Productivity-cost controversies in cost-effectiveness analysis: Review andresearch agenda

Productivity costs represent true costs to society and should not be ignore d in a cost-effectiveness analysis. However, there is dissension among heal th economists regarding measurement of productivity costs. Certain health e conomists argue for inclusion of productivity costs in the denominator of t he cost-effectiveness ratio, measured in quality-adjusted life-years. Other s argue that productivity costs should be included in the numerator of the cost-effectiveness ratio, measured in dollars using the friction-cost metho d or the human-capital method. This paper reviews the productivity-cost con troversies and offers suggestions for future research addressing the debate d issues.