Strengthening Cost-Effectiveness Analysis for Public Health Policy

Although the U.S. spends more on medical care than any country in the world, Americans live shorter lives than the citizens of other high-income countries. Many important opportunities to improve this record lie outside the health sector and involve improving the conditions in which Americans live and work: safe design and maintenance of roads, bridges, train tracks, and airports; control of environmental pollutants; occupational safety; healthy buildings; a safe and healthy food supply; safe manufacture of consumer products; a healthy social environment; and others. Faced with the overwhelming array of possibilities, U.S. decision makers need help identifying those that can contribute the most to health. Cost-effectiveness analysis is designed to serve that purpose, but has mainly been used to assess interventions within the health sector. This paper briefly reviews the objective of cost-effectiveness analysis and its methodologic evolution and discusses the issues that arise when it is used to evaluate interventions that fall outside the health sector under three headings: structuring the analysis, quantifying/measuring benefits and costs, and valuing benefits and costs.