This document discusses different types of economic evaluation used for decision making in health care: Cost-effectiveness analysis compares the costs and effects of different interventions to achieve a health objective. Cost-minimization analysis compares costs of programs that achieve identical outcomes. Cost-utility analysis considers both quality and quantity of life by using quality-adjusted life years, allowing comparison across health programs. Cost-benefit analysis values both costs and benefits in monetary terms to directly compare options through a benefit-cost ratio. Economic evaluations are important tools for assessing the efficiency and feasibility of health interventions and identifying relevant alternatives systematically.

1. Types of
Economic
Evaluation

2. Cost Effectiveness Analysis
(CEA)
• Investigates the best way of achieving a single objective by
comparing effects and costs.
• It evaluates either which possible intervention will best achieve a
given objective at the least cost or when given a fixed budget, which
intervention maximizes the effectiveness of the expenditure.
• A method of analysis used for decision-making that estimates the
total costs of achieving a defined health care objective.
• Often visualized on a cost-effectiveness plane consisting of four-
quadrants.

3. Cost-Effectiveness Plane

4. Cost Minimization Analysis
(CMA)
• An analytical tool used to compare two costs of programs that
achieved the same outcome.
• It compares alternative programs where relevant outcome measures
are equal.
• It is assumed that regardless of which ever option is taken, the
effects or outcomes will be identical.
• Therefore, with the assumption that the outcomes of the
interventions are measurably identical, the least option is chosen.

5. Cost Utility Analysis (CUA)
• Preferred when there are multiple objectives of the program, when
quality of life is an important outcome and when quality of life &
quantity of life are both important.
• The primary advantage of this type is that the outcome measure is
generic, and this is helpful when comparing the relative merit of
many different types of health care program.
• A method used to make policy decisions that considers the quantity
as well as the quality of life-years saved from a medical intervention.
• This is measured by quality-adjusted life-years (QALYs) which
depends on both the number of life-years generated by the medical
procedure and the ensuing quality of life.

6. Cost Benefit Analysis (CBA)
• Values both costs and benefits in money terms and compares them
through the criteria:
BENEFITS
COSTS
This type directly compares the benefits of a chosen option against the costs
incurred with the option wherein it becomes also a ratio.
• It estimates the total costs and benefits of an activity.

7. Importance of economic evaluation
• The techniques are valuable tools in assessing the economic
feasibility and efficiency of health interventions.
• These can be used in assessing such as in health programs,
medical therapeutic and diagnostic interventions, and
pharmacologic therapeutic.
• Without systematic analysis, it is not possible to identify the relevant
alternatives.