Why cost-effectiveness thresholds for global health donors differ from thresholds for Ministries of Health (and why it matters)

TL;DR

This paper explains why global health donors use different cost-effectiveness thresholds than national health ministries and why this distinction is important for decision-making.

Contribution

The paper highlights the need for distinct cost-effectiveness thresholds for international donors versus national decision makers.

Findings

International donors face different resource constraints and opportunity costs than national decision makers.

Using donor-specific cost-effectiveness thresholds could improve the accuracy of global health priority-setting.

Further research is needed to develop practical frameworks for donor-perspective thresholds.

Abstract

Healthcare cost-effectiveness analysis is increasingly used to inform priority-setting in low- and middle-income countries and by global health donors. As part of such analyses, cost-effectiveness thresholds are commonly used to determine what is, or is not, cost-effective. Recent years have seen a shift in best practice from a rule-of-thumb 1x or 3x per capita GDP threshold towards using thresholds that, in theory, reflect the opportunity cost of new investments within a given country. In this paper, we observe that international donors face both different resource constraints and opportunity costs compared to national decision makers. Hence, their perspective on cost-effectiveness thresholds must be different. We discuss the potential implications of distinguishing between national and donor thresholds and outline broad options for how to approach setting a donor-perspective threshold. Further work is needed to clarify healthcare cost-effectiveness threshold theory in the context of international aid and to develop practical policy frameworks for implementation.

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