Public Health Economics

Economics is the study of decisions—the incentives that lead to them, and the consequences from them—as they relate to production, distribution, and consumption of goods and services when resources are limited and have alternative uses. CDC uses economics to identify, measure, value, and compare the costs and consequences of alternative prevention strategies.

Featured Tool

MV PICCS—the Motor Vehicle Prioritizing Interventions and Cost Calculator for States—can help state decision makers prioritize and select from a suite of 14 effective motor vehicle injury prevention interventions. It calculates the expected number and cost of injuries prevented, lives saved, and costs of implementation, while taking into account available resources.

Economics Methods

Cost analysis of intervention/program, side effects, and illness. CDC economists have explored the costs of cancers, hospital-acquired infections, communicable diseases, and even an outbreak investigation for local health departments.
Economic evaluation for comparing two or more interventions/programs in terms of costs or benefits; evaluations include cost-effectiveness, cost-benefit, and cost-utility analyses. CDC economists performed evaluations on screening options for diabetes, diagnostic options for HIV and TB, vaccine strategies, and injury prevention programs.
Decision and transmission modeling includes developing and testing regression models, Markov decision-choice models, agent-based models, simulations, and theoretical mathematical models. CDC economists have performed modeling on vaccine strategies, HIV diagnosis and treatment, and state public health resource-allocation options.
Regulatory impact analysis for anticipating and evaluating the impact of regulations on costs and/or behaviors. CDC economists’ work in this area includes analyzing the effect of required pre-travel medical consultation for international travelers.
Budget impact analysis (BIA) for estimating the financial consequences of adopting a new intervention for local, regional, and national budgets. A BIA is usually performed in addition to a cost-effectiveness analysis to provide a comprehensive economic assessment of a new policy or programmatic intervention.
Health impact assessment (HIA) for bringing together scientific data, public health expertise, and stakeholder input to identify the potential health effects of a proposed policy, plan, program, or project. An HIA offers practical recommendations for ways to minimize risks and capitalize on opportunities to improve health.

Economics Tools

The following tools can be used to evaluate the costs and burden of various health problems and the effectiveness and efficiency of health programs. The tools were created by CDC and its partners.

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Chronic Disease

Center for Health Care Strategies’ Return on Investment Calculator
Enables policy makers and program administrators from Medicaid, health plans, and healthcare organizations to evaluate the financial benefits of initiatives designed to improve healthcare quality and reduce costs

County Health Calculator
Estimates how education and income affect health outcomes at county or state levels

Physical Inactivity Cost Calculator
Estimates the costs of medical care, workers’ compensation, and lost productivity associated with physical inactivity

OSHA’s “Safety Pays” Program
Uses a company’s profit margin, the average costs of an occupational injury or illness, and an indirect cost multiplier to project the amount of sales a company would need to cover those costs and the potential effects on a company’s profitability

Economic Evaluation

Recommendations for Conduct, Methodological Practices, and Reporting of Cost-Effectiveness Analyses
Recommendations developed by the Second Panel on Cost-Effectiveness in Health and Medicine

A Review and Analysis of Economic Models of Prevention Benefits
Reviews a variety of approaches to estimating the health and economic impacts of preventive health services, prevention programs, and policy interventions, and considers their usefulness to public and private sector decision makers

HHS Guide to Analyzing the Cost-Effectiveness of Community Public Health Prevention Approaches
Provides practical advice to help program managers and evaluators understand, design, and perform cost-effectiveness evaluations of community public health prevention programs

US Department of Veterans Affairs Health Economics Research Center
Helps Veterans Affairs (VA) researchers assess the cost-effectiveness of medical care, evaluate the efficiency of VA programs and providers, and conduct high-quality health economics research; also offers training about cost data and economic research

Economic Evaluation for State Asthma Programs [PDF-3.7MB]
Provides the basics of why and how to conduct economic evaluation to complement a state asthma program’s overall evaluation activities, including the considerations involved in planning and implementation.

Economic Evaluation of Public Health Laws and Their Enforcement [PDF-400KB]
Provides an overview of the tensions that exist when laws or regulations restrict activities harmful to health, with trade-offs required between the good of the whole community versus the good of an individual. For example, wearing a helmet substantially decreases a motorcyclist’s risk of death and the associated costs, yet legislation mandating helmets can be considered a restriction of freedom of choice.

Economic Impact Analysis Tool
Allows community programs to assess their own performance and use the data to leverage resources for their sustainability. Also translates project-specific impacts into community-wide effects, including any new health and community services provided, number of jobs created, wages earned, and overall impact on the economy.

Best Practices for Conducting Economic Evaluations in Health Care: A Systematic Review of Quality Assessment Tools
Describes the strengths and weaknesses of checklists that have been used to evaluate best practices for conducting and reporting on economic evaluations in healthcare. Identifies well-developed checklists for use by investigators, reviewers, and journal editors to ensure that economic evaluations and their systematic reviews will be informative and transparent.

Public Health Return on Investment Tool
Designed to help public health departments estimate the economic returns from investments made in strategies that enhance public health service delivery, including quality improvement interventions. To use the tool, you’ll need to create a free account; for detailed instructions, use the ROI Tool Instructional Guide.

Budget Impact Analysis—Principles of Good Practice
Describes updated guidance on methods for performing a Budget Impact Analysis. This report of the ISPOR 2012 Budget Impact Analysis Good Practice II Task Force was published in Value in Health in 2014.

Introductory Handbook for Undertaking Regulatory Impact Analysis [PDF–313KB]
Provides practical guidance on using regulatory impact analysis as a way of improving regulatory quality and, as a result, government effectiveness and efficiency.

National Research Council: Improving Health in the United States: The Role of Health Impact Assessment
Offers guidance to officials in the public and private sectors on conducting health impact assessments to evaluate public health consequences of proposed decisions, and suggests actions that could minimize adverse health impacts and optimize beneficial ones.

Minimum Elements and Practice Standards for Health Impact Assessment [PDF-1.2MB]
Translates the values underlying health impact assessments (HIAs), along with key lessons from HIA practice into specific “standards for practice” for each phase of the HIA process.

Flu

CommunityFlu 2.0
Simulates the spread of influenza through a model community and assesses the impact of a variety of potential interventions (e.g., vaccinations, school closings, wearing of facemasks, patient and household isolation/self-quarantine). Also provides estimates for the numbers of cases, hospitalizations, and deaths that might be seen among different age groups in a representative community. Allows users to estimate the economic impact, in terms of days of work lost, of an influenza epidemic/pandemic in a community, calculating the savings and costs associated with one or more interventions.

FluAid 2.0
Helps state- and local-level planners prepare for the next influenza pandemic by providing estimates of the potential impact specific to their locality, including deaths, hospitalizations, and outpatient visits due to pandemic influenza.

FluLabSurge 1.0
Helps laboratory directors estimate the demand for specimen testing during an influenza pandemic, and helps public health planners develop pandemic response plans. Estimates the daily number of specimens that may be delivered to a lab for testing and evaluates the testing capacity of a specific lab (e.g., how many samples can be tested per day or work shift) per pandemic transitional day found in each of the pandemic stages.

FluSurge 2.0
Estimates the surge in demand for hospital-based services during an influenza pandemic, such as the number of hospitalizations and deaths of a pandemic (whose length and virulence are determined by the user) and the number of people who would require hospitalization, ICU care, or ventilator support during a pandemic, given existing hospital capacity

FluWorkLoss 1.0
Estimates the number of days lost from work due to an influenza pandemic

HIV

HIV Economic Model: (HIVEcon)
Helps assess costs and benefits of the proposed rule change to remove HIV infection from US immigration screening [PDF-160KB], evaluating both the potential number of HIV-positive immigrants to the United States and the health system costs over time, given the change in regulation

Injury Prevention

Motor Vehicle Safety Cost Calculator: MV PICCS 3.0
Helps state decision makers prioritize and select from 12 effective motor vehicle injury prevention interventions

Cost of Injuries and Violence in the United States
Reviews the medical and loss-of-work costs of injuries and violence, including a link to the Cost of Injury Reports, which give cost of injury estimates for fatal or nonfatal injuries, classified by intent and mechanism, or by body region and nature of injury

Estimating the Costs of Unintentional Injuries [PDF-454KB]
Demonstrates how costs of fatal and nonfatal unintentional injuries can be estimated for a community

Policy Analysis

The Use of Economics in Informing US Public Health Policy
Covers a broad range of issues and methodologic approaches to illustrate the many ways that economics has been used in public health

Mechanisms of Legal Effect: Perspectives from Economics [PDF–365KB]
Introduces the concepts used by economists in in studying how laws, regulations, and other policies can address market failures in order to improve public health.

Public Health Preparedness

Maxi-Vac 1.0 and Maxi-Vac Alternative
These tools assist with planning large-scale smallpox vaccination clinics with maximum patient flow-through. Users can select the number and type of professional resources available to operate a clinic (e.g., physicians, nurses), and the software will allocate those staff, optimizing clinic operations.

MedCon: Pre-Event [PDF-534KB]
Estimates the baseline medical care requirements (i.e., the number of persons who would require medical care) of a displaced population following a disaster due to pre-existing medical conditions

National Health Security Preparedness Index
An annual measure of health security and emergency preparedness at the national, state, and community levels

Surveillance

SurvCost
Estimates the costs of Integrated Disease Surveillance and Response (IDSR) systems and the seven categories of resources: personnel, office operating items, transportation, laboratory materials and supplies, treatment and programmatic response items, media or public awareness campaigns, and capital items

Training

Introduction to Prevention Effectiveness
CDC-developed course that reviews public health economic studies and evaluation methods, covering the definition of prevention effectiveness, key components of prevention effectiveness studies, basic economic evaluation methods, and sources of prevention effectiveness data

Five-Part Webcast on Economic Evaluation
Webcast from CDC’s Division for National Heart Disease and Stroke Prevention designed to help public health practitioners understand the value of economic evaluation and choose the appropriate economic analysis for their needs

Health Economics Information Resources: A Self-Study Course
Online course that gives an overview and discussion of important sources of health economics information, highlighting the characteristics of US healthcare financing and guiding users in the assessment of health economic evaluation studies

CDC Steven M. Teutsch Prevention Effectiveness Fellowship
A two-year, postdoctoral, applied training program that helps health policy decision-makers determine allocation and use of resources to maximize health impact