Economic Evaluation of Public Health Interventions

1
Economic Evaluation ofPublic Health Interventions

• A Primer

2
Economic Evaluation

• Applied analytic methods to identify, measure,
  value, and compare the costs and outcomes of
  alternative interventions.

3
Why Care About Economic Evaluation Methods?

• Resources are scarce, but wants are unlimited
• Every choice has an associated opportunity cost
• Trade-offs must be made
• Objective of economic evaluation is to facilitate
  the use of scarce resources to maximize health
  outcomes
• Complements effectiveness measures gathered
  through monitoring, evaluation, and research

4
Common Economic Evaluation Approaches in Public
Health

• Cost Studies
• Program Cost Analysis
• Cost-of-Disease Analysis
• Cost-Outcome Studies
• Cost-Effectiveness Analysis
• Cost-Utility Analysis
• Cost-Benefit Analysis
• Resource Allocation and Other Studies

5
Cost Analyses

• Program Cost Analysis
• Estimates total costs of running a program
• Labor personnel, training
• Supplies
• Overhead
• Cost-of-Disease Analysis
• Estimates total costs incurred because of a
  disease or condition
• Direct medical costs
• Productivity losses
• Can indicate potential benefits of health
  interventions

6
Cost-Outcome Analyses

• Compares net cost of an intervention to net
  outcomes achieved
• Cost-Effectiveness
• Effectiveness measured in health outcomes
  achieved
• e.g., per HIV infection averted per appropriate
  provision of antenatal services
• Allows comparison of alternative interventions to
  achieve same health outcomes
• Note Cost-Effective ? Cost-Saving

7
Cost-Outcome Analyses (cont.)

• Cost-Utility
• Utility is expressed as the number of life years
  saved adjusted to account for loss of quality or
  for disability (QALYs or DALYs)
• e.g., per QALY gained
• Allows comparison of different health
  interventions
• Provision of ARVs vs. PMTCT
• Provision of ARVs vs. polio vaccination

8
Cost-Outcome Analyses (cont.)

• Cost-Benefit
• All benefits, such as health outcomes and lives
  saved, are expressed in monetary terms
• Allows comparison of disparate programs with a
  wide range of health and non-health outcomes
• VCT programs vs. secondary education
• Business-case for provision of ARVs to workers

9
Use of Economic Evaluation in Setting Health
Policy
10
Building Economic Evaluations

• Sources for Model Inputs
• Ongoing monitoring and evaluation activities
• Special studies
• Published literature
• Dealing with Uncertainty
• Sensitivity analysis
• Monte Carlo simulations

11
Conclusion

• Economic Evaluation can inform policy and
  programming by
• Estimating cost per health outcome achieved
• Identifying which of competing interventions
  maximizes health gains
• Determining efficient budgetary allocations given
  resource constraints
• Providing evidence to key policy-makers
  demonstrating value of particular interventions