Generalized Cost Effectiveness Analysis

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A number of guidelines on cost-effectiveness analysis (CEA) already exist.
There are two reasons for producing another set. The first is that
traditional analysis has focused on assessing new or additional
interventions in comparison with current practice in that area. It is
difficult to use this type of “incremental” analysis to determine if the
current mix of interventions represents an efficient use of resources.
Secondly, for all but the richest countries, the cost and time required to
evaluate the large number of interventions and identify opportunities to
enhance efficiency are prohibitive. It is important to maximize the
possibility of generalizing results from one setting to another. The
approach of generalized CEA (GCEA) proposed in this Guide seeks to
provide analysts with a method of assessing whether the current mix of
interventions is efficient as well as whether a proposed new technology or
intervention is appropriate. It also seeks to maximize the generalizability
of results across settings.
The WHO Guide to Cost-Effectiveness Analysis should be considered
as complementary to existing guidelines on CEA. GCEA proposes the
evaluation of interventions against the counterfactual of “doing
nothing”, thereby providing decision-makers with information on what
could be achieved if they could start again to build the health system, i.e.
reallocate all health resources. As will be shown in the Guide, this
information is a prerequisite to the definition of an efficient mix of
interventions, achievable in the long run. This specific feature—not
addressed in traditional CEA which typically evaluates new interventions
in comparison with the current mix (intervention mix constrained CEA
or IMC-CEA)—categorizes GCEA as a different, more fundamental, type
of economic analysis. For many narrower applications of CEA, such as
the appraisal of a new version of an existing drug in a specific country,
the currently practised CEA remains an appropriate method although it
should be realized that this does not inform decision-makers on the best
use of health resources in general.i It is also possible to undertake a
traditional analysis as part of a GCEA.
The main objective of this Guide is to provide policy-makers and
researchers with a clear understanding of the concepts and benefits of
GCEA. It provides guidance on how to undertake studies using this form
of analysis and how to interpret the results. The main focus is on those
methodological issues which make GCEA different from traditional CEA,
such as the definition of the counterfactual for analysis. In addition,
attention is paid to controversial issues in CEA where choices are
required, such as the inclusion or exclusion of productivity costs.
Furthermore, the Guide provides some detailed discussions on issues
which are little debated in the literature but nevertheless important, for
example, the technical approach to the transferability of cost estimates
across settings. On all these matters, the Guide has benefited from a
meeting of experts in cost-effectiveness analysis convened by WHO in
Geneva in early 2002. In that meeting, the first version of the Guide was
presented, and this published version builds on some of the discussion in
that meeting.
Since GCEA and IMC-CEA are both embedded in the same economic
framework, they share many of the same techniques which are discussed in
detail elsewhere, such as the methods for the allocation of hospital costs. In
those instances, the reader is referred to the other literature. This Guide
proposes a standard set of methodological choices on how to perform
GCEA to enhance the comparability and generalizability of results. The
intended audience are those analysts with some background in CEA.
The Guide, in Part One, begins with a brief description of GCEA and
how it relates to the two questions raised above. It then considers issues
relating to study design, estimating costs, assessing health effects,
discounting, uncertainty and sensitivity analysis, and reporting results.
Detailed discussions of selected technical issues and applications are
provided in a series of background papers, originally published in
journals, but included in this book for easy reference in Part Two.
The first paper by Murray et al., on “Development of WHO
Guidelines in Generalized Cost-Effectiveness Analysis” formally lays out
the motivation and framework for GCEA. It highlights the use of GCEA
for improving sectoral efficiency, based on the comparative analysis of
current as well as proposed new interventions against a common
counterfactual.
The second paper, “PopMod: A longitudinal population model with
two interacting disease states”, is a detailed technical description of the
multi-state dynamic life table that calculates the health and mortality
experience of a population with two interacting conditions or disease
states, as well as other causes of mortality and morbidity. It was
developed by WHO in a spreadsheet format, and subsequent
collaboration with a scientific consultancy group and Statistics Canada
allowed the model to be transferred into various programming
environments including a microsimulation version.
The next two papers, “Programme costs in the economic evaluation of
health interventions” and “Econometric estimation of country-specific
hospital costs”, describe how cost estimates can be derived for different
subregions. The programme cost paper describes how one category of
costs, those which represent resources consumed at all levels aside from

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from : http://www.who.int/choice/publications/p_2003_generalised_cea.pdf
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