Menu ENN Search

Pros and cons of cost-effectiveness thresholds

Research snapshot1

Cost-effectiveness analysis is used to compare the costs and outcomes of alternative policy options. Each resulting cost-effectiveness ratio represents the magnitude of additional health gained per additional unit of resources spent. Many countries use cost-effectiveness analyses and cost-effectiveness ratios to guide their decisions on resource allocation and to compare the efficiencies of alternative health interventions. In 2001, the World Health Organisation (WHO) Commission on Macroeconomics in Health suggested cost-effectiveness thresholds based on multiples of a country’s per-capita gross domestic product (GDP). The Commission suggested that it is reasonable to spend the estimated value of a year of healthy life, per capita, on an intervention that led to a mean of at least one additional year of healthy life per capita. In some contexts, in choosing which health interventions to fund and which not to fund, this and other more recent thresholds based on GDP have been used as decision rules.

However, experience with the use of such GDP-based thresholds in decision-making processes at country level shows them to lack country specificity. In addition, economic models that are often used to generate cost-effectiveness ratios can be inaccurate. This can lead to wrong decisions being made on how to spend healthcare resources. Cost-effectiveness information should be used alongside other considerations, such as budget impact and feasibility, in a transparent decision-making process, rather than in isolation based on a single threshold value. Although cost-effectiveness ratios are undoubtedly informative in assessing value for money, countries should be encouraged to develop a context-specific process for decision-making that is supported by legislation, has stakeholder buy-in (for example, the involvement of civil society organisations and patient groups) and is transparent, consistent and fair.


Footnotes

1Bertram MY, Lauer JA, De Joncheere KD, Edejer T, Hutubessy R, Kieny MP and Hill SR. (2016) Cost-effectiveness thresholds: pros and cons. Bull World Health Organ 2016;94:925–930. http://dx.doi.org/10.2471/BLT.15.164418926


 

More like this

FEX: Costs, cost-effectiveness, and financial sustainability of CMAM in Northern Nigeria

By Sasha Frankel, Mark Roland and Marty Makinen Sasha Frankel worked for the Results for Development Institute as a Senior Programme Associate focusing on health financing and...

FEX: From the editor

Rabia, seven months, with her mother at an OTP Aim and structure of this special issue This Field Exchange special issue on ‘Lessons for the scale up of Community-based...

Resource: Cost Effectiveness of Community-Based Management of Acute Malnutrition (CMAM) in Malawi

Reference: Health and Policy Planning, 2011: 1-11. Published March 4th 2011. This study assessed the cost-effectiveness of community-based management of acute malnutrition...

FEX: Cost effectiveness of community-based and inpatient therapeutic feeding programmes to treat SAM in Ethiopia

Health Extension Worker testing the appetite of a malnourished child, Menkere health post, Tigray region By Asayehegn Tekeste, Kebede Deribe, Dr Mekitie Wondafrash and Dr...

FEX: Impact evaluation of cash, food vouchers, and food transfers among Colombian refugees and poor Ecuadorians in urban Ecuador

Summary of evaluation1 Evaluation headlines: Levels of food insecurity and associated anaemia are high amongst Columbian refugees and poor Ecuadorians in the northern...

en-net: Organisation of an integrated CMAM programme

We are about to integrate the OTP part of a CMAM program in public health centres, and there will be no nutrition-dedicated staff : the only nurse in charge will do...

FEX: Promoting community based management of severe acute malnutrition as a child survival intervention

By Andre Briend Andre is Adjunct Professor at the Department for International Health, University of Tampere School of Medicine, FIN-33014, Tampere, Finland and Department of...

FEX: Cash, food or vouchers? Evidence from a randomised experiment in northern Ecuador

Summary of research1 Location: Northern Ecuador What we know: There is ongoing debate on the most effective form of food assistance: cash, food vouchers or food...

FEX: Cost effectiveness of CMAM in Malawi

Government of Malawi guidelines Summary of published research1 A recent study assessed the cost-effectiveness of community-based management of acute malnutrition (CMAM) to...

FEX: Thin on the Ground

By Louisa Gisling, SC UK Questioning the evidence behind World Bank-funded community nutrition projects in Bangladesh, Ethiopia and Uganda, key findings of the Save the...

FEX: Comparing cash and food transfers: findings from a pilot project in Sri Lanka

By Lili Mohiddin (Oxfam GB), Manohar Sharma (IFPRI), Anette Haller (WFP Rome) Lili Mohiddin, Manohar Sharma & Anette Haller Lili Mohiddin has been an Emergency Food Security...

FEX: Designing an inter-agency multipurpose cash transfer programme in Lebanon

By Isabelle Pelly Isabelle Pelly was Save the Children's Food Security & Livelihoods Adviser in Lebanon until September 2014, and co-chair of the Lebanon Cash Working Group....

FEX: Cash supported income generation activities in Southern Sudan

By Emily Sloane and Silke Pietzsch Emily Sloane was a Food Security and Livelihoods Trainee at ACF-USA supporting the evaluation of the project's income generating activities...

FEX: Community case management of severe acute malnutrition in southern Bangladesh

Summary of study1 Bangladesh has the fourth-highest number of children (approximately 600,000 at any one time) suffering from severe acute malnutrition (SAM) in the world....

FEX: Community Managed Targeting – Tanzania

Post-script by Jeremy Shoham, ENN DFID commissioned an evaluation of the community-managed targeting programme in Singida and Dodoma regions of Central Tanzania in May 1999....

FEX: Do poverty, poor health and nutrition increase the risk of armed conflict onset?

Summary of published research1 A recent study analysed the effects of improving economic, food security and health status on the risk of armed conflict onset, focusing on the...

FEX: Nutrition incentives in dairy contract faming in northern Senegal

Summary of research1 Location: Senegal What we know: Seasonality plays an important role in milk production in Senegal; milk production is the cornerstone of nutrition,...

FEX: Distributing food (Special Supplement 1)

Food may be distributed in many different ways but the method of distribution will, to a large extent, depend on the eligible groups and the method for identifying them....

FEX: Ready-to-use therapeutic food and the WHO list of essential medicines

By Aurélie du Châtelet, Anne-Dominique Israel, Elise Rodriguez, Wisdom Dube, Laetitia Battisti, Magali Garcia, Coline Morin and Natalie Sessions. Aurélie...

FEX: Understanding access to nutritious food by poor urban pregnant women and lactating mothers and their children in Kisumu, Kenya

By Albertien van der Veen, Rik Delnoye and Femke van der Lee Albertien van der Veen is an experienced public health nutritionist/epidemiologist and team-leader of the urban...

Close

Reference this page

Pros and cons of cost-effectiveness thresholds. Field Exchange 55, July 2017. p20. www.ennonline.net/fex/55/prosandcons