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The Limits of Cost-Benefit Analysis as a Guide to Priority-Setting in Rehabilitation

Brookings Institution

Policy makers and program managers concerned with targeting resources to meet the rehabilitation needs of the nation cannot rely on the backlog of 18 cost-benefit studies to decide among alternative kinds and amounts of investment. Overly simplistic forecasting of the future earnings of rehabilitants, the insufficiencies of data concerning the benefits and costs of rehabilitation, and the extreme sensitivity of the cost-benefit model's results to its untested underlying assumptions argue against priority-setting based on intuitively appealing class-specific calculations that appear to show greater rates of return for investments in some kinds of disabled persons over others. Until substantial upgrading of the state of the art along certain recommended lines takes place, the political process looks like the only sensible and fair way to approach choice and the assertion ofpriorities.

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