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Lecture to the Health Economics module of the Diploma of Clinical Research Coordinators by Omar Hasan Kasule Sr Professor of Epidemiology and Bioethics August 9, 2020 13.00-15.00
DEFINITION OF CEA
• Cost-effectiveness analysis measures the technical efficiency of an intervention.
• Costs are computed monetary terms
• Benefits are expressed in their natural units.
• CEA is used instead of CBA because it does not involve monetary evaluation of benefits which is very difficult.
COMPUTATION OF CEA
• Cost-effectiveness is computed as net costs/benefits.
• The net costs are the intervention costs + costs of side effects – direct medical costs saved.
• A ratio of cost to health effects is computed for each intervention.
• Cost-effectiveness analysis enables a comparison of costs alternative disease control strategies with benefits of each alternative measured in the same units.
EXAMPLE OF CEA
• For example for HBV we may compare the costs of three alternative approaches
• Alternative #1: no vaccination,
• Alternative #2: universal vaccination,
• Alternative #3: vaccination preceded by screening. T
• The cost of each alternative is computed and the cheapest is adopted.
CEA EVALUATES BENEFITS AGAINST AN ACCEPTABLE COST
• The benefit used is saving a life-year is estimated.
• The life year may be adjusted for quality of life
• Example what do you prefer after cancer diagnosis:
• Alternative #1: Do nothing, save your money, and enjoy 1 year of normal life?
• Alternative #2: Pay for surgery, chemotherapy, and radiotherapy and spend 3 years of hospitalization and disability?
PROBLEMS OF CEA
• Cost data is difficult to obtain. Often charge data is used but it is not a good substitute because what is charged is either below or above the actual cost depending on market factors.
• The health effects of an intervention are not easy to measure accurately and because unquantifiable value judgments are involved.
• Life expectancy and QALY are sometimes used as benefits but they are not considered perfect.