Fairer decisions, better health for all: Health equity and cost-effectiveness analysis

This report provides a non-technical introduction to practical methods for using cost-effectiveness analysis to address health equity concerns, with applications to low-, middle- and high-income countries. These methods can provide information about the likely impacts of alternative health policy decisions on inequalities in health, financial risk protection and other health-related outcomes that may be considered unfair, allowing for the distribution of costs as well as benefits. They can also provide information about the trade-offs that sometimes arise between improving total health and reducing health inequalities of different kinds. We distinguish three general ways of using cost-effectiveness analysis to address health equity concerns: (1) equity impact analysis, which quantifies the distribution of costs and effects across a population by equity-relevant variables such as socioeconomic status, ethnicity, location, gender, age and severity of illness; (2) equity constraint analysis, which counts the cost of choosing fairer but less cost-effective options; and (3) equity weighting analysis, which uses equity weights or parameters to explore how much concern for equity is required to choose fairer but less cost-effective options. We hope this report will raise awareness of the practical tools of cost-effectiveness analysis that are now available to help give health care and public health policy makers a better understanding of who gains and who loses from their priority setting decisions.