Guide to Analyzing the Cost-Effectiveness

1. INTRODUCTION
   This guide provides practical advice to help program managers and evaluators understand,
   design, and perform cost-effectiveness (CE) evaluations of community public health
   prevention programs. Each chapter of the guide provides advice for addressing specific
   components of a CE analysis. For example, Chapter 2 describes the planning process for CE
   analysis and decisions about study design that must be made up front—prior to collecting or
   analyzing cost or effectiveness data. Chapter 3 discusses issues that need to be considered
   when selecting from among possible outcome measures for the prevention program.
   Chapter 4 contains advice and tools for measuring program costs. Chapter 5 contains
   instructions for performing a CE analysis and provides examples, and Chapter 6 answers the
   question of how results from CE studies can be used by decision makers.
   Throughout the guide, we have attempted to provide easy-to-follow instructions, advice,
   and relevant examples to lead community program managers and evaluators through the
   design and implementation of CE analysis. In the interest of brevity, the guide focuses on
   common concerns about how best to design and perform CE analysis in a community
   prevention setting that focuses on health promotion. For a more complete treatment of
   issues surrounding CE analysis and related economic studies (e.g., cost-benefit, business
   case analysis) in both clinical and community settings, we encourage readers to consult one
   of the many texts available on economic evaluation as applied to public health or health
   care. A list of such texts is provided in Appendix A. These texts are geared primarily toward
   researchers and provide additional methodological details for conducting economic
   evaluations of clinical or community prevention efforts. Examples of CE studies from the
   literature are summarized in Appendix B.
   1.1 Background
   Disease prevention and health promotion have been increasingly emphasized as two of the
   most important goals of public health. In 2002, President Bush announced the HealthierUS
   Initiative, which identifies four key objectives for Americans: increase physical activity,
   promote responsible diet, increase use of preventive health screenings, and make healthy
   choices concerning smoking and alcohol. The U.S. Department of Health and Human
   Services’ Steps to a HealthierUS Initiative (Steps) provides additional support for disease
   prevention and health promotion activities by working with community programs to reduce
   the burden of chronic disease. The community-level prevention approaches that have been
   implemented vary, but most are based on the socioecological framework of behavior
   change. They attempt to encourage healthy lifestyle choices by intervening directly with
   individuals or indirectly through multilevel social and environmental factors (e.g.,
   interpersonal, organizational, community, and public policy) that influence individuals’
   ability to make healthy lifestyle choices (McLeroy et al., 1988).
   Guide to Analyzing the Cost-Effectiveness of Community Public Health Prevention Approaches
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   Careful evaluations of the different programs are needed to aid decision making about which
   prevention interventions to promote in a particular community. Decision makers need
   answers to questions such as the following: (1) Does the program work? Does it have the
   desired impact on risk behaviors or health? (2) Is the program the best use of scarce
   resources? The main contribution of CE analysis is in addressing the second of these
   questions. However, it can also shed light on the real-world impact of interventions and
   programs.
   CE analysis quantifies program costs in dollars. Program outcomes are quantified in
   nonmonetary units, such as increased minutes of exercise, reduced number of cigarettes
   smoked, life years gained, or even quality-adjusted life years (QALYs) gained. CE analysis
   can be used to estimate the cost-effectiveness of a single program as compared with the
   alternative of “no program” or to compare the cost-effectiveness of several different
   possible prevention programs—those designed to achieve both similar and disparate
   outcomes. For example, a CE study of a single prevention program as compared with the
   alternative of no program might tell us that the program costs $1,000 for each additional 30
   minutes of physical activity achieved. Similarly, a CE study of two alternative approaches for
   increasing physical activity might indicate that Program A costs $50 for each 30 minutes of
   physical activity achieved, while the mutually exclusive Program B costs $1,000 to achieve
   the same outcome. Such information is useful to decision makers when trying to decide
   whether to fund a specific community prevention approach and how much of several
   alternative prevention approaches to support. Results from CE analysis are also useful to
   community program managers for deciding whether to use additional resources to expand
   an existing program or to change intervention approaches and implement an alternative
   prevention strategy.
   1.2 How Should This Guide Be Used?
   This guide is intended for use by the managers and evaluators of community prevention
   programs to assist with assessing program costs and cost-effectiveness. It focuses on the
   questions and issues that need to be addressed to evaluate a program’s cost-effectiveness.
   We strongly recommend that CE analysis be planned as a single component in a much
   broader strategy for program evaluation. The overall evaluation strategy for a program
   should first involve assessing whether the program meets specific process goals, such as
   determining whether the program is providing the services it was intended to provide at the
   appropriate level and intensity. This is sometimes referred to as “implementation fidelity”
   (see, e.g., Rychetnik et al., 2002). The overall evaluation should also involve a strategy for
   evaluating the broader public health impact (see Chapter 3). For example, it is important to
   evaluate program inputs, such as participation, as well as program outcomes, to understand
   the likely public health impact of a program. Other evaluation techniques, such as RE-AIM
   (Reach, Efficacy/Effectiveness, Adoption, Implementation, and Maintenance) and the
   Chapter 1 — Introduction
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   Centers for Disease Control and Prevention’s (CDC’s) “Framework for Program Evaluation in
   Public Health” (CDC, 1999; see Appendix A for a list of resources), that take into account
   the program’s reach into the community and other factors may be more appropriate for a
   broader evaluation. CE analysis is best for summarizing the value of a program (cost per
   unit of benefit) so that a decision maker can assess whether the program’s benefits are
   worthwhile in light of its costs. This guide was written to provide instructions, advice, and
   examples to help community public health prevention program managers and evaluators
   conduct CE studies. Instructions and advice for performing other types of economic
   evaluations are available in Haddix, Teutsch, and Corso (2003) and Drummond et al.
   (1997).
   We recommend using the guide early in the planning process for CE analysis to help identify
   the specific questions you would like to answer about the value of your program and
   determine what information is needed to answer those questions. In particular, we
   recommend that you review Chapter 2 and related resources on study design as you are
   beginning to plan a CE study. Similarly, Chapter 6 answers questions about how results
   from CE analysis are used in decision making that may be useful to consider during the
   planning phase of a CE study. You may choose to read the guide in its entirety before
   getting started on CE analysis or consult relevant chapters as needed to guide cost and
   cost-effectiveness data collection, analysis, and interpretation.
   CE studies can provide information that is useful for decision making by program managers
   and policy makers at local, state, and national levels. However, results from CE studies
   should be considered in combination with other factors, such as the feasibility and
   desirability of intervening within a specific population, to help inform policy decisions about
   which prevention strategies to adopt. It is our hope that this guide will serve as a starting
   point for community program managers or evaluators who are interested in incorporating
   CE analysis into an overall strategy for health prevention program evaluation.

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