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Appendix A

Allocating Resources to Medical Technologies

Cost-effectiveness analysis and benefit-cost analysis have been applied in the evaluation of several medical technologies, including vaccines (Koplan et al., 1979; Schoenbaum et al., 1976; Willems et al., 1980). Weinstein and Stason (1977) have reviewed these applications. The premise underlying the use of such methods is that the rankings supplied by the cost-effectiveness ratios, if obtained by uniform methods, could offer a guide to the allocation of limited resources by health care providers.

Application of cost-effectiveness analysis to the setting of priorities for clinical research also has been suggested and methods have been outlined by Mosteller and Weinstein (1981). These methods have been applied informally to set priorities for clinical trials at the National Heart, Lung, and Blood Institute (Levy and Sondik, 1982).

A decision-analytic approach to priority setting for health programs has been used in Ghana (Ghana Health Assessment project Team, 1981). It was proposed that priority setting for disease prevention could be guided by the impact of target diseases measured on an index called “days of healthy life lost,” in which days of morbidity were weighted on a 0–1 scale and then aggregated with days of life lost. This example, like many others based on the impact of illness, considers only potential benefits and does not consider the costs and effectiveness of specific disease interventions, nor does it consider economic benefits or costs.

Priorities for Biomedical Research

Cost-effectiveness analysis has been proposed to help set priorities for biomedical research (Keeler, 1970). For this purpose, the numerator of the cost-effectiveness ratio is the cost of the research itself, while the denominator is a benefit-cost estimate of the net expected reduction in the economic cost of the disease, multiplied by the subjective probability of successful research. Keeler’s study contains an example based on a comparison (as of 1970) of hepatitis versus rubella vaccines.

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