With the availability of futuristic technologies, we have come across numerous opportunities by which health can be improved. Any intervention, be it large or small scale, involves cost to the health system and to the patients. However, the resources available are scarce especially in low- and middle- income countries like Nepal.There is always a limit to the budget and resources available to the government, health care providers and the citizens. So, we have to make a difficult choice on which intervention should we spend our resources on to receive maximum benefits in return. This is where economic evaluation comes into play, it can help set out the value of costs and benefits between competing alternatives available. Use of economic evaluation to implement cost-effective interventions will allow LMICs to make the optimum use of scarce resources to improve the health status of the population.
Different methods of economic evaluation are used depending on the target population, size of the institution and level of governance. A hospital can use Clinical Decision Analysis (CDA), to identify the most effective treatment method for any specific disease. Likewise, on a larger scale, health systems of different countries can use Cost-effectiveness (CE) threshold. CE threshold is defined as a change in cost divided by change in health outcomes (disease or death averted or life years gained). It is described as the maximum amount a decision maker is willing to pay for a unit of health outcome. National Institute of Health and Clinical Excellence (NICE), UK has the CE threshold of GBP 20,000 per life years gained. Likewise, in the United States, interventions ranging from USD 10,000 – USD 50,000 per life years are classified as cost-effective and interventions with ratio equal to or greater than USD 10,000 as classified as highly cost-effective.
Many studies have been carried out to assess the implicit use of cost-effectiveness threshold as a sole method of decision making in health care in LMICs. Economic evaluations are considered important and useful however, their direct influence on decision making is moderate especially at macro and micro levels. The World Bank introduced a set of thresholds for LMICs in 1993, in which thresholds below USD 50 per Disease Adjusted Life Years (DALY) was considered highly cost-effective for low-income settings and thresholds below USD 150 per DALY was considered highly cost-effective in middle income countries. The growing use of 1 to 3 times GDP has raised concerns in the recent times as it lacks proper foundation. Its use in the LMICs is also questionable as per capita consumption in wealthier countries exceeds the per capita consumption in LMICs by 1 to 2 orders of magnitude. So, the analyst argue that the threshold should be lowered to 0.01 -0.51 times GDP per capita in LMICs.
In the context of Nepal, economic evaluations cannot be considered a dominant decision criterion for making health care decisions at present times. There are multiple layers of factors to be considered before implementing any interventions. Due to differences in resources, data availability, budget, financing mechanisms and socio-cultural factors thresholds cannot be equivalent across varying economies. Instead of relying on the conventional international thresholds, efforts should be made towards developing country specific thresholds. Acknowledging the practical limitations for devising country specific thresholds immediately, LMICs can begin with the enlightenment use of cost-effectiveness thresholds, by using scientific evidence with a backgroundinformation, ideas and concepts toassist the policy makers to view problems and solutions in decision making. Next, call to action for global agencies to re-examine and revise the existing standard criteria for cost-effectiveness and lower the threshold for both low- and middle-income countries should be initiated. In the end, standard guideline and technical assistance should be provided to assist the LMICs in developing their country specific threshold.
(Suvekshya Tiwari, MSc Health Economics, University of York.)
