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Bridging the gap between health and non-health investments: moving from cost-effectiveness analysis to a return on investment approach across sectors of economy

Sendi, Pedram

In: International Journal of Health Care Finance and Economics, 2008, vol. 8, no. 2, p. 113-121

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    Title
    • Bridging the gap between health and non-health investments: moving from cost-effectiveness analysis to a return on investment approach across sectors of economy
    Author
    • Sendi, Pedram. Division of Health Economics, Basel Institute for Clinical Epidemiology, Basel University Hospital, Hebelstrasse 10, 3rd Floor, 4031, Basel, Switzerland
    Document Type
    • Postprint
    Language
    • English
    Published in
    • International Journal of Health Care Finance and Economics, 2008, vol. 8, no. 2, p. 113-121. Springer US; http://www.springer-ny.com
    Other Version
    OAI-PMH Identifier
    • oai:doc.rero.ch:317856
    Summary
    When choosing from a menu of treatment alternatives, the optimal treatment depends on the objective function and the assumptions of the model. The classical decision rule of cost-effectiveness analysis may be formulated via two different objective functions: (i) maximising health outcomes subject to the budget constraint or (ii) maximising the net benefit of the intervention with the budget being determined ex post. We suggest a more general objective function of (iii) maximising return on investment from available resources with consideration of health and non-health investments. The return on investment approach allows to adjust the analysis for the benefits forgone by alternative non-health investments from a societal or subsocietal perspective. We show that in the presence of positive returns on non-health investments the decision-maker's willingness to pay per unit of effect for a treatment program needs to be higher than its incremental cost-effectiveness ratio to be considered cost-effective