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Assessing costs and benefits of whole-of-government prevention

Project title: Development of a cost-benefit analysis framework integrating inter-sectoral benefits of prevention

Start date: July 2016

Estimated end date: June 2018

What is the issue?

Changing the social and environmental factors (upstream factors) that lead to poor health requires political support, whole-of-government collaboration and co-ordinated action across several government sectors.

Efforts to improve a population’s diet and physical activity levels to prevent obesity requires a focus on systemic and environmental factors and co-ordinated action across several settings, including schools, workplaces and government sectors, such as agriculture, food, finance, urban planning and transport.

Decision makers who want to use this whole-of-government approach to tackle the obesity epidemic may find it useful to have data about the effectiveness of different interventions as well as information about the economic credentials of possible options.

Economic evaluations allow decision makers to make an informed judgment about the value for money of different interventions based on the incremental cost of implementing the intervention relative to the foregone benefit of maintaining the status quo.

Economic tools to inform decisions that have inter-sectoral impacts are not well developed or broadly used.

How is the project addressing the issue?

Decision makers who want to use a whole-of-government approach when allocating resources need to be able to compare policies within and across sectors. Traditional health economic evaluations used in Australia express benefits only in health outcomes.

Cost-benefit analysis (CBA) considers both the costs and benefits of a proposed policy action in monetary terms. It is also the only economic evaluation tool that allows comparisons between sectors, so it is best placed to inform whole-of-government decision making on spending priorities.

However, different government sectors use different CBA methodologies and conventions, making it difficult to make valid comparisons between policies. The aim of this research is to establish an acceptable CBA framework that outlines a reference case for the evaluation of prevention interventions with a focus on obesity prevention.

The research will include:

  • A literature review of CBA guidelines and conventions in different government sectors in Australia
  • A literature review of different methods of valuing health effects in CBA
  • Interviews with economists and decision makers from different government sectors.

 What are the expected outcomes?

  • Knowledge about the similarities and differences between CBA guidelines and applications in different government sectors across the Commonwealth and State Governments
  • Knowledge of stakeholder views (i.e. decision makers and economists from different government departments) on the features of a CBA framework that may be acceptable across sectors
  • Development of a CBA framework to assess the economic credentials of prevention interventions.

Project leads:

Project Steering Committee:

Prevention Centre economics working group

  • This project aims to enhance whole-of-government decision making on prevention interventions
  • The interview participants (decision makers and economists from different government departments) are also the end users of this research and will be kept informed and involved as the research progresses.

Both literature reviews have commenced.