Cost-Effectiveness Analysis

Introduction

Cost-effectiveness analysis (ACE) or cost-effectiveness analysis (CEA) is a form of economic analysis that compares the relative costs with the results (effects) of two or more courses of action. Cost-effectiveness analysis is different from cost-benefit analysis, which assigns a monetary value to the measure of the effect.[1] Cost-effectiveness analysis is frequently used in the field of health services, where it may be inappropriate to monetize the health effect. Typically, CEA is expressed in terms of a ratio where the denominator is a gain in health to some extent (life-years, premature births averted, vision-years gained) and the numerator is the cost associated with the health gain.[2] The most commonly used outcome measure is quality-adjusted life years (QALYs).[1] Cost-utility analysis is similar to cost-effectiveness analysis. Cost-effectiveness analysis is often visualized as the cost-effectiveness plane consisting of four quadrants. The results represented in Quadrant I are more effective and more costly, those in Quadrant II are more effective and less costly, those in Quadrant III are less effective and less costly, and those in Quadrant IV are less effective and more costly.[3].

General application

The concept of cost-effectiveness applies to the planning and management of many types of organized activities. It is widely used in many aspects of life. In the procurement of military tanks, for example, competing designs are compared not only by purchase price, but also by factors such as their range, speed, rate of fire, armor protection, caliber and armor penetration of their weapons. If a tank's performance in these areas is equal to or even slightly inferior to its competitor, but substantially less expensive and easier to produce, military planners may select it as more profitable than the competitor. Instead, if the difference in price is close to zero, but the more expensive competitor would convey an enormous advantage on the battlefield through special ammunition, radar fire control, and laser range, allowing it to destroy enemy tanks with precision at extreme distances, military planners can choose instead—based on the same principle—cost-effectiveness.

Cost-effectiveness analysis also applies to many other areas of human activity, including the economics of automobile use.

Cost-effectiveness analysis in pharmacoeconomics

Cost-Effectiveness Analysis

Introduction

General application

Cost-effectiveness analysis in pharmacoeconomics

In the context of pharmacoeconomics, the cost-effectiveness of a therapeutic or preventive intervention is the relationship between the cost of the intervention and a relevant measure of its effect. Cost refers to the resource spent on the intervention, usually measured in monetary terms such as dollars or pounds. The extent of the effects depends on the intervention being considered. Examples include the number of people cured of a disease, the mm Hg reduction in blood pressure, and the number of symptom-free days experienced by a patient. Selection of the appropriate effect measure should be based on clinical judgment in the context of the intervention being considered.

A special case of CEA is cost-utility analysis, where effects are measured in terms of years lived in full health, using a measure such as quality-adjusted life years or years of life potentially lost. Cost-effectiveness is typically expressed as an incremental cost-effectiveness ratio (ICER), that is, the ratio of the change in costs to the change in effects. A comprehensive compilation of cost-utility analyzes in the peer-reviewed medical literature is available on the Registry of Cost-Effectiveness Analyzes website.

A 1995 cost-effectiveness study of more than 500 life-saving medical interventions found that the average cost per intervention was $42,000 per year of life saved.[4] A 2006 systematic review found that industry-funded studies often ended with cost-effective ratios below $20,000 per QALY and low-quality studies and those conducted outside the US. and the EU were less likely to be below this threshold. While the two conclusions of this article may indicate that industry-funded CER measures are of lower methodological quality than those published by non-industry sources, there is also the possibility that, due to the nature of retrospective or other non-public work, publication bias may exist rather than methodological biases. There may be incentives for an organization to not develop or publish an analysis that does not demonstrate the value of its product. Furthermore, peer-reviewed articles in journals must have a solid and defensible methodology, as this is the expectation of the peer review process.[5].

Navegación

Cost-Effectiveness Analysis

Introduction

General application

Cost-effectiveness analysis in pharmacoeconomics

Cost-Effectiveness Analysis

Introduction

General application

References

Cost-effectiveness analysis in pharmacoeconomics

References