No exit: next steps to help promote South Pacific peace and prosperity

This paper explores contemporary official and scholarly thinking on aid, development, conflict prevention and strategic shaping to try to identify promising avenues to promote regional growth and stability in a tight budget environment. Overview As Australia focuses on its global interests in a changing and challenging international environment, there’s a danger that we’ll lose sight of important constants of history and geography. We don’t have an either/or choice to focus on near or distant security imperatives. While the Australian Government’s decision to lift defence funding will help with this, cutting aid to help offset that boost may prove counterproductive. We also need to further improve the quality of our aid and regional diplomacy, as well as the hard and soft aspects of our security engagement. This paper suggests some useful first steps for doing so

Dimensions of design space: a decision-theoretic approach to optimal research design

Bayesian decision theory can be used not only to establish the optimal sample size and its allocation in a single clinical study, but also to identify an optimal portfolio of research combining different types of study design. Within a single study, the highest societal pay-off to proposed research is achieved when its sample sizes, and allocation between available treatment options, are chosen to maximise the Expected Net Benefit of Sampling (ENBS). Where a number of different types of study informing different parameters in the decision problem could be conducted, the simultaneous estimation of ENBS across all dimensions of the design space is required to identify the optimal sample sizes and allocations within such a research portfolio. This is illustrated through a simple example of a decision model of zanamivir for the treatment of influenza. The possible study designs include: i) a single trial of all the parameters; ii) a clinical trial providing evidence only on clinical endpoints; iii) an epidemiological study of natural history of disease and iv) a survey of quality of life. The possible combinations, samples sizes and allocation between trial arms are evaluated over a range of costeffectiveness thresholds. The computational challenges are addressed by implementing optimisation algorithms to search the ENBS surface more efficiently over such large dimensions.Bayesian decision theory; expected value of information; research design; costeffectiveness analysis

Rights, responsibilities and NICE: a rejoinder to Harris

Harris' reply to our defence of the National Institute for Clinical Excellence's (NICE) current cost-effectiveness procedures contains two further errors. First, he wrongly draws a conclusion from the fact that NICE does not and cannot evaluate all possible uses of healthcare resources at any one time and generally cannot know which National Health Service (NHS) activities would be displaced or which groups of patients would have to forgo health benefits: the inference is that no estimate is or can be made by NICE of the benefits to be forgone. This is a non-sequitur. Second, he asserts that it is a flaw at the heart of the use of quality-adjusted life years (QALYs) as an outcome measure that comparisons between people need to be made. Such comparisons do indeed have to be made, but this is not a consequence of the choice of any particular outcome measure, be it the QALY or anything else

Budget allocation and the revealed social rate of time preference for health

Appropriate decisions based on cost-effectiveness evaluations of health care technologies depend upon the cost-effectiveness threshold and its rate of growth as well as some social rate of time preference for health. The concept of the cost-effectiveness threshold, social rate of time preference for consumption and social opportunity cost of capital are briefly explored before the question of how a social rate of time preference for health might be established is addressed. A more traditional approach to this problem is outlined before a social decision making approach is developed which demonstrates that social time preference for health is revealed through the budget allocations made by a socially legitimate higher authority. The relationship between the social time preference rate for health, the growth rate of the cost-effectiveness threshold and the rate at which the higher authority can borrow or invest is then examined. We establish that the social time preference rate for health is implied by the budget allocation and the health production functions in each period. As such, the social time preference rate for health depends not on the social time preference rate for consumption or growth in the consumption value of health but on growth in the cost-effectiveness threshold and the rate at which the higher authority can save or borrow between periods. The implications for discounting and the policies of bodies such as NICE are then discussed.Economic evaluation. Discounting. Cost-effectiveness analysis

Mark versus Luke? Appropriate Methods for the Evaluation of Public Health Interventions

The purpose of this paper is to demonstrate that a social decision making approach to evaluation can be generalised to interventions such as public health and national policies which have multiple objectives and impact on multiple constraints within and beyond the health sector. We demonstrate that a mathematical programming solution to this problem is possible, but the information requirements make it impractical. Instead we propose a simple compensation test for interventions with multiple and cross-sectoral effects. However, rather than compensation based on individual preferences, it can be based on the net benefits falling on different sectors. The valuation of outcomes is based on the shadow prices of the existing budget constraints, which are implicit in existing public expenditure and its allocation across different sectors. A ‘welfarist’ societal perspective is not sufficient; rather, a multiple perspective evaluation which accounts for costs and effects falling on each sector is required.cost-effectiveness analysis, decision rules, public health

A stitch in time: preserving peace on Bougainville

A decade after the successful peacekeeping mission, and a year and a half before the window opens for a referendum on Bougainville’s political status, the peace process is dangerously adrift.In this paper, Peter Jennings and Karl Claxton set out a plan to help deliver a sustainable solution for next steps in the peace process. An Australian-led preventive development effort, conducted in close cooperation with our regional partners, is needed to avoid the future requirement for a larger, costlier, riskier, and more intrusive peacekeeping mission than the limited intervention appropriate in 1997-2003.The new Government’s decision to link aid more directly to our strategic interests could assist. While the initiative would require a significant initial investment, it could create a substantial longer-term cost saving and avoid serious military, diplomatic and reputational risks

The value of implementation and the value of information: combined and uneven development

In a budget constrained healthcare system the decision to invest in strategies to improve the implementation of cost-effective technologies must be made alongside decisions regarding investment in the technologies themselves and investment in further research. This paper presents a single, unified framework that simultaneously addresses the problem of allocating funds between these separate but linked activities. The framework presents a simple 4 state world where both information and implementation can be either at the current level or ‘perfect’. Through this framework it is possible to determine the maximum return to further research and an upper bound on the value of adopting implementation strategies. The framework is illustrated through case studies of health care technologies selected from those previously considered by the UK National Institute for Health and Clinical Excellence (NICE). Through the case studies, several key factors that influence the expected values of perfect information and perfect implementation are identified. These factors include the maximum acceptable cost-effectiveness ratio, the level of uncertainty surrounding the adoption decision, the expected net benefits associated with the technologies, the current level of implementation and the size of the eligible population. Previous methods for valuing implementation strategies have confused the value of research and the value of implementation. This framework demonstrates that the value of information and the value of implementation can be examined separately but simultaneously in a single framework. This can usefully inform policy decisions about investment in healthcare services, further research and adopting implementation strategies which are likely to differ between technologies.Value of information analysis; value of implementation; healthcare decisionmaking, Bayesian analysis

Appropriate Perspectives for Health Care Decisions

NICE uses cost-effectiveness analysis to compare the health benefits expected to be gained by using a technology with the health that is likely to be forgone due to additional costs falling on the health care budget and displacing other activities that improve health. This approach to informing decisions will be appropriate if the social objective is to improve health, the measure of health is adequate and the budget for health care can reasonably be regarded as fixed. If NICE were to recommend a broader =societal perspective‘, wider effects impacting on other areas of the public sector and the wider economy would be formally incorporated into analyses and decisions. The problem for policy is that, in the face of budgets legitimately set by government, it is not clear how or whether a societal perspective can be implemented, particularly if transfers between sectors are not possible. It poses the question of how the trade-offs between health, consumption and other social arguments, as well as the valuation of market and non market activities, ought to be undertaken.Perspective. Cost-effectiveness analysis. Economic evaluation.

Budgetary policies and available actions: a generalisation of decision rules for allocation and research decisions

The allocation problem in health care can be characterised as a mathematical programming problem but attempts to incorporate uncertainty in costs and effect have suffered from important limitations. A two stage stochastic mathematical programming formulation is developed and applied to a numerical example to explore and demonstrate the implications of this more general and comprehensive approach. The solution to the allocation problem for different budgets, budgetary policies, and available actions are then demonstrated. This analysis is used to evaluate different budgetary policies and examine the adequacy of standard decision rules in cost-effectiveness analysis. The research decision is then considered alongside the allocation problem. This more general formulation demonstrates that the value of further research depends on: i) the budgetary policy in place; ii) the realisations revealed during the budget period; iii) remedial actions that may be available; and iv) variability in parameters values.