Types of economic studies (an assessment of cost is common to all study types detailed)5 7 15
| Type of economic study | Description | Outcomes | Further explanation |
|---|---|---|---|
| Cost-offset study | Presents the costs (incurred and saved) associated with the policy change | Not measured | No consideration of health outcomes |
| Cost-minimisation analysis | Presents the costs (incurred and saved) associated with the policy change compared to the status quo | Assumed equal | Involves the assumption that the outcomes associated with the new policy are equivalent to those associated with the status quo, thus it is sufficient to compare the costs of the two to identify the least costly way of achieving the outcome. It must be noted that true equivalence of outcomes is rare and cost-minimisation analysis is often used inappropriately |
| Cost-consequences analysis | Presents a detailed listing of the various impacts on outcomes associated with the policy change with no attempt to value the aggregated components in a single metric | Range of outcomes listed | A useful first step towards economic evaluation. No attempt to combine or simplify outcomes into a single measure of effectiveness. Unless all of the individual outcome components move in the same direction, in order to determine whether a policy is worthwhile, it will be necessary to aggregate the various components and, with cost-consequences analyses, the burden for this will fall on the policy maker, who must decide the weightings associated with each component. |
| Cost-effectiveness analysis | Presents the outcomes associated with the policy change, and the status quo, in terms of uni-dimensional health or clinical units. The additional costs associated with the policy change are then presented in terms of a cost-effectiveness ratio, as, for example, the additional cost per additional asthma attack averted | Measured in health units (eg, asthma attacks, mental health score, physical health score) | Cost-effectiveness analysis requires that there is a single measure of outcome that captures the impacts of the policy. The main issue for cost-effectiveness analysis is that it can only be used to compare policies that generate the same outcomes. For example, it would not be possible to compare the cost-effectiveness of a housing intervention for which the outcome is measured as asthma attacks averted, with an intervention for which the outcome is measured as change in mental health score |
| Cost-utility analysis | Special case of cost-effectiveness analysis where the outcomes are presented as utility values. The additional costs associated with the policy change are presented in terms of a cost-utility ratio (often referred to as the cost-effectiveness ratio), as, for example, the additional cost per QALY | Measured as utility score reflecting both the health outcomes and preferences for them (eg, QALY) | Cost-utility analyses can be used to compare policy changes in different areas, with different natural outcomes, by providing a common measure of outcome. The most commonly used measure of utility is the QALY which incorporates measures of the quantity of life with assessments of the quality of life. The main issue for cost-utility analysis is that it may not capture the broader non-heath consequences associated with the policy |
| Cost-benefit analysis | Presents the outcomes associated with the policy change, and the status quo, in monetary units. The monetary value of the outcomes is then simply compared to the costs; any policy change where the monetary value of the outcomes outweighs the costs is therefore considered worthwhile | Measured in monetary terms | Cost- benefit analysis can be used to compare policy changes in different areas. Outcomes not limited to health consequences, will include all outcomes associated with the policy that are of importance to the individual. It is important to note that the term ‘cost-benefit analysis‘ is frequently misused to represent economic evaluation in general or cost-offset, cost-minimisation or cost-effectiveness analysis |
QALY, quality adjusted life year.