these services is frequently much more than what a patient pays. In many instances, government or other agencies may be subsidising this component; e.g., in a government hospital, the services of the neurologists and other specialists may be provided free, and the charges for video EEG or MRI may be only the cost of consumables. Many institutions also provide some cross subsidy by which they reduce the charges for poor patients by compensating it from more well off patients. Hence, the final bill charged to the patient may be quite diffrent from the actual costs. The cost of services may be different in different parts of the country. The cost of infrastructure in a big city may be more than that for the same in a more modest setting. These factors also should be considered while computing the cost of epilepsy care. The direct cost of epilepsy is gathered in one of the three methods viz. (1) self reported treatment data from providers or patients, (2) medical charts or billing data obtained from the provider or patient, and (3) hypothetical model based on disease characteristics.

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World TABLE 2 Cost Benefit Evaluation of Epilepsy Costs Benefits Direct Medical Cost Outpatient services in patient services Fixed cost of utilities Variables cost (diagnostic tests, drugs, devices) Home care services Ancillary services Volunteers Morbidity Control of seizures Improvement in cognition Morbidity due to adverse drug reaction Morbidity due to surgery if any Direct Non-Medical cost Care provided by family and friends Transportation to and from hospitals Child care Housekeeping Social services Mortality Lives saved Lives lost due to adverse drug effects or surgery Indirect Cost Time and productivity Change in productivity Income lost by family members Forgone leisure time Psychosocial Improvement in quality of life Quality adjusted life years Intangible Cost Cost attributed to pain Suffering, social stigma, etc. Economic Use of health resources Increase in productivity Reduction in patient care expenditures Indirect cost Indirect cost commonly has three components (1) employment related —the lost earnings associated with reduced output when people withdraw from work due to morbidity or premature mortality; (2) productivity related—the reduced earnings from absence or reduced productivity due to morbidity for those who continue to work despite the illness; and (3) household related—the lost value of household production when people alter the time they devote to such work because of epilepsy. Calculation of indirect cost involves in-depth examination of the impact of the illness on the socioeconomic life of the patients and their families. Intangible cost This aspect of epilepsy care has not yet been adequately examined. The social stigma, pain and suffering that an individual suffers because of epilepsy

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World constitutes intangible costs. In some studies they are expressed in unit terms or scales and in some studies an economic equivalent of this loss is expressed. CONSEQUENCE (BENEFIT) Consequences or benefits are the result of using a medical service or in economic terms, the outcome of using a particular resource. With regard to epilepsy, the positive consequences would include control of seizures, years of increased productivity and probably years of life saved (by avoiding death due to accidents) and improvement in social life. The negative consequences would include adverse effect of the drugs or the investigations carried out, and time expended in making repeated visits to clinic and pharmacies (Table 3). PERSPECTIVE Economic evaluation can be performed from different perspectives or viewpoints. Patient's perspective emphasizes the out-of-pocket expenditure to the TABLE 3 Annual Per Person Cost of Epilepsy (modified from ref. 14) Country, year Population Cost measures Direct cost Indirect cost Australia, 1993 All epilepsies Direct medical, some indirect age +5 US$2,751 US$3,381 Switzerland, 1993 Individuals on AED Direct medical, non-medical, some indirect US$9,400 US$5,130 UK, 1990 All active and inactive epilepsies Direct medical, non-medical, some indirect US$2,600 US$5,989 USA, 1994 Refractory adult epilepsy Direct medical, some indirect US$2,971 US$9,418 India, 1998 Active and inactive epilepsy Direct medical, non-medical, some indirect INR 5,070 INR 6,000

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World patient and his family. The costs borne by the provider or society at large are less important. Quality of life, time lost to work, etc. are also important from the patient's perspective. Provider's perspective evaluates costs from the service provider's (such as hospital) viewpoint. Third party payer's perspective examines cost evaluation from the insurance company or employer's viewpoint. Societal perspective examines the entire social and economic effect of the new treatment (e.g., epilepsy surgery) on all segments of the society. Such studies would examine the lifetime medical and surgical cost and consequences. Costs related to a wide array of services such as institutional care and home services need to be included in addition to hospital care, outpatient care, etc. Perspective is a key factor in defining the research question and evaluating the cost and consequence of any new program for epilepsy. The most comprehensive study examines the cost and benefits from the societal perspective. COST OF ILLNESS STUDIES (COI) This is a form of evaluation which computes the current economic impact of a disease including the costs and consequences of treating the disease. No comparison of treatment modalities is made. Traditionally there are two methods of estimating the cost of an illness. The commonly used approach is the human capital method that divides cost into direct and indirect components. An alternative approach to estimate the cost of illness is the willingness to pay method. This approach defines the cost of an illness in terms of what people would be willing to pay for a hypothetical permanent cure for the disease. The former approach is more frequently used. Most of the COI studies on epilepsy have been based on prevalence based estimates [4,5,6 and 7]. Such studies do not express the variation in the cost of management due to changes in the natural history of epilepsy. Longitudinal studies are ideal for estimating the cost of epilepsy over a period of time. Two such studies have been published recently [8,9]. The first comprehensive study on epilepsy in the USA was carried out in 1975 [10]. That study estimated the national cost of epilepsy at $3.6 billion for 2.1 million cases. On a per patient basis, the 1975 figure represents US $7,440 in 1995, $1,150 (15%) for direct treatment-related costs and $6,290 (85%) for indirect employment-related costs. Begley et al. estimated the cost of epilepsy based on its natural history [ 9]. They identified six prognostic groups of epilepsy. Based on epidemiological data and these models, they estimated the lifetime cost of epilepsy for a cohort of persons diagnosed in 1990 in the United States. The total lifetime cost in 1990 for all perons with onset of epilepsy in 1990 was estimated at $3.0 billion (direct cost accounting for 62%). The cost per patient ranged from $4,272 for persons with remission after initial diagnosis and treatment to $138,602 for persons with intractable seizures. An exhaustive cost of illness study on epilepsy was carried out in the UK [11]. This is based on data from the National Epilepsy Society and National

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World General Practice Study Group for Epilepsy. A longitudinal cost profile of epilepsy was calculated, with an average initial direct cost of £611 (US$917) per patient per annum which decreased after eight years of follow-up to £169 (US$254) per patient per annum. The cost of newly diagnosed epilepsy in the first year of diagnosis in the UK was £18 million (US$27 million). The total annual cost of established epilepsy in the UK was estimated to be £1930 million (US$2,895 million), over 69% of which was due to indirect costs (unemployment and excess mortality). The cost of active epilepsy per patient was approximately £4167 (US$6,251), and of inactive epielpsy £1630 (US$2,445) per patient per annum. Recently, another study had been carried out in the UK based on the prevalence of epilepsy.[ 12] The per annum per patient direct cost of epilepsy was £1568. The largest single element of cost (58%) to the health service was the cost of inpatient episodes followed by drug cost (23%). There are well-conducted “cost of illness studies” from Switzerland, Australia and other western countries (Table 3).[13] These studies indicate that epilepsy is an enormous economic burden to the society and the major component of the cost is the indirect cost constituted by lost productivity. With effective treatment, 70–80% of patients can go in for remission and can be effectively rehabilitated with positive economic gain. SPECIAL PROBLEMS IN EVALUATING COST OF EPILEPSY Several methodological issues that influence the economic appraisal of epilepsy should be kept in mind while interpreting data on cost of epilepsy studies [14]. It is important to ensure that all major components of cost are included in a given study. The definition of epilepsy also assumes importance when the cost is evaluated from the societal perspective. The commonly used definition of two or more unprovoked seizures has many limitations. Considerable cost may be involved in the evaluation of single seizures which would not be included if we follow this definition. Epilepsy is a collection of syndromes that differ widely in terms of severity. The cost of mild epilepsy with rare seizures that do not interfere with normal life is quite different from severe epilepsy with very frequent seizures and considerable morbidity. Hospital based studies are likely to reflect the client characteristics and may accordingly bias the data. There may be other co-morbidities such as mental retardation or motor disability that may inflate the cost unless suitable adjustments are done. It is also important to differentiate between prevalence based studies and longitudinal studies.

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World GENERAL TOOLS OF ECONOMIC EVALUATION The value of a procedure, e.g., epilepsy surgery, is equal to the sum of all costs subtracted from all consequences discounted over time at a particular discount rate.[15] There are four commonly used approaches of cost and benefits evaluations. Cost Benefit Analysis This is the most exhaustive approach in which real cost and consequences are expressed in monetary terms. In this regard, many of the resources and consequences have to be given somewhat arbitrary monetary value. For example, the anxiety that one may lose memory following the surgery is a cost and the peace of mind that seizures will not occur is a benefit which are difficult to translate into monetary units. By using monetary values on both sides of the economic appraisal equation, it is possible to estimate the net gain to the society from a particular treatment. In principle this is an excellent tool to make comparisons between different treatment protocols for the disorder and different disorders altogether. However, the monetary value assigned to many benefits is arbitrary to a large extent and may not be comparable. Cost Effectiveness Analysis In this approach, the benefits are not converted into monetary units but are evaluated as such. This approach is frequently adopted to compare different treatment protocols that apparently achieve the same outcome; e.g., the costs of medical and surgical treatment can be compared against the outcome of seizure frequency, measured as the number of seizures in unit period. Cost Utility Analysis (CUA) CUA is another approach that measures costs in monetary terms, but measures consequences in terms of their quality or utility. In CUA no attempt is made to measure health outcomes in monetary terms. Rather, CUA employs a common non-monetary tool to measure those consequences that are not amenable to economic expression. One of the recommended tools to measure the outcome is quality adjusted life years (QALY). Disability Adjusted Life Years (DALY) is another outcome measure that can be used instead of QALY. However, utility measures have a number of disadvantages including the bias against the elderly, the impossibility of generalizing quality of life across or within patient groups.

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World Cost Minimization Analysis (CMA) CMA assumes that the outcomes of two treatment options are the same and a direct comparison of costs for two alternate treatment protocols can be made. For example, if the remission rates of different AEDs are the same, how do we minimize the cost by choosing the AEDs. PHARMACO-ECONOMIC EVALUATION OF EPILEPSY The increase in the cost of epilepsy care due to the use of newer AEDs has been the focus of interest recently. It is estimated to be approximately US$500 million a year in United States. Certain methodological issues need to be kept in mind while interpreting such data, e.g., the cost of newer AEDs (acquisition cost) may be many-fold more than conventional AEDs. However the overall cost of treating epilepsy with such drugs could be less because of savings from fewer hospital visits for seizures, or management of adverse drug reactions or increased productivity. Similarly, the one-time cost of presurgical evaluation and epilepsy surgery is many times more than that of medical treatment, but the lifetime cost would be less for patients who achieve complete remission by surgery. COMPARISON OF NEWER AEDS AGAINST CONVENTIONAL AEDS Comparative studies of monotherapy have been published for lamotrigine [17,18] and vigabatrin as compared to carbamazepine.[19,20] A cost minimization study was carried out by Shakespeare and Simeon in which carbamazepine and lamotrigine were compared as monotherapy for partial or generalized epilepsy.[21] They observed that cost of therapy with carbamazepine was about one third of lamotrigine (£179 vs. £522) even after the costs associated with the management of adverse events and therapeutic switching were considered. Markowitz et al. have used another model to examine the cost-effectiveness of lamotrigine as an add-on therapy for epilepsy [22]. In this model, they estimated the cost of treating patients with intractable epilepsy with conventional AED and the cost of presurgical evaluation and surgery as the base data. The difference in cost due to introduction of lamotrigine in the ensuing 10 years was projected. The results showed that in the first year the lamotrigine regime costs an additional US$83.90 per seizure free day, and US$16.30 per seizure free day gained in the 3rd to 10th year. In the second year lamotrigine costs less because fewer persons from the lamotrigine group underwent presurgical evaluation and surgery. Another recent study had examined the lifetime cost utility of lamotrigine as an add-on ther-

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World apy.[23] They have observed that adjunctive lamotrigine would cost approximately US$41,000 per unit increase in quality adjusted life year. The cost of medical treatment of epilepsy with Vigabatrin (VGB) was compared with the cost of evaluation and surgery for epilepsy in 52 patients with intractable epilepsy [24]. In this study, the direct costs associated with treatment with the conventional AED, VGB, epilepsy surgery evaluation (ESE) and epilepsy surgery were analyzed. Sixty percent of the 52 patients obtained a reduction in seizure frequency of 50% or more with VGB. Of the 21 operated patients, 57% became seizure free. Corresponding figures for VGB responders who did not go through ESE and VGB non-responders who were not operated on were 6% and 0%, respectively. The mean yearly costs (expressed as 1991 prices) of epilepsy-related health care including AED treatment were US$1,594, the year before starting VGB therapy, and US$2,959 in the first year of VGB treatment including a mean yearly cost of VGB of US$1,572. The mean total cost for ESE and surgery was US$46,778 (N = 21), while the mean cost of ESE in patients evaluated but not accepted for surgery (N = 14) was US$24,054. Considering the costs for ESE and surgery in the whole patient series, the mean total cost of rendering one patient seizure free with surgery was US$110,000. Surgery is the most effective treatment option in selected cases of severe partial epilepsy. If its costs are distributed over the patient's expected lifetime, the yearly cost is comparable to the present yearly cost of medication with VGB. They opined that, since many patients achieve satisfactory seizure control with VGB, and considering the risks of surgery, it is a rational policy to let patients try this drug (or another of the new generation of AED) before entering ESE. ACQUISITION COST MAY NOT REFLECT THE OVERALL COST Fosphenytoin is a new AED which can be administered intravenously or intramuscularly for status epilepticus. This drug is about 15 times more expensive than phenytoin, but was shown to have better efficacy and less adverse effects in controlled clinical trials. Two recent studies [25,26] have shown that the outcome cost (acquisition cost plus the cost of treating adverse drug reactions) is less for fosphenytoin (US$156.68) than phenytoin (US$543.47), although the former is 15 times more expensive (US$90.00 vs. US$6.70). ECONOMIC ASPECTS OF EPILEPSY: SCENARIO IN DEVELOPING COUNTRIES Ninety per cent of the world's 40 million people with epilepsy live in developing countries. The vast majority of them are not on regular treatment. These countries have meager facilities for advanced care for epilepsy. The capital investment in epilepsy care would involve import of substantial sophisticated

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World equipments, and spares, as well as training of personnel to handle this equipments properly. There is fierce competition for resources from several corners and its allocation is often a political decision. Quantification of the benefits of treating epilepsy also has problems in such countries. Unemployment among the healthy population, the traditional social underexpectations from sick people, and the impact of joint families all need to be taken into consideration. Direct conversion of local currency to equivalent US dollars would also be misleading as the purchasing power and monetary value of local currency may not be adequately reflected in it. Interaction with anti-cysticercal drugs, anti malarial and anti tubercular drugs that are frequently prescribed for people residing in tropical countries add another dimension to this problem [27]. A recent study from Latin America has highlighted the need for detailed studies on economic aspects of epilepsy in developing countries [28]. Chandra has drawn attention to some of the difficulties in estimating the cost of epilepsy in his study from Indonesia [29]. COST OF EPILEPSY CARE IN INDIA There is no published report on cost of epilepsy from India. In a previous study, we had examined the various services that are utilized in the care for epilepsy in Kerala State [30]. This study, carried out at a tertiary referral center for epilepsy, indicated that primary care services are underutilized by people with epilepsy. The mean delay in diagnosis of the condition is about nine months. A study from another tertiary referral center for epilepsy in North India has suggested that the cost of epilepsy care can be reduced and the quality of care improved by proper clinical evaluation and education of general physicians.[31] Another recent study had shown that the frequency of polytherapy with its associated higher cost can be reduced by intervention from a tertiary referral center [32]. A multicenter study involving one center each from eight states of India was carried out recently [33]. This is the first large scale study that has addressed the medical service utilization by patients with epilepsy. It had also examined some of the direct cost of epilepsy care in India. Patients included all age groups (mean age 23 years). Half of them had localization related epilepsy. The mean delay in diagnosis of the condition was 1.5 ± 4 years. The average number of hospital visits was three per year (range 1–30). The median of hospitalization because of epilepsy was one per year (range 1–18). About six percent of them were never on any AED. Polytherapy was reduced from 48% to 22% of patients after referral to an advanced epilepsy center. Nearly three-quarters of them (70.2%) have had at least one EEG, one-third (36.1%) had one or more CT scan, and only 8.5% of them had one MRI scan. The direct cost of treatment was over Rs. 5000/- (Table 4).

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World TABLE 4 Some of the Direct Costs of Treatment of Epilepsy in India per year [33]. Particulars Rs. Outpatient service 310 Investigations 1,560 AEDs 1,050 Hospitalizations 1,830 Travel 320 Total 5,070 The mean loss of workdays was about 58 days. The indirect cost related to loss of work may be to the tune of Rs. 6000/-. The out-of-pocket expenditure for anterior temporal lobectomy for intractable temporal lobe epilepsy in Kerala is approximately Rs. 46700/-. These studies have brought out some interesting aspects of pharmaco-economics and selection of cases. Newer drugs and more expensive AEDs like lamotrigine, if administered without any selection criteria, would increase the cost of treatment many-fold over treatment with conventional drugs. However, these drugs may have a clear economic advantage in the case of intractable epilepsy. Similarly, the savings in terms of fewer hospital visits or admission, fewer adverse drug reactions that need intervention and better quality of life may overcome the higher acquisition cost of some of the newer drugs or surgical treatment. However, the cost of epilepsy care from the societal perspective would increase many-fold if the same treatment and investigations are administered to all patients. Economic evaluation of epilepsy care is a relatively newer branch. Scientists from the field of clinical epileptology, health economics and health administrators need to work together to appraise the subject satisfactorily. Further, economic evaluation of treatment of epilepsy and its consequences in our settings would enable the physicians to improve evidence-based practice as we enter the next millenium. REFERENCES 1. Chadwick D.: Do new antiepileptic drugs justify their expense? Arch Neurol 1998; 55: 1140–1142. 2. Hachinski V.: New antiepileptic drugs: The cost of innovation. Arch Neurol 1998; 55: 1142. 3. Beran RG, Pachlatko C : Final report of the ILAE commission on economic aspects of epilepsy, 1994–1997. Epilepsia 1997; 38: 1359–1362.

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World 4. Banks GK, Regan KJ, Beran RG: The prevalence and direct costs of epilepsy in Australia. In: Beran RG, Pachlatko C (eds.) Cost of Epilepsy: Proceedings of the 20th International Epilepsy Congress, Ciba Geigy Verlag, Baden, Germany 1995; 39–48. 5. Beran RG, Banks GK: Indirect costs of epilepsy in Australia. In Beran RG, Pachlatko C (eds.) Cost of Epilepsy: Proceedings of the 20th International Epilepsy Congress, Ciba Geigy Verlag Baden, Germany 1995; 49–54. 6. Gessner U, Sagmeister M, Horisberger B: The cost of epilepsy in Switzerland. Int J Health Sci 1993; 4: 121–128. 7. Cockrell OC, Hart YM, Sanders JWAS et al.: The cost of epilepsy in United Kingdom: An estimation based on the results of two population-based-studies. Epilepsy Res 1994; 18: 249–260. 8. Cockerell OC: Pharmacoeconomic considerations in the drug treatment of epilepsy CNS Drugs 1996; 6: 450–461. 9. Begley CE, Annegers JF, Lairson DR et al.: Cost of epilepsy in the United States: A model based on incidence and prognosis. Epilepsia 1994; 35: 1230–1243. 10. Commission for the control of epilepsy and its consequences. Economic cost of epilepsy. In: Plan for nationwide action on epilepsy, Vol. IV, DREW Publication No. 78-279. NIH, Washington, D.C. 1978; 117–118. 11. Cockrell OC, Hart YM, Sanders JWAS et al.: The cost of epilepsy in United Kingdom: an estimation based on the results of two population-based studies. Epilepsy Res 1994; 18: 249–260. 12. Jacoby A, Buck D, Baker G et al.: Uptake and costs of care for epilepsy: findings from a UK regional study. Epilepsia 1998; 39: 776–786. 13. Gessner U, Sagmeister M, Horisberger B: The cost of epilepsy in Switzerland. Int J Health Sci 1993; 4: 121–128. 14. Begley CE, Annegers JF, Lairson DR et al.: Methodological issues in estimating the cost of epilepsy. Epilepsy Res 1999; 33: 39-55. 15. Luce BR, Elixhauser A: Standards for the socioeconomic evaluation of health care services Springer Verlag, New York, 1990. 16. Cockerell OC: Pharmacoeconomic considerations in the drug treatment of epilepsy CNS Drugs 1996; 6: 450–461. 17. Brodie MJ, Richens A, Yuen AW: Double blind comparison of lamotrigine and carbamazepine in newly diagnosed epilepsy. UK Lamotrigine/Carbamazepine Trial Group. Lancet 1995; 345: 476–479. 18. Reunanen M, Dam M, Yen AW: A randomized open multicentre comparative trial of lamotrigine and carbamazaepine as monotherapy in patients with newly diagnosed or recurrent epilepsy. Epilepsy Res 1996; 23: 149–155. 19. Chadwick D, Roi L, Kennedy KM : Vigabatrin (Sabril) as a first line monotherapy in newly diagnosed epilepsy. A double blind comparison with carbamazepine. (Abstract) Epilepsia 1996; 37: 6. 20. Kalviainen R, Aikia M, Saukkonen AM et al.: Vigabatrin vs carbamazepine monotherapy in patients with newly diagnosed epilepsy. Arch Neurol 1995; 52: 989–996. 21. Shakespeare A, Simeon G: Economic analysis of epilepsy treatment: A cost minimisation analysis comparing carbamazepine and lamotrigine in UK. Seizure 1998; 7: 119–125. 22. Markowitz MA, Mauskopf JA, Halpern MT: Cost effectiveness model of adjunctive lamotrigine for the treatment of epilepsy. Neurology 1998; 51: 1026–1033.

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Neurological, Psychiatric, and Developmental Disorders: Meeting the Challenge in the Developing World 23. Messori A, Trippoli S, Becagli P et al : Adjunctive lamotrigine therapy in patients with refractory seizures: A lifetime cost-utility analysis. Eur J Clin Pharmacol 1998; 53: 421–427. 24. Malmgren K, Hedstrom A, Granquist R et al : Cost analysis of epilepsy surgery and of vigabatrin treatment in patients with refractory partial epilepsy. Epilepsy Res 1996; 25: 199–207. 25. Ramsay RE, Wilder BJ : Parenteral fosphenytoin: Efficacy and economic considerations. Neurologist 1998; 4: S30–S34. 26. Marchetti A, Magar R, Fischer J et al.: Pharmacoeconomic evaluation of intravenous fosphenytoin (Cerebyx) versus phenytoin (Dilantin) in hospital emergency departments. Clin Ther 1996; 18: 953–966. 27. Trevathan E, Medina MT: Antiepileptic drugs in developing countries. Lancet 1998; 351: 1210–1211. 28. De-Bittencourt PR : The social and economic reality vis-à-vis the availability and use of medical care for eplieptic patients in Latin America. Epilepsies 1998; 10: 135–142. 29. Chandra B : Economic aspects of epilepsy in Indonesia. In Beran RG, Pachlatko CH. Cost of Epilepsy. Ciba Geigy Verlag, Baden. 1995; 75–82. 30. Sanjeev V. Thomas, Ramankutty V, Aley Alexander: Management and Referral Patterns of Epilepsy in India. Seizure 1996; 5: 303–306. 31. Sawhney IMS, Lekhra OP, Shashi JS et al : Evaluation of epilepsy management in a developing country: A prospective study of 407 patients. Acta Neurol Scand 1996; 94: 19–23. 32. Radhakrishnan K, Pradeep, Nayak : Profile of antiepileptic pharmacotherapy in a tertiary referral center in South India: A pharmacoepidemiological and pharmaco-economic study Epilepsia 1999; 40: 179–185. 33. Thomas SV, Abraham PA, Alexander M et al : Utilization of services for epilepsy and its economic burden in India: A multicenter study. Epilepsia 1999; 40: (Suppl 2) 198.

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