Economic Appraisal of Public Health Interventions

This paper considers problems associated with the economic appraisal of health interventions, and
recommends some
solutions for overcoming these problems. The authors identify several issues
that make economic appraisal of public health interventions particularly
difficult to evaluate in economic terms:

• The baseline for analysis is not very clear, because the
  determinants of existing inequalities in health in the population have
  not been adequately studied.
• Most evaluation is on the effects of downstream interventions, but those are "mediated by broader social
  structural factors." It is, however, difficult to measure upstream interventions alone, as they may provide necessary but
  not sufficient conditions for change.
• Behaviour changes are difficult to model, because behaviour is "more than the operation of a simple economic
  calculus of the mind".
• It is difficult to separate out cause and effect in public health
  interventions, because the multi-faceted approach
  of many interventions makes the causal factors difficult to clearly identify.
• Public health interventions have relatively little pre-trial
  development, and therefore may change during implementation.
• Results of public health programmes often take years to achieve their
  goals, and it is difficult to decide when the intervention is completed.
• The results of public health interventions are complex, and may not be easily measured with standard cost per quality-adjusted
  life year.
• Evaluators must decide whether to measure results at individual or population level.

The authors provide descriptions of a number of analysis methods that economists have developed to
evaluate interventions or programmes of varying complexity:

• cost-offset study
• cost minimisation analysis
• cost effectiveness analysis
• cost-utility analysis
• cost-benefit analysis
• discrete choice experiments
• cost consequence analysis

After analysing the benefits and problems associated with each method, the
authors conclude that economic evaluations should be performed in public health programme evaluations, but
such appraisals should allow enough flexibility to account for the complexities of such programmes. They argue that the
cost-benefit analysis (CBA) is the ideal method for evaluation at the societal level, because it "would integrate outcomes into a single measure, allowing comparisons between interventions." But they recommend cost-consequence analysis (CCA) because it is simpler to apply and can be used to address "interventions with more than one outcome." The authors
provide six examples of how different forms of economic appraisals are being
applied in real-world situations.

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