Development of WHO guidelines on generalized cost‐effectiveness analysis

The growing use of cost‐effectiveness analysis (CEA) to evaluate specific interventions is dominated by studies of prospective new interventions compared with current practice. This type of analysis does not explicitly take a sectoral perspective in which the costs and effectiveness of all possible interventions are compared, in order to select the mix that maximizes health for a given set of resource constraints. WHO guidelines on generalized CEA propose the application of CEA to a wide range of interventions to provide general information on the relative costs and health benefits of different interventions in the absence of various highly local decision constraints. This general approach will contribute to judgements on whether interventions are highly cost‐effective, highly cost‐ineffective, or something in between. Generalized CEAs require the evaluation of a set of interventions with respect to the counterfactual of the null set of the related interventions, i.e. the natural history of disease. Such general perceptions of relative cost‐effectiveness, which do not pertain to any specific decision‐maker, can be a useful reference point for evaluating the directions for enhancing allocative efficiency in a variety of settings. The proposed framework allows the identification of current allocative inefficiencies as well as opportunities presented by new interventions. Copyright © 1999 John Wiley & Sons, Ltd.