Understanding cost-effectiveness

Abstract

Healthcare delivery in the USA and abroad has changed dramatically over the last several decades. Along with the growth in diagnostic and therapeutic interventions, the costs of healthcare have escalated out of proportion relative to other aspects of the economy. This growth has fostered careful scrutiny of both the effectiveness and efficiency of healthcare delivery. Because of this emphasis on the economics of healthcare, physicians require an understanding not only of the efficacy and clinical utility of their interventions, but also of the relative value in an economic sense of their efforts. In other words, physicians in the modern era must now appreciate the concept of cost-effectiveness. Cost-effectiveness and cost-utility analyses are critical evaluative tools. Explicit data on comparative cost-effectiveness are useful for allocating the increasingly stretched healthcare resources. This article provides a primer for understanding the methods and applications of cost-effectiveness and cost-utility analyses.