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 8: Fundamentals of cost–utility analysis

Robert J. Brent

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


In this chapter a general measure of effect is discussed, that is, a QALY. With this more general measure, it is now possible to compare across health care programs. We focus on how CUA widens the sphere of influence of CEA analysis and leave till the next chapter the technical details of how QALYs can be estimated. We compare and contrast CUA with both CEA (in the first section) and CBA (in the third section). In between these comparisons of evaluation methods, we explain how lists of CUA, called ‘league tables’, are, and should be, constructed. We also look at a US panel’s guidelines for making CUA studies comparable. We then outline a comprehensive actual CUA exercise – the Oregon plan – that tried to establish health care priorities in an explicit policy-making setting. The case studies concentrate on how comparisons are made in CUA in order to determine when a cost-per-QALY is worthwhile.

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