Accounting for health opportunity costs in key decisions in healthcare resource allocation in low- and middle-income countries

The concept of opportunity cost is fundamental to economic analysis. Opportunity costs exist because resources are scarce, and so their use in one way means they are not available for use in other ways. Economic evaluation methods that enable opportunity costs to be accounted for in decision-making in healthcare in high-income countries (HICs) are well-developed. However, methods are less well-developed to inform decisions in low- and middle-income countries (LMICs) despite the fact that it is in these countries where healthcare resources are most constrained and the potential health gains per additional resource spent on healthcare are greatest. This thesis provides methods to answer key policy questions for healthcare resource allocation in LMICs by extending existing frameworks and estimating key parameters required to inform them to enable health opportunity costs to be accounted for. It begins by providing empirical estimates of the marginal cost per unit of health produced by the healthcare system for LMICs, which were previously unavailable. How calculations of value founded on such estimates can be used to inform international guidelines about whether specific healthcare interventions should be provided in countries, whether and the extent to which these should be externally supported, and how to prioritise the development of new healthcare interventions for provision in LMICs is demonstrated. Next, the sources for empirical evidence to inform key parameter estimates for a framework of economic evaluation that accounts for the timing of costs and effects in a more appropriate way are identified, and the assumptions implicit in existing guidelines for economic evaluation are exposed and compared. Finally, a framework is developed to inform health benefits package (HBP) design that takes account of health opportunity costs and can analytically consider dimensions pertaining to equity, financing and implementation, while explicitly assessing key trade-offs in package design.