Abstract
BackgroundIt is an unresolved issue as to whether cost-benefit analysis (CBA) or cost-effectiveness analysis (CEA) is the preferable analytical toolkit for use in health technology assessment (HTA). The distinction between the two and an expressed preference for CEA go back at least to 1980 in the USA and, most recently, a Harvard-based group has been reappraising the case for CBA. ObjectivesThis article seeks to answer the question: would the use of cost-benefit analysis rather than the more usual cost-effectiveness analysis be an improvement, specifically in appraising health and health-related investments in low and middle-income countries (LMICs) as they transition to Universal Health Coverage?. Methods/ResultsA selective literature review charts the welfare economics (welfarism and extra-welfarism) roots of both approaches. The principal distinguishing feature of the two is the monetary valuation of health outcomes under CBA compared with the use of health constructs such as the Quality-Adjusted Life-Year (QALY) or Disability-Adjusted Life-Year (DALY) under CEA. The former enables direct comparison of the outcomes of health investments with the monetized outcomes of other investments, while the CEA approach facilitates direct comparisons with other health investments. Seven challenges in using CBA in developing countries arise, including ethical issues in outcome valuation, practical challenges in the acquisition of data, intrinsic bias in data on values, and some of the practical issues of implementation for either CBA or CEA. ConclusionsWe conclude with a list of nine issues that both CBA and CEA need to settle if they are to be useful in LMICs. For the immediate future we judge CBA to be the less practicable.
Highlights
It is an unresolved issue as to whether cost-benefit analysis (CBA) or cost-effectiveness analysis (CEA) is the preferable analytical toolkit for use in health technology assessment (HTA)
The issue with which this article concerns may be put quite : Would the use of cost-benefit analysis (CBA) rather than cost-effectiveness analysis (CEA) be an improvement in appraising health and health-related investments in low- and middle-income countries (LMICs) in the context of their journey toward universal health coverage (UHC)? If the answer is “yes,” it would seem desirable to seek an international consensus on the appropriate methods to be used through the development of a best practice guide as well as a set of criteria for deciding when CBA would serve policymakers’ needs better than CEA
We conclude that for a guide to best practice for CBA to be useful, more empirical evidence is needed of whether and how policymakers use CBA to inform resource allocation decisions, followed by a process that proactively involves low and middle-income countries (LMICs) budget holders in its development
Summary
If the answer is “yes,” it would seem desirable to seek an international consensus on the appropriate methods to be used through the development of a best practice guide as well as a set of criteria for deciding when CBA would serve policymakers’ needs better than CEA. We discuss the advantages and weaknesses of the CBA approach and propose that for policymakers interested in successfully attaining and sustaining UHC, CEA may be a more appropriate approach to economic analysis to the extent it is better suited to address the UHC objectives of maximizing health and financial protection. We conclude that for a guide to best practice for CBA to be useful, more empirical evidence is needed of whether and how policymakers use CBA to inform resource allocation decisions, followed by a process that proactively involves LMIC budget holders in its development. We start with a review of best practice guides in the field of health economics
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