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Cost-effectiveness versus social impact: dilemmas in decision-making on health financing
Prioritizing the use of scarce resources to generate the greatest gain in health, improve quality of life and reduce the numbers of mortality from all causes in the population are the purposes of health systems.

Cost-effectiveness versus social impact: dilemmas in decision-making on health financing

Ornella Moreno Mattar

Ornella Moreno Mattar

Health Administrator,
MSc in Public Policy,
health economics lead

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Prioritizing the use of scarce resources to generate the greatest gain in health, improve quality of life and reduce the numbers of mortality from all causes in the population are the purposes of health systems. But these purposes have great barriers such as the lack of resources to finance the drugs, devices, procedures and programs that generate the best results, for this reason health decision-making is one of the most complex processes faced by health care providers. governments.


The most transparent way of making health decisions is through a prioritization process for the use of system resources, provided that this process is supported by the best available evidence (1). For this, there are different tools that can contribute to this prioritization, for example, Health Situation Analysis (ASIS) and economic evaluations in health, among the latter the most used are cost-effectiveness analyzes (ACE).


The foregoing is even recognized in the most decisive regulations for the country, such as the Statutory Law, which in its articles 21 and 23 present cost-effectiveness as one of the criteria to identify “priorities, financing mechanisms, acquisition, storage, production, purchase and distribution of supplies, technologies and drugs, as well as drug price regulation mechanisms ”(2).


ACEs are used to compare the costs and health outcomes of two or more technologies (drugs, procedures, or equipment / devices). The result of an ACE is the ratio between the costs of the technologies of interest and their health outcomes (1).


Some of the health outcomes that are compared in ACEs can be avoided heart attacks, decreased pain, decreased seizures, among others. The results of these analyzes can be represented on an incremental cost-effectiveness plane (see figure 1).


Figure 1. Cost-effectiveness plan

costo efectividad

In this case, the ideal result would be to opt for the technology that is in quadrant 1, that is, the most effective and least expensive.Unfortunately, the information is not always so clear and in many cases making decisions about prioritizing in health compromises ethical issues, for example What happens when a drug is more effective and much more expensive than what is currently covered by benefit plans or insurance schemes? (quadrant 4 - figure 1).


  • The price and innovation of biological medicines


Greater effectiveness due to higher prices is the case for many of the innovative biological medicines. This shows that decisions about the prioritization process in health are not always technically recommended as the “most cost-effective”.


In some cases, a less cost-effective option would be the one included in benefit plans and payment schemes, with the aim of guaranteeing the best health outcomes and the best well-being of patients over and above the sustainability strategies of the system. This happens as long as the technology is below the cost-effectiveness threshold, that is, that additional cost is within my limit of availability to pay for the technology.


In some cases, a technology can demonstrate great results in health, but in the same way its cost may be above the willingness to pay, however, in favor of guaranteeing the right to health and with the robust evidence that supports its prescription. What decision should the payer make?


  • Orphan drugs


Another important example in this line is that of orphan drugs, which offer important therapeutic improvements for patients suffering from rare diseases, but are usually considerably more expensive than non-orphan drugs, this raises doubts about their cost-effectiveness without losing sight of its advantages in effectiveness (3).


These drugs are, in most cases, the only alternative for patients with orphan diseases, for this reason payers face great challenges to guarantee adequate access to these treatments (3). 


  • Palliative care


A discussion that takes the debate on cost-effectiveness to a deeper level of discussion is that of the technologies used for palliative care, which in many cases are very expensive and the benefits they generate are marginal given the conditions of the population involved. which are directed (4).


However, beyond the final results in health, the quality of life of patients and the conditions with which they must carry their disease require comprehensive care, humanizing health services and guaranteeing an improvement in well-being (4).


  • When evidence is lacking to determine cost-effectiveness


In many settings, due to the lack of evidence to support the cost-effectiveness of interventions, informed decision-making can be complicated. But cases such as, for example, the integration of mental health professionals into primary health care protocols, end up representing such a notorious social gain for patients, which displaces cost-effectiveness as a key factor for prioritization and financing. (5).


Finally, it should be kept in mind that ACEs account for the relationship between cost and health outcomes, but they do not accurately reflect the importance that health professionals and decision makers (payers, providers, Government) place on social benefit in general, including aspects social like equity (6). Therefore, ACEs, like most economic evaluations, should be a tool that guides decision-making in health, but not the only aspect to take into account.


  1. Langer A. A framework for assessing Health Economic Evaluation (HEE) quality appraisal instruments. BMC Health Serv Res. 2012; 12: 253.
  2. Ministry of Health and Social Protection; Statutory Health Law No. 1751 February 16. 2015 p. 13.
  3. Chambers JD, Silver MC, Berklein FC, Cohen JT, Neumann PJ. Orphan Drugs Offer Larger Health Gains but Less Favorable Cost-effectiveness than Non-orphan Drugs. J Gen Intern Med. 2020; 35 (9): 2629–36.
  4. Smith S, Brick A, O'Hara S, Normand C. Evidence on the cost and cost-effectiveness of palliative care: A literature review. Vol. 28, Palliative Medicine. 2014. p. 130–50.
  5. Woods JB, Greenfield G, Majeed A, Hayhoe B. Clinical effectiveness and cost effectiveness of individual mental health workers placed within primary care practices: A systematic literature review. BMJ Open. 2020; 10 (12).
  6. Li DG, Wong GX, Martin DT, Tybor DJ, Kim J, Lasker J, et al. Attitudes on cost-effectiveness and equity: A cross-sectional study examining the viewpoints of medical professionals. BMJ Open. 2017 Jul 1; 7 (7).

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