Costs and benefits of health programs: A framework to assist in informing policy decisions
Key Objective
The key objective of this project is to develop a framework to assist policy makers in assessing the costs and benefits of alternative health programs in order to inform health policy decisions. There are three outputs of the project: a briefing paper, the framework document and a case study illustrating the use of the framework by employing smoking prevention and cessation as an example.
Briefing paper
The background briefing paper summarises international approaches to assessment of costs and benefits of health programs to inform priority setting and decision making, based on a review of the literature. It provides an outline of approaches and where they have been used. In addition to a preliminary literature review, the briefing paper provides a summary of the main approaches to priority setting which were identified through the review.
Framework
This document sets out a proposed framework to assist policy makers in the NSW health system to assess the costs and benefits of alternative health services/interventions to inform health policy and resource allocation decisions within and between programs. The framework takes into account the available sources of evidence, the nature of the evidence and how this differs across different areas of health service delivery. The key focus of this framework is on the development of an appropriate evidence base to support decisions about investing in service delivery within the health system, and inform priority setting. The proposed framework has been developed to be sufficiently broad to encompass the full range of potential health interventions from population health and preventive interventions to specific interventions for particular conditions. The framework is informed by a literature review of different approaches to program evaluation and priority setting which was reported in the Briefing Paper.
The framework sets out in detail the means by which decision makers can assess the costs and benefits, of new programs in order that such programs are able to demonstrate that they are effective in delivering social or community benefit and that they represent value for money. This requires considering, in particular, whether investment in a proposed new service or intervention is worthwhile, what other services will have to be forgone to fund the new program, what, among the alternative uses of resources, are the best buys and can existing resources be re-allocated to improve outcomes?
Case study of interventions aimed at smoking prevention and cessation
The key objective of this report was to model the cost-effectiveness of a range of existing and potential interventions aimed at both prevention and cessation of smoking for the NSW population. The model was constructed using effectiveness data obtained from a literature review of smoking cessation and prevention interventions and costs using NSW data where possible as well as published data. Following a literature review of cessation and prevention strategies included those likely to be relevant in the NSW health system and including those currently implemented and potential interventions, a decision analytic model was constructed using estimates of effectiveness of selected strategies, and local estimates of resources required to implement the strategies/interventions.
The results produced by the model indicate that the most cost effective interventions are brief advice, tailored self-help materials and Varenicline. Depending on the upper threshold of willingness to pay for one additional quitter, any of these three options offer the most quitters per dollar spent compared to the others. For an additional $491 per quitter, an additional 15,584 quitters over a 12 month period could be obtained. If willingness to pay per quitter is higher than this amount then an additional $1,334 per quitter produces an additional 19,362 quitters and an additional $15,338 produces an additional 28,295 quitters.
A model has been produced in Excel and instructions for running and updating the model have been provided to NSW Health. As better information becomes available, the parameters in the model pertaining to the effectiveness of an intervention, as well as any associated costs can be updated and a new economic evaluation can be run.
Funding Source
NSW Department of Health
CHERE staff
Rosalie Viney, Marion Haas, Jane Hall, Gisselle Gallego, Stephen Goodall, Richard Norman, Nicole Tschaut, Kees van Gool, Jody Church, Braedon Donald
Collaborators
Liz Develin1
1. Centre for Health Advancement, NSW Health
