 Show Cost-effectiveness analysis is a way to examine both the costs and health outcomes of one or more interventions. It compares an intervention to another intervention (or the status quo) by estimating how much it costs to gain a unit of a health outcome, like a life year gained or a death prevented. idea icon Because CEA is comparative, an intervention can only be considered cost effective compared to something else.
CEA provides information on health and cost impacts of an intervention compared to an alternative intervention (or the status quo). If the net costs of an intervention are positive (which means a more effective intervention is more costly), the results are presented as a cost-effectiveness ratio. A cost-effectiveness ratio is the net cost divided by changes in health outcomes. Examples include cost per case of disease prevented or cost per death averted. However, if the net costs are negative (which means a more effective intervention is less costly), the results are reported as net cost savings. The example below presents the results from a cost-effectiveness analysisexternal icon of a screening intervention for preventing chlamydia infections among high risk women (compared to the status quo of no screening). The results are presented as a cost-effectiveness ratio. This cost-effectiveness ratio can be compared to another intervention to determine which is more cost-effective. Sexually Transmitted DiseasesThis analysis modeled the intervention as applied to 10000 women Sexually Transmitted Diseases
In the example below, we compare the childhood vaccination programexternal icon to the status quo of no vaccination program. We can see that the costs of implementing the program are less than the medical and productivity costs averted. Because the intervention is cost saving, the results are not presented as a cost-effectiveness ratio. Instead, they are presented as net cost savings. Childhood Vaccination ProgramChildhood Vaccination Program
For additional information, please see the example as used in the CDC Introduction to Economic Evaluation in Public Healthexternal icon online training, as well as the original study. CEA can be useful in comparing the health and cost impacts of different interventions affecting the same health outcome. It can also be useful for understanding how much an intervention may cost (per unit of health gained) compared to an alternative intervention. For example, a decision maker might find it useful to know if an intervention is cost saving, and if not how much more would it cost to implement it compared to a less effective intervention. What are the major types of costs?There are two kinds of costs, fixed and variable. Fixed and variable costs impact the business in different ways but both are important in making the business profitable.
What are the types of health economics?Four different types of study are usually distinguished: cost minimization studies, cost-benefit studies, cost-effectiveness studies, and cost-utility studies.
What is fixed cost in health economics?Fixed costs - those costs which, within a short time span, do not vary with the quantity of production; e.g., heating and lighting. Incremental cost - the extra costs associated with an expansion in activity of a given service. Marginal cost - the cost of producing one extra unit of a service.
Which method of costing is used by healthcare industry?To realize an effective cost control, a practical and accurate cost accounting system is indispensable in hospitals. In traditional cost accounting systems, the volume-based costing (VBC) is the most popular cost accounting method.
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