Priority setting in practice: what is the best way to compare costs and benefits?

Edward C. F. Wilson, Stuart J. Peacock and Danny Ruta

Health Economics, 2009, vol. 18, issue 4, 467-478

Abstract: Prioritising candidates for health‐care expenditure using cost per Quality‐Adjusted Life Year (QALY) is a helpful but insufficient means of ranking alternative uses for scarce health‐care funds at the local level. This is because QALYs do not by themselves capture all criteria decision makers need to take into account. Other criteria such as reducing inequalities, meeting national and local priorities and public acceptability also feature in the decision maker's utility function. Programme budgeting and marginal analysis (PBMA) is an established framework for systematic priority setting in which a ‘weighted benefit score’ for each option is calculated based on all relevant decision‐making criteria. Ranking options as a ratio of cost to benefit is desirable and necessary to ensure efficiency. In this paper we review a number of approaches to scoring costs and benefits of options in a PBMA context. Several approaches rank by benefit score alone, rather than efficiency (cost per unit of benefit). Of those that do rank by efficiency, we discuss the benefits and drawbacks. The optimal approach is far from clear, with each technique having its own strengths and weaknesses. A deliberative approach using summaries of costs and benefits of options as a basis for discussion may be preferable. Copyright © 2008 John Wiley & Sons, Ltd.

Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:wly:hlthec:v:18:y:2009:i:4:p:467-478

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