T3-E
Risk-benefit analysis: Lessons learned at federal agenciesMaryland E 2:15 PM
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| Chair(s): Richard Williams rwilliam@cfsan.fda.gov
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| At the urging of the US OMB, federal agencies continue to expand risk analysis in many cases to include risk-benefit analysis (RBA) and/or cost-benefit analysis (CBA). OMB uses the results of these in the decision making process for formulating rules and major actions. RBAs must answer the question: Does the health benefit that will be accrued from this rule outweigh the health risk that may be incurred to accomplish it? CBAs weigh the trade-offs in terms of costs. This session discusses case studies that describe some analyses performed to estimate health risks and benefits of specific risk management proposals or tasks, and the implications and impacts of using RBAs and CBAs in decision making. |
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T3-E.1 2:15 PM Measuring the benefits of risk-based regulations. Quesenberry HH*, Gallagher DL; USDA FSIS, Virginia Polytechnic Institute and State University heather.hicksquesenberry@fsis.usda.gov
Abstract: The Food Safety and Inspection Service (FSIS) administers the Federal Meat Inspection Act and the Poultry Products Inspection Act to ensure that meat, poultry, and egg products in commerce are wholesome, unadulterated, and properly labeled. FSIS issued a regulation in October 2003 to require establishments that produce certain ready-to-eat (RTE) meat and poultry products to prevent product adulteration by the pathogenic environmental contaminant Listeria monocytogenes. Under these regulations, establishments that produce RTE meat and poultry products, which are exposed to the environment after lethality treatments and that support the growth of L. monocytogenes, are required to have one of three alternate control measures that prevent final product adulteration by L. monocytogenes. In the first alternative, an establishment controls L. monocytogenes by using a post-lethality treatment of the product and an antimicrobial agent or process that suppresses or limits the growth of the pathogen. Alternately in a second option, an establishment may choose to address L. monocytogenes by using a post-lethality treatment or an antimicrobial agent or process that suppresses or limits the growth of the pathogen. Thirdly, an establishment that processes RTE products may control L. monocytogenes in the post-lethality processing environment through sanitation procedures only. This presentation describes the predicted human health impact resulting from the full implementation of FSIS Rule 9 CFR 430, i.e. the adoption of alternative Listeria monocytogenes control measures, in FSIS-regulated establishments from October 2003 until December 2005. The median estimated number of FSIS commodity-associated deaths from listeriosis previous to final adoption of the Rule is 286 per year, and post-implementation is 168 per year, for an estimated number of lives saved as a result of implementation of the Rule at 118 per year.
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T3-E.2 2:35 PM How does risk/risk analysis fit in a regulatory impact analysis? Mancini DJ*, Beck N; US OMB dmancini@omb.eop.gov
Abstract: Regulations alter behavior, which can raise risks as well as lower them. Understanding the nature of the behaviors changed by regulation is essential to estimate a true regulatory impact. Understanding risk tradeoffs is a subset, albeit a very important one, of this general concept. Often, the cost of an increased risk is incurred by the same persons or firms as incur the benefit of a risk reduction. For example, if individual purchasing patterns change as the result of a labeling regulation, people may incur both positive and negative changes in risk, depending on the overall risk profile of the new versus the old products. A more complicated case is when the increased risks are not suffered by the same population as also enjoys the risk reductions. In these cases, agencies often have to rely on more complicated preference modeling and market analysis. Regardless of the framework within which risks are estimated, OMB Circular A-4 has broad implications for risk assessments included as part of an RIA. Because benefit-cost analysis is a primary tool for agency decision-making, it is essential that risk assessments are designed to be compatible with benefit-cost analysis. Among other things, risk assessments must be objective and transparent in substance and presentation, should allow for the evaluation of regulatory alternatives, must present "central estimates" such as the expected value of risks for a proposal and feasible alternatives, and must be conducted in a way that facilitates sensitivity and formal quantitative analysis.*
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T3-E.3 2:55 PM Using market-based regulation to reduce risks from releases of hazardous materials. Farber GS*; US EPA farber.glenn@epa.gov
Abstract: Large Federal spill prevention programs have been developed to reduce risks associated with releases of hazardous materials. Federal and state governments write and promulgate regulations, inspect industrial facilities, and take enforcement action against violators. These programs are probably effective at preventing releases and reducing human health and ecological risks. However, the regulatory structures tend to be inefficient, and discourage flexibility, innovation, and superior environmental performance. One possibility for ameliorating those problems is to supplement or replace the federal regulatory program with a requirement for an insurance policy or bond. This paper examines the ramifications of implementing such a market-based regulatory initiative in example programs, such as RCRA hazardous waste management and oil spill prevention, control, and countermeasures.
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T3-E.4 3:15 PM Cost benefit analysis and discounting: Uses and misuses in decision making. McLaughlin CF*; US FDA cristina.mclaughlin@fda.hhs.gov
Abstract: Many tools in economic analysis are often misrepresented as a means to prevent regulation. For example cost-benefit analysis (CBA) is often criticized for promoting de-regulation because the costs are not measured in a way that is comparable with the benefits. Another criticism is that it doesn't yield a "fair" result. Finally, CBA is criticized for discounting effects because it is believed to "de-value" human life and health. This paper will address common misperceptions as to what CBA can and cannot do. The main focus of this paper is in exploring how discounting can help evaluate costs and benefits of policies whose effects will happen in the very distant future or span over a long period of time. Recognizing the difference between time preference and uncertainty about the future will help decision makers in formulating an optimal policy choice. This presentation will provide examples on how past decisions would have changed if the criticized aspects of CBA, mainly discounting, were different.
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