Health Economics: Tools to Measure and Maximize Programme Impact

Abstract

Kahn, Mwai, Kazi, and Marseille explain how economics brings together estimates of disease burden and the costs needed to reduce that burden so that policymakers can choose which intervention strategies will maximize health gains with available resources. The authors introduce and illustrate key health economics methods, including econometrics, cost-benefit analysis, micro-costing, behavioural economics, work force projections, financing, and discrete choice experimentation. They describe methods for calculating Disability-Adjusted Life Years, a standard summary metric that combines health losses due to mortality and morbidity, thus permitting comparison and summation across diseases and populations. The authors explain cost-effectiveness analysis, which compares health intervention costs with reductions in burden of disease, yielding the widely used Incremental Cost-Effectiveness Ratio, and discuss the ethical underpinnings of cost-effectiveness.