Benefit-Cost Analysis in Disease Control Priorities, Third Edition

Authors: Angela Chang, Susan Horton, Dean Jamison

Citation:

Abstract:

The benefit-cost analysis (BCA) findings from the entire series of Disease Control Priorities, Third Edition (DCP3) are summarized in this chapter. The authors also examine (1) the existing methods for valuing life, (2) possible improvements, and (3) recommendations for future research priorities. BCA, long used for analyzing public policy, tends to raise controversies because it assigns monetary values to outcomes (such as changes in annual mortality probabilities). BCA and cost-effectiveness analysis (CEA) in the health sector represent two distinct cultures. The metric for value in CEA can accommodate real health outcomes, such as child deaths averted, and aggregate measures, such as quality-adjusted life years (QALYs), as well as more granular measures, such as malaria cases correctly treated. BCA involves an additional step of assigning monetary value to health benefits, which requires analysts to explicitly assume a certain relationship between the proportional change in this monetary value and the differences in countries’ income levels, namely, income elasticity, a factor often not considered in CEA. The choice of applying CEA or BCA to evaluate economic benefits depends on the type of outcomes produced by the health interventions.