Cost effectiveness analysis aims to capture identify (and monetize) all of a treatments benefits, risk and costs and then determine if the treatment is worth the money. Traditionally, however, benefits, risk and costs only related to benefits that accrue to the health care system. Many studies in the academic literature have advocated for a societal perspective (e.g, Jonsson, 2009; Sanders et al. 2016 Weinstein, 1990)). So why doesn’t this happen? In practice, there is no singular decision-maker that is responsible for all of a society’s benefits and costs across all industries.
…even if a clear societal perspective was defined, a cost‐benefit analysis conducted from a single societal perspective could only assist a hypothetical decision maker responsible for allocating resources to public health interventions. By contrast, in reality, different stakeholders are involved in and affected by the delivery of these programs, and each has particular remits and outcomes of interest.
One key question then is does using a broader societal framework make a difference for health care interventions? My own research (Shafrin et al. 2019) finds that using a societal perspective may tilt the balance when examining the value of immuno-oncology treatments for non-small cell lung cancer. A paper by Ramponi et al. (2021) find that in the case of interventions aiming to reduce alcohol misuse in criminal offenders, the perspective also matters. ‘
The authors examine three separate interventions: client information leaflet, brief advice, and brief lifestyle counseling. Clinical information came from the Screening and Intervention Program for Sensible drinking (SIPS) trial. The authors consider not only the interventions costs, and costs on the health care system, but also the impact on patient utilities, criminal justice costs and opportunity costs. The authors then aggregate costs and benefits using four perspectives:
- Health care system (Narrow) This perspective only measures benefits and costs accruing to the health care system
- Criminal justice. This perspective focuses only on costs and benefits to the criminal justice system.
- “Full” health care system. This perspective looks only at benefits and costs accruing to the health care system, but also includes any additional impacts on health outcomes and health care costs via criminal justice (e.g., health impact on crime victims)
- Joint health care system / Criminal justice. This perspective includes all benefits and costs that accrue to society via either the health care system or the criminal justice system. Benefits were valued based on QALYs gained (for health system) and avoided reconvictions (for the criminal justice system).
So which intervention was the best? The answer is, it depended on the perspective taken.
From a “narrow” health care system perspective, CIL [client information leaflet] offered the greatest net health, and BA [brief advice] and BLC [brief lifestyle counseling] should not be introduced. By contrast, from a criminal justice system perspective, BLC was found to be the least costly and most effective, suggesting that BLC should be introduced. From a “full” health care system perspective, BLC offered the greatest net health and should be introduced. From a joint health and criminal justice perspective, BLC resulted in both a net health gain and a net reduction in crime and should be recommended for implementation.
In short, for treatments to reduce alcohol misuse in criminal offenders, using more narrow perspectives may identify suboptimal treatments as optimal. The Second Panel on Cost Effectiveness in Health and Medicine recommends conducting an impact inventory to demonstrate how these additional value components could influence the results of a cost effectiveness analysis. This study provides a clear example that the perspective from which a cost effectiveness analysis is conducted may have a major impact estimated treatment value and, consequently, any value-based treatment recommendations that decision-makers may establish.
- Ramponi F, Walker S, Griffin S, Parrott S, Drummond C, Deluca P, Coulton S, Kanaan M, Richardson G. Cost‐effectiveness analysis of public health interventions with impacts on health and criminal justice: An applied cross‐sectoral analysis of an alcohol misuse intervention. Health Economics. 2021 Jan 14.