Cost-effectiveness analysis for sector-wide priority setting in health

Cost-effectiveness analysis (CEA) provides one means by which decision-makers may assess and potentially improve the performance of health systems. The process can help to ensure that resources devoted to health systems are achieving the maximum possible benefit in terms of outcomes that people value. Over the past three decades there has been an exponential growth in the number of economic appraisals performed in health. Following standard textbooks on economic evaluations, most of these CEA studies pursue an incremental approach which requires comparison of the additional costs of an intervention over current practice with additional health benefits. Such an incremental approach, however, is unable to provide policy makers with all necessary information relating to decisions like: "Do the resources currently devoted to health achieve as much as they could?", or "How best to use additional resources if they become available?". This thesis proposes a broader sectoral approach via the application of a generalized CEA framework which also al!ows examination of existing inefficiencies in the health system- that is, the wide variations in CE ratios observed among interventions that are currently in use suggest there is considerable room to improve efficiency by moving from inefficient interventions currently in use to efficient interventions that are under-utilised. In developing countries in particular reallocation of scarce financial resources is most important.

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