A generalized cost-effectiveness model for the evaluation of health programs

Abstract

This research is concerned with the optimal allocation of resources within the health service system. In particular it is concerned with methods for selecting, within specified constraints, the optimal sub·set of health service programs from a set of feasible programs. Current approaches are reviewed and found inadequate. Cost-benefit analysis measures the economic, but not the health, consequences of a program. Cost-­ effectiveness analysis measures the health benefits in program-specific units , thus excluding any inter-program comparisons. A new approach is proposed which generalizes the cost-effectiveness model by combining it with a new morbidity-mortality health index. The index for a particular health state is the subjective utility which society attaches to a day in that state. The index is s standardized with zero for dead and one for healthy . The index-day can then be viewed as a universal unit of health, and the mode l structured to maximize these units, within specified constraints. Two techniques are investigated for measuring the required subjective utilities: a time trade-off technique and a von Neumann-Morgenstern standard gamble approach. Both are applied in individual interviews with eleven general practitioners to measure the utilities of five different health states. Both prove highly reliable as measured by their internal consistency and each gives equivalent results, but the time trade-off technique is significantly easier to administer. Two computational algorithms are investigated for analysing a set of potential health programs to select the optimal sub-set: a cost-effectiveness ranking algorithm developed specifically for this project and a standard zero-one integer linear programming algorithm. The former proves superior for most applications: it is more efficient, it provides more useful information and it can handle larger problems . The latter proves more flexible for handling complicated problem structures. A computer program for the cost-effectiveness ranking algorithm is provided. ­ The new approach is tested by applying it to four different programs covering a broad spectrum of the health service field: two preventive screening programs, one for newborn (a screening program for the eradication of hemolytic disease of the newborn) and one for adults (a tuberculosis screening program); a treatment program for an acute condition (a coronary emergency rescue service ); and a treatment program for a chronic condition (a kidney dialysis and transplantation program ). Data gathering is a time- consuming task and a plea is made for better quality data, particularly in the measurement of program health benefits. Otherwise, no outstanding difficulties are encountered and it is concluded that the approach is applicable to a wide variety of health programs - - perhaps all .

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