Cost-outcome analysis

Cost-outcome analysis Determines the net cost of an intervention relative to its health effect... 

The comparison between these components can be done using different methods (e.g., Murray and Evans 2003 Edejer et al. 2003 Muenning 2002 Drummond et al. 2004). First, all inputs and results can be expressed in monetary terms, that is, outputs, outcomes, and impacts are transformed to currency units and compared with the costs (difference or quotient). This cost-benefit analysis is rarely done in... 

An effective HE or cost-effectiveness analysis is designed to answer certain questions, such as Is the treatment effective What will it cost and How do the gains compare with the costs By combining answers to all of these questions, the technique helps decision makers weigh the factors, compare alternative treatments, and decide which treatments are most appropriate for specific situations. Typically, one chooses the option with the least cost per unit of measure gained the results are represented by the ratio of cost to effectiveness (C E). With this type of analysis, called a cost-effectiveness analysis (CEA), various disease end points that are affected by therapy (risk markers, disease severity, death) can be assessed by corresponding indexes of therapeutic outcome (mmHg blood pressure reduction, hospitalizations averted, life years saved, respectively). It is beyond the scope of this chapter to elaborate further on principles of cost-effectiveness analyses. A number of references are available for this purpose [11-13]. 

Cost-benefit analysis Cost-effectiveness analysis Cost-consequences analysis Cost-utility analysis Cost-offset analysis Comprehensive Comprehensive Comprehensive Comprehensive Comprehensive Monetary valuation of outcomes One outcome only Multiple outcomes measured Summary utility score of outcomes No outcomes measured... 

Cost-minimization analysis concerns a direct comparison only between treatments that produce identical outcomes. However, other than in the case of generic substitution,... 

Cost-utility analysis is similar to cost-efFectiveness analysis in approach, but uses utility as the outcome measure. The utility value is a measure that combines preferences for and values of the overall effect of an intervention on survival, physical and mental health, and social function. Utility is combined with estimates of length of life to provide an assessment of quality-adjusted life years (QALYs). As in cost-efFectiveness analysis, incremental cost-utility ratios are calculated to estimate the cost of producing one extra QALY. 

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... 

Important outcome indicators to evaluate postintoxication and/or postwithdrawal treatment of substance abuse and dependence can be divided into three major groups decreased consumption of substances, decreased problems associated with substance use, and increased psychosocial functioning. Although it is less commonly employed, a quality-of-life scale can help determine how substance abuse/dependence treatment has affected your patients lives. If you are involved in the cost-justification of services, a cost-benefit analysis could also become important, although this is more often used at the administrative level,... 

In order to associate a number to represent the utility of these four outcomes we have to choose between several types of economic evaluations, basically between cost-effectiveness analysis, cost-utility analysis and cost-benefit analysis. The first of these is ruled out because it measures the health outcome in natural units. Given that the side effects of drags are of a varied nature, we need to be able to aggregate the different seriousness of these side effects in order to obtain a single utility, at least for the NSEA event. Furthermore, this utility must be comparable with that of, for example, the SER event. This is not possible with cost-effectivity. If we chose cost-utility, the utility associated with each event would be measured in QALYs gained or lost in each option. As QALYs are a universal measure of health benefit, cost-utility analysis could be appropriate for this type of decision. Lastly, cost-benefit analysis would also be appropriate, as it measures the utilities associated with each outcome in monetary terms, which reflect the willingness to pay for one of the outcomes in terms of safety and effectiveness. 

Cost-effectiveness analysis Dollars Nonmonetary outcomes... 

Table 12.1 summarizes five major types of pharmacoeconomic evaluations cost-consequence, cost-benefit, cost-effectiveness, cost-minimization, and cost-utility (Drummond et al., 1997 Kielhorn and Graf von der Schulenburg, 2000). In a cost-consequence analysis, a comprehensive list of relevant costs and outcomes (consequences) of alternative therapeutic approaches are presented in tabular form. Costs and outcomes are typically organized according to their relationship to cost (direct and indirect), quality of life, patient preferences, and clinical outcomes (see taxonomy below). No attempt is made to combine the costs and outcomes into an economic ratio, and the interpretation of the analysis is left in large part to the reader. 

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. 

Cost-minimisation analysis are performed when the clinical outcomes (e.g. efficacy and safety) of the comparator groups are virtually identical and for all practical purposes can be considered to be equal. Because no decision can be made based on differences in the clinical endpoints, decisions are based on the incremental costs of the treatment pathways. Such was the case in a study that assessed the cost-effectiveness of treating proximal deep vein thromboses (DVT) at home with low molecular weight heparin versus standard heparin in hospital therapy. A cost-minimisation approach was chosen for this analysis because the results from a comparative clinical trial confirmed that there were no statistically significant differences in safety or efficacy between the two treatment groups. The study authors concluded that for patients with acute proximal DVTs, treatment at home with low molecular weight heparin was less costly than hospital treatment with standard heparin. ... 

The CUA is a form of cost-effectiveness analysis in which the health outcomes are measured in terms of quality-adjusted life-years (QALYs) gained. The QALY is a measure that associates quantity of life (e.g. survival data and life... 

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. 

When several outcomes result from a medical intervention (e.g., the prevention of both death and disability), cost-effectiveness analysis may consider the outcomes together only if a common measure of outcome can be developed. Frequently, analysts combine different categories of clinical outcomes according to their desirability, assigning a weighted utility, or value, to the overall treatment outcome. A utility weight is a measure of the patient s preferences for his or her health state or for the outcome of an intervention. The comparison of costs and utilities sometimes is referred to as cost-utility analysis,... 

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. 

An even less complex approach than cost-benefit or cost-effectiveness analysis would be simply to enumerate the costs involved in medical care and to ignore the outcomes that result from that care. This approach is known as cost-identification analysis. By performing cost-identification analysis, the researcher can determine alternative ways of providing a service. The analysis might be expressed in terms of the cost per unit of service provided. For example, a cost-identification study might measure the cost of a course of antibiotic treatment, but it would not calculate the clinical outcomes (cost-effectiveness... 

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. 

Van Lent-Evers, N.A., Mathot, R.A., Geus, W.P., van Hour, B.A., and Vinks, A.A. (1999) Impact of goal-oriented and model-based clinical pharmacokinetic dosing of aminoglycosides on clinical outcome a cost-effectiveness analysis. Ther Drug Monit 21 63-73. 

COST-EFFECTIVENESS ANALYSIS COSTS PER COMMON UNIT OF OUTCOME... 

When it is assumed that the effectiveness of two therapies is equal, the effectiveness part of the cost-effectiveness ratio can be dropped from the analysis. In this situation, only the cost differences between the two therapies are examined. Usually this includes the cost of the drug, costs of administration, the treatment of side effects or adverse reactions and the incidence and prevalence of the condition. For example, Fenton et al. (1982) compared the costs of home versus hospital treatment of psychiatric patients when the outcomes of each were considered not to differ in any respect except that one requires a hospital stay and the other does not. The cost-minimization analysis simply looked at the differences in costs of the two treatments. The result is, not unexpectedly, that hospitalization was 64% more expensive than home-based treatment. 

COST-BENEFIT ANALYSIS COMPARISON OF PROGRAMS WITH DIFFERENT OUTCOMES... 

Establishing the value of a new pharmaceutical can be done through a cost-effectiveness ratio, where the costs are compared with currently accepted therapy and the effect is expressed in natural units such as life-years gained or disability-free days. A cost-utility analysis uses QALYs as the expression of the drug s effect, which is a measure that incorporates all the outcomes as well as all the costs of the drug treatment. Such a broad-based measure captures how much improved the patient s life becomes as a result of the treatment and at what cost. Quality-adjusted life-years can be viewed as life-years gained,... 

Cost-minimization analysis is a tool used to compare two or more treatment alternatives that are assumed to be equal in efficacy. It simply compares the direct and indirect costs of treatment alternatives in dollars and does not consider the outcomes of the treatments (because they are assumed to be the same). Examples could be to compare the costs of intravenous versus oral dosage forms of the same drug or hospital versus home administration of intravenous pain management. 

Cost-utility analysis is used when quality of fife is the most important outcome being examined. This is common in disease states in which how one feels or what one can do is more important than a clinical laboratory value or economic outcome (e.g., chronic diseases such as heart disease, diabetes, arthritis, cancer, or HIV/AIDS). Cost-utility analyses compare the direct and indirect costs of an intervention with some measurable level of humanistic outcome, such quality of life or level of satisfaction. The direct and indirect costs of treatment alternatives again are expressed in monetary terms. The humanistic outcomes associated with each intervention can be expressed as an SF-12 or SF-36 health survey score for quality of life (Ware, 1997), as a satisfaction survey score (Mac-Keigan and Larson, 1989), or as quality-adjusted life-years (QALYs). QALYs represent the number of full years at full health that are valued equivalently with... 

When determining which method of economic analysis she should use, she eliminated cost-minimization analysis because the treatment alternatives (service versus no service) will not result in equivalent outcomes. A cost-effectiveness analysis would not be appropriate because she is only interested in one particular program. A cost-utility analysis is also not appropriate because quality of life, while included in the project, is not the focus of her project. A cost-benefit analysis could be appropriate. A cost-benefit analysis requires that both the interventions and outcomes be valued in monetary units. She can determine the direct medical and/or nonmedical costs for each patient from data captured by her HMO. The HMO is very interested in costs, both those to implement the service and those it may save as a result. Cynthia decides that the most understandable analysis to present to the HMO is a cost-benefit analysis. 

Cost-utility analysis is concerned with comparisons between programmes, e.g. an antenatal drug treatment which saves a young life or a hip replacement operation which improves mobility in a man of 60 years. Such differing outcomes can be placed on the same basis for comparison by computing quality-adjusted life years (see below). 

AspenTech has developed and applied quantitative cost-benefit analysis for engineering systems, including applied thermodynamics. The analysis, provided by Aspen Value Process (AVP), is a collaborative process yielding multi-level, broad commitment for business process changes enabled by software solutions. A key outcome of AVP is the customers validation of the estimated value. The financial information is highly sensitive and consequently there are no published cases available. Here, we present the basic approach and give typical quantitative assessment results. One could either carry out an extrapolation of this analysis to assess the industry-wide benefits (as is done below), or, alternatively, carry out a series of these assessments with specific producers. 

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