IDEAS home Printed from https://ideas.repec.org/p/chy/respap/122cherp.html
   My bibliography  Save this paper

Cost per DALY averted thresholds for low- and middle-income countries: evidence from cross country data

Author

Listed:
  • Jessica Ochalek

    (Centre for Health Economics, University of York, UK.)

  • James Lomas

    (Centre for Health Economics, University of York, UK)

  • Karl Claxton

    (Centre for Health Economics, University of York, UK.)

Abstract

Low- and middle-income countries (LMICs) face difficult decisions about which health care interventions are worthwhile given existing constraints on health care expenditure. Decisions require some assessment of the health opportunity costs of proposed investments, i.e., a ‘supply side’ cost-effectiveness threshold (CET) that represents the likely health effects of changes in health care expenditure. This paper provides a framework for generating country-level CETs using existing published estimates of the mortality effect of health expenditure. Two different estimation strategies are used (Bokhari et al (2007) and Moreno-Serra and Smith (2015)) and, where possible, estimation is extended to include other measures of mortality, survival and disability outcomes, reflecting the demographic and other characteristics of each LMIC. The results suggest that CETs representing likely health opportunity costs tend to be below the lower bound suggested by WHO of 1x GDP per capita. Hence, many previous and existing recommendations about which interventions are cost-effective that are based on the WHO threshold are likely to do more harm than good.

Suggested Citation

  • Jessica Ochalek & James Lomas & Karl Claxton, 2015. "Cost per DALY averted thresholds for low- and middle-income countries: evidence from cross country data," Working Papers 122cherp, Centre for Health Economics, University of York.
  • Handle: RePEc:chy:respap:122cherp
    as

    Download full text from publisher

    File URL: http://www.york.ac.uk/media/che/documents/papers/researchpapers/CHERP122_cost_DALY_LMIC_threshold.pdf
    File Function: First version, 2015
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Markus Brückner, 2013. "On the simultaneity problem in the aid and growth debate," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(1), pages 126-150, January.
    2. Gravelle, H.S.E. & Backhouse, M.E., 1987. "International cross-section analysis of the determination of mortality," Social Science & Medicine, Elsevier, vol. 25(5), pages 427-441, January.
    3. Farasat A. S. Bokhari & Yunwei Gai & Pablo Gottret, 2007. "Government health expenditures and health outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 16(3), pages 257-273, March.
    4. Stinnett, Aaron A. & Paltiel, A. David, 1996. "Mathematical programming for the efficient allocation of health care resources," Journal of Health Economics, Elsevier, vol. 15(5), pages 641-653, October.
    5. Linda Ryen & Mikael Svensson, 2015. "The Willingness to Pay for a Quality Adjusted Life Year: A Review of the Empirical Literature," Health Economics, John Wiley & Sons, Ltd., vol. 24(10), pages 1289-1301, October.
    6. Paul Revill & Simon Walker & Jason Madan & Andrea Ciaranello & Takondwa Mwase & Diana M Gibb & Karl Claxton & Mark J Sculpher, 2014. "Using cost-effectiveness thresholds to determine value for money in low- and middle-income country healthcare systems: Are current international norms fit for purpose?," Working Papers 098cherp, Centre for Health Economics, University of York.
    7. Filmer, Deon & Pritchett, Lant, 1999. "The impact of public spending on health: does money matter?," Social Science & Medicine, Elsevier, vol. 49(10), pages 1309-1323, November.
    8. Rodrigo Moreno-Serra & Peter C. Smith, 2015. "Broader health coverage is good for the nation's health: evidence from country level panel data," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 178(1), pages 101-124, January.
    9. Hammitt, James K. & Robinson, Lisa A., 2011. "The Income Elasticity of the Value per Statistical Life: Transferring Estimates between High and Low Income Populations," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 2(1), pages 1-29, January.
    10. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    11. Zeynep Or, 2001. "Exploring the Effects of Health Care on Mortality Across OECD Countries," OECD Labour Market and Social Policy Occasional Papers 46, OECD Publishing.
    12. A. Newall & M. Jit & R. Hutubessy, 2014. "Are Current Cost-Effectiveness Thresholds for Low- and Middle-Income Countries Useful? Examples from the World of Vaccines," PharmacoEconomics, Springer, vol. 32(6), pages 525-531, June.
    13. Getzen, Thomas E., 2000. "Health care is an individual necessity and a national luxury: applying multilevel decision models to the analysis of health care expenditures," Journal of Health Economics, Elsevier, vol. 19(2), pages 259-270, March.
    14. A. Newall & M. Jit & R. Hutubessy, 2014. "Authors’ Reply to Gandjour: “Are Current Cost-Effectiveness Thresholds for Low- and Middle-Income Countries Useful? Examples from the World of Vaccines”," PharmacoEconomics, Springer, vol. 32(12), pages 1247-1247, December.
    15. Martin, Stephen & Rice, Nigel & Smith, Peter C., 2008. "Does health care spending improve health outcomes? Evidence from English programme budgeting data," Journal of Health Economics, Elsevier, vol. 27(4), pages 826-842, July.
    16. Weinstein, Milton & Zeckhauser, Richard, 1973. "Critical ratios and efficient allocation," Journal of Public Economics, Elsevier, vol. 2(2), pages 147-157, April.
    17. Hammitt James K. & Robinson Lisa A, 2011. "The Income Elasticity of the Value per Statistical Life: Transferring Estimates between High and Low Income Populations," Journal of Benefit-Cost Analysis, De Gruyter, vol. 2(1), pages 1-29, January.
    18. Karl Claxton & Mark Sculpher & Stephen Palmer & Anthony J Culyer, 2015. "Causes For Concern: Is Nice Failing To Uphold Its Responsibilities To All Nhs Patients?," Health Economics, John Wiley & Sons, Ltd., vol. 24(1), pages 1-7, January.
    19. John Nixon & Philippe Ulmann, 2006. "The relationship between health care expenditure and health outcomes," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 7(1), pages 7-18, March.
    20. Nancy Devlin & David Parkin, 2004. "Does NICE have a cost‐effectiveness threshold and what other factors influence its decisions? A binary choice analysis," Health Economics, John Wiley & Sons, Ltd., vol. 13(5), pages 437-452, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ryota Nakamura & James Lomas & Karl Claxton & Farasat Bokhari & Rodrigo Moreno-Serra & Marc Suhrcke & Peter Berman, 2020. "Assessing the Impact of Health Care Expenditures on Mortality Using Cross-Country Data," World Scientific Book Chapters, in: Paul Revill & Marc Suhrcke & Rodrigo Moreno-Serra & Mark Sculpher (ed.), Global Health Economics Shaping Health Policy in Low- and Middle-Income Countries, chapter 1, pages 3-49, World Scientific Publishing Co. Pte. Ltd..
    2. Claxton, Karl & Asaria, Miqdad & Chansa, Collins & Jamison, Julian & Lomas, James & Ochalek, Jessica & Paulden, Mike, 2019. "Accounting for timing when assessing health-related policies," LSE Research Online Documents on Economics 100038, London School of Economics and Political Science, LSE Library.
    3. Niek Stadhouders & Xander Koolman & Christel van Dijk & Patrick Jeurissen & Eddy Adang, 2019. "The marginal benefits of healthcare spending in the Netherlands: Estimating cost‐effectiveness thresholds using a translog production function," Health Economics, John Wiley & Sons, Ltd., vol. 28(11), pages 1331-1344, November.
    4. James Lomas & Stephen Martin & Karl Claxton, 2018. "Estimating the marginal productivity of the English National Health Service from 2003/04 to 2012/13," Working Papers 158cherp, Centre for Health Economics, University of York.
    5. Devine, Angela, 2018. "The Economics of Vivax Malaria Treatment," Thesis Commons zsc6x, Center for Open Science.
    6. Jessica Ochalek & Karl Claxton & Paul Revill & Mark Sculpher & Alexandra Rollinger, 2016. "Supporting the development of an essential health package: principles and initial assessment for Malawi," Working Papers 136cherp, Centre for Health Economics, University of York.
    7. Peter J. Neumann & David D. Kim & Thomas A. Trikalinos & Mark J. Sculpher & Joshua A. Salomon & Lisa A. Prosser & Douglas K. Owens & David O. Meltzer & Karen M. Kuntz & Murray Krahn & David Feeny & An, 2018. "Future Directions for Cost-effectiveness Analyses in Health and Medicine," Medical Decision Making, , vol. 38(7), pages 767-777, October.
    8. Claxton, Karl & Asaria, Miqdad & Chansa, Collins & Jamison, Julian & Lomas, James & Ochalek, Jessica & Paulden, Mike, 2019. "Accounting for Timing when Assessing Health-Related Policies," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 10(S1), pages 73-105, April.
    9. Angela Devine & Minnie Parmiter & Cindy S Chu & Germana Bancone & François Nosten & Ric N Price & Yoel Lubell & Shunmay Yeung, 2017. "Using G6PD tests to enable the safe treatment of Plasmodium vivax infections with primaquine on the Thailand-Myanmar border: A cost-effectiveness analysis," PLOS Neglected Tropical Diseases, Public Library of Science, vol. 11(5), pages 1-19, May.
    10. Aidan Hollis, 2016. "Sustainable Financing of Innovative Therapies: A Review of Approaches," PharmacoEconomics, Springer, vol. 34(10), pages 971-980, October.
    11. Hiral Anil Shah & Tim Baker & Carl Otto Schell & August Kuwawenaruwa & Khamis Awadh & Karima Khalid & Angela Kairu & Vincent Were & Edwine Barasa & Peter Baker & Lorna Guinness, 2023. "Cost Effectiveness of Strategies for Caring for Critically Ill Patients with COVID-19 in Tanzania," PharmacoEconomics - Open, Springer, vol. 7(4), pages 537-552, July.
    12. Tom L. Drake & Yoel Lubell, 2017. "Malaria and Economic Evaluation Methods: Challenges and Opportunities," Applied Health Economics and Health Policy, Springer, vol. 15(3), pages 291-297, June.
    13. Susan Horton & Hellen Gelband & Dean Jamison & Carol Levin & Rachel Nugent & David Watkins, 2017. "Ranking 93 health interventions for low- and middle-income countries by cost-effectiveness," PLOS ONE, Public Library of Science, vol. 12(8), pages 1-12, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jessica Ochalek & Karl Claxton & Paul Revill & Mark Sculpher & Alexandra Rollinger, 2016. "Supporting the development of an essential health package: principles and initial assessment for Malawi," Working Papers 136cherp, Centre for Health Economics, University of York.
    2. Beth Woods & Paul Revill & Mark Sculpher & Karl Claxton, 2015. "Country-level cost-effectiveness thresholds: initial estimates and the need for further research," Working Papers 109cherp, Centre for Health Economics, University of York.
    3. Claxton, Karl & Asaria, Miqdad & Chansa, Collins & Jamison, Julian & Lomas, James & Ochalek, Jessica & Paulden, Mike, 2019. "Accounting for Timing when Assessing Health-Related Policies," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 10(S1), pages 73-105, April.
    4. Claxton, Karl & Asaria, Miqdad & Chansa, Collins & Jamison, Julian & Lomas, James & Ochalek, Jessica & Paulden, Mike, 2019. "Accounting for timing when assessing health-related policies," LSE Research Online Documents on Economics 100038, London School of Economics and Political Science, LSE Library.
    5. Jessica Ochalek & Miqdad Asaria & Pei Fen Chuar & James Lomas & Sumit Mazumdar & Karl Claxton, 2019. "Assessing health opportunity costs for the Indian health care systems," Working Papers 161cherp, Centre for Health Economics, University of York.
    6. Culyer, Anthony J., 2016. "Cost-effectiveness thresholds in health care: a bookshelf guide to their meaning and use," Health Economics, Policy and Law, Cambridge University Press, vol. 11(4), pages 415-432, October.
    7. Emanuele Arcà & Francesco Principe & Eddy Van Doorslaer, 2020. "Death by austerity? The impact of cost containment on avoidable mortality in Italy," Health Economics, John Wiley & Sons, Ltd., vol. 29(12), pages 1500-1516, December.
    8. Boachie, Micheal Kofi & Ramu, K., 2015. "Public Health Expenditure and Health Status in Ghana," MPRA Paper 66371, University Library of Munich, Germany.
    9. Mujaheed Shaikh & Afschin Gandjour, 2019. "Pharmaceutical expenditure and gross domestic product: Evidence of simultaneous effects using a two‐step instrumental variables strategy," Health Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 101-122, January.
    10. AfDB AfDB, 2007. "Working Paper 91 - Health Expenditures and Health Outcomes in Africa," Working Paper Series 2224, African Development Bank.
    11. Peter J. Neumann & David D. Kim & Thomas A. Trikalinos & Mark J. Sculpher & Joshua A. Salomon & Lisa A. Prosser & Douglas K. Owens & David O. Meltzer & Karen M. Kuntz & Murray Krahn & David Feeny & An, 2018. "Future Directions for Cost-effectiveness Analyses in Health and Medicine," Medical Decision Making, , vol. 38(7), pages 767-777, October.
    12. Stephen Martin & Nigel Rice & Peter C Smith, 2008. "The link between health care spending and health outcomes for the new English Primary Care Trusts," Working Papers 042cherp, Centre for Health Economics, University of York.
    13. AfDB AfDB, 2007. "Working Paper 91 - Health Expenditures and Health Outcomes in Africa," Working Paper Series 2304, African Development Bank.
    14. Stephen Martin & Nigel Rice & Peter C Smith, 2007. "The Link Between Health Care Spending and Health Outcomes: Evidence from English Programme Budgeting Data," Working Papers 024cherp, Centre for Health Economics, University of York.
    15. Henrik Andersson & James Hammitt & Gunnar Lindberg & Kristian Sundström, 2013. "Willingness to Pay and Sensitivity to Time Framing: A Theoretical Analysis and an Application on Car Safety," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(3), pages 437-456, November.
    16. Herrera-Araujo, Daniel & Rochaix, Lise, 2020. "Does the Value per Statistical Life vary with age or baseline health? Evidence from a compensating wage study in France," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    17. Patrick Carlin & Brian E. Dixon & Kosali I. Simon & Ryan Sullivan & Coady Wing, 2022. "How Undervalued is the Covid-19 Vaccine? Evidence from Discrete Choice Experiments and VSL Benchmarks," NBER Working Papers 30118, National Bureau of Economic Research, Inc.
    18. Arthur E. Attema & Han Bleichrodt & Olivier L’Haridon & Patrick Peretti-Watel & Valérie Seror, 2018. "Discounting health and money: New evidence using a more robust method," Journal of Risk and Uncertainty, Springer, vol. 56(2), pages 117-140, April.
    19. Gianmarco León & Edward Miguel, 2017. "Risky Transportation Choices and the Value of a Statistical Life," American Economic Journal: Applied Economics, American Economic Association, vol. 9(1), pages 202-228, January.
    20. Hultkrantz, Lars & Svensson, Mikael, 2012. "A Comparison of Benefit Cost and Cost Utility Analysis in Practice: Divergent Policies in Sweden," Working Papers 2012:5, Örebro University, School of Business.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:chy:respap:122cherp. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gill Forder (email available below). General contact details of provider: https://edirc.repec.org/data/chyoruk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.