The use of modelling approaches for the economic evaluation of public health interventions

This chapter considers the use of modelling for public health economic evaluation. The approach to decision analytic modelling within health economic evaluation is described and five key challenges relating to modelling public health interventions are highlighted: incorporating equity; extrapolating multi-component intervention effectiveness beyond study data; capturing relevant complex relationships and feedback loops of a dynamically complex system; modelling human behaviour; and capturing relevant non-health costs and outcomes and the relationship between individual and social determinants. The chapter describes current practice and the latest methodological research in these areas. It outlines two general approaches which could help to address these challenges by (i) adopting an iterative approach to the evaluation by using early-stage decision modelling to guide primary data collection, and (ii) a conceptual modelling framework to guide the model development process.

Cost–benefit analysis for applied public health economic evaluation

Chapter 9 introduces the reader to the stages of cost–benefit analysis (CBA) as specifically applied to public health intervention economic evaluation. The specific focus of this chapter follows on from the messages of Chapter 6 on the relevance of, and methods for, quantifying the ‘outcomes’ of public health interventions in monetary form for CBA. Two case studies focus on the use of stated preference discrete choice experiment (SPDCE) methodology for valuation of multi-attribute benefits comprising health, non-health, and process outcomes of the type likely to occur in PHIs.

Cost–utility analysis of public health interventions

This chapter builds upon Chapters 2 and 6 by introducing the reader to the history and concepts of health-related quality of life, cost–utility analysis, quality-adjusted life years (QALYs), and payer thresholds. The aim of this chapter is to outline in more depth the role of applied cost–utility analyses in the economic evaluation of public health interventions. The chapter goes on to reproduce a paper by Owen and colleagues at the National Institute for Health and Care Excellence (NICE) in the United Kingdom. This paper shows that many public health interventions often have a cost per QALY considerably lower than the £20,000 payer threshold conventionally used by NICE in the United Kingdom.

To disinvest or invest? The role of programme budgeting and marginal analysis (PBMA) for economic evaluation and prioritization between public health interventions

This chapter describes the application of programme budgeting and marginal analysis (PBMA) as an evidence-based framework to make resource allocation decisions such as whether to invest or disinvest in certain services, products, or interventions. This evidence-based eight-step decision-making process can help decision-makers to maximize the impact of healthcare resources on the health needs of a local population. Programme budgeting is an appraisal of past resource allocation in specified programmes or services with a view to tracking future resource allocation in those same programmes or services. Marginal analysis is the appraisal of the added benefits and added costs of a proposed investment or the lost benefits and lower costs of a proposed disinvestment. This chapter pays particular attention to the use of the PBMA framework to appraise a national health improvement budget as a case study to illustrate the methods practical application in public health.

Identifying, measuring, and valuing outcomes within economic evaluations of public health interventions

Chapter 6 explores the many challenges associated with identification, measurement, valuation, reporting, and presenting outcomes within economic evaluations of population health interventions and policies. Drawing on the vast literature in this area, existing guidelines, government recommendations, and methodological advances, this chapter will outline the current challenges, solutions, and suggestions. This chapter also introduces a number of research developments and new outcome measures particularly suited to public health intervention evaluation. These developments include the growing acceptance and relevance of broader measures of outcomes, greater use of ‘capability well-being’ as an outcome, and an increasing use of alternative reporting and presenting frameworks to accommodate these outcomes such as cost–consequence analysis, multi-criteria decision analysis, and social cost–benefit analysis.

Applying methods of economic evaluation to public health: Contemporary solutions to traditional challenges

Chapter 3 opens with a discussion of the role of study design, the gold standard traditionally being a randomized controlled trial, and widens this to consider other types of study design such as cohort studies and natural experiments. Readers are introduced to the idea that many public health interventions are ‘complex interventions’ and there is a need for a ‘systems-based approach’ to understanding their potential effectiveness and cost-effectiveness. The chapter highlights the relevance of behavioural economics to the evaluation of public health interventions. This chapter goes on to summarize a range of challenges faced by economists, used to evaluate healthcare technologies in a healthcare setting, when they start evaluating public health interventions, which are often delivered outside the health sector in, for example, schools and workplaces. UK guidance from NICE is presented on good practice in economic evaluation of public health interventions along with ideas about how such evaluations are best reported in the literature.

The role of multi-criteria decision analysis (MCDA) in public health economic evaluation

Decision making regarding implementation of public health interventions (PHIs) can sometimes be heuristic (i.e. ad hoc) and it can be argued that decisions based only on a single criterion disregards important information about other relevant related outcomes. Multi-criteria decision analysis (MCDA) can help decision-makers make decisions based on multiple, sometimes conflicting criteria. This chapter looks at the definition and history of decision analysis as a field of study and at its application in various disciplines. It describes the different approaches used in MCDA and how these approaches help generate information a decision-maker can use to make decisions regarding resource allocation in public health. A case study is presented which shows a practical example of MCDA being conducted to evaluate healthcare policy issues in public health in The Netherlands.

Cost-effectiveness analysis of public health interventions

Building on Chapter 2, which introduced the reader to the purpose, principles, and statistical methods of cost-effectiveness analysis, this chapter provides a case study of a cost-effectiveness analysis undertaken alongside a trial of a public health intervention conducted by Edwards and colleagues into enhancing ventilation in homes of children with asthma. The association between poor housing and ill-health has long been recognized. This chapter reproduces in full a paper reporting the CHARISMA study, one of the first economic evaluation studies worldwide alongside a pragmatic randomized controlled trial of improving heating and ventilation in the homes of children with asthma. In summary, tailored ventilation and heating modifications moved 17 per cent of children in the intervention group from below the original median (‘severe asthma’) to above that median (‘moderate asthma’), while only 3 per cent of controls moved from ‘severe’ to ‘moderate’. Thus, a net 14 per cent of children (or 29 per cent of children with ‘severe’ asthma) became ‘moderate’.

International perspectives and future directions for research and policy

This final chapter of the book provides an international perspective on health economics applied to public health intervention evaluation, with international examples offered. The chapter sets out research priorities for public health economics: increased use of behavioural economics; ethical considerations of the use of financial incentives in behaviour change; valuing green space in the built environment and valuing nature; exploring the roll of prevention and public health in a circular economy; increased use of cost-benefit analysis (CBA); standardization of return on investment (ROI) and social return on investment (SROI); navigating the research funding environment; precision public health; why many public health programmes fail to demonstrate effectiveness and cost-effectiveness; the need for payer thresholds for changes in population health; the challenge posed by assets based interventions; widening the range of costs measured; and publication of economic evaluation of public health interventions (PHIs). The chapter concludes with a review of the entire book and a suggested checklist for the conduct, analysis, and reporting of economic evaluation of PHIs.

Return on investment, social return on investment, and the business case for prevention

This chapter describes social return on investment (SROI) analysis as a method to calculate a wider concept of value of an intervention from each £1 invested, across the ‘triple bottom line’ of economic, social, and environmental value. The method is underpinned by seven principles and can be considered a practical, stakeholder adaptation of cost–benefit analysis, although there are important differences between these two methods. This chapter outlines the method, providing an illustrative case study of applying SROI analysis to housing improvements to highlight each stage of the analysis and provide a worked example of the method. The merits and limitations of this relatively new method are also discussed, including reasons for the increased use of the approach for economic evaluation of PHIs. The role of SROI in producing a pragmatic business case for prevention is also discussed.