Measuring Health Inequality in the Context of Cost-Effectiveness Analysis

In this chapter we discuss the cost-effectiveness analysis (CEA) of public health interventions where there are combined, and potentially conflicting, objectives of increasing total population health and reducing unfair health inequalities in the population. Our focus is on identifying appropriate health inequality measures in this context to quantify the impacts of interventions on unfair health inequality and, where necessary, analyse equity-efficiency trade-offs between improving total population health and reducing unfair health inequality. We recognise that this requires a number of important social value judgements to be made, and so prefer measures that facilitate transparency about these social value judgements. We briefly summarise the literature on health inequality and health-related social welfare functions, and conclude that while valuable it is not entirely suitable for our purpose. We borrow instead from the wider literature on economic inequality, highlighting how this translates to a health setting, and identify appropriate measures for CEA. We conclude with a stylised example illustrating how we would apply a battery of dominance rules and social welfare indices to evaluate the health distributions associated with two hypothetical health interventions.