Utility analysis

Method

A utility analysis can be used to approximate value to the outcomes resulting from the implementation of a National Water Safety Plan. This type of analysis is useful when identifying which drowning reduction interventions will have the greatest benefit against investment, helping identify components to include as part of a water safety plan. ‘Utility’ can be understood as ‘value for money’ or ‘cost-effectiveness’. Utility analysis compares costs and outcomes which are measured in different units. This differs from cost-benefit analysis, which uses a common unit (ie. financial value) to compare costs and benefits.  

Utility analysis is often referred to in the health sector as a cost-effectiveness or cost-utility analysis. A well-established application of cost-utility analysis is Quality Adjusted Life Years (QALYs) which quantify the effectiveness of a health intervention according to a) the ratio to which it extends life expectancy and b) improvements to the quality of each year lived. To illustrate further:  

  • Intervention A allows a person to live a certain amount of additional years than if no intervention took place, but with a decreased quality of life.
  • Intervention B allows a lesser amount of additional years of life but with a higher resulting quality of life. The net benefit between the two interventions is then calculated and compared to costs incurred through intervention delivery. Thus, the two units considered in this analysis are monetary expense and QALYs.  

A number of different units of utility may be considered when developing a water safety plan, such as the financial cost associated with intervention implementation, the proportion of the population that the intervention will be relevant to, and the likelihood that the intervention will reduce drowning rates in your specific context.  


Advantages

  • A utility analysis can support developers of a National Water Safety Plan to make informed and evidence-based decisions when choosing plan components.  
  • It allows interventions to be compared using different units of measuring cost and benefit.  
  • It provides a more complete understanding of intervention cost-effectiveness than cost-benefit analysis.   
  • Can be used to justify funding requests. 
  • It helps to answer the question “is an intervention worth it?”


Disadvantages

  • Can be controversial as it is difficult to put a value on health status or quality of life. There are ethical dilemmas around putting a cost on human life (see Utilitarianism).   
  • It may be difficult to reach a consensus between stakeholders on the importance of different utilities.  
  • Can be complex to calculate or measure quality of life accurately, causing incorrect conclusions can be drawn. 


Context

A utility analysis forms part of assessing resource needs when considering which interventions are most cost-effective to incorporate into a National Water Safety Plan. It may be beneficial to compare results with analyses done for similar plans in similar settings.  

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