A cost benefit analysis framework for preventive health interventions to aid decision-making in Australian governments Full Text
Cost–benefit analysis (CBA) is a type of economic evaluation where the costs and benefits of a proposed policy action are considered in monetary terms. Australian federal and various state government central agencies (e.g. treasuries and the Department of Premier and Cabinet) recommend the use of CBA to inform significant government actions and mandate the use of CBA for submissions to the Cabinet [1,2,3,4,5,6]. Our results suggest that using different approaches to monetise benefits can lead to divergent conclusions about the value of vaccination.
- All guidance documents emphasize the importance of testing the impact of key assumptions and variables in sensitivity analyses.
- What is not so obvious is that an intervention’s chances of being approved is very much dependent on what other interventions are not being evaluated.
- The equity and distributional impacts should be fully described, and disaggregated impacts across relevant subgroups (by socioeconomic status, cultural background and geographical location) should be quantified where appropriate.
- Our QM approach with a £23,000/QALY WTP is analogous to NICE’s cost-effectiveness reference case, which has a cost-effectiveness threshold of £20,000–£30,000/QALY [9], although our approach is based on individual rather than societal WTP arguments.
The role of Table 5 is to demonstrate the fact that there already exist many dementia interventions that have been evaluated using CBA and found to be socially worthwhile. Many different methods have been employed to put a price on the effect that was found to be the one most relevant by the evaluator of the intervention. Because it is expressed in monetary what is a cost benefit analysis terms, it is then commensurate with the costs, which are almost always measured in monetary terms (For an exception, where costs and benefits are both expressed in non-monetary terms ((time is the numeraire), see the CBA of the 55-mph speed limit in [6]). It is therefore now possible to compare directly the benefits and costs to see which is greater.
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This process involves the submission of a business case (which includes a CBA) to the NSW Treasury, who then informs the Cabinet Committee and the Cabinet Standing Committee on Expenditure Review [42]. This committee is chaired by the NSW Treasurer and consists of senior members from the Department of Premier and Cabinet and NSW Treasury [43]. The use of a CBA framework for policy appraisal is likely to be particularly useful for Cabinet decision-making, for several reasons. Firstly, CBA is the most common tool for policy appraisal across various sectors, such as transport and the environment [7, 8] and given that the Cabinet consists of government ministers from diverse sectors, an evaluation framework that is familiar to Cabinet members may assist decision-making. Secondly, when allocating resources across sectors, trade-offs need to be made, and hence appraisals across sectors need to be consistent and comparable [9, 10].
How can doctors decide not to treat a patient with severe injuries predicting that the patient will probably not survive? I’m no expert on this topic, but I’m certain that this is not why these people went to medical school. This involves finding out how much individuals would be willing to pay for a health or non-health benefit. For https://www.bookstime.com/ example, individuals can be presented with a hypothetical scenario, such as the risk of cardiovascular disease, and asked how much they would pay for a digital product that monitors cholesterol levels to reduce that risk. However, you may not need to conduct your own willingness-to-pay study if relevant estimates already exist.
Lost production: a new production-based approach
However, if a variation of a listed intervention is the new intervention being evaluated, then the new intervention is mutually exclusive, as both the listed and the new intervention cannot both take place at the same time. In this case, the cost-effectiveness of the particular listed intervention becomes the benchmark for deciding the fate of the new intervention. Thus, for example, consider instead of purchasing five sets of hearing aids over a lifetime, which is what the hearing aid intervention listed in Table 1 involved, one is now evaluating instead purchasing six hearing aids over one’s lifetime. Dividing these cost estimates by the outcome effects produces the cost-effectiveness ratios for each intervention. On the basis of this ranking of the five interventions, education would be the most cost-effective, and avoiding living in a nursing home would be judged the least-cost-effective. In summary, all these types of evaluations share similarities in identifying costs and subsequent money-related outcomes; they differ in the nature of outcomes and consequences being examined.
The conventional production-based approaches account for productivity loss from individuals with the paid jobs only and thus disregard homemakers who comprise a substantial proportion of cervical cancer cases (mean age 45, interquartile range 27–59) [38]. As indicated in one of WHO’s guidelines on CBA, the economic value of unpaid work, such as homemaking and caring, is undervalued using this approach [39]. As such, we also considered modified versions of the conventional production-based methods (HC-M and FC-M) in which paid labour and homemakers within the same age group were assumed to have the same economic productivity. The assumption is in line with the UK’s recent effort in recognising the value of unpaid work at home and its contribution to the economy, by providing it with a monetary value equivalent to the average wages of those who are paid to do those tasks [40]. The proportion of homemakers in each age group was approximated based on the Office for National Statistics employment statistics [13]. When the effect for the CEA is not a QALY, as when the outcome was considered narrowly to be just the reduction in dementia symptoms, CEA would not be able to be compared with any other healthcare intervention that was not related to dementia.
How should equity, distributional impacts and other considerations be incorporated into the Preventive Health CBA Framework?
Even when dementia symptoms cannot be reduced directly, the consequences of a person’s dementia symptoms can be mitigated, especially for the benefit of a dementia person’s caregiver. Since time saved by the caregiver can be given a monetary value using labor market valuations, for example, by using the federal minimum wage rate, the benefits of the TAP were straight-forward to estimate. The occupational therapist’s time spent traveling to the caregiver’s house, and training the dementia patient and caregiver, was estimated to be $942. Subtracting these costs from the benefits made the net-benefits positive at $7933 (See [2], chapter 9).