Country-Level Cost-Effectiveness Thresholds: Initial Estimates and the Need for Further Research

Abstract

Background: Cost-effectiveness analysis can guide policymakers in resource allocation decisions. It assesses whether the health gains offered by an intervention are large enough relative to any additional costs to warrant adoption. When there are constraints on the health care system's budget or ability to increase expenditures, additional costs imposed by interventions have an "opportunity cost" in terms of the health foregone because other interventions cannot be provided. Cost-effectiveness thresholds (CETs) are typically used to assess whether an intervention is worthwhile and should reflect health opportunity cost. Nevertheless, CETs used by some decision makers-such as the World Health Organization that suggested CETs of 1 to 3 times the gross domestic product (GDP) per capita-do not.

Objectives: To estimate CETs based on opportunity cost for a wide range of countries.

Methods: We estimated CETs based on recent empirical estimates of opportunity cost (from the English National Health Service), estimates of the relationship between country GDP per capita and the value of a statistical life, and a series of explicit assumptions.

Results: CETs for Malawi (the country with the lowest income in the world), Cambodia (with borderline low/low-middle income), El Salvador (with borderline low-middle/upper-middle income), and Kazakhstan (with borderline high-middle/high income) were estimated to be $3 to $116 (1%-51% GDP per capita), $44 to $518 (4%-51%), $422 to $1967 (11%-51%), and $4485 to $8018 (32%-59%), respectively.

Conclusions: To date, opportunity-cost-based CETs for low-/middle-income countries have not been available. Although uncertainty exists in the underlying assumptions, these estimates can provide a useful input to inform resource allocation decisions and suggest that routinely used CETs have been too high.

Keywords: benefits package; cost-effectiveness; quality-adjusted life-years; threshold; universal health care; willingness to pay.

Fig. 1

Method for inferring country-specific cost-effectiveness thresholds from the UK threshold.

Fig. 2

Predicted cost-effectiveness threshold (k) values by country income. GDP, gross domestic product; PPP, purchasing power parity; QALY, quality-adjusted life-year; USD, US dollar.