OREGON STATE UNIVERSITY

EXTENSION USES COST-BENEFIT ANALYSIS TO EVALUATE PROGRAM

10/12/2001

CORVALLIS - The Oregon State University Extension Service's Expanded Food and Nutrition Education Program (EFNEP) has helped thousands of low-income Oregonians improve their lives by teaching them how to improve their diets.

A recent cost benefit analysis found that the program may have saved as much as $1.6 million in potential annual health care costs through successful participation of the program's users. This figure represents an estimated savings of funds that might have been spent by government, health insurance companies and individuals for treatment of health conditions related to nutrition.

Ellen Schuster, OSU Extension Service nutrition and foods specialist, and Molly Engle, OSU Extension Service evaluation specialist, conducted the analysis.

"The result of cost-benefit analysis is a ratio of costs to benefits," Engle said. "This ratio shows that every dollar invested in a program results in a possible benefit that can be expressed in dollar value."

The analysis of EFNEP yielded a ratio of $1 to $3.63 - each dollar spent on the program produced an estimated benefit of $3.63 in possible health care savings.

EFNEP is a federally funded program that delivers nutrition education to low-income families. The EFNEP program is delivered in Oregon by faculty and staff working in the OSU Extension Service's Family and Community Development program area.

EFNEP participants learn how to make healthy food choices, how to handle and store food safely and how to better manage their resources. In 1999, 854 Oregon families with 1,256 children ages 19 years and younger participated in EFNEP.

"One of the most useful outcomes of doing a cost-benefit study is that you can put a dollar value on the results of a program," said Schuster. "This information is very effective in helping decision-makers and the public understand the worth of a program."

The analysis is based on a complex formula that compares the dollar value of possible savings in health care costs to the costs of the program. The costs are defined as the value of the resources that must be used to develop and operate the program.

The benefits in the analysis were estimated as dollars saved that might have been spent to treat program participants for health problems that have nutritional components.

Cost-benefit analysis turned out to be a good way of measuring this program's effectiveness because EFNEP delivers nutrition education that helps participants improve their diets, which has a positive effect on overall health, Schuster explained. As a result, participating individuals are more likely to avoid various diseases and conditions, and the expense of getting treatment, she added.

Some of the nutrition-related health problems included in the analysis were osteoporosis, food-borne illnesses, diabetes, obesity, colorectal cancer and cardiovascular disease.

Although widely used by governments and the private business sector to evaluate program policies and business operations, cost-benefit analysis is not commonly used in evaluating Extension educational programs, Engle noted.

"To my knowledge, cost-benefit analysis of an Extension Service Family and Community Development education program has never been done at OSU," said Engle. "This analysis can be a useful tool in measuring the effectiveness of these types of programs."

 

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