"output." To assess cost-effectiveness, one asks which of the two programs achieves this output at lower total social cost; it is this program that can be described as "cost-effective." In practice, formidable conceptual and empirical issues confront even the simplest of cost-effectiveness analyses, particularly when unit costs vary with the level of output or when outcomes have multiple dimensions that must be considered. These issues are discussed in the second main section below. Only the most rudimentary forms of cost-effectiveness analysis have been applied to family planning programs, whether in the United States or in developing countries. As is made clear in what follows, perhaps the most informative literature on these issues is that concerned with health care costs in the United States, also reviewed in the second main section.

Finally, it is important to mention yet an additional objective of evaluation that arises in some circumstances: to determine the net social benefits generated by a particular program. This is termed a cost-benefit analysis. Cost-benefit analysis requires a means of translating outcome measures—such as pregnancies averted—into a single metric or standard that permits comparisons among quite different programs operating, perhaps, in quite different sectors. Even if attention is confined to the health sector, controversy must inevitably accompany any effort to force very dissimilar outcomes into a common metric or index for evaluation. A well-known recent attempt is that of the World Bank (1993), which sought in the concept of DALYS (disability-adjusted life-year saved) an index for assessing a great range of programs in developing-country health care.1 Such approaches are commented on only briefly below.2


The DALYS index relies on a combination of subjective rankings and empirical data to represent the degree of health disability associated with various illnesses and conditions. If these rankings are accepted one has a means of comparing the benefits from investing in (for example) family planning programs with those derived from investments in malaria control.


As discussed in the body of Chapter 8, the term cost-benefit analysis is sometimes misapplied in reference to the net effects of public investments in family planning service delivery for public budgets in health and social service sectors in general. Levey et al., (1988) term this a "taxpayer's benefit-cost" perspective. A taxpayer's benefit-cost analysis asks whether public expenditures are likely to be reduced, on net, by public funding of family planning services. This perspective frames the evaluation issue very narrowly, being concerned only with the impact of one form of public expenditure on another form. There is no clear or necessary relationship between the claims that programs make on government budgets and their cost-effectiveness or social desirability. Thus, the terms "benefit" and "cost" that appear in a taxpayer's benefit-cost analysis bear no obvious correspondence to social benefits and costs.

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