Cost savings

The Health Intervention Impact Calculator estimates potential cost savings engendered by specified health intervention by propagating reductions in disease incidence, morbidity, and case-fatality rates to prevailing estimates of disease-specific health expenditure provided in the Australian Institute of Health and Welfare (AIHW) report: Disease expenditure in Australia 2018-19.

Methodology

Each year within the simulation model, for a selected target_disease, the population is divided into four buckets by disease phase:

1. Healthy: those who do not have the disease
2. Incident phase: those who have contracted the disease in the current year
3. Medial phase: those who have contracted the disease in a prior year
4. Death phase: those who will die from the disease in the current year

Each disease phase is associated with an estimation of health-system expenditure, which varies between diseases to reflect differences in the rate at which treatments generate health expenditure. Health expenditure estimates also vary by sex and age.

Each year within the simulation model, individuals move between disease phases depending on incidence and fatality rates for the given target_disease. Total cost savings are estimated as the difference in total health-system expenditure between the business as usual (BAU) scenario, and the intervention scenario. Total health-system expenditure is estimated as the sum of phase-specific health-system expenditure weighted by the proportions of the target population in each of the four disease phases.