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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 June 8, 2021
DEFINITION OF CEA
- Cost-effectiveness analysis measures the technical efficiency of an intervention.
- Costs are computed in 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 nett costs/benefits.
- The nett 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 the costs of alternative disease control strategies with the 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.
- The cost of each alternative is computed and the cheapest is adopted.
- 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 because unquantifiable value judgments are involved.
- Life expectancy and QUALY are sometimes used as benefits but they are not considered perfect.