Cost-effectiveness analysis

Cost-effectiveness analysis (CEA) is a form of economic analysis that compares the relative costs and outcomes (effects) of different courses of action. Cost-effectiveness analysis is distinct from cost–benefit analysis, which assigns a monetary value to the measure of effect.^[1] Cost-effectiveness analysis is often used in the field of health services, where it may be inappropriate to monetize health effect. Typically the CEA is expressed in terms of a ratio where the denominator is a gain in health from a measure (years of life, premature births averted, sight-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 (QALY).^[1]

Cost–utility analysis is similar to cost-effectiveness analysis. Cost-effectiveness analyses are often visualized on a plane consisting of four quadrants, the cost represented on one axis and the effectiveness on the other axis.^[3] Cost-effectiveness analysis focuses on maximising the average level of an outcome, distributional cost-effectiveness analysis extends the core methods of CEA to incorporate concerns for the distribution of outcomes as well as their average level and make trade-offs between equity and efficiency, these more sophisticated methods are of particular interest when analysing interventions to tackle health inequality.^[4]^[5]

^ ^a ^b Bleichrodt H, Quiggin J (December 1999). "Life-cycle preferences over consumption and health: when is cost-effectiveness analysis equivalent to cost–benefit analysis?" (PDF). J Health Econ. 18 (6): 681–708. doi:10.1016/S0167-6296(99)00014-4. PMID 10847930.
^ Gold MR; et al. Cost-effectiveness in health and medicine. p. xviii.
^ Black, William (1990). "A Graphical Representation of Cost-Effectiveness". Med Decis Making. 10 (3): 212–214. doi:10.1177/0272989x9001000308. PMID 2115096. S2CID 2056683.
^ Asaria, M; Griffin, S; Cookson, R (January 2016). "Distributional Cost-Effectiveness Analysis: A Tutorial". Medical Decision Making. 36 (1): 8–19. doi:10.1177/0272989x15583266. PMC 4853814. PMID 25908564.
^ Asaria, M; Griffin, S; Cookson, R; Whyte, S; Tappenden, P (June 2015). "Distributional cost-effectiveness analysis of health care programmes--a methodological case study of the UK Bowel Cancer Screening Programme" (PDF). Health Economics. 24 (6): 742–54. doi:10.1002/hec.3058. PMID 24798212.

[CEAvCBA-1] Bleichrodt H, Quiggin J (December 1999). "Life-cycle preferences over consumption and health: when is cost-effectiveness analysis equivalent to cost–benefit analysis?" (PDF). J Health Econ. 18 (6): 681–708. doi:10.1016/S0167-6296(99)00014-4. PMID 10847930.

[2] Gold MR; et al. Cost-effectiveness in health and medicine. p. xviii.

[3] Black, William (1990). "A Graphical Representation of Cost-Effectiveness". Med Decis Making. 10 (3): 212–214. doi:10.1177/0272989x9001000308. PMID 2115096. S2CID 2056683.

[4] Asaria, M; Griffin, S; Cookson, R (January 2016). "Distributional Cost-Effectiveness Analysis: A Tutorial". Medical Decision Making. 36 (1): 8–19. doi:10.1177/0272989x15583266. PMC 4853814. PMID 25908564.

[5] Asaria, M; Griffin, S; Cookson, R; Whyte, S; Tappenden, P (June 2015). "Distributional cost-effectiveness analysis of health care programmes--a methodological case study of the UK Bowel Cancer Screening Programme" (PDF). Health Economics. 24 (6): 742–54. doi:10.1002/hec.3058. PMID 24798212.

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