Table 3.

Summary.

	Cost-benefit analysis	Cost-effectiveness/cost-utility analysis
Summary	A comparative analysis of two or more alternatives in terms of their relative costs and consequences. Within a cost-benefit analysis, both the costs and outcomes are expressed in monetary terms. This type of analysis typically involves summing the values of an intervention's costs and benefits based on the preferences of those affected. The analysis foundation is based on the welfarist approach (Box 1).	A comparative analysis of two or more alternatives in terms of their relative costs and consequences. Within a cost-effectiveness analysis, the health consequences of a health intervention are measured in a single natural unit. In contrast, a cost-utility analysis is a specific form of cost-effectiveness analysis, where the health consequences are measured using a generic measure of health status that considers both the effect on mortality and morbidity (such as DALYs/QALYs). The analysis foundation is based on the extra-welfarist approach (Box 1).
Advantages	More consistent with how other public interventions are evaluated and the facilitation of cross-sector comparisons (i.e., can compare the economic benefit to investments outside of the healthcare sector). It can therefore consider allocative efficiency of resource allocation across different sectors/society (Table 2). Potential to value a wider range of benefits. A monetary output is desirable to a range of stakeholders.	More commonly performed-making comparisons of different studies easier.More established guidelines for methodology and reporting.Forgoes the need to monetize health benefits and the corresponding equity and ethical issues.The cost-effectiveness thresholda can be a way of capturing how much health is expected to be foregone if the resources in question are used for an intervention accounting for the budget constraints within the healthcare sector.
Limitations and areas of debate	Methodological and data difficulties regarding placing a monetary value on health benefits – particularly to non-fatal health outcomes. Methods used are more variable and there are less well-established reporting guidelines – making it harder to compare studies. Output can easily be misinterpreted and difficulties regarding practical interpretation. Less commonly performed than cost-effectiveness/cost-utility analysis. Placing a monetary value on health benefits generates notable equity concerns. Typically, do not account for issues surrounding fixed budget constraints and therefore fail to accurately reflect what other health interventions may need to be displaced.	Limited availability of cost-effectiveness thresholds.DALY and QALY generic summary measures have limitations.Non-health benefits may not be fully captured and there is variation regarding if/how they are quantified and included.Difficult to compare the results to investments outside of the healthcare sector (limited potential for cross-sector comparisons). They have a more limited potential in how they can consider the allocative efficiency of resource allocation particularly beyond the healthcare sector (Table 2).Although cost-effectiveness/cost-utility analyses avoid the need to monetize health benefits, they are still associated with equity and ethical issues.
Key message for policymakers	Cost-benefit analyses facilitate cross-sectoral comparisons and can include a wider range of benefits. However, there needs to be greater awareness of the current methods and variations in the approaches being used when placing a monetary value on health benefits (Boxes 2, 3), and the potential for the results to be misinterpreted. Importantly, the economic benefits being reported within such studies are typically an approximation, in terms of social welfare or potential economic benefits related to productivity gains. The risk here is that many may not realise how intangible these estimated economic benefits can be and may misinterpret them as the actual realisable or fiscal monetary benefits.	Cost-effectiveness/cost-utility analyses have key advantages for directly comparing different health interventions when considering resource allocation within the healthcare sector. However, it is important to acknowledge that notable non-health benefits of interventions may not be captured. Although some of these broader benefits can, in principle, be monetised and included in analyses when using a broad societal perspective, there is variation in when and how they are included. It is also more difficult to compare the results of cost-effectiveness/cost-utility analyses to investment in other sectors, limiting cross-sector comparisons.

^aDepending on how it is calculated.