Insights from Financial Economics to Value Healthcare Investments that Reduce System-Level Risks: Example of Disease Elimination and Eradication

System-level risks generate volatility that can threaten the stability of public health systems and jeopardise population health. In financial terms, these risks may be systematic, arising from macroeconomic shocks, or systemic, arising from cascading failures due to interconnectedness. Interventions such as disease elimination and eradication (DEE) play a crucial role in mitigating the aggregate impact of such risks. However, conventional health economic evaluations often overlook these broader benefits realised during periods of instability, focusing instead on programme-specific risks under steady-state assumptions. Insights from financial economics can help capture this value and inform a more robust economic appraisal. This paper explores how concepts from financial economics can strengthen conventional health economic methods for evaluating programmes that reduce the aggregate impact of such system-level risks, using DEE as a primary example. It draws on asset pricing theory, macroeconomic models of rare disasters, real options analysis, and discounting practices. Key recommendations include recognising the added value of programmes that perform better during downturns due to the protection they offer against macroeconomic shocks or catastrophic events; using 'real options' thinking to manage uncertainty and preserve flexibility in long-term, high sunk cost projects; and accounting for equity considerations when setting discount rates for programmes with significant intergenerational impacts. The financial economics tools highlighted here could serve as key components of a broader analytical framework, supporting investment decisions that recognise and more accurately capture the value of investments that reduce the aggregate impact of system-level risks.