Relative Health Improvements with Alternative Frameworks

Headshot of James Hammitt Speaking Into Microphone at Event

The social value of decreasing health risks to people of different age, health status, and income depends on the evaluation framework employed in an analysis. These values can be evaluated using cost-effectiveness analysis (CEA), benefit-cost analysis (BCA), or one of many social-welfare functions (SWF). These frameworks can rank interventions differently depending on how the health effects and costs are distributed in the population. In a recent paper, CHDS faculty James Hammitt analyzed how the social value of an intervention that decreases the probability, severity (effect on health status), or lethality of an illness differs when evaluated using BCA, CEA, and three benchmark SWFs: utilitarian, ex ante prioritarian, and ex post prioritarian. He concluded that the social values of improvements in health and decreases in the cost of an intervention depend on individual circumstances of the affected people in diverse ways that depend on the evaluation framework. In contrast, the conditions under which a decrease in risk, severity, or lethality is socially preferred to a decrease in another of these dimensions are identical for BCA, CEA, the utilitarian and ex ante prioritarian SWFs, but can differ for the ex post prioritarian SWF. These results show how the relative merits of alternative health policies can depend on the choice of policy-evaluation framework.

Learn more: Read Prevention, Treatment, and Palliative Care: The Relative Value of Health Improvements under Alternative Evaluation Frameworks
Learn more: Read The Social Value of Mortality Risk Reduction: VSL vs. the Social Welfare Function Approach
Learn more: Read Fair Innings? The Utilitarian and Prioritarian Value of Risk Reduction over a Whole Lifetime
Learn more: Read the book, M.D. Adler and O.F. Norheim (eds.), Prioritarianism in Practice, Cambridge University Press, Cambridge 2022.

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