Economic Analysis of Health Sector Projects - A Review of Issues, Methods, and Approaches

Abstract

The paper asserts that project designs and benefit valuation in the health sector are much more complex than in other sectors that traditionally apply economic cost-benefit analysis. Economic analysis should therefore begin at the early stage of project development. Improved project economic analysis provides a strong basis for choosing between project alternatives and program and project approaches. The selected option to meet the likely demand for project activities is further evaluated to examine their worth from the point of view of the national economy and long-term sustainability. Increased attention to the extent of cost recovery and the analysis of budgetary implication issues likewise enhance prospects for project impact and sustainability. The paper discusses the key issues in the economic analysis of health sector projects and then presents possible approaches pertaining to demand analysis, analysis of alternative project designs, project framework analysis, cost-effectiveness analysis, cost-benefit analysis, and project sustainability analysis.