Recent emphasis in the field of health economics has been on the assessment of the cost-effectiveness of healthcare interventions and treatments. Health economics provides a set of economic evaluation methods to carry out such assessments. The four main economic evaluation methods are cost-minimization analysis, cost-effectiveness analysis, cost-utility analysis, and cost-benefit analysis. The underlying structure of all such methods consists of the explicit measurement of costs incurred in the application and the benefits are then consequent from the outcomes. The approach to measure cost is similar in these methods but they differ in the evaluation of health outcomes.
Cost Minimization Analysis
This is limited to situations where the health benefits of opposing treatments are proven to be equal. For instance, a decision may involve prescribing a generic drug instead of a brand-name drug to attain the same health outcome at less cost.
This is an evaluation method that compares the financial costs of therapeutic modes that result in outcomes that are defined in non-monetary terms. For example, the options being compared may differ in terms of the size of their impact on the health outcome—such as the number of lives saved, diseases cured, or complications prevented.
Cost-Utility Analysis is similar to cost-effectiveness analysis since costs are measured in terms of money and health outcomes are defined. However, in cost-utility analysis, the health outcomes are determined in terms of utilities such as quantity and quality of life (e.g. using QALYs).
It measures both costs and the associated benefits of a project in terms of money. This method allows comparing procedures that may belong to very dissimilar areas of health care.
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