Country-level cost-effectiveness thresholds: initial estimates and the need for further research
Healthcare systems in low- and middle-income countries (LMICs) face considerable population healthcare needs with markedly fewer resources than those in developed countries. The way in which available resources are allocated across competing priorities is crucial in affecting how much health is generated overall, who receives healthcare interventions and who goes without. Cost-effectiveness analysis (CEA) is one tool that can assist policy-makers in resource allocation. The central concern in CEA is whether the health gains offered by an intervention are large enough relative to its costs to warrant adoption. This requires some notion of the value that must be realized by an intervention, which is most frequently represented using a cost-effectiveness threshold (CET). CETs should be based on estimates of the forgone benefit associated with alternative priorities which consequently cannot be implemented as a result of the commitment of resources to an alternative. For most health care systems these opportunity costs fall predominantly on health as a result of fixed budgets or constraints on health systemsâ€™ abilities to increase expenditures. However, many CEAs to inform decisions in LMICs have used aspirational expressions of value, such as the World Health Organizationâ€™s (WHO) recommended CETs (of 1-3 times GDP per capita in a country) which are not based upon opportunity costs. In contrast, we estimate CETs for a number of countries based upon recent empirical estimates of foregone benefit (from the English NHS) and international income elasticities of the value of health. The resulting CETs are much lower than those previously posited by WHO. There is no intention to provide definitive CETs; rather, the study is intended to provoke further research in this area of crucial policy importance and outlines how more robust estimates of CETs could be generated.
|Date of creation:||Mar 2015|
|Contact details of provider:|| Postal: York Y010 5DD|
Phone: (01904) 321401
Web page: http://www.york.ac.uk/che
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Drummond, Michael F. & Sculpher, Mark J. & Torrance, George W. & O'Brien, Bernie J. & Stoddart, Greg L., 2005. "Methods for the Economic Evaluation of Health Care Programmes," OUP Catalogue, Oxford University Press, edition 3, number 9780198529453.
- Hammitt James K. & Robinson Lisa A, 2011.
"The Income Elasticity of the Value per Statistical Life: Transferring Estimates between High and Low Income Populations,"
Journal of Benefit-Cost Analysis,
De Gruyter, vol. 2(1), pages 1-29, January.
- Hammitt, James K. & Robinson, Lisa A., 2011. "The Income Elasticity of the Value per Statistical Life: Transferring Estimates between High and Low Income Populations," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 2(01), pages 1-29, January.
- Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
- W. Kip Viscusi & Joseph E. Aldy, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," NBER Working Papers 9487, National Bureau of Economic Research, Inc.
- Karl Claxton & Simon Walker & Steven Palmer & Mark Sculpher, 2010. "Appropriate Perspectives for Health Care Decisions," Working Papers 054cherp, Centre for Health Economics, University of York.
- Getzen, Thomas E., 2000. "Health care is an individual necessity and a national luxury: applying multilevel decision models to the analysis of health care expenditures," Journal of Health Economics, Elsevier, vol. 19(2), pages 259-270, March.
- Farasat A. S. Bokhari & Yunwei Gai & Pablo Gottret, 2007. "Government health expenditures and health outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 16(3), pages 257-273.
- Farasat A.S. Bokhari & Yunwei Gai & Pablo Gottret, 2005. "Government Health Expenditures and Health Outcomes," Working Papers wp2005_02_01, Department of Economics, Florida State University, revised May 2006.
- Takeru Shiroiwa & Yoon-Kyoung Sung & Takashi Fukuda & Hui-Chu Lang & Sang-Cheol Bae & Kiichiro Tsutani, 2010. "International survey on willingness-to-pay (WTP) for one additional QALY gained: what is the threshold of cost effectiveness?," Health Economics, John Wiley & Sons, Ltd., vol. 19(4), pages 422-437.
- Linda Ryen & Mikael Svensson, 2015. "The Willingness to Pay for a Quality Adjusted Life Year: A Review of the Empirical Literature," Health Economics, John Wiley & Sons, Ltd., vol. 24(10), pages 1289-1301, October.
- Mansour Farahani & S. V. Subramanian & David Canning, 2010. "Effects of state-level public spending on health on the mortality probability in India," Health Economics, John Wiley & Sons, Ltd., vol. 19(11), pages 1361-1376.
- Mansour Farahani & S. V. Subramanian & David Canning, 2009. "Effects of state-level public spending on health on the mortality probability in India," PGDA Working Papers 5009, Program on the Global Demography of Aging.
- Paul Revill & Simon Walker & Jason Madan & Andrea Ciaranello & Takondwa Mwase & Diana M Gibb & Karl Claxton & Mark J Sculpher, 2014. "Using cost-effectiveness thresholds to determine value for money in low- and middle-income country healthcare systems: Are current international norms fit for purpose?," Working Papers 098cherp, Centre for Health Economics, University of York.
- repec:reg:rpubli:282 is not listed on IDEAS
- Rodrigo Moreno-Serra & Peter C. Smith, 2015. "Broader health coverage is good for the nation's health: evidence from country level panel data," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 178(1), pages 101-124, 01.
- Karl Claxton & Steve Martin & Marta Soares & Nigel Rice & Eldon Spackman & Sebastian Hinde & Nancy Devlin & Peter C Smith & Mark Sculpher, 2013. "Methods for the estimation of the NICE cost effectiveness threshold," Working Papers 081cherp, Centre for Health Economics, University of York. Full references (including those not matched with items on IDEAS)