In benefit-cost analysis, all consequences are reduced to a single, monetary quantity: the net expected economic benefit of a project. This requires that a monetary value be placed on health outcomes such as lives saved, as well as on non-health outcomes. Measures of economic productivity, such as earnings, often are used to monetize health improvements, but any such method has serious problems. (In fact, multiattribute scoring and decision analysis with multiple objectives often use this kind of judgment implicitly.) After all valued consequences have been monetized, the calculation of expected values proceeds as in multiattribute decision analysis: probabilities of various scenarios are multiplied by the corresponding utility values (or, in benefit-cost analysis, dollar values) and then summed.
Benefit-cost analysis is deeply rooted in the economic theory of social welfare. A society that wishes to maximize its welfare, according to theory, is supposed to adopt programs whose aggregate benefits exceed aggregate costs, to whomever those benefits and costs accrue. In recent years, the normative rationale for benefit-cost analysis has been challenged, though its value as a prescriptive tool is recognized even by some critics of its ethical standing (Swartzman et al., 1982; Office of Technology Assessment, 1980).
The committee found that initial efforts to define its own goals and to identify the kinds of information necessary to choose among vaccine candidates simplified the task of selecting an appropriate methodology.
Neither the multiattribute accounting method nor the multiattribute scoring method satisfied the committee’s intention to make full use of available data. In addition, they did not permit identification of all subjective elements included in the analysis.
The benefit-cost approach also had two major drawbacks from the committee’s perspective. First, it required that a monetary value be assigned to health benefits such as avoidance of death, pain, and suffering. This is a very difficult and controversial task. The second problem was that the benefit-cost approach seemed to go beyond the committee’s goal of comparing ways to reduce morbidity and mortality.
An approach that combines the essential features of cost-effectiveness analysis and decision analysis was selected after lengthy consideration as the most appropriate for the committee’s purpose. It provides insights on both the expected health benefits from a vaccine (i.e., the morbidity and mortality it could avert) and the costs of achieving those benefits.
Every method has limitations and drawbacks and the cost-effectiveness approach is no exception. It is important to note that some factors cannot be quantified and incorporated into a cost-effectiveness analysis. Chapter 8 deals with issues of this type that should be