Productivity-cost controversies in cost-effectiveness analysis: review and research agenda

Productivity costs represent true costs to society and should not be ignored in a cost-effectiveness analysis. However, there is dissension among health economists regarding measurement of productivity costs. Certain health economists argue for inclusion of productivity costs in the denominator of the cost-effectiveness ratio, measured in quality-adjusted life-years. Others argue that productivity costs should be included in the numerator of the cost-effectiveness ratio, measured in dollars using the friction-cost method or the human-capital method. This paper reviews the productivity-cost controversies and offers suggestions for future research addressing the debated issues.