CHDS deputy director Lisa Robinson addressed the intersection between cost-effectiveness analysis (CEA) and benefit-cost analysis (BCA) in the 2026 Anne Mills Health Economics Lecture, focusing on how changes in health and longevity are valued. The lecture was hosted by the Global Health Economics Centre at the London School of Hygiene & Tropical Medicine.
In introducing her, Andrew Briggs noted that Robinson has focused her career on improving the use of evidence to inform policy. Her talk described the roles of conventional CEA and BCA in supporting decisions within and outside of the health care sector. Both approaches have many common components, and provide systematic and well-established methods for examining impacts. Robinson said she is always amazed by what she learns when systematically reviewing the evidence, often finding that policies have consequences that would not otherwise have been anticipated. Where CEA and BCA most differ is in the normative judgements that underlie how each approach places a value on improved health and longevity. CEA focuses on maximizing health, using non-monetary measures such as quality-adjusted life years (QALYs) or disability-adjusted life years (DALYs). BCA focuses on maximizing welfare, relying on monetary measures derived from individuals’ preferences for exchanging their own incomes for the outcomes they experience.
One challenge is the widespread misunderstanding of how monetary estimates are used to value mortality risk reductions. People interpret the term “value per statistical life (VSL)” as the value of what their life is “worth,” while in reality it is derived from individuals’ willingness to pay for small changes in their own risks.
These two frameworks intersect when monetary values are used as thresholds in CEA or to value QALYs or DALYs in BCA. The demand-side thresholds used in CEA are much lower than values derived from empirical willingness-to-pay research, raising a number of difficult questions.
Robinson noted that both methods are intended to inform rather than determine decisions, given the need to consider factors that are difficult to quantify and the effects of uncertainty, as well as budgetary, legal, and political constraints. She concluded that distributional analysis is essential but often difficult to conduct, in part because the distribution of costs across disadvantaged and advantaged groups is hard to estimate.
Robinson’s own work includes conducting benefit-cost analyses, developing related approaches, and drafting guidance documents. For example, she contributed to economic analysis guidance for the US Department of Health and Human Services and for low- and middle-income countries. In addition to serving as deputy director of the Center for Health Decision Science, she is a core faculty member of the Center for Climate, Health, and the Global Environment (C-CHANGE).
Learn more: Watch the lecture recording, From CEA to BCA: Values and Decisions
Learn more: Read a recent Risk Analysis profile, Lisa Robinson: Benefit–Cost Analyses for Evidence-Based Decisions
Learn more: Read more about the derivation of thresholds, Understanding and Improving the One and Three Times GDP per Capita Cost-Effectiveness Thresholds
Related news: New OECD Research on “Valuing Life”
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