Cost-benefit analysis: Difference between revisions
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A '''cost-benefit analysis''' is a "method of comparing the cost of a program with its expected benefits in dollars (or other currency). The benefit-to-cost ratio is a measure of total return expected per unit of money spent. This analysis generally excludes consideration of factors that are not measured ultimately in economic terms. Cost effectiveness compares alternative ways to achieve a specific set of results."<ref>{{MeSH|term}}</ref> | A '''cost-benefit analysis''' is a "method of comparing the cost of a program with its expected benefits in dollars (or other currency). The benefit-to-cost ratio is a measure of total return expected per unit of money spent. This analysis generally excludes consideration of factors that are not measured ultimately in economic terms. Cost effectiveness compares alternative ways to achieve a specific set of results."<ref>{{MeSH|term}}</ref> | ||
==Metrics used in cost-benefit analyses== | ==Metrics used in cost-benefit analyses== | ||
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* Cost of Preventing an Event (COPE)<ref name="pmid18170986">{{cite journal |author=Maharaj R |title=Adding cost to NNT: the COPE statistic |journal=ACP J. Club |volume=148 |issue=1 |pages=A8 |year=2008 |pmid=18170986 |doi= |issn=|url=http://www.acpjc.org/Content/148/1/issue/ACPJC-2008-148-1-A08.htm}}</ref>. For example, to prevent a major vascular event n a high-risk adult , the [[number needed to treat]] is 19, the number of years of treatment are 5, and the daily cost of the generic drug is 68 cents. The COPE is 19 * 5 * ( 365 * .68) which equals $23,579 in the United States. | * Cost of Preventing an Event (COPE)<ref name="pmid18170986">{{cite journal |author=Maharaj R |title=Adding cost to NNT: the COPE statistic |journal=ACP J. Club |volume=148 |issue=1 |pages=A8 |year=2008 |pmid=18170986 |doi= |issn=|url=http://www.acpjc.org/Content/148/1/issue/ACPJC-2008-148-1-A08.htm}}</ref>. For example, to prevent a major vascular event n a high-risk adult , the [[number needed to treat]] is 19, the number of years of treatment are 5, and the daily cost of the generic drug is 68 cents. The COPE is 19 * 5 * ( 365 * .68) which equals $23,579 in the United States. | ||
* Years (or months or days) of life saved. "A gain in life expectancy of a month from a preventive intervention targeted at populations at average risk and a gain of a year from a preventive intervention targeted at populations at elevated risk can both be considered large."<ref name="pmid9691106">{{cite journal |author=Wright JC, Weinstein MC |title=Gains in life expectancy from medical interventions--standardizing data on outcomes |journal=N Engl J Med |volume=339 |pages=380–6 |year=1998 |pmid=9691106 |doi=}}</ref> | * Years (or months or days) of life saved. "A gain in life expectancy of a month from a preventive intervention targeted at populations at average risk and a gain of a year from a preventive intervention targeted at populations at elevated risk can both be considered large."<ref name="pmid9691106">{{cite journal |author=Wright JC, Weinstein MC |title=Gains in life expectancy from medical interventions--standardizing data on outcomes |journal=N Engl J Med |volume=339 |pages=380–6 |year=1998 |pmid=9691106 |doi=}}</ref> | ||
==Standards in conducting a cost-benefit analysis== | |||
Standards have been developed for the conduct of cost-benefit analyses<ref name="pmid8861994">{{cite journal |author=Siegel JE, Weinstein MC, Russell LB, Gold MR |title=Recommendations for reporting cost-effectiveness analyses. Panel on Cost-Effectiveness in Health and Medicine |journal=JAMA |volume=276 |issue=16 |pages=1339–41 |year=1996 |pmid=8861994 |doi=}}</ref> and for [[systematic review]]s of cost-benefit analyses<ref name="pmid12038919">{{cite journal |author=Jefferson T, Demicheli V, Vale L |title=Quality of systematic reviews of economic evaluations in health care |journal=JAMA |volume=287 |issue=21 |pages=2809-12 |year=2002 |pmid=12038919 |doi= |url=http://jama.ama-assn.org/cgi/pmidlookup?view=long&pmid=12038919}}</ref>. | |||
==Difficulties in cost-benefit analyses== | ==Difficulties in cost-benefit analyses== | ||
Revision as of 10:41, 24 March 2008
A cost-benefit analysis is a "method of comparing the cost of a program with its expected benefits in dollars (or other currency). The benefit-to-cost ratio is a measure of total return expected per unit of money spent. This analysis generally excludes consideration of factors that are not measured ultimately in economic terms. Cost effectiveness compares alternative ways to achieve a specific set of results."[1]
Metrics used in cost-benefit analyses
- Cost per year of life saved[2] The definition of an acceptable cost per year of life saves ranges from $50,000 to $200,000.[3]
- Cost of Preventing an Event (COPE)[4]. For example, to prevent a major vascular event n a high-risk adult , the number needed to treat is 19, the number of years of treatment are 5, and the daily cost of the generic drug is 68 cents. The COPE is 19 * 5 * ( 365 * .68) which equals $23,579 in the United States.
- Years (or months or days) of life saved. "A gain in life expectancy of a month from a preventive intervention targeted at populations at average risk and a gain of a year from a preventive intervention targeted at populations at elevated risk can both be considered large."[5]
Standards in conducting a cost-benefit analysis
Standards have been developed for the conduct of cost-benefit analyses[6] and for systematic reviews of cost-benefit analyses[7].
Difficulties in cost-benefit analyses
The costs saved by successful treatment of one disease may be offset by greater longevity leading to increased costs from other disease.[8]
References
- ↑ Anonymous (2024), term (English). Medical Subject Headings. U.S. National Library of Medicine.
- ↑ Tengs TO et al (1995). "Five-hundred life-saving interventions and their cost-effectiveness". Risk Anal 15: 369–90. PMID 7604170. [e]
- ↑ Cutler DM, Rosen AB, Vijan S (2006). "The value of medical spending in the United States, 1960-2000". N. Engl. J. Med. 355 (9): 920-7. DOI:10.1056/NEJMsa054744. PMID 16943404. Research Blogging.
- ↑ Maharaj R (2008). "Adding cost to NNT: the COPE statistic". ACP J. Club 148 (1): A8. PMID 18170986. [e]
- ↑ Wright JC, Weinstein MC (1998). "Gains in life expectancy from medical interventions--standardizing data on outcomes". N Engl J Med 339: 380–6. PMID 9691106. [e]
- ↑ Siegel JE, Weinstein MC, Russell LB, Gold MR (1996). "Recommendations for reporting cost-effectiveness analyses. Panel on Cost-Effectiveness in Health and Medicine". JAMA 276 (16): 1339–41. PMID 8861994. [e]
- ↑ Jefferson T, Demicheli V, Vale L (2002). "Quality of systematic reviews of economic evaluations in health care". JAMA 287 (21): 2809-12. PMID 12038919. [e]
- ↑ van Baal PH, Polder JJ, de Wit GA, et al (2008). "Lifetime Medical Costs of Obesity: Prevention No Cure for Increasing Health Expenditure". PLoS Med. 5 (2): e29. DOI:10.1371/journal.pmed.0050029. PMID 18254654. Research Blogging.