Abstract
This chapter aims to present a practical prioritarian approach to economic evaluation of health programmes, taking into account impacts on income as well as health, with an illustrative application. We propose applying the prioritarian transform to lifetime well-being, defined as the sum of current period well-being over the lifetime. We first describe two simple ways of combining individual-level information on income and health to generate an index of well-being, based on the equivalent life and equivalent income approaches respectively. We then illustrate how these two metrics can be used to conduct lifetime prioritarian evaluation using a simple hypothetical comparison of two funding options for cancer treatment in a low-income country – out-of-pocket payment (OOP) and universal public funding (UPF) via taxes or compulsory insurance premiums proportional to income. We compare the findings of lifetime prioritarian evaluation with those of utilitarian evaluation and benefit-cost analysis.We find that standard cost-effectiveness analysis and benefit-cost analysis are not sensitive to income redistribution, while lifetime prioritarian evaluation is sensitive not only to total effects on health and income but also to progressive redistribution of lifetime income, health and well-being favouring the worse-off.
| Original language | English |
|---|---|
| Title of host publication | Prioritarianism in Practice |
| Publisher | Cambridge University Press |
| Pages | 260-316 |
| Number of pages | 57 |
| ISBN (Electronic) | 9781108691734 |
| ISBN (Print) | 9781108480932 |
| DOIs | |
| Publication status | Published - 1 Jan 2022 |
Bibliographical note
Publisher Copyright:© Cambridge University Press 2022.
Keywords
- Benefit-cost analysis
- Cost-effectiveness analysis
- Economic evaluation
- Health
- Health financing
- Income
- Prioritarian social welfare functions
- Priority setting