Cost effectiveness analysis

Method

A cost-effective analysis (CEA) is designed to identify interventions that provide the greatest health benefit for the least amount of cost. A model intervention will make large improvements to the health and wellbeing of a population for a minimal amount of financial input. This is beneficial to apply when selecting interventions to include as part of a National Water Safety Plan. CEAs are useful to perform when working within a budget, or when comparing a number of similar interventions. This type of analysis is important to perform as cost is often a barrier to intervention implementation, sustainability and upscale. Further, a CEA can be used to lobby governments and organisations to fund interventions that have been shown to greatly improve public health at little cost. 

As CEAs present health improvements made against the financial input required to run an intervention, results are often reported as a monetary value against:  


Number of lives saved per year 


Years of Life Lost (YLL)

Represents each year of life lost when an individual dies as a result of drowning, calculated by subtracting age at death from a standard life expectancy 


Disability Adjusted Life-Years (DALYs)

Combines YLL with years of living with morbidity to show how quality of life is impacted by drowning-related health impacts 

When performing a CEA, attempt to incorporate all indirect and long-term benefits an intervention is likely to have into the analysis. Likewise, it is important to accurately identify all indirect and long-term costs associated with an intervention. This may require consultation with a panel of stakeholders who are familiar with the daily operations of an intervention, or with individuals who have previously implemented the intervention in a similar context.  

A CEA can be performed during  water safety plan development, and also at the end of plan implementation, as form of evaluation. If performed for evaluation, the outcomes of the CEA can be compared to those of similar existing interventions, or alternative interventions which were not selected as part of the water safety plan. Positive outcomes may encourage funders to continue supporting interventions post-plan implementation, or upscale the intervention to additional sites as part of the water safety plan.  

A cost benefit analysis may be more appropriate to perform than a CEA if monetary values are able to be clearly assigned to individual cost items of an intervention.  


Advantages

  • A cost-effective analysis is an effective way to compare similar interventions when developing or evaluating a National Water Safety Plan. 
  • It takes local context into consideration when calculating perceived health benefit.  
  • It is a useful tool to lobby governments, organisations and stakeholders. 
  • It is possible to use the results of existing CEAs when comparing interventions to save time and resources. 
  • YYLs and DALYs are weighted to produce realistic measures. 


Disadvantages

  • It does not consider broader ethical issues regarding resource distribution, or the current political or social climate the intervention is being implemented in. 
  • Conducting a CEA can be time consuming and may require expert input. 
  • It may be difficult to anticipate or identify indirect and long-term benefits or costs of an intervention. 


Context

A CEA can be completed during development of a National Water Safety Plan, as part of plan evaluation, or both. It is most useful to conduct in resource-limited settings or when working within a limited budget.  

back to top