Question

Suppose you work for a healthcare organization and your local government is considering establishing something called a health effectiveness analysis program (HEAP).

The purpose of this program would be to look for areas of intervention that would promote health and save money for the state and its people.

You have been asked to write a brief memo for your organization’s leadership.

Using the example of childhood immunizations, identify and briefly discuss three or more issues or questions that are likely to arise in making economic evaluations (e.g., cost–benefit or cost-effectiveness analyses) of health interventions.

What impact would this intervention have on demand and consumer behavior in the long run?

Answer 1

September 26, 2020

Re: Health Effectiveness Analysis Program (HEAP) – Childhood Immunizations

To Whom It May Concern;

Cost-effective analysis (CEA) may be an important contributor in making health careinvestment decisions about interventions that aim to improve the promotion of health. CEA helps identify ways to redirect resources to achieve more. With new vaccines on the rise, promising to reduce burdens of childhood disease; CEA is needed to gain a fuller understanding of how the use of economic evidence may improve child health programming.

What inputs are included?

• Net cost is the intervention costs minus averted medical and productivity costs.
• Changes in health outcomes are outcomes with the intervention in place minus outcomes without the intervention in place.
• Examples of health outcomes include heart attacks and deaths from heart disease.

What output does a cost-effectiveness analysis provide?

CEA provides information on health and cost impacts of an intervention compared to an alternative intervention (or the status quo). If the net costs of an intervention are positive (which means a more effective intervention is more costly), the results are presented as a cost-effectiveness ratio. A cost-effectiveness ratio is the net cost divided by changes in health outcomes. Examples include cost per case of disease prevented or cost per death averted. However, if the net costs are negative (which means a more effective intervention is less costly), the results are reported as net cost savings.

In the example below, we compare the childhood vaccination program to the status quo of no vaccination program. We can see that the costs of implementing the program are less than the medical and productivity costs averted. Because the intervention is cost saving, the results are not presented as a cost-effectiveness ratio. Instead, they are presented as net cost savings.

Cost-Effectiveness Analysis is a relatively new tool, and is still being refined. It has been used extensively in recent years to decide on cost-effective health interventions in areas like vaccination policy and preventative versus curative health interventions. The method also holds significant potential relevance to environment and health decision- making, as policymakers become more familiar with the assessment method, and as greater resources are directed to the quantification of health impacts of environmental hazards.