USING COST-EFFECTIVENESS COST-BENEFIT ANALYSIS TO ALLOCATE HEALTH RESOURCES - A LEVEL PLAYING FIELD FOR PREVENTION/

Introduction: Prevention is being promoted as a means to improve healt h status and to save health care costs. Economic evaluations of preven tion (i.e., cost-effectiveness and cost-benefit analyses) indicate tha t some prevention activities, like many treatments, do not save money, although many are relatively cost-effective. It has been suggested, h owever, that prevention is held to a higher standard than treatment be cause prevention programs are expected to demonstrate cost savings, an d that the methods of economic evaluation understate the cost-effectiv eness of prevention. Although the converse assertion is less commonly made, economic evaluations may also overstate the cost-effectiveness o f prevention. The purpose of this article is to examine how the method s of economic evaluation may systematically understate, or overstate, the cost-effectiveness (or net benefits) of prevention. Methods: We ex amine three key methods: (1) how future costs and benefits are valued (''discounting''), (2) how costs and benefits to people beyond those w ho are the users of prevention are valued (''externalities''), and (3) how nonmonetary costs and benefits to individuals are valued (''intan gibles''). Results: We discuss several recommendations for each key me thod, and we use a hypothetical example of the cost-effectiveness of a vaccine to prevent human immunodeficiency virus (HIV) to illustrate o ur points. Conclusions: We conclude that the methods of economic evalu ation may both understate and overstate the cost-effectiveness of prev ention.