Table 6 Recommendations for the Preventive Health CBA Framework and associated rationale

When to conduct a CBA

Investments over A$ 10 million [ii; iv]

For investments less than A$ 10 million, CBA should be commensurate with the size of investment and built into the decision-making process [iv; v]

Perspective and referent group

Primary analysis using a societal perspective [i—clear concept of benefit; ii]

Health sector perspective for additional analyses [iii]

State-based community referent group [iv; v]

Comparator/base case

Defined as the status quo [i—comparative analysis; ii; iii]

Comparator referred to as the base case [ii]

Options for appraisal

Number of options commensurate with the size of the investment [i—comparative analysis; iv]

Options underpinned by government health strategy [v]

MCA to establish short tractable list of options for detailed CBA. The MCA should use criteria commonly used in preventive health decision-making [ii; iv]

Time horizon

Up to 30 years based on the nature of the intervention [ii] and lifetime/100 years if 30 years unlikely to capture all important impacts [i—capture the full economic life of project; iii]. The most appropriate time horizon with justification should be used for the primary analysis, with the other used in sensitivity analyses

Social discount rate

Base case 3% [i; iii]

Sensitivity analyses using 0%, 5%, 7% and 10% [ii; v]

Costs and benefits

All impacts consistent with societal perspective identified, including healthcare costs borne by all payers (including federal government) [i—clear concept of benefit, opportunity cost; iii; iv]. Important impacts measured and valued [iv]. This should be commensurate with the size of investment

Report proportion of healthcare cost/cost savings that will accrue to state government compared to other funders [ii; v]

Develop logic models to identify potential impacts across all sectors [i—opportunity cost]

Quantify and value significant impacts across all sectors and report these by sector [iii]

Quantify health impacts using health-related quality-of-life measures (QALY or DALY) [iii]

Value DALY/QALY using VSLY (A$ 303,531, in 2017 values). This value should be consistent across all CBAs across all jurisdictions [ii]

Productivity impacts excluded in primary analysis [iii; iv]

Sensitivity analyses:

 VSLY values: A$ 315,732 and A$ 88,136 (in 2017 values). A range of values should be tested when using a health sector perspective

 VSLY to value life-years (LY) rather than DALYs/QALYs

 Include indirect productivity impacts on employers using the FCA and gender-free wage rates

Decision rules

NPV and BCR. BCR basis of decision-making when intervention rankings differ between the two [ii]

All impacts resulting from an intervention should be accounted for on the benefits side of the equation when calculating BCR [ii]

Sensitivity analyses

One-way, scenario and probabilistic sensitivity analyses undertaken to assess the variability in the results [ii; iii; v]

All input parameters and assumptions should be documented with mean values, distributions and the sources [v]

Avoid the terms “uncertainty analysis” and “risk analysis”

Distributional impacts and other considerations

Primary analyses should not include equity or other impacts in the technical CBA results [ii]

Full description of equity and distributional impacts with quantification of impacts across subgroups where appropriate [v]

Full description of other important considerations related to preventive health interventions reported qualitatively and quantitatively [v]

Reporting

Full description of options for appraisal and the assumptions and inputs used in the analysis [v]

Results disaggregated by sector and reported by method of measurement [iii; v]

Full documentation and interpretation of primary analysis, sensitivity analyses and distributional impacts [v]