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With the current global burden of health problems, proper allocation of limited resources is essential. A challenge facing public health professionals is determining how to successfully execute health interventions to positively influence health for the largest group of people with these limited resources. To aid the decision-making of resource allocation, analyses on the cost effectiveness of potential interventions are performed. Although this process has been used in the assistance of various medication distributions, cost effective analysis is not without error. It faces an ethical dilemma that raises questions about the fairness of resource allocation resulting from such an analysis.
This paper provides an overview of cost-effectiveness analysis and explores instances where it has been used in public health. It then examines the benefits and the challenges that stem from the application thereof.
How cost effectiveness is determined
Cost effectiveness is a comparison of the overall cost or resource allocation of a health intervention versus the cumulative health benefits expected from it.(2) In cost effectiveness analysis (CEA), the primary method currently used to conduct this process, health benefits are determined by using two types of measurements, QALYs and DALYs. The QALY (quality adjusted life years) measure is a qualitative method of determining how many additional years would be added on to a person’s life as a result of a given intervention. It not only takes into account the quantity of life, but also the quality of life as a result of the intervention. Therefore, it is a calculation encompassing life expectancy and the quality of the remainder of life.(3) To account for the number of QALYs, the duration of treatment would be multiplied by the health quality of the life value assigned.(4) The quality of life value is a numerical rating ranging from zero to one, zero representing the worst health possible and one being the best. Health quality includes various factors such as pain level, mobility and mood.(5) There is no age distinction with QALYs, the QALY of a three year-old, a forty year-old and a ninety year-old all have the same value.
Conversely, the DALY (disability adjusted life years) measure is the difference between the healthy years due to the intervention and the years lost due to ill health, disability or early death.(6) In effect, it combines mortality and morbidity due to poor health or disability. DALYs are calculated by adding the years of life lost and the years of life lived with a disability. To determine the impact of an intervention on the DALYs of a population, researchers would separately calculate DALYs with an intervention and without the intervention and then compare the results. The variables included when calculating both years of life loss and years of life lived with disability are life expectancy, age, future time and disability. Usually the life expectancy referenced in the calculation is the standard expected years of life lost (SEYELL).(7) For greater accuracy in CEA, it is recommended that instead of SEYELL, the local life expectancy is used, granted mortality is stable.(8) In the interventions referenced in this paper, the health benefits were measured primarily by the DALYs averted as a result of the intervention.
Costs stemming from health interventions are measured fiscally. They are reported in international dollars ($Int), which compensates for the difference in relative price and the purchasing power of respective countries.(9) Ultimately, this enables equal comparison to be facilitated across regions. For example, $Int 1 would buy the same amount of healthcare resources in Sub-Saharan Africa (SSA) as it would in the United States. When tabulating costs, itemisation of patient, programme and training costs of the programme are taken into account.(10) In addition, one must take into account the yearly cost of delivering the intervention to the affected population and the mean cost of the one DALY obtained through the intervention. Therefore, an essential variable needed to determine intervention effectiveness is found by analysing the total cost of DALYs due to the implemented programme.
The actual calculation used in cost analysis is dependent on the implementer but overall it follows a standardised formula. Typically, a cost effectiveness ratio for an intervention is calculated by dividing the total cost by the total number of DALYs averted or QALYs gained by the intervention. A standardised cost effectiveness ratio is calculated for each potential intervention for a disease area. The most helpful and economical intervention is then isolated and the incremental cost effectiveness ratio (ICER) is found.(11) The ICER is defined as the change in cost of an intervention divided by the incremental change in programme effectiveness.(12) The ICER is important because it indicates the economic attractiveness of an intervention – the lower the ICER the more economically feasible the intervention.(13) In the situation where additional resources are available, the ICER would be referenced and the intervention with the lowest cost per DALY averted would be selected to be administered to the population.
To ascertain that the financial values calculated for an intervention are actually cost effective, the World Health Organization (WHO) created a standardised tool in 1998 called the WHO CHOICE, CHOoosing Interventions that are Cost Effective (CHOICE). CHOICE equips public health professionals with overall, generalisable results from their interventions, which can be compared across varying settings. This is done by analysing current and new interventions and comparing them to a controlled situation, where no intervention was performed. Using this method, the WHO wanted to standardise CEA processes applied to all health interventions worldwide. As a result of eliminating issues such as the different starting points for analysis, the WHO has aided the comparison of interventions across different settings.(14) The creation of CHOICE has also developed country contextualisation tools needed in the assessment of intervention costs and impacts for each region. The tool encompasses 14 epidemiological sub regions, presenting the costs of different health interventions, and then places the data in an archive internet accessible for policy makers. This simplifies the process of creating an analysis for specific regions, providing a road map for public health professionals.(15)
According to CHOICE, an intervention is considered to be very cost effective when it has a cost effective ratio of less than the gross domestic product (GDP) per capita, and if the ratio is less than three times the gross domestic product (GDP) per capita, then it is seen as cost effective. With an estimated GDP of US$ 2,000 per capita in SSA, an intervention has a range of less than US$ 2,000 to US$ 6,000 for being cost effective, that is, the cost per DALYs averted should be <US$ 2,000.(16)
Cost effectiveness in practice: COPD and asthma
In the Sub-Saharan region of Africa, public health professionals have performed analyses to determine cost effective interventions for chronic obstructive respiratory disease (COPD) and asthma using the WHO diagnostic tool.
In 2011, COPD was reported by the WHO as the fourth leading cause of death worldwide, causing 3.28 million deaths, and accounting for 5.8% of the total mortality.(17) By 2030, it is projected that COPD will claim the number three spot, nearly doubling in the number of deaths attributed to this condition. COPD is a disease endemic to low and middle-income countries, where 90% of all of the COPD mortality cases are occurring. These increases are associated with consumption and exposure to tobacco products, exposure to indoor and outdoor smoke caused by solid fuel used in cooking and heating and with demographic change.(18) Individuals suffering from COPD have a limited airflow, which sometimes manifests as cough, sputum production, shortness of breath and fatigue.(19) Sometimes misdiagnosed as asthma, COPD and asthma share defining symptoms such as coughing, shortness of breath and wheezing but they remain two separate conditions. Asthma is an affliction found in 300 million individuals globally.(20) Contact with allergens and viral infections increase one’s chances of developing this condition. With treatment, asthma patients will experience normal lung function and will be symptom free between exacerbations; COPD patients however, are plagued by symptoms daily.
Intervention for COPD consisted of preventing and treating the worsening of symptoms by eliminating exposure to smoke by smoking cessation and administering the flu vaccine. The intervention for asthma relies mainly on medical treatment through drugs.(21) The disability weights used in this intervention were 0.17 for mild and 0.53 for severe COPD. For asthma, 0.03 denoted intermittent and mild persistent asthma, 0.23 for moderate persistent asthma and 0.36 for severe persistent asthma.(22)
COPD interventions accounted for the majority of the patient level costs due to drug price. The price for traded goods was based on the International Drug Price Indicator Guide, which provides international competitive prices. Local goods and service prices were taken from cross-country regressions. Referencing clinical practice guidelines, treatment for asthma included bronchodilators, long acting β agonists, corticosteroids and leukotriene receptor agonists to control the progression of the asthmatic condition.(23) Similarly to the treatment for asthma, 76% of costs were used for interventions that consisted of more than one drug (corticosteroids plus long acting β agonists and inhaled corticosteroids plus leukotriene receptor agonists).
Cost effectiveness results were shown as the number of DALYs averted per million population per year of application of the intervention. Cost results are expressed in millions of international dollars per million population per year, equivalent to the cost per capita. The yearly costs of all interventions for COPD and asthma used within SSA stretched from US$ 49,000 to US$ 749,000 per million population.(24) The remaining amount funded primary care visits. Each DALY averted ranged from US$ 2,686 to US$ 39,307.(25) Overall, asthma interventions were found to be the least expensive of the two conditions. Low dose inhaled corticosteroids and long acting β agonists cost US$ 2686 and US$ 9112 per DALY. The third most cost effective treatment was the inhaled bronchodilator, used to treat COPD (US$ 36,769 per DALY).(26)
Cost effectiveness in practice: Vision and hearing loss
Another example of cost effectiveness practice that took place in SSA had the objective of defining costs and effects of different interventions to treat cataract trachoma, refractive error, hearing loss, meningitis and chronic otitis media.(27) To determine the degree of health effectiveness of each of the interventions, research was conducted using various resources. For medical procedures such as cataract surgery, data was taken from the Cochrane reviews. In other circumstances when finding out the efficacy of drug treatment, evidence was taken from individual studies. When there was no evidence available, expert opinion was referenced, as was the case when determining levels of compliance and the benefits of wearing hearing aids and glasses.(28) All of the interventions were evaluated over a 10 year time frame, a standard of the WHO-CHOICE programme. The health gains of the programme were specified at the number of DALYs averted.
Following WHO CHOICE guidelines, patient level costs were defined as all costs accumulated from patient and provider contact. Drug costs were based on international drug prices, with a slight increase to account for international and local transportation costs. Calculations for total patient costs were found by taking the costs per patient treated multiplied by the number of patients that underwent treatment.(29) All of the costs were reported in international dollars (Int$).
Researchers found that in trachoma control, trichiasis surgery is the most cost effective, followed by mass treatment with azithromycin ointment.(30) Mass treatment with tetracycline ointment and targeted treatment with azithromycin are not cost effective. In the treatment of cataracts, cataract surgery was found to be more cost effective compared than interacapsular surgery.(31) These visual interventions cost <US$ 285 per DALY averted.(32) For auditory disorders, it was found that passive screening the population for disorders combined with hearing aid administration was the most costs effective, trailed by five year screening of adults and yearly screening of children in primary and secondary school. Screening for hearing impairments combined with distribution of hearing aids costs US$ 1000 per DALY averted.(33) Treatment with topical antibiotics was found to be the best intervention for chronic otitis media, yielding an average cost per DALY averted of <US$ 63. Referencing the WHO-CHOICE benchmark, these interventions are all classified as very cost effective.
During the implementation and analysis of the vision and hearing intervention, researchers came across various limitations. The first was attributed to the analysis being performed at the regional level, which can be problematic as crucial cost differences exist between countries located in the same region.(34) Most interventions take place on a country level, so both the cost estimates and cost effectiveness should be performed based on that level. The next issue stemmed from the assumptions made on the intervention effectiveness. As stated previously, they were based on a variety of sources and can reflect circumstances different to the one at hand, thus results must be interpreted with this in mind. Another issue was that all the interventions were analysed at a high efficiency level and the interventions were evaluated at 50%, 80% and 95% coverage levels.(35) These high levels may not always be attainable but was included to show benefits when optimum conditions take place. Despite the limitations, the benefits of the interventions were clear; the analysis strengthened the existing data supporting cataract surgery and treatment of chronic otitis media as excellent methods for fighting vision and hearing impairments. Furthermore, the results support that 32 million DALYs can be averted in SSA when effective interventions are scaled up.(36) It also resulted in two more policy implications in treatment; one being the screening of school children for refractive errors and the second using azithromycin for the treatment of trachoma.
Problems with the solution
Though this tool is extremely helpful in the administration of heath treatment programmes, it is not without issues. One problem stems from interventions implemented with inadequate background data, such as information on health effects and costs of interventions at a population level in the chosen region, as described in the hearing and visual example above.(37) In another intervention on maternal and neonatal health in developing countries, researchers found that some programmes have based interventions on limited efficacy trials and expert opinion.(38) These trials contained quality services administered by experienced professionals, a situation which is usually not the case during public health interventions in Africa. These optimum settings create biased data, which may not be applicable to developing countries. To address this issue it is recommended that feasibility is taken into account in the initial stages of programme intervention planning. Policy and public health experts should take into account not only the financial situation of the implementers but also look into factors such as the economic situation of the country and region, the staff available to perform and maintain the intervention, the education level of staff, the compliance level of the selected population and the potential coverage levels. In tandem with planning, it is imperative that there is an adequate grasp of the medical burden within a chosen region before a cost analysis is performed. This will assist efficacy of health programmes within the population as well as clearly define the true benefits of the intervention.(39)
Another issue stems from the construction of the cost effective analysis - essentially cost effectiveness determines which interventions will maximise the QALYs and minimise the DALYs. When obtaining QALYs, a specific metric assessment is performed to determine setbacks within the quality of one’s life. Within that assessment, standard gambles, visual analogue scales, and time and person trade-offs, are all utilised.(40) The problem lies in which audience should be used, those who have the disability or random individuals who do not. Opinions of those who do suffer from a health affliction are generally different from those who do not. Naturally those without health problems will define the quality of life of someone with a disability as worse than those who actually have said problem,(41) resulting in fewer QALYs produced, than if the data were from those with a disability. Conversely, using the preferences of those with disabilities will lessen the impact of the results, because the baseline was from the viewpoint of those with a disability.
The World Health Organisation when evaluating DALYs decided to give less weight to DALYs of infants, children and the elderly. This is due to their belief that all of the aforementioned groups are chiefly dependent on working adults in their prime years.(42) However, this viewpoint is troublesome as it views people from a monetary standpoint. It can be seen as discrimination against these groups because they have no economic benefit to society, thus labelling their lives as lower in value. This raises a problem of ethics and equity. Within public health, a specialised ethics framework for fieldwork has not been created.(43) In fact, the field of public health ethics is not widespread amongst public health professionals and students at all, as it is a recent development. The Public Health Leadership Society instituted a code of ethics in 2002, but is not clear if and how those regulations are being applied amongst researchers and workers.(44) It is recommended that to address this ethics issue a framework should be created specifically for situations faced by public health workers. Similar to CHOICE, this general code would be followed by all workers, thus addressing the abovementioned problems and creating a uniform response to the most common public health ethical issues of today.
As with many public health problems, there is no single answer to these issues. Determining if these problems are applicable to each situation will lie with the policy maker. The first steps in managing these problems would be using cost effect analysis in the manner it was intended, as a tool. The CEA should not be used as the only variable in determining the best course of action when distributing interventions to a health population. In Brock’s analysis of cost effectiveness, he references Erik Nord’s “person trade-off” approach as an alternative to the traditional CEA.(45) The person-trade-off is a quantitative tool that is said to account for an individual’s concern for equity. It estimates the societal values of different health care interventions. This method essentially asks how many outcomes of one kind they would consider equal in social value to a specified number of outcomes of another kind.(46) However, there has been little use or exploration of this methodology within public health so its practicality is unknown. It is imperative that researchers ensure that they take equality and ethicality into account along with the other basic factors when implementing any type of intervention.
Cost effective analysis is an invaluable tool within public health. With the use of this tool, public health professionals are able to distribute aid more efficiently, ensuring that maximum benefit is obtained for each population. With the WHO creation of CHOICE, public health workers now have a centralised methodology to use in the determination of cost effective interventions. Despite this fact, there still needs to be more discussion on cost effectiveness to ensure that its usage is fair and ethical to the populations it seeks to assist. The public health world is a constantly evolving and for public health professionals to best face these problems, it is their duty that each solution possesses the same dexterity.
Written by Modupeola Dovi (1)
(1) Contact Modupeola Dovi through Consultancy Africa Intelligence’s Public Health Unit ( email@example.com).
(2) Brock, D. and Wikler, D., 2006. “Ethical issues in resource allocation, research, and new products development”, In. Jamison, D.T., Breman, J.G. and Measham, A.R. et al (eds.). Disease control priorities in developing countries (2nd edition). Oxford University Press: New York.
(3) Robberstad, B., 2005. QALYs vs DALYs vs LYs gained: What are the differences, and what difference do they make for health care priority setting? Norwegian Journal of Epidemiology, 15(2), pp. 183-191.
(4) Sassi, F., 2006. Calculating QALYs, comparing QALY and DALY calculations. Health Policy Plan, 21, pp. 402–408.
(5) ‘Measuring effectiveness and cost effectiveness’, National Institute for Health and Clinical Excellence, 20 April 2010, http://www.nice.org.uk.
(6) Fox-Rushby, J.A. and Hanson, K., 2001. Calculating and presenting disability adjusted life years (DALYs) in cost effectiveness analysis. Health Policy Planning, 16, pp. 326–331.
(7) Sassi, F., 2006. Calculating QALYs, comparing QALY and DALY calculations. Health Policy Plan, 21, pp. 402–408.
(9) Baltussen, R. and Smith, A., 2012. Cost effectiveness of interventions to combat vision and hearing loss in sub-Saharan Africa and South East Asia: Mathematical modelling study. BMJ, 344,:e615.
(10) Gureje, O., et al., 2007. Cost-eﬀectiveness of an essential mental health intervention package in Nigeria. World Psychiatry, 6, pp. 42–48.
(11) Chisholm, D. and Saxena, S., 2012. Cost effectiveness of strategies to combat neuropsychiatric conditions in sub-Saharan Africa and South East Asia: Mathematical modelling study. BMJ, 344,:e609.
(12) Simoens, S., ‘What is the incremental cost-effectiveness ratio (ICER)?’, Generics and Biosimilars Initiative, 30 September 2010, http://www.gabionline.net.
(13) Sassi, F., 2006. Calculating QALYs, comparing QALY and DALY calculations. Health Policy Plan, 21, pp. 402–408.
(14) Chisholm, D., 2005. Choosing cost-effective interventions in psychiatry: Results from the CHOICE programme of the World Health Organization. World Psychiatry, 4(1), pp. 37–44.
(15) ‘More information on the rationale, activities, and goals of WHO Choice’, World Health Organization, 23 May 2012, http://www.who.int.
(16) Sassi, F., 2006. Calculating QALYs, comparing QALY and DALY calculations. Health Policy Plan, 21, pp. 402–408.
(17) ‘Chronic obstructive pulmonary disease (COPD)’, World Health Organization, November 2011, http://www.who.int.
(18) Stanciole, A.E., et al., 2012. Cost effectiveness of strategies to combat chronic obstructive pulmonary disease and asthma in sub-Saharan Africa and South East Asia: Mathematical modelling study. BMJ, 344,:e608.
(20) ‘Asthma statistics’, American Academy of Asthma, Allergy, and Immunology, 24 May 2012, http://www.aaaai.org.
(21) Stanciole, A.E., et al., 2012. Cost effectiveness of strategies to combat chronic obstructive pulmonary disease and asthma in sub-Saharan Africa and South East Asia: Mathematical modelling study. BMJ, 344,:e608; ‘Asthma in the US’, Centers of Disease Control and Prevention, 3 May 2011, http://www.cdc.gov.
(23) Stanciole, A.E., et al., 2012. Cost effectiveness of strategies to combat chronic obstructive pulmonary disease and asthma in sub-Saharan Africa and South East Asia: Mathematical modelling study. BMJ, 344,:e608.
(27) Baltussen, R. and Smith, A., 2012. Cost effectiveness of interventions to combat vision and hearing loss in sub-Saharan Africa and South East Asia: Mathematical modelling study. BMJ, 344,:e615.
(37) Kim, J.Y., et al., 2005.Limited good and limited vision: Multidrug resistant tuberculosis and global health policy. Social Science & Medicine, 61,pp. 847-859.
(38) Adam, T., et al. 2005. Cost-eﬀectiveness analysis of strategies for maternal and neonatal health in developing countries. BMJ, 331, pp. 1107.
(39) Evans, D.B., et al., 2005. WHO-CHOICE Millennium Development Goals Team. Achieving the millennium development goals for health: Evaluation of current health intervention strategies and future priorities in developing countries. BMJ, 10, pp. 1136.
(40) Brock, D., 2004. “Ethical issues in the use of cost effectiveness analysis for the prioritization of health resources”, In Khushf, G. (ed.). Handbook of bioethics, Kluver Academic Publisher: Dordrecht.
(41) Menzel, P., et al., 2002. The role of adaptation to disability and disease in health state valuation: A preliminary normative analysis. Social Science and Medicine, 55(12), pp. 2149–2158.
(42) Murray, C.J.L., 1994. Quantifying the burden of disease: The technical basis for disability-adjusted life years. Global comparative assessments in the health sector: Disease burden, expenditures and intervention packages, 72(3), pp. 429-445.
(43) Bailey, L., ‘Public health workers lack guidance for solving ethical dilemmas’, The University Record, 6 April 2009, http://www.ur.umich.edu.
(45) Brock, D., 2004. “Ethical issues in the use of cost effectiveness analysis for the prioritization of health resources”, In Khushf, G. (ed.). Handbook of bioethics, Kluver Academic Publisher: Dordrecht.