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Suggested Citation:"Front Matter." Institute of Medicine. 2006. Valuing Health for Regulatory Cost-Effectiveness Analysis. Washington, DC: The National Academies Press. doi: 10.17226/11534.
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VALUING HEALTH FOR REGULATORY COST-EFFECTIVENESS ANALYSIS

Wilhelmine Miller, Lisa A. Robinson, and Robert S. Lawrence, Editors

Committee to Evaluate Measures of Health Benefits for Environmental, Health, and Safety Regulation

Board on Health Care Services

INSTITUTE OF MEDICINE OF THE NATIONAL ACADEMIES

THE NATIONAL ACADEMIES PRESS
Washington, D.C.
www.nap.edu

Suggested Citation:"Front Matter." Institute of Medicine. 2006. Valuing Health for Regulatory Cost-Effectiveness Analysis. Washington, DC: The National Academies Press. doi: 10.17226/11534.
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THE NATIONAL ACADEMIES PRESS
500 FIFTH STREET, N.W.Washington, DC 20001

NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance.

This study was supported by Contract No. 282-99-0045 between the National Academy of Sciences and Department of Health and Human Services. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the organizations or agencies that provided support for this project.

Library of Congress Cataloging-in-Publication Data

Valuing health for regulatory cost-effectiveness analysis / Wilhelmine Miller, Lisa A. Robinson, and Robert S. Lawrence, editors ; Committee to Evaluate Measures of Health Benefits for Environmental, Health, and Safety Regulation, Board on Health Care Services.

p. ; cm.

Includes bibliographical references and index.

ISBN 0-309-10077-1 (casebound book)

1. Medical care—Cost effectiveness—Research—Methodology. 2. Cost effectiveness. I. Miller, Wilhelmine. II. Robinson, Lisa A. III. Lawrence, Robert S., 1938- . IV. Institute of Medicine (U.S.). Committee to Evaluate Measures of Health Benefits for Environmental, Health, and Safety Regulation.

[DNLM: 1. Cost-Benefit Analysis—methods—United States. 2. Health Policy—economics—United States. 3. United States Government Agencies—United States. WA 540 AA1 V215 2006]

RA410.5.V35 2006

362.1068′1—dc22

2006001486

Additional copies of this report are available from the
National Academies Press,
500 Fifth Street, N.W., Lockbox 285, Washington, DC 20055; (800) 624-6242 or (202) 334-3313 (in the Washington metropolitan area); Internet, http://www.nap.edu.

For more information about the Institute of Medicine, visit the IOM home page at: www.iom.edu.

Copyright 2006 by the National Academy of Sciences. All rights reserved.

Printed in the United States of America.

The serpent has been a symbol of long life, healing, and knowledge among almost all cultures and religions since the beginning of recorded history. The serpent adopted as a logotype by the Institute of Medicine is a relief carving from ancient Greece, now held by the Staatliche Museen in Berlin.

Suggested Citation:"Front Matter." Institute of Medicine. 2006. Valuing Health for Regulatory Cost-Effectiveness Analysis. Washington, DC: The National Academies Press. doi: 10.17226/11534.
×

“Knowing is not enough; we must apply.

Willing is not enough; we must do.”

—Goethe

INSTITUTE OF MEDICINE OF THE NATIONAL ACADEMIES

Advising the Nation. Improving Health.

Suggested Citation:"Front Matter." Institute of Medicine. 2006. Valuing Health for Regulatory Cost-Effectiveness Analysis. Washington, DC: The National Academies Press. doi: 10.17226/11534.
×

THE NATIONAL ACADEMIES

Advisers to the Nation on Science, Engineering, and Medicine


The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences.


The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Wm. A. Wulf is president of the National Academy of Engineering.


The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine.


The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Wm. A. Wulf are chair and vice chair, respectively, of the National Research Council.

www.national-academies.org

Suggested Citation:"Front Matter." Institute of Medicine. 2006. Valuing Health for Regulatory Cost-Effectiveness Analysis. Washington, DC: The National Academies Press. doi: 10.17226/11534.
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COMMITTEE TO EVALUATE MEASURES OF HEALTH BENEFITS FOR ENVIRONMENTAL, HEALTH, AND SAFETY REGULATION

ROBERT S. LAWRENCE (Chair), Associate Dean for Professional Practice and Programs and Edyth Schoenrich Professor of Preventive Medicine,

Bloomberg School of Public Health, Johns Hopkins University, Baltimore, Maryland

HENRY A. ANDERSON, Chief Medical Officer,

Environmental and Occupational Disease Epidemiologist, Wisconsin Division of Public Health, Madison

RICHARD T. BURNETT, Senior Research Scientist,

Healthy Environments and Consumer Safety Branch, Health Canada, Ottawa, Ontario, Canada

CARL F. CRANOR, Professor of Philosophy,

University of California, Riverside

MAUREEN L. CROPPER, Professor,

University of Maryland, and

Lead Economist,

The World Bank, Washington, DC

NORMAN DANIELS, Professor of Ethics and Population Health,

Harvard School of Public Health, Boston, Massachusetts

DENNIS G. FRYBACK, Professor of Population Health Sciences and Industrial Engineering,

Department of Population Health Sciences, University of Wisconsin, Madison

ALAN M. GARBER, Staff Physician,

Veterans Affairs Palo Alto Health Care System

; Henry J. Kaiser, Jr. Professor and Professor of Medicine, Director,

Center for Health Policy, and

Director,

Center for Primary Care and Outcomes Research, Stanford University, Stanford, California

MARTHE R. GOLD, Arthur C. Logan Professor and Chair,

Department of Community Health and Social Medicine, City University of New York Medical School, New York

JAMES K. HAMMITT, Professor of Economics and Decision Sciences and Director,

Harvard Center for Risk Analysis, Harvard University, Boston, Massachusetts

LISA I. IEZZONI, Professor of Medicine,

Harvard Medical School, and

Co-Director of Research,

Division of General Medicine and Primary Care, Beth Israel Deaconess Medical Center, Boston, Massachusetts

PETER D. JACOBSON, Professor of Health Law and Policy and Director,

Center for Law, Ethics, and Health, University of Michigan School of Public Health, Ann Arbor

EMMETT KEELER, Senior Mathematician and Professor of Health Economics,

RAND, Santa Monica, California

WILLARD G. MANNING, Professor,

Harris School of Public Policy Studies, The University of Chicago, Chicago, Illinois

Suggested Citation:"Front Matter." Institute of Medicine. 2006. Valuing Health for Regulatory Cost-Effectiveness Analysis. Washington, DC: The National Academies Press. doi: 10.17226/11534.
×

CHARLES POOLE,* Associate Professor,

Department of Epidemiology, University of North Carolina School of Public Health, Chapel Hill

DAVID A. SCHKADE, Jerome Katzin Professor,

Rady School of Management, University of California, San Diego

ADVISERS TO THE COMMITTEE

ALAN KRUPNICK, Senior Fellow and Director,

Quality of the Environment, Resources for the Future, Washington, DC

JUDITH L. WAGNER, Scholar-in-Residence,

Institute of Medicine, Washington, DC

MILTON C. WEINSTEIN, Henry J. Kaiser Professor of Health Policy and Management,

Harvard School of Public Health and Center for Risk Analysis, Boston, Massachusetts

IOM Staff

Wilhelmine Miller, Project Director

Ryan L. Palugod, Research Assistant

Principal Consultant

Lisa A. Robinson, Independent Consultant

*  

Served from March 2004 to June 2005.

Suggested Citation:"Front Matter." Institute of Medicine. 2006. Valuing Health for Regulatory Cost-Effectiveness Analysis. Washington, DC: The National Academies Press. doi: 10.17226/11534.
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Reviewers

This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Research Council’s (NRC’s) Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following individuals for their review of this report:

ELENA ANDRESEN, Professor of Epidemiology, University of Florida, College of Public Health and Health Professions, and Research Health Scientist, North Florida/South Georgia VA Medical Center, Gainesville

DAVID A. ASCH, Eilers Professor of Health Care Management and Economics, Executive Director, Leonard Davis Institute of Health Economics, The Wharton School, University of Pennsylvania, Philadelphia

TRUDY A. CAMERON, Professor of Economics, University of Oregon, Eugene

LELAND B. DECK, Senior Economist, U.S. Environmental Protection Agency (retired) and Vice President, Abt Associates (retired), Rockville, Maryland

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AMY D. KYLE, Research Scientist and Lecturer, Environmental Health Sciences Division, School of Public Health, University of California, Berkeley

JOSEPHINE MAUSKOPF, Global Director, Health Economics, RTI-International, Research Triangle Park, North Carolina

THOMAS O. MCGARITY, Professor, University of Texas School of Law, Austin

RICHARD D. MORGENSTERN, Senior Fellow, Resources for the Future, Inc., Washington, DC

CHARLES E. PHELPS, Provost, University of Rochester, Rochester, New York

MICHAEL STOTO, Senior Statistical Scientist and Associate Director for Public Health, Center for Domestic and International Health Security, The RAND Corporation, Arlington, Virginia

CASS SUNSTEIN, Karl N. Llewellyn Distinguished Service Professor of Jurisprudence, School of Law, The University of Chicago, Chicago, Illinois

PETER UBEL, Associate Professor of Internal Medicine, Director, Program for Improving Health Care Decisions, and Staff Physician, Ann Arbor Veterans Affairs Medical Center, University of Michigan, Ann Arbor

ROBERT WACHBROIT, Professor of Philosophy, Maryland School of Public Policy, University of Maryland, College Park

JONATHAN B. WIENER, Professor of Law, Environmental Policy, and Public Policy Studies, Duke University, and Founding Director, Center for Environmental Solutions, Durham, North Carolina

Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations nor did they see the final draft of the report before its release. The review of this report was overseen by John C. Bailar III, Professor Emeritus, The University of Chicago, and Louise B. Russell, Research Professor, Institute for Health, Health Care Policy and Aging Research, Rutgers, The State University of New Jersey. Appointed by the NRC and Institute of Medicine, they were responsible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the authoring committee and the institution.

Suggested Citation:"Front Matter." Institute of Medicine. 2006. Valuing Health for Regulatory Cost-Effectiveness Analysis. Washington, DC: The National Academies Press. doi: 10.17226/11534.
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Preface

Valuing Health for Regulatory Cost-Effectiveness Analysis responds to several important analytical and policy challenges. These include how to estimate the health-related effects of regulatory interventions to reduce environmental, health, and safety risks; how to conduct informative cost-effectiveness analyses (CEAs) of such interventions prospectively; and how to use the results of CEAs and of other kinds of economic analyses in public policy decisions about regulating risks to human health and safety. In 2003 John D. Graham, the Administrator of the Office of Information and Regulatory Affairs in the Office of Management and Budget, asked the Institute of Medicine (IOM) to convene an expert consensus committee to address these questions. A consortium of federal regulatory and health policy offices and agencies supported this effort financially and, equally essentially, with information and analytic expertise generously provided to the study committee throughout the project.

This report of the Committee to Evaluate Measures of Health Benefits for Environmental, Health, and Safety Regulation is the latest in a series by the IOM and the National Research Council (NRC) of The National Academies that have addressed risk assessment and communication; economic evaluation of environmental, health, and safety risks; and measurement of population health. These precursor reports include the NRC reports Risk Assessment in the Federal Government: Managing the Process (1983); Improving Risk Communication (1989); Valuing Health Risks, Costs, and Benefits for Environmental Decision Making: Report of a Conference (1990); and Estimating the Public Health Benefits of Proposed Air Pollu-

Suggested Citation:"Front Matter." Institute of Medicine. 2006. Valuing Health for Regulatory Cost-Effectiveness Analysis. Washington, DC: The National Academies Press. doi: 10.17226/11534.
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tion Regulations (2002); and the IOM report Summarizing Population Health: Directions for the Development and Application of Population Metrics (1998). We build on the insights of these earlier efforts and cover new ground in this latest work, which offers guidance on the application of summary health measures to the economic analysis of regulations. This report takes as its primary audience regulatory analysts and public-sector decision makers. We have tried to make the text accessible for lay readers also, to help promote public understanding of important governmental functions and processes.

The work of the Committee to Evaluate Measures of Health Benefits has involved multidisciplinary collaborations of a breadth unusual even for IOM committees, which frequently draw on members with diverse expertise. Representing capability in environmental and population health sciences, economics, ethics, law, statistics, and medicine, the Committee worked together over 20 months to develop a sound and feasible approach to incorporating CEA with health-related effectiveness measures into regulatory impact analyses. Committee members, advisers, IOM staff and consultants, and federal agency experts learned together, through undertaking three case studies, the challenges and possibilities for regulatory CEA.

As chair, I have been most impressed by the intellectual openness and generosity of all of the committee in our work together to address an essentially practical problem of public policy. When conflicting convictions and preferences grounded in members’ particular disciplines emerged, all made a great effort to see beyond the questions of theory and the ideal to constructive and feasible proposals and methods for analysts and decision makers. The steady hand on the tiller of Wilhelmine Miller, study director, allowed the committee to navigate successfully the many challenging currents of our deliberations, and for this we are all indebted to her. This report is the result of an especially productive collaboration.

Robert S. Lawrence, M.D.

Chair

December 2005

Suggested Citation:"Front Matter." Institute of Medicine. 2006. Valuing Health for Regulatory Cost-Effectiveness Analysis. Washington, DC: The National Academies Press. doi: 10.17226/11534.
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Acknowledgments

Valuing Health for Regulatory Cost-Effectiveness Analysis reflects the contributions of many people. The Committee would like to acknowledge and thank those who so generously participated in the development of this report.

First, we would like to thank the federal sponsors of this project who supported and guided the project, including John Graham, Administrator, Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget; John Morrall, III, OIRA; and project officers Joanna Siegel, Agency for Healthcare Research and Quality (AHRQ), and Phaedra Corso, Centers for Disease Control and Prevention (CDC). Financial support was provided by the Environmental Protection Agency (EPA), several agencies and offices of the Department of Health and Human Services and the Department of Transportation, the Consumer Product Safety Commission (CPSC), and the Department of Agriculture.

The Committee’s deliberations were informed by presentations and discussions held November 30 and December 1, 2004, at public workshop and meeting sessions. The following experts and scholars made presentations and continued to share advice and expertise with the Committee and project staff over many months: John Brazier, University of Sheffield; Dan Brock, Harvard University; David Feeny, University of Alberta; Peter Franks, University of California–Davis; Amiram Gafni, McMaster University; Daniel Hausman, University of Wisconsin; Robert Kaplan, University of California–Los Angeles; Paul Kind, University of York; Ellen MacKenzie, Johns Hopkins University; Erik Nord, Norwegian Institute of Public Health;

Suggested Citation:"Front Matter." Institute of Medicine. 2006. Valuing Health for Regulatory Cost-Effectiveness Analysis. Washington, DC: The National Academies Press. doi: 10.17226/11534.
×

Joshua Salomon, Harvard University; Elizabeth Vigdor, Duke University; and David Wasserman, University of Maryland. Edward Sondik, Director, National Center for Health Statistics, Dave Moriarty, CDC, William Lawrence, AHRQ, and S. “Chris” Haffer, Centers for Medicare and Medicaid Services, provided information on federal data collection and statistical policy and fielded many questions over the course of the project. Reed Johnson, Research Triangle Institute, also presented his research to the Committee at its first meeting in May 2004. Susan Stewart, National Bureau of Economic Research, made her research on statistically inferred health indexes available to the Committee.

Federal agency staff supported this project in several important ways. Randall Lutter, Food and Drug Administration (FDA), Albert McGartland, EPA, and Lawrence Blincoe, National Highway Traffic Safety Administration (NHTSA), introduced current agency practices in presentations at the Committee’s May 2004 meeting. Numerous agency staff participated in subsequent interviews supporting the Committee’s commissioned paper on current practices (Robinson, 2004). A full list of participants is provided in that paper; however, we would particularly like to thank the following individuals for setting up the interviews and reviewing the draft materials: James DeMocker, Bryan Hubbell, Lyn Luben, and Nathalie Simon, EPA; Clark Nardinelli and Richard Williams, FDA; Clare Narrod, Ronald Meekof, and Charles Williams, Department of Agriculture; Robert Burt and Deborah Aiken, Occupational Safety and Health Administration; Robert Stone, Mine Safety and Health Administration; Lawrence Blincoe and James Simons, NHTSA; Charles Rombro, Federal Motor Carriers Safety Administration; and Gregory Rodgers, CPSC. Without their enthusiastic and extensive support, this report and its evidentiary basis would not exist; the Committee is extremely grateful for their assistance.

The three case studies undertaken by the Committee involved many of the agency staff already mentioned as well as many others. A synopsis of the case studies, included as Appendix A to this report, acknowledges all of the participants; the Committee would especially like to thank the following individuals. The case studies would not have been possible without extended consultations with and help from those involved in the original agency regulatory analyses, particularly Bryan Hubbell, EPA; Clark Nardinelli, FDA; and Lawrence Blincoe and James Simons, NHTSA. Several CDC staff provided important assistance in developing and implementing the approaches used to assess health-related quality of life impacts in each case study. Anne Haddix, Office of the Director, CDC, offered CDC’s staff expertise in planning and conducting the case studies. Phaedra Corso, Center for Injury Prevention, CDC, deserves special recognition for initiating the first case study (of the NHTSA child restraints regulation), which provided the basic framework for the subsequent studies and was an

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important learning experience for the Committee. Sajal Chattopadhyay, Xiangming Fang, Tursynbek Nurmagambetov, Seymour Williams, and Darwin LaBarthe, all of CDC, devoted considerable time and effort to the case studies. Committee consultants Carmen Brauer and Peter Neumann, Harvard School of Public Health, Janel Hanmer, University of Wisconsin, Robert Black, Independent Consultant, Bryce Mason, RAND, and Patrick Sullivan, University of Colorado Health Sciences Center, made indispensable contributions to the case study analyses. William Lawrence, AHRQ, provided data and advice throughout the project.

We were especially fortunate to have three experts serve as advisers and sounding boards throughout the course of the study. Alan Krupnick, Judith Wagner, and Milton Weinstein helped design and critique the case studies, proposed lines of investigation and analysis for the report, and reviewed many drafts of Committee materials; their participation has enriched our work immeasurably. S. Matthew Liao, Greenwall Fellow in Bioethics and Health Policy, Johns Hopkins University, assisted in the development of the Committee’s discussion of the ethical implications of economic analysis in regulatory policy during his internship at the Institute of Medicine (IOM), and Andrew Wolman, George Washington University Law School, provided pro bono legal research. Lisa A. Robinson served as principal consultant to the Committee over the course of our study, bringing great expertise, energy, and intelligence to the project. We are indebted to her for contributions that extended well beyond the formal consultancy. Ryan Palugod expertly provided research assistance and general support to the Committee, consultants, and IOM staff.

This study was directed by Wilhelmine Miller, senior program officer of the Board on Health Care Services, which provided overall guidance and support to the study committee.

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VALUING HEALTH
FOR REGULATORY COST-EFFECTIVENESS ANALYSIS

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Promoting human health and safety by reducing exposures to risks and harms through regulatory interventions is among the most important responsibilities of the government. Such efforts encompass a wide array of activities in many different contexts: improving air and water quality; safeguarding the food supply; reducing the risk of injury on the job, in transportation, and from consumer products; and minimizing exposure to toxic chemicals. Estimating the magnitude of the expected health and longevity benefits and reductions in mortality, morbidity, and injury risks helps policy makers decide whether particular interventions merit the expected costs associated with achieving these benefits and inform their choices among alternative strategies. Valuing Health for Regulatory Cost-Effectiveness Analysis provides useful recommendations for how to measure health-related quality of- life impacts for diverse public health, safety, and environmental regulations. Public decision makers, regulatory analysts, scholars, and students in the field will find this an essential review text. It will become a standard reference for all government agencies and those consultants and contractors who support the work of regulatory programs.

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