Cost-Effectiveness Thresholds in Global Health: Taking a Multisectoral Perspective

Abstract

Good health is a function of a range of biological, environmental, behavioral, and social factors. The consumption of quality health care services is therefore only a part of how good health is produced. Although few would argue with this, the economic framework used to allocate resources to optimize population health is applied in a way that constrains the analyst and the decision maker to health care services. This approach risks missing two critical issues: 1) multiple sectors contribute to health gain and 2) the goods and services produced by the health sector can have multiple benefits besides health. We illustrate how present cost-effectiveness thresholds could result in health losses, particularly when considering health-producing interventions in other sectors or public health interventions with multisectoral outcomes. We then propose a potentially more optimal second best approach, the so-called cofinancing approach, in which the health payer could redistribute part of its budget to other sectors, where specific nonhealth interventions achieved a health gain more efficiently than the health sector’s marginal productivity (opportunity cost). Likewise, other sectors would determine how much to contribute toward such an intervention, given the current marginal productivity of their budgets. Further research is certainly required to test and validate different measurement approaches and to assess the efficiency gains from cofinancing after deducting the transaction costs that would come with such cross-sectoral coordination.