Table of Contents

International Handbook on Ageing and Public Policy

International Handbook on Ageing and Public Policy

Handbooks of Research on Public Policy series

Sarah Harper, Kate Hamblin, Jaco Hoffman, Kenneth Howse and George Leeson

The International Handbook on Ageing and Public Policy explores the challenges arising from the ageing of populations across the globe for government, policy makers, the private sector and civil society. It examines various national state approaches to welfare provisions for older people, and highlights alternatives based around the voluntary and third-party sector, families and private initiatives. The Handbook is highly relevant for academics interested in this critical issue, and offers important messages for policy makers and practitioners.

Chapter 13: Assessing the cost-effectiveness of therapies for older people

Richard Edlin

Subjects: economics and finance, health policy and economics, politics and public policy, public policy, social policy and sociology, ageing, comparative social policy, economics of social policy, health policy and economics


Every publicly funded healthcare system must negotiate a host of competing demands for limited resources. In the current environment of increased austerity, this need to justify expenditures has taken on an increasing relevance. At this very broad level, treatments might be justified on a multitude of grounds, including efficiency (in maximizing health), equity (in reducing health inequalities between groups), accessibility (in reducing obstacles to healthcare), availability (attempting to provide treatments as widely as practical) and justice (making decisions in a fair way). Clearly, there will always be debates about both the specific definitions of these and similar terms (Daniels 2000; Penchansky and Thomas 1981; Tsuchiya 2000). Even larger debates relate to the relative importance of each of these and other considerations (Culyer 1997; Harris 1997; Ratcliffe et al. 2009; Sen 1992). Given this, however, each of these concerns plays an important role in determining what a health system does, how resources are spent, and who benefits from them. Economics concerns itself with exactly these types of questions (Samuelson and Nordhaus 2001). Health economic analysis has become an important element within decision making in many countries, and formalized evaluations are used in many locations. Economic evaluations are defined as comparing the costs and benefits of alternative actions. Cost-effectiveness analysis (CEA) is a particular form of economic evaluation that selects a set of treatments to maximize population health from a given health budget.

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