Intro
The economic analyses in this volume focus on activities whose main objective is to improve health. Although the chapters vary considerably, all possess, nonetheless, a common core of definitions, assumptions, and methods of analysis. These are drawn primarily from concepts and applications in the Oxford Textbook of Public Health (Jamison 2002), drawing partly on the 1993 World Development Report (World Bank 1993). In this chapter, we summarize and explain the common features and some of the variations of economic analysis and point the reader to examples throughout the book.
First is a general discussion of cost-effectiveness analysis (CEA), which is the principal analytic tool used here. Here we explain what such analysis does and does not provide, how it is related to the concept of burden of disease, and how it can be used, along with other criteria, in setting priorities.
Because CEA is applied to specific interventions, the next section describes the several meanings of that term and the way that interventions are classified and evaluated. It is essential to understand what is being analyzed before considering in detail how the analysis is conducted.
Estimating the effectiveness of an intervention requires specifying the units in which that concept is measured. This action in turn requires choices of several parameter values, including, in the analyses reported here, the discount rate applied to future years; the disability weights that describe the severity of diseases and conditions, corresponding to the health losses that they cause; and the life expectancy at different ages, which determines how many years of healthy life can be saved by averting a death or preventing or treating a long-term health problem. We also consider briefly the nonhealth benefits that may result from a health intervention.
The subsequent section deals with the costs of interventions: first with the question of which costs to include in the analysis, and then with the conversion of costs in national currencies to equivalents in U.S. dollars for international comparisons.
Despite the common assumptions and parameter values, the economic analyses differ from chapter to chapter in how comprehensive and how exact they are, including how they deal with a variety of approximations and how the results vary from place to place or according to differences in the assumptions. This section also contains a brief description of the differences in the quality of the basic evidence and in how widely conclusions are applicable.
Estimates of the cost-effectiveness of interventions often describe what happens at the level of the individual patient or beneficiary. In the next section, we suggest two ways to consider costs and outcomes at the population level, allowing for large differences among countries in the size of population; the incidence or prevalence of a disease, condition, or risk factor; and the amount spent or available to spend on an intervention.
In the final section, we indicate how the type of analysis presented in this volume might be improved and how it can be applied to help set priorities among the large number of interventions to which limited resources can be applied.
