Strengthening Cost-Effectiveness Analysis for Public Health Policy

Abstract

Although the U.S. spends more on medical care than any country in the world, Americans live shorter lives than the citizens of other high-income countries. Many important opportunities to improve this record lie outside the health sector and involve improving the conditions in which Americans live and work: safe design and maintenance of roads, bridges, train tracks, and airports; control of environmental pollutants; occupational safety; healthy buildings; a safe and healthy food supply; safe manufacture of consumer products; a healthy social environment; and others. Faced with the overwhelming array of possibilities, U.S. decision makers need help identifying those that can contribute the most to health. Cost-effectiveness analysis is designed to serve that purpose, but has mainly been used to assess interventions within the health sector. This paper briefly reviews the objective of cost-effectiveness analysis and its methodologic evolution and discusses the issues that arise when it is used to evaluate interventions that fall outside the health sector under three headings: structuring the analysis, quantifying/measuring benefits and costs, and valuing benefits and costs.