Economic analysis of prevention: Evaluating the ripple effect

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Improving the economic analysis of prevention

Project title

What is the issue?

There is a growing awareness of the limitations of existing methods of economic evaluation in capturing the full range of potential outcomes, costs and cost savings of disease-prevention activities.

Economic evaluation tends to measure bottom-line measures such as cost-effectiveness and changes in health outcomes, but it undervalues intermediate benefits, such as cultural or institutional changes that occur as a result of the intervention.

How did the project address the issue?

This project aimed to develop an approach to the economic analysis of prevention programs that is potentially broader than conventional forms of economic evaluation but simple enough to be used routinely.

The project:

  • Examined approaches to the economic analysis of prevention programs
  • Identified what criteria practitioners and policy makers use to inform investment decisions in prevention (ideal and in practice)
  • Identified contexts in which economic evidence is used
  • Established guidelines for evaluation that are consistent with the objectives of decision making.

What were the outcomes?

The project produced a guide to commissioning economic evaluations – an approach that will improve the quality and relevance of economic analysis for prevention. Aligning decision-makers’ expectations with how researchers design and undertake economic evaluations should enable investment decisions in disease prevention to be better informed by evidence and to be more responsive to community values.

Relevance for practice

The project developed practical and simple ways to assess the wider economic impacts of prevention interventions, beyond cost and cost-effectiveness. It provided guidelines that allow policy makers to make better decisions about the wider benefits of prevention programs.

Funding

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