The Efficiency Path: An Estimation of Cost-Effectiveness Thresholds for 185 Countries Based on Per Capita Health Expenditures and Life Expectancy

Abstract

Objectives: Cost-effectiveness (CE) is increasingly used for resource allocationworldwide. One key hurdle for its widespread use is the lack of a widely acceptedmethodology to derive thresholds at the healthcare system (HS) or country level.The objective is to propose a methodology and derive local CE thresholds basedon per capita health expenditures (pcHE) and life expectancy (LE). Methods:Our approach is based on the relationship between pcHE and LE; assuming thatthe increase in expenditures reflects the CE of the interventions added to reachcurrent LE. For HS willing to maintain or increase their secular trend of raisingpcHE in order to improve health, the threshold (measured in units of pcHE) willbe: Threshold=(LE+1)*i-LE; where LE is measured in life-years (LY) or QALYs; and?i? is the ratio of increase in pcHE that the HS is willing to accept to increase LEby one unit (eg i=1.09 for a 9% increase). For HS with cost-containment mandates:Threshold=LE-((LE-1)/i), where ?i? represents the past increase in pcHE togain the last unit of LE. We used OLS to predict ?i? for 185 countries, followingboth a cross-sectional (2013) and a longitudinal approach (2003-2013) using WorldBank data. Results: Depending on income strata and LE, countries can expect toincrease pcHE by 7-10% for an additional LY and between 10-13% for an additionalQALY. This represent cost per QALY thresholds ranging from 9-11 pcHE in HighIncometo 5-8 in Low-Income countries, which translates to thresholds of 32-40thousands US dollars in UK; 83-101 in USA; 6-7 in Mexico and 0.5 in Uganda (around0.9, 1.8, 0.6 and 0.7 GDP per capita respectively). Conclusions: This approach,based on widely available data, can be useful to inform decisions in all countriesusing economic evaluations. Our results show thresholds usually lower than thosepromoted by WHO