Cost-Effectiveness Analysis (Final)

cost-effectiveness analysis

A form of economic evaluation whose goal is to identify, examine, and compare the relevant costs and consequences of competing drug regimens and interventions

cost-effective intervention

An outcome whose cost is justified by its relative effectiveness compared to competing alternatives

intermediate outcomes

are measurable effects of a disease or its treatment that are proved to be an indicator of the long-term, final outcome

average cost-effectiveness ratio (CER)

-The ratio of resources used per unit of clinical benefit

-Is calculated simply by dividing the costs by the effectiveness

incremental cost-effectiveness ratio (ICER)

–Measures the additional costs one service or program imposes over another, compared with the additional effects, or benefits it delivers

–Is the ratio of the difference in costs divided by the difference in outcomes

–This ratio provides a measure of extra cost per extra unit of outcome when comparing two different options (i.e., how much are we paying for each extra unit of output)