Cost–Benefit Analysis and Health Care Evaluations
Show Less

Cost–Benefit Analysis and Health Care Evaluations

Robert J. Brent

Cost–benefit analysis is the only method of economic evaluation which can effectively indicate whether a health care treatment or intervention is worthwhile. This book attempts to build a bridge between cost–benefit analysis, as developed by economists, and the health care evaluation literature which relies on other evaluation approaches such as cost-minimization, cost-effectiveness analysis and cost–utility analysis.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 6: Fundamentals of Cost-Effectiveness Analysis

Robert J. Brent


6. Fundamentals of cost-effectiveness analysis 6.1 INTRODUCTION Here we start with the first of two chapters on CEA, focusing on the basic principles. Unlike a CM, which only deals with costs, a CEA includes effects as well as costs. The two are related by forming a cost-to-effects ratio. What to include in this ratio is the first topic under discussion. Then we present the underlying CEA decision-making model and illustrate how cost-effectiveness calculations are to be made and interpreted. Because of the inherent shortcomings of CEA, we quickly turn attention to ways of converting CEA into CBA. The case studies are primarily devoted to showing how these conversion methods have been put into practice. 6.1.1 CEA as an Approach to Evaluation Unlike a CM study, a CEA looks at both the consequences (effects) and costs of a procedure. A CEA looks at the amount of cost per unit of effect: C / E. One can now compare across (some) programs. Moreover, one can allow for the fact that different programs achieve their objectives to different degrees. Thus, for instance, the cost per case detected can be used to make comparisons of screening programs for different diseases. If one screening program can detect more cases than another, this is allowed for in the comparison. For CM one must have a given / fixed level of output. On the other hand, there is a fundamental problem with a costeffectiveness (and cost–utility)...

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

or login to access all content.