The Economics of Prevention

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Aims

The OECD project on the Economics of Prevention aims at:

• Developing a conceptual framework on the economics of non-communicable disease prevention, through which the scope and potential for government intervention will be explored;
• Devising appropriate methods for assessing prevention programmes, taking into account the strengths and weaknesses of conventional methods (e.g. cost-effectiveness analysis) in the area of prevention;
• Applying the conceptual framework and assessment methods to the analysis of issues and policies in the prevention of conditions linked to diet and physical activity.

Background

The project has been conceived against a background of rising concern about the expected growth in the burden of chronic diseases in OECD countries, particularly in relation to changing lifestyles. The project is primarily focused on the question of whether and to what extent efforts should be made to prevent non-communicable diseases rather than to accept the consequences of treating and managing them.

A common assumption is that individuals are in the best position to judge their own welfare and to maximise that welfare subject to the income constraints they face. However, the markets in which many lifestyle choices are made do not always work efficiently. Therefore, consumption behaviours that originate in such markets may not always lead to improvements in individual and/or societal welfare. Government intervention may be appropriate when “market failures” are significant and could be corrected, for instance, when consumers lack information of the consequences of consumption decisions, or when there are spill-over effects (individual behaviour which affects the welfare of others) or when consumers are unable to make sufficiently rational and informed choices (as is generally the case among children, for example). Prevention policies may provide opportunities for increasing social welfare, but they may also be used to favour a redistribution of health, i.e. to reduce health disparities among population groups.

Project management

The project is being managed by the Health Division in the Directorate for Employment, Labour and Social Affairs. It also entails collaboration with other OECD Directorates, notably the Trade and Agriculture and the Education Directorates, and with other international organisation working on similar issues, in particular the European Commission and the World Health Organization. 

Timing

The project was launched in January 2007.

• 27 April 2007. A first meeting of national expert from participating countries will be held to refine the scope of the project and focus its conceptual framework.
• The first working paper, The Prevention of Lifestyle-Related Chronic Diseases: an Economic Framework, was published in March 2008.
• A second paper, reporting the preliminary findings of an international comparison of trends in selected risk factors and chronic conditions and their determinants will be published during the course of the 2008.

Contact 

Franco Sassi: franco.sassi@oecd.org
Jeremy Hurst: jeremy.hurst@oecd.org