Distributional Cost-Effectiveness Analysis

Abstract

Distributional cost-effectiveness analysis aims to help healthcare and public health organizations make fairer decisions with better outcomes. Standard cost-effectiveness analysis provides information about total costs and effects. Distributional cost-effectiveness analysis provides additional information about fairness in the distribution of costs and effects—who gains, who loses, and by how much. It can also provide information about the trade-offs that sometimes occur between efficiency objectives such as improving total health and equity objectives such as reducing unfair inequality in health. This is a practical guide to a flexible suite of economic methods for quantifying the equity consequences of health programmes in high-, middle-, and low-income countries. The methods can be tailored and combined in various ways to provide useful information to different decision makers in different countries with different distributional equity concerns. The handbook is primarily aimed at postgraduate students and analysts specializing in cost-effectiveness analysis but is also accessible to a broader audience of health sector academics, practitioners, managers, policymakers, and stakeholders. Part I is an introduction and overview for research commissioners, users, and producers. Parts II and III provide step-by-step technical guidance on how to simulate and evaluate distributions, with accompanying hands-on spreadsheet training exercises. Part IV concludes with discussions about how to handle uncertainty about facts and disagreement about values, and the future challenges facing this young and rapidly evolving field of study.

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