Cost-effectiveness analysis
Cost-effectiveness analysis
Cost-effectiveness analysis (pronunciation: kɒst-ɪˈfɛktɪvnəs əˈnælɪsɪs) is a form of economic evaluation that compares the relative costs and outcomes (effects) of different courses of action.
Etymology
The term "cost-effectiveness analysis" is derived from the English words "cost", "effectiveness", and "analysis". "Cost" comes from the Old French coste (rib, side, flank), from Latin costa "rib". "Effectiveness" is from the Latin effectus meaning "accomplishment, performance". "Analysis" is from the Greek analusis meaning "a breaking up, a loosening, releasing".
Definition
Cost-effectiveness analysis is a method of economic analysis that allows the comparison of two or more interventions to determine which provides the best value for money. It is often used in the field of health economics to compare the cost and effectiveness of different healthcare interventions.
Methodology
The methodology of cost-effectiveness analysis involves the calculation of the cost-effectiveness ratio, which is the ratio of the cost of an intervention to its effectiveness. The lower the ratio, the more cost-effective the intervention is considered to be. The effectiveness of an intervention is often measured in terms of quality-adjusted life years (QALYs) or disability-adjusted life years (DALYs).
Related Terms
- Economic evaluation
- Health economics
- Healthcare interventions
- Quality-adjusted life years
- Disability-adjusted life years
See Also
External links
- Medical encyclopedia article on Cost-effectiveness analysis
- Wikipedia's article - Cost-effectiveness analysis
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