John Cullinan

Health spillovers arise when an individual's serious illness affects those close to them emotionally, psychologically, and/or physically. As a result, healthcare interventions that improve the lives of patients may also confer wider health benefits. However, contrary to widespread calls for health spillovers to be included in health economic evaluation, others have argued this could have adverse distributional consequences and equity implications. This paper presents a novel approach to spillover inclusion in health economic evaluation using a ‘prioritarian transformation’ of health gains that allows these equity concerns to be addressed. Affording greater weight to the incremental change in patient outcomes when incorporating carer/family health spillovers into resource allocation decisions, the method provides a feasible means of moderating the distributional impact of spillover inclusion. It also introduces a normative, theoretical perspective to a largely empirical extant literature and, as such, its axiomatic basis is examined. Finally, an illustrative example of the approach is presented to demonstrate its application.