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Member Research & Reports

Member Research & Reports

Johns Hopkins: Standard Thresholds for Determining Cost-Effectiveness of Public Health Interventions in Low-Income Countries Too Low

A recent study provides some of the first empirical evidence that the standard practices employed by the World Health Organization (WHO) and other public health organizations for determining whether an intervention is cost-effective are likely causing users to significantly underestimate the cost-effectiveness of many life-saving public health interventions in low-income settings.

Led by Dr. Bryan Patenaude, a health economist and assistant professor in the department of international health at the Johns Hopkins Bloomberg School of Public Health, the study calculated the value of a statistical life-year (VSLY) for a low-income setting.

In health economics, the VSLY is a reference point that can help governments decide which life-saving interventions to prioritize and allocate resources to. The VSLY measures the price, on average, that a group of individuals is willing to invest to gain an additional year of life for a member of that group. Based on decades-old studies in the U.S., an intervention has been considered cost-effective if it gains one life year at a cost of less than 3 times the per capita income.

Dr. Patenaude’s study in Ukonga, Tanzania, however, yielded a VSLY number of 4.5 times per capita income – much higher than the standard employed for similar low-income communities. The finding suggests that in the past, many health interventions have been evaluated for cost-effectiveness using a threshold much lower than the community itself would have set.

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