Cost–Benefit Analysis and Health Care Evaluations, Second Edition

Cost–Benefit Analysis and Health Care Evaluations, Second Edition

Robert J. Brent

Cost–benefit analysis is the only method of economic evaluation that can effectively indicate whether a health care treatment or intervention is worthwhile. In this thoroughly updated and revised second edition, Robert Brent expands the scope of the field by including the latest concepts and applications throughout all regions of the world. This book attempts to strengthen the link between cost–benefit analysis and the mainstream health care evaluation field, which is dominated by non-economists. The need to build a bridge between the two is more important than ever before, as the general understanding of cost-benefit analysis appears to have regressed.

Chapter 2: Cost minimization and the definition of ‘cost’

Robert J. Brent

Subjects: economics and finance, health policy and economics, valuation, environment, valuation, social policy and sociology, health policy and economics


We begin our account of health care evaluations with the cost part of CBA. All four evaluation types rely on these costs, which makes an analysis of costs common to all. We will be first focusing on CM because an estimation of costs is all that is required to use this evaluation type. We start by defining economic costs and explain how they depend on the time period being considered. The role of discounting is then introduced. From there we present a detailed account of how CM fits in with economic theory, explaining cost curves in the short and long runs. The first section closes with an analysis of how discounted costs at different times are combined into a present value figure. Cost minimization and its relationship with CEA and CBA criteria are explored in the next section. Cost minimization applications follow and the chapter ends with the problems and final comments section.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information