Cost-benefit analysis , health care

Shah and Jenkins (2000) in a review of mental health economic studies from around the world identified 40 cost-of-illness studies, of which five covered all disorders, one neuroses, two panic disorders and one anxiety. All were from developed countries. There were numerous cost-effectiveness studies but none involving the anxiety disorders specifically. One study in the UK examined the cost-benefit analysis of a controlled trial of nurse therapy for neurosis in primary care (Ginsberg et al, 1984). 

Cost-benefit analysis uses monetary valuations of the morbidity and mortality consequences of diseases or interventions. This allows estimation of the absolute and relative net social benefit of intervention, calculated as the monetary value of the consequences of an intervention minus the direct costs. Any health or social care intervention with a net social benefit greater than zero (i.e. the benefits are greater than the costs) is worth undertaking. Two approaches have typically been used to value outcomes in monetary values. The first is the human capital approach, where the monetary value of benefit represents the value of changes in the amount or type of work done or use of leisure time as... 

In a cost-benefit analysis, both costs and consequences are valued in dollars and the ratio of cost to benefit (or more commonly benefit to cost) is computed. Cost-benefit analysis has been used for many years to assess the value of investing in a number of different opportunities, including investments (or expenditure) for health care services. Cost-effectiveness analysis attempts to overcome (or avoid) the difficulties in cost-benefit analysis of valuing health outcomes in dollars by using nonmonetary outcomes such as life-years saved or percentage change in biomarkers like serum cholesterol levels. Cost-minimization analysis is a special case of cost-effectiveness analysis in which the outcomes are considered to be identical or clinically equivalent. In this case, the analysis defaults to selecting the lowest-cost treatment alternative. Cost-utility analysis is another special case of cost-effectiveness analysis in which the value of the outcome is adjusted for differences in patients preferences (utilities) for the outcomes. Cost-utility analyses are most appropriate when quality of life is a very important consideration in the therapeutic decision. 

Economic evaluation compares costs and consequences of alternative health care treatments or programs (Drummond et al. 2005). In one form of economic evaluation, cost-benefit analysis, all costs and consequences are valued in monetary terms. However, in health care it is much more common to use cost-effectiveness analysis, where the difference in cost between alternatives is compared with the difference in outcomes measured in units such as life years gained or quality-adjusted life years (QALYs) gained. 

One potential difficulty of cost-benefit analysis is that it requires researchers to express an intervention s costs and outcomes in the same units. Thus, monetary values must be associated with years of life lost and morbidity due to disease and with years of life gained and morbidity avoided due to intervention. Expressing costs in this way is obviously difficult in health care analyses. Outcomes (treatment benefits) may be difficult to measure in units of currency. Translating disease and treatment outcomes into monetary measures may be more difficult than translating them into clinical outcome measures, such as years of life saved or years of life saved adjusted for quality. 

As with the translation of clinical outcomes into monetary measures, there also are difficulties associated with combining different outcomes into a common measure in cost-effectiveness analysis. However, it generally is considered more difficult to translate all health benefits into monetary units for the purposes of cost-benefit analysis than to combine clinical outcome measures. Thus, cost-effectiveness analysis is used more frequently than cost-benefit analysis in the medical care literature. 

Clinical pharmacology plays no less significant a role in primary health care. That includes emphasis on essential drugs, safe and rational use of essential medicines including their side effects and outcomes, drug data transmission and analysis, and training with emphasis on prevalent diseases. Interactions between orthodox and traditional (complementary) medicines are carefully considered. Cost-benefit analysis is made possible. 

Cost-effectiveness and cost-benefit analyses are frequently mentioned in academic and policy-analysis circles. These notions center on careful examination of the costs and their corresponding outputs. Eisenberg defines cost-effectiveness analysis as the measure of the net cost of providing service (expenditures minus savings) as well as the results obtained (e.g., clinical results measured singly or a series of results measured on some scale). Cost-benefit analysis determines whether the cost is worth the benefits by measuring both in the same units. Such analyses will be critical, as future policy decisions are made with regard to the collection, allocation, and utilization of finite resources in the health care system for the enhancement of health status of the American people. 

Nowadays a drug company has not only to show its paymasters - governments, insurers and so on - that its new prodnct is safe and works, but also that it is cost-effective. In Anstralia, this has been spelled out in legislation. Since 1993, any drng submitted for approval must be accompanied not only by the resnlts of clinical trials bnt also by an economic impact analysis. In 1999, the United Kingdom set np a National Institnte for Clinical Excellence (NICE) to advise the National Health Service on the cost-effectiveness of health care technologies. Other countries ask formally or informally for pharmacoeconomic analysis. Economic impacts can be measured in a variety of ways, for example, cost-effectiveness, cost-utility or full cost-benefit stndies. 

Since the 1990s, for the first time as an overt policy issue, society has questioned the amount of money spent on health care. There is general agreement that some sort of rationing is inevitable but none on who is to do the rationing or how. Will a balance be struck on the basis of ability to pay or on some sort of cost-benefit analysis Consider the following situation ... 

There could be ancillary benefits for some building protection systems, such as improved air filtration leading to higher-quality indoor air. Recent research suggests that air quality is correlated with sick days, health care costs, and productivity, but it could take some time before such measures are sufficiently reliable to be useful in a cost-benefit analysis. In the near term, however, the likelihood that such trends exist and are statistically significant might serve as an ancillary motivation for security improvements (Fisk, 2000a,b Seppanen and Fisk, 2006). 

For others it is the financial cost of the medicine. Indeed many patients undermedicate specifically as a cost cutting measure. It should be noted that the factors determining cost-benefit analysis may differ between asthmatic adults and parents of children with asthma. Parents may be more prepared to spend money on their children than themselves, though in some health care systems the cost of medicines for the child is free. 

ALARP concept basically comes from the British health and safety system (Act 1974)- It is not in true sense a quantitative method, although cost—benefit analysis is often used to get ALARP. It is a challenging subjective method, as it requires duty holders and others to exercise their judgment very carefully. In risk analysis, three factors play important role, viz. trouble, time, and cost. The breakeven point in... 

Cutler and Kadiyala s (2003) estimates of life expectancy benefits associated with improved cardiovascular treatment suggest a high value of pharmaceutical products relative to costs. An analysis at the national level would provide confirmation that the value of pharmaceuticals is not limited to cardiovascular disease. Here we performed such an analysis for Canada, where the public funding of health care has led to extensive debate over its value and, more specifically, over the value of pharmaceutical products whose rate of growth within the health care budget continues to increase. 

Warner KE, Luce BR. Cost benefit and cost effectiveness analysis in health care principles, practice and potential. Ann Arbor (MI) Health Administration Press 1982. 

Etemad LR, Hay JW. 2003. Cost-effectiveness analysis of pharmaceutical care in a medicare dmg benefit program. Value Health 6 425. 

Health economics is concerned with the cost and consequences of decisions made about the care of patients. It therefore involves the identification, measurement, and valuation of both the costs and the consequences. The process is complex and is an inexact science, The approaches to economic evaluation include (1) cost minimization, (2) cost benefit, (3) cost effectiveness, and (4) cost utility analysis (Table 13-2). 

As when evaluating the published medical literature, results from economic analyses should not be taken at face value . Reports should be detailed, clear and transparent. It is crucial that readers be able to follow exactly what was done (with justification) throughout the analysis. Care should also be taken to determine that the type of analysis performed (for example CEA, CBA) corresponds with the analytical technique purported to be used in the study. Zarnke and colleagues sampled the published literature to assess whether evaluations labelled as cost-benefit analyses met the contemporary definition using CBA methodology. They reported that 53% of the 95 studies assessed were reclassified as cost comparisons because health outcomes were not appraised. Several authors have developed checklists that are useful when evaluating the overall quality of an economic analysis. One of the best-known checklists is given in Box 20.1. 

The overall cost of therapy is an important consideration in contemporary medical practice. Meaningful cost analysis goes beyond the cost of the medication itself and incorporates the impact of a given therapeutic agent on overall health care cost. Because of the relative lack of benefit among objective outcome measures in COPD... 

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