Valuing Health for Regulatory Cost-Effectiveness Analysis (2006) / Chapter Skim
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Executive Summary
Executive Summary
Pages 1-14
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For economically significant rules, agencies are required to present an economic analysis -- in the form of a benefitcost analysis (BCA) -- of the national impacts of alternative regulatory strategies and to assess the distribution of the impacts across different segments of society.
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Committee to Evaluate Measures of Health Benefits for Environmental, Health, and Safety Regulation provides recommendations and guidance regarding the measurement of health and safety improvements using CEA. In response to a request from OMB, the Committee investigated alternative approaches for assessing health-related impacts in CEA by reviewing current federal agency practices; commissioning supporting research; reviewing the available literature; and completing three case studies of agency rulemakings.
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· Review measures for aggregating health improvements currently used in CEA, including specific instruments and assessment techniques for developing composite measures that combine consideration of longevity and HRQL. · Develop criteria for choosing among measures potentially useful in the evaluation of health outcomes in regulatory CEA.
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For example, air pollution regulations reduce the incidence of several types of acute and chronic cardiovascular and respiratory conditions as well as associated mortality. In addition, some health and safety regulations provide nonhealth benefits, such as preserving natural resources.
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The Committee's own investigations suggest that the importance of mortality relative to HRQL effects varies substantially among regulatory interventions. Regardless, both mortality and HRQL impacts such as illness and disability are of interest to decision makers.
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Once the characteristics of the health state of interest are matched to the functional and experiential domains used in the specific index, an HRQL index value can be calculated based on the results of the instrument's underlying valuation survey. Regardless of whether the index used is generic or specially designed for a particular study, the index values for health states derived from valuation surveys are based on information about individuals' relative preferences for different states of health.
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Criteria for Selecting Integrated Measures of Health Impacts for Regulatory Analysis The Committee developed the following criteria for applying HALYs in regulatory analysis. · First, the measure should be applicable to the range of health states and conditions considered in regulatory analysis.
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The basic values embedded in our political system and reflected in federal regulatory guidance require that decision makers consider the distributional implications of regulations. As a result, such considerations must be explicitly introduced into the process of developing and issuing regulations along with the summary analytic results.
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CEA is a tool for determining the relative efficiency of different interventions to achieve a defined objective, such as maximizing life-year or QALY gains. Ignoring other qualitative features of the risks involved or the contexts of the risks may well produce misleading comparisons of different regulatory options or interventions and lead to poor societal and regulatory decisions.
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· Comparisons of cost-effectiveness ratios for diverse interventions can be misleading if they do not include information that highlights differences in methods, unmeasured effects, and distributional impacts across interventions. These conclusions led the Committee to develop recommendations in four areas: selecting integrated measures of effectiveness; constructing and reporting cost-effectiveness ratios; presenting information for regulatory decision making; and collecting data and conducting research to improve HRQL measurement for regulatory CEA.
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· The index values estimated for health conditions or health states of interest should be based on information from the population affected by the costs, benefits, or other impacts of the regulatory intervention, which for most economically significant regulations will be best repre sented by the general U.S. population.
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The cost measure would incorporate both net changes in health care treatment costs and the value of any monetized nonhealth ben efits as offsets. Recommendation 3: The life-year and QALY estimates used in regulatory analyses should reflect actual population health as closely as possible, comparing the predicted HRQL and life expectancy of the affected population in the absence of the intervention (i.e., the regulatory baseline)
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Recommendation 9: Because of the many value dimensions encompassed by societal decisions regarding the mitigation of risks to health and safety and the far-ranging impacts of such decisions, policy makers and program administrators should work to ensure the substantive involvement of a broad range of individuals and groups at all stages of policy development for regulating risks. Collecting Data and Conducting Research to Improve HRQL Measurement and Regulatory CEA Although useful for regulatory analysis, the data and methods currently available for measuring and valuing health in CEA have limitations that should be addressed by a long-term research agenda.
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· Methods to correlate QALY values based on different generic HRQL indexes so that estimates from different underlying valuation surveys are consistent and can be used in the same analysis. Given the substantial impact of major health and safety regulations on the national economy and societal welfare, it is imperative that related decisions be based on high-quality analyses, the results and limitations of which are clearly communicated in a form that is understandable by a wide variety of audiences.
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