Using cost-effectiveness/cost-benefit analysis to allocate health resources: a level playing field for prevention?

INTRODUCTION

Prevention is being promoted as a means to improve health status and to save health care costs. Economic evaluations of prevention (i.e., cost-effectiveness and cost-benefit analyses) indicate that some prevention activities, like many treatments, do not save money, although many are relatively cost-effective. It has been suggested, however, that prevention is held to a higher standard than treatment because prevention programs are expected to demonstrate cost savings, and that the methods of economic evaluation understate the cost-effectiveness of prevention. Although the converse assertion is less commonly made, economic evaluations may also overstate the cost-effectiveness of prevention. The purpose of this article is to examine how the methods of economic evaluation may systematically understate, or overstate, the cost-effectiveness (or net benefits) of prevention.

METHODS

We examine three key methods: (1) how future costs and benefits are valued ("discounting"), (2) how costs and benefits to people beyond those who are the users of prevention are valued ("externalities"), and (3) how nonmonetary costs and benefits to individuals are valued ("intangibles").

RESULTS

We discuss several recommendations for each key method, and we use a hypothetical example of the cost-effectiveness of a vaccine to prevent human immunodeficiency virus (HIV) to illustrate our points.

CONCLUSIONS

We conclude that the methods of economic evaluation may both understate and overstate the cost-effectiveness of prevention.