The Broader Opportunity Costs in the Broader Cost-Effectiveness Analysis Framework

Laura Vallejo-Torres ()
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Laura Vallejo-Torres: Universidad de Las Palmas de Gran Canaria

Applied Health Economics and Health Policy, 2023, vol. 21, issue 3, No 3, 373-384

Abstract: Abstract Background The traditional cost-effectiveness analysis framework usually takes a healthcare system perspective, where the aim is to maximise population health from a fixed budget allocated to healthcare. Extensions to this framework have been suggested, including: (i) incorporating impacts that fall outside the healthcare sector; (ii) accounting for outcomes beyond health; and (iii) assessing equity considerations. Several alternatives have been proposed that serve these purposes, for example, the extended “impact inventory”, the “beyond-the-QALY” approach and the distributional cost-effectiveness analysis. Objective This paper aims to develop a comprehensive framework that incorporates into the cost-effectiveness analysis framework some of its most advocated extensions and provides a means of arriving at a unidimensional cost-effectiveness analysis result measure. Methods Building on previous work, I proposed a framework that explicitly incorporates the full extent of the opportunity costs that arise when new dimensions and distributional concerns are included in cost-effectiveness analyses. A hypothetical example is provided as a way of illustration. Results Operationalising the proposed framework requires system-wide representative values and/or robust estimates concerning: (i) selecting dimensions; (ii) measuring opportunity costs associated with each dimension; (iii) quantifying equity weights and percentages of beneficiaries and losers meeting equity considerations; and (iv) attaching monetary values to dimensions measured using a non-monetary metric. Conclusions Extending the cost-effectiveness analysis framework entails extending the measurement of the opportunity costs of funding decisions. This implies populating an ambitious puzzle that in some cases poses fundamental conceptual and empirical questions. Potential routes of further research that might facilitate such undertaking are proposed.

Date: 2023
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DOI: 10.1007/s40258-023-00801-z

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