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Classical Utilitarianism compared to Cost Effectiveness Anal

Contrast CEA with utilitarianism. Do its differences, as you characterize them, make it a better or worse account of what policies we should follow in resource allocation for health?

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This paper contrasts several dissimilar features of classical utilitarianism versus cost-effectiveness analysis that are similar enough to allow juxtaposition in a broader resource allocation context. It further analyzes which aspects of utilitarianism and which of the CEA make it a better measure in resource allocation for health in several dimensions of what I consider a good health policy ought to consider: (1) empirically-based methodology, (2) economic efficiency, (3) reflection of social values, (4) consideration of severity of condition, (5) life-saving and treatment in the face of death and (6) level of health potential.

Classical Utilitarianism (CU) is traceable to the philosophical works of Jeremy Bentham and John Stuart Mill. From the principle of utility, Bentham found pain and pleasure to be the only intrinsic values in the world: "nature has put man under the governance of two sovereign masters: pleasure and pain." From this he derived the rule of utility: that the good is whatever brings the greatest happiness to the greatest number of people. (Bentham 1789) Later, after realizing that the formulation recognized two different and potentially conflicting principles, he dropped the second part and talked simply about "the greatest happiness principle." (Bentham, 1823)

Cost-effectiveness analysis (CEA) is a widely used but imprecise term that means different things to various users. According to A. M. Garber et al. (1996: 26), "Cost-effectiveness analysis is a method designed to assess the comparative impacts of expenditures on different health interventions." CEA assesses the advantages and disadvantages of alternative interventions to examine the inevitable trade-offs in resource allocation (Berger and Teutsch, 2000). I will use CEA's most frequent use that captures benefits as "number of lives saved" and monetizes direct costs only. According to the Center for Disease Control (2006) CEA was created early in the 1970s as a tool for healthcare resource allocation decision-making.

I will contrast several dissimilar features of classical utilitarianism versus cost-effectiveness analysis that are similar enough to allow juxtaposition in a broader resource allocation context. I will further analyze which aspects of utilitarianism and which of the CEA make it a better measure in resource allocation for health in several dimensions of what I consider a good health policy ought to consider: (1) empirically-based methodology, (2) economic efficiency, (3) reflection of social values, (4) consideration of severity of condition, (5) life-saving and treatment in the face of death and (6) level of health potential.

(1) What does each include?

CEA is defined as a ratio of incremental aggregate costs to incremental aggregate health gains. (CDC, 2006) Because CEA uses a particular outcome measure that must be common among the programs being considered, its value is limited when the programs have different outcomes. To overcome this limitation, CEA uses more general summary measures (e.g., "number of lives saved"). It is important to note that this as not equivalent to utilitarianism, though they share a strategy of maximizing a good. Rooted in ethical rationale, CEA does not include all costs and all benefits. In particular, CEA does not include indirect costs and non-health benefits, both of which are main departures from Utilitarianism.

CEA accounts for social accountability concerns by omitting indirect benefits and costs, which is a major departure from a utilitarian approach which would include both. In that sense, CEA has equity considerations built into its construction, unlike CU.

(2) How is each measured?

Classical utilitarianism points to no single measurable metric of value, while CEA compares options in a metric of "dollar per health benefit (e.g. lives saved)". CEA measures benefits in discrete, specific and natural units (lives) and are not monetized. Unlike CEA, Utilitarianism follows an abstract metric: let hedons be units of pleasure and dolors be units of pain though neither Bentham nor Mills ever define a specific example of hedons and dolors. For each act available to X, figure the net balance of hedons and dolors that there will be in the world if X does that action. According to CU, what morality requires is that X performs that act that has the greatest net balance.

In terms of a health policy, CEA has a choice of natural units that are empirically measurable, while CU is ambiguously rooted in a moral philosophy discourse on the theory of value and hence CU's theory of value is of questionable practical significance for policy purposes.

(3) What notion of ...

Solution Summary

This paper contrasts several dissimilar features of classical utilitarianism versus cost-effectiveness analysis that are similar enough to allow juxtaposition in a broader resource allocation context. It further analyzes which aspects of utilitarianism and which of the CEA make it a better measure in resource allocation for health in several dimensions of what I consider a good health policy ought to consider: (1) empirically-based methodology, (2) economic efficiency, (3) reflection of social values, (4) consideration of severity of condition, (5) life-saving and treatment in the face of death and (6) level of health potential.

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