
For any health program, it is essential to check not just the total health gain but also who is receiving those gains; as fair decisions depend on both. Typical cost-effectiveness analysis (CEA) emphasizes efficacy by comparing costs and quality-adjusted life years (QALYs), indirectly considering all QALYs as equal in spite of whether they apply to the rich or poor, the healthy or severely ill, thus inadvertently increasing existing health disparities. Alternatively, equity-based approaches can make exact value decisions about minimizing inequitable and avoidable health gaps, using ethical theories, including egalitarianism and prioritarianism to validate giving extra importance to improvements in disadvantaged groups.(1-3)
To implement equity factors, analysts first disaggregate costs and health outcomes by equity-relevant categories, including socioeconomic status, ethnicity, gender, region, or baseline health. This is done with the intention of estimating and not assuming the distributional effects of interventions. Extended or “equity-informative” CEA then informs subgroup-specific findings and inequality parameters, combined with standard incremental cost-effectiveness ratios (ICERs), enabling decision-makers to assess who benefits and who loses choosing different policy options without condensing everything into a single number. This descriptive step is often possible with fewer data enhancements and already offers a clearer base for deliberation about equity-efficiency trade-offs.(1)
Distributional cost-effectiveness analysis (DCEA) specifically focuses on inequality in a social welfare framework that values both total health and its distribution. DCEA turns intervention costs into health opportunity costs and demonstrates alternative options for changing the distribution of lifetime health across groups, condensing the result with indices, including the equally distributed health that drops as inequality increases. By changing inequality aversion metrics, DCEA shows when a slightly less efficient intervention may be socially preferable since it provides larger gains to the worst off.(2)
Equity weights applied to QALYs or disability-adjusted life years (DALYs) are another way to reinforce support for equity, by attributing higher weights to health gains for people who are poorer, more severely ill, or have larger lifetime health deficits. These weights can be obtained from empirical studies of public preferences or from ethical reasoning. However, they pose practical and ethical questions about how to draw and validate the chosen parameters in a clear, legitimate manner. Even when not used routinely as decision rules, equity-weighted analyses can explain how different social value findings would change intervention rankings.(4)
Most health technology assessment (HTA) recommendations continue to prefer standard CEA and refer to equity only in broad terms, leaving distributional concerns to informal discussions rather than precise modelling. However, evidence suggests that incorporating equity considerations is not only feasible but also useful for decisions on screening, vaccination, and service delivery, for e.g., in low- and middle-income countries seeking universal health coverage.(1, 5) As methods, including extended CEA, DCEA, and equity weighting, are more widely applied, economic evaluation can transform into a more accessible, value-aware tool that facilitates transparent balancing of efficacy and equity in health policy.
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References
- Muir JM, Radhakrishnan A, Ozer Stillman I, Sarri G. Health Equity Considerations in Cost-Effectiveness Analysis: Insights from an Umbrella Review. Clinicoecon Outcomes Res. 2024; 16:581-596.
- Asaria M, Griffin S, Cookson R. Distributional Cost-Effectiveness Analysis: A Tutorial. Med Decis Making. 2016; 36(1):8-19.
- Sivanantham P, Anandraj J, Ravel V, et al. Equity Considerations in Health Economic Evaluations: A Systematic Review of WHO South-East Asia Region Countries. WHO South-East Asia Journal of Public Health. 2024; 13(2): 69-77.
- Sassi F, Archard L, Le Grand J. Equity and the economic evaluation of healthcare. Health Technol Assess 2001; 5(3).
- Methods for the development of NICE public health guidance (third edition). 2012. [Accessed online on 22nd December 2025]. Available at: https://www.nice.org.uk/process/pmg4/chapter/incorporating-health-economics


















