Difference between revisions of "Cost-effectiveness analysis"

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== Related Articles ==
 
== Related Articles ==
 
*[[Cost-effectiveness of an electronic medication ordering system (CPOE/CDSS) in hospitalized patients]]
 
*[[Cost-effectiveness of an electronic medication ordering system (CPOE/CDSS) in hospitalized patients]]
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*[[Cost-Effectiveness of a Computerized Provider Order Entry System in Improving Medication Safety Ambulatory Care]]
  
 
== Resources ==
 
== Resources ==

Latest revision as of 00:13, 19 November 2015

Cost Effectiveness Analysis (CEA) is economic method of evaluation that compares cost and effect so users can make better decisions. In health care, CEA is used to compare different treatments in terms of their cost per unit of output. Output is an outcome such as more cases diagnosed, additional years of life, or utility. The ratio generated (see below) can be interpreted as the "price" of the new strategy, as compared to the old strategy. If a new strategy has a low price it is frequently described as being a "good value" or "cost effective".

Cost Effectiveness Analysis - An Executive Summary

Cost Effectiveness Ratio =[(cost of new strategy) - (cost of old strategy)]/[(effectiveness of new strategy - effectiveness of old strategy]

Brief History

1960s

Invented by mathematicians and linear programmers to assist the United States military in making allocation decisions.

1977

A landmark paper was written by MC Weinstein and WB Stason and published in the New England Journal of medicine introducing clinicians to the use of cost effectiveness in evaluation of healthcare resources (Foundations of cost-effectiveness analysis for health and medical practices. Engl J Med. 1977 Mar 31; 296(13):716-21)

Brief excerpt from Weinstein et al paper:

"Limits on health-care resources mandate that resource-allocation decisions be guided by considerations of cost in relation to expected benefits. In cost-effectiveness analysis, the ratio of net health-care costs to net health benefits provides an index by which priorities may be set. Quality-of-life concerns, including both adverse and beneficial effects of therapy, may be incorporated in the calculation of health benefits as adjustments to life expectancy. The timing of future benefits and costs may be accounted for by the appropriate use of discounting. Current decisions must inevitably be based on imperfect information, but sensitivity analysis can increase the level of confidence in some decisions while suggesting areas where further research may be valuable in guiding others. Analyses should be adaptable to the needs of various health-care decision makers, including planners, administrators and providers."

Principal Use

CEA is used by the government, policy developers, health maintenance organizations, professional organizations and hospitals to evaluate treatment strategies and make policy recommendations.

Advantages

CEA facilitates comparisons between different treatment strategies and supports users in administration of resouces.

Shortcomings

CEA depends on Randomized Clinical Trial Data, its' conclusions are sensitive to which treatments are compared, the treatments compared might not reflect treatments available or offered by clinicians, results may lead to the generation of policies that does not meet each individuals' needs, and CEA requires a value judgment, and therefore, CEA is vulnerable to bias.

Examples in Informatics

  • Royle P, Waugh N. Literature searching for clinical and cost-effectiveness studies used in health technology assessment reports carried out for the National Institute for Clinical Excellence appraisal system.

Health Technol Assess. 2003;7(34):iii, ix-x, 1-51. Review

  • Kopach R, Sadat S, Gallaway ID, Geiger G, Ungar WJ, Coyte PC. Cost-effectiveness analysis of medical documentation alternatives. Int J Technol Assess Health Care. 2005 Winter;21 (1):126-31.
  • Glasgow ME, Cornelius FH. Benefits and costs of integrating technology into undergraduate nursing programs. Nurs Leadersh Forum. 2005 Summer;9 (4):175-9.

Related Articles

Resources

  1. Detsky et al. Relevance of Cost-effectiveness Analysis to Clinicians and Policy Makers. JAMA. 2007 Jul 11; (298)(2);221-224
  2. Weinstein et al. Foundations of cost-effectiveness analysis for health and medical practices. Engl J Med. 1977 Mar 31; 296(13):716-21)
  3. American College of Physicians website http://www.acponline.org/clinical_information/journals_publications/ecp/sepoct00/primer.htm

(accessed 02/27/08)