Cost effectiveness and strategic planning (WHO-CHOICE)

An overview of the rationale, activities and goals of WHO-CHOICE

Why is Cost-Effectiveness Analysis important?

Health systems have multiple goals, but the fundamental reason they exist is to improve health. Yet health systems with very similar levels of health expenditure per capita show wide variations in population health outcomes. Part of the difference can be explained by variation in non-health system factors, such as the level of education of the population. But part can also be explained by the fact that some systems devote resources to expensive interventions with small effects on population health, while at the same time low cost interventions with potentially greater benefits are not fully implemented.

Cost-effectiveness analysis (CEA) is one tool decision-makers can use to assess and potentially improve the performance of their health systems. It indicates which interventions provide the highest "value for money" and helps them choose the interventions and programmes which maximize health for the available resources.

CEA requires information on:

  • The extent to which current and potential interventions improve population health, i.e., effectiveness
  • The resources required to implement the interventions, i.e., costs

The impact of interventions on population health is vital. But it is also important to determine the role of different interventions in contributing to other socially desirable goals, such as reducing health inequalities, and being responsive to the legitimate expectations of the population.