This document describes four approaches to incorporating equity into economic evaluation of health interventions: 1. Equity evidence review examines existing evidence on equity issues and stakeholder perspectives 2. Equity constraint analysis assesses health benefits foregone if more equitable but less cost-effective options are chosen 3. Equity distribution analysis quantifies how health impacts are distributed across groups 4. Equity trade-off analysis enables analysis of trade-offs between health and equity impacts by estimating both, allowing evaluation of interventions based on improving outcomes and reducing inequality. The document reviews previous literature on these approaches and provides examples of studies that have implemented each type.

1. Andrew Mirelman
Co-Authors: Richard Cookson, Miqdad Asaria, Susan
Griffin, Marc Suhrcke
Methods for Incorporating Health
Equity Impacts in Economic
Evaluation with Applications to Low
and Middle Income Countries
1

2. Objectives
1. To describe different approaches for including
equity in economic evaluation.
2. To show the requirements for each approach and
what information each provides.
3. To improve understanding of how CHE’s work on
distributional cost-effectiveness analysis (DCEA)
may be moved forward and potentially applied in
low and middle income countries.

3. Reviews of Equity in Economic
Evaluation
1. Sassi et al. Equity and the Economic Evaluation of
Healthcare. Health Technology Assessment; 2001.
2. Weatherly et al. Methods for assessing the cost-
effectiveness of public health interventions: Key
challenges and recommendations. Health Policy;
2009.*
3. Johri et al. Can Cost-Effectiveness Analysis Integrate
Concerns for Equity? Systematic Review. Int. Journal
of Technology Assessment in Health Care; 2012.
*also see: Cookson et al. Health Economics, Policy Law; 2009.

4. Sassi et al. 2001
• Identifies 2 methods for incorporating equity
i. Equity weighting – requires defining of a social
welfare function (SWF) and normative decisions
inherent to the analysis.
ii. Tabulation – sub-group analysis, a descriptive and
positive approach to incorporating equity.

5. Source: Sassi et al. 2001

6. Sassi et al. 2001 – Some
Conclusions
• Proposes a two-stage solution for moving forward:
i. Tabulation approach in the short term with adequate
sub-group sensitivity analyses.
ii. Conceptual and methodological work should be
explored in the medium-long term that could offer a
solution that uses equity-weighting.

7. Weatherly et al. 2009
• Defines four approaches to incorporating equity in
economic evaluation:
i. Review equity information
ii. Health inequality impact assessment (HIIA)
iii. Opportunity cost analysis
iv. Equity weighting of health outcomes

8. Weatherly et al. 2009
• Defines four approaches to incorporating equity in
economic evaluation:
i. Review equity information
ii. Health inequality impact assessment (HIIA)
iii. Opportunity cost analysis
iv. Equity weighting of health outcomes
…makes distinction that #4 explicitly values the
equity-efficiency trade-off.

9. Weatherly et al. 2009 – Some
Conclusions
• Invokes Sassi et al. and concludes that positive and
normative approaches is in a similar vein to
Culyer’s deliberative versus algorithmic
differentiation.
• Also concludes that equity weighting research
should proceed in order to better understand
health equity impacts.

10. Johri et al. 2012
• Focuses on three approaches to incorporating
equity:
i. Weighting
ii. Opportunity costs
iii. Multi-criteria decision analysis (MCDA)

11. Johri et al. 2012
• Additionally provides a useful framework for what
normative criteria are useful
i. Disease-related
ii. Social groups
iii. Financial and social effects
• These provide a mapping for discussing equity
criteria and were also adopted as appropriate
equity criteria for the GPS-Health checklist
(Norheim et al. 2014).

12. Johri et al. 2012 – Some
Conclusions
• They conclude that these methods (weighting,
opportunity costs and MCDA) should be employed.
“To foster the best overall decision under specific
circumstances, we recommend that HTA bodies use
techniques for explicit consideration of equity such
as those reviewed in this study as part of a
deliberative process that emphasizes procedural
fairness through accountability, transparency,
consistency, and the proper use of scientific
evidence.”

13. Four Approaches for Equity
• From these three reviews, we distilled four types of
analysis for incorporating equity in economic
evaluation:
1. Equity Evidence Review
2. Equity Constraint Analysis
3. Equity Distribution Analysis
4. Equity Trade-off Analysis

14. Four Approaches for Equity
1. Equity Evidence Review
• What are the equity issues; what is already known about
them; what do stakeholders think?
2. Equity Constraint Analysis
• How much benefit is foregone if a more cost-effective
option is ruled out on equity grounds?
3. Equity Distribution Analysis
• How much do different groups gain and lose?
4. Equity Trade-Off Analysis
• For values of the equity-efficiency trade-off, which
intervention is selected based on improving outcomes
and reducing inequality?

15. Types of equity analysis and
benefits considered
Approach Health Benefits Health + Financial
Benefits
1. Equity Evidence
Review
A B
2. Equity Constraint
Analysis
C D
3. Equity Distribution
Analysis
E F
4. Equity Trade-Off
Analysis
G H

16. Four Approaches for Equity – Pros and Cons
1. Equity Evidence Review
1. Pro – Requires no new analysis.
2. Con – Requires that evidence exists.
2. Equity Constraint Analysis
1. Pro – Flexible to many types of equity or non-equity constraints.
2. Con – Don’t know the distribution of equity impact and does not
value the equity-efficiency trade-off.
3. Equity Distribution Analysis
1. Pro – Gives you group specific information about who gains and who
loses.
2. Con – Data on sub-groups may not exist.
4. Equity Trade-Off Analysis
1. Pro – Can be incorporated into consistent equity framework.
2. Con – Calculations can be complex and can be demanding on the
data to have all parameters in terms of common metric (e.g. QALY).

17. Examples of Equity Approaches
1. Equity Evidence Review
• Miljeteig I, Johansson KA, Sayeed SA, Norheim OF. End-of-life decisions as
bedside rationing. An ethical analysis of life support restrictions in an Indian
neonatal unit. Journal of Medical Ethics 2010;36; 473-478.
2. Equity Constraint Analysis
• Cleary, Susan, Gavin Mooney, and Di McIntyre. "Equity and efficiency in
HIV‐treatment in South Africa: the contribution of mathematical programming to
priority setting." Health Economics 19.10 (2010): 1166-1180.
3. Equity Distribution Analysis
• Verguet, Stéphane, et al. "The consequences of tobacco tax on household health
and finances in rich and poor smokers in China: an extended cost-effectiveness
analysis." The Lancet Global Health 3.4 (2015): e206-e216.
4. Equity Trade-Off Analysis
• Asaria, M, Griffin, S, Cookson, R, Whyte, S, Tappenden, P. (2015). Distributional
cost-effectiveness analysis of health care programmes – a methodological case
study of the UK Bowel Cancer Screening Programme. Health Economics. 24(6):
742–754 http://onlinelibrary.wiley.com/doi/10.1002/hec.3058/abstract

18. When are we interested in equity
impacts?
• Adding equity to economic evaluation imposes a
cost.
• Clear win-win situations may not require it.
• Situations where it could be warranted include:
1. Making decisions when there are trade-offs in
health and equity.
• When it’s not cost-effective, should we accept it?
2. For population-wide, preventive interventions,
there are benefits that aren’t accounted for in
cost-effectiveness analysis and re-design may
lead to more equal distribution.

19. Net Equity
Impact (NEI)
+
-
-
Equity-Efficiency Impact Plane
Net Health Impact (NHI)
I. Win-Win
Beneficial Health Impact
Beneficial Equity Impact
III. Lose-Lose
Harmful Health Impact
Harmful Equity Impact
IV. Lose-Win
Harmful Health Impact
Beneficial Equity Impact
II. Win-Lose
Beneficial Health Impact
Harmful Equity Impact
+

20. 
Health
(H)
Cost
(C)
CA
A
Standard Economic Evaluation with
Threshold Value of Health, k
k
Is A Cost-Effective?

21. 
Health
(H)
Cost
(C)
HDA
HGA
CA
A
Net Health Benefit (NHB)
= Health Gained (HG)
Minus
Health Displaced (HD)
Standard Economic Evaluation with
Threshold Value of Health, k
NHB
k
NHB

22. Health
(H)
Cost
(C)

HDBHGB
CB
B
Net Health Loss (NHL)
HG – HD < 0
Is B cost-effective?
k
NHL
NHL

23. B
Net Health Impact (NHI) = Health Benefit - Health Opportunity Cost
-
A
0
+
Standard Economic Evaluation
Intervention B
is NOT cost-effective
(-ve net health impact) compared
with do nothing (0)
Intervention A
is cost-effective
(+ve net health impact) compared
with do nothing (0)
Note: positive
and negative NHI
are switched
Net Health Impact (NHI)

24. Net Equity
Impact (NEI)
-ve
-ve
+ve
Estimating Equity Impacts
A
B
HARMFUL
equity impact
BENEFICIAL equity
impact
Net Health Impact (NHI)

25. Net Equity
Impact (NEI)
-ve
-ve
+ve
Estimating Equity Impacts
A
B
HARMFUL
equity impact
BENEFICIAL equity
impact
Net Health Impact (NHI)
1. Is this beneficial equity impact of B worth
the net health loss?
2. Is this harmful equity impact of A justified
by the net health gain?

26. NEI
NHI
-ve
-ve
+ve
Method 1: Equity Evidence Review
A
B

27. Example of equity review – Miljeteig
2010
• Explores cost-effectiveness
and equity evidence side
by side.
• Use a systematic case
review methodology.
• Diagram equity weights
when discussing the
evidence for valuing lives.
• Also a careful discussion of
the context of resource
scarcity.
Source: Miljeteig et al. J Med Ethics 2010; 36:473-478.

28. Net Equity
Impact (NEI)
Net Health Impact (NHI)
-ve
-ve
+ve
Method 2: Equity Constraint Analysis
A
B
Net health loss if
equity constrains us
to implement B and
not to implement A

29. Example of equity constraint analysis –
Cleary 2010
• Describe three treatment
scenarios across a range of
budgets:
1. equal treatment
2. decent minimum
3. health maximization

30. Source: Cleary et al. Health Econ. 2010; 19:1166-1180.

31. Net Equity
Impact (NEI)
Net Health Impact (NHI)
-ve
-ve
+ve
Method 3: Equity Distribution Analysis
A
B
Quantifies the
distribution of health
impacts,
and so reduces
uncertainty

32. NEI
NHI
-ve
-ve
+ve
Method 3: Equity Distribution Analysis
A
B
Quantifies the
distribution of health
impacts,
and so reduces
uncertainty

33. Example of equity distribution analysis
– Verguet 2015
• Packaged as a form of analysis called Extended Cost-
Effectiveness Analysis (ECEA) and used widely in the latest
round of the Disease Control Priorities Project.
• Adds financial risk protection as a benefit.
• Typically broken down by wealth quintile.

34. Source: Verguet et al. 2015

35. NEI
-ve
-ve
+ve
A
B
NHI
Method 4: Equity Trade-Off Analysis
Adds comparable
summary estimates of
net equity impact,
and so reduces
uncertainty further
Enables analysis of trade-
offs between health and
equity impact

36. Example of equity trade-off analysis
• Distributional cost-effectiveness analysis (DCEA) done at CHE.
• Assesses baseline levels of health and can incorporate group-specific
opportunity costs.
• Transforms QALYs into equally distributed equivalent (EDE) QALYs, which
are weighted according to an Atkinson Index given a level of inequality
aversion.

37. Key Additional Data Requirements
1. Total health levels without intervention.
2. Incidence or eligibility for intervention.
3. Treatment effect in terms of health gains and
resources used.
4. Health opportunity costs.
5. #1-4 in terms of equity relevant characteristics
(e.g. income, ethnicity).
6. Quantified trade-off in equity and efficiency from
SWF. Examples from DCEA so far use Atkinson
(relative) and Kolm (absolute) indices.

38. Source: Asaria et al. 2015

39. Examples of approaches of equity
analysis and benefits considered
Approach Health Benefits Health + Financial
Benefits
1. Equity Evidence
Review
A B
2. Equity Constraint
Analysis
C: Opportunity Cost
of Equity (with MP)
D
3. Equity Distribution
Analysis
E: Sub-groups
analysis
F: ECEA
4. Equity Trade-Off
Analysis
G: DCEA H: DCBA*

40. Conclusions
• We describe four approaches to incorporating equity
into economic evaluation.
• Previous reviews have found that equity is lacking in
economic evaluation and proposed different
methodological approaches.
• ECEA, being used more in global health, provides a
dashboard of health equity and financial equity impact.
• The DCEA approach provides a framework for multiple
inequality measures, incorporating baseline health and
looking at group-specific opportunity costs.
• DCEA also requires quantifying the health-equity trade-
off -- such as an inequality aversion parameter.

41. Thank You