Assessing costs and benefits of whole-of-government prevention


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

This project is finished.

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 included:

  • 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 were the outcomes?

We developed a cost benefit analysis framework.

Relevance for practice

The framework has been shared with NSW Treasury and NSW Health for internal use. Several of the NSW government representatives are interested in being kept informed about any further work on cost benefit analysis, and also have been interested in co-authoring the publications.

Project start date: July 2016

Project end date: June 2018

Project leads:

Project Steering Committee:

Prevention Centre economics working group

This project was funded by the NHMRC, Australian Government Department of Health, NSW Ministry of Health, ACT Health and the HCF Research Foundation.

 

NHMRC, Australian Government Department of Health, NSW Government Health, HCF Research Foundation, ACT Government Health, hosted by Sax Institute

This project has now been completed. The final outcomes are listed below.

Outputs

Three publications (in draft), including stakeholder views on a cost-benefit framework for public policy decision making, and on the development of a CBA framework for the evaluation of upstream obesity prevention interventions.

Impact

  • Facilitated increased knowledge among NSW Health staff on the benefits of considering economic evidence in decision making
  • Facilitated increased knowledge among NSW Health staff on the requirements from NSW Treasury for CBA and how it can be applied to the health sector
  • Facilitated a better understanding among NSW Treasury staff of the issues related to applying CBA for preventive health interventions
  • Benefits of co-production
    • Better understanding of the decision making process in NSW Health and NSW Treasury both by government and researchers
    • Better understanding of where, how and the types of economic evidence that can feed into the decision making process in NSW Health

Presentations

  • Focus group with nine representatives from NSW Health (Centre for Population Health, Office of Preventive Health, Centre for Epidemiology and Evidence, Cancer Institute NSW, Health Infrastructure, Department of Premier and Cabinet).
  • Four interviews with NSW Treasury (Economic Analysis and Evaluation, Agency Budget and Policy, Commissioning and Contestability, Fiscal Estimates and Financial Reporting).