Cost-effectiveness analysis. (Economic Evaluation and Health Care, part 3)

When different health care interventions are not expected to produce the same outcomes both the costs and the consequences of the options need to be assessed. This can be done by cost-effectiveness analysis, whereby the costs are compared with outcomes measured in natural units--for example, per life saved, per life year gained, and per pain or symptom free day. Many cost-effective analyses rely on existing published studies for effectiveness data as it is often too costly or time consuming to collect data on cost and effectiveness during a clinical trial. Where there is uncertainty about the costs and effectiveness of procedures sensitivity analysis can be used, which examines the sensitivity of the results to alternative assumptions about key variables. In this article Ray Robinson describes these methods of analysis and discusses possibilities for how the benefits of alternative interventions should be valued.

If the outcomes of alternative procedures or programmes under review are the same, or very similar, then attention can focus upon the costs in order to identify the least cost option. The method of evaluation for this--cost-minimisation analysis--was described in last week's article. If, however, the outcomes are not expected to be the same, then both the costs and consequences of alternative options need to be considered. Cost-effectiveness analysis is one method of economic evaluation that allows this to be done.

Measures of effectiveness

In order to carry out a cost-effectiveness analysis it is necessary to have suitable measures of effectiveness. These will depend on the objectives of the particular interventions under review. In all cost-effectiveness analysis, however, measures of effectiveness should be defined in appropriate natural units and, ideally, expressed in a single dimension.

Common measures used in several studies have been "lives saved" and "life years gained." Thus Boyle and colleagues, in their study of neonatal intensive care of very low birthweight babies, measured effectiveness in terms of mortality rates at the time of discharge of newborn infants from hospital.[1] Their study compared two periods--one before the introduction of neonatal intensive care, and one after its introduction--and measured cost effectiveness in terms of additional costs per life saved. Both Ludbrook[2] and Churchill and colleagues[3] …