Question

Cost Comparison Analysis Economic issues are always to be considered during the process of program planning and evaluation. Economic evaluations are analyses that center on the cost of a program and the relationship of the cost to the outcome or impact of the program. A cost comparison analysis compares the costs of at least two programs. CEA, CBA, and CUA are examples of cost comparison analyses. Use the South University Online Library or the Internet to research on cost comparison analysis. Create a report in a 4- to 5-page Microsoft Word document that includes the following:

An analysis and explanation of the pros and cons of a CEA. Describe how health program planners would use a CEA to assist them in making decisions about their programs.

An analysis and explanation of the pros and cons of a CBA. Describe how health program planners would use a CBA to assist them in making decisions about their programs.

An analysis and explanation of the pros and cons of a CUA. Describe how health program planners would use a CUA to assist them in making decisions about their programs.

Select two public health programs that you would like to compare by means of an economic evaluation. Analyze, identify, and describe the type of economic analysis that you would use in the evaluation.

Answer 1

Pros of CEAs

1. Evidence for advocacy and decision-making : This can be used with an objective of decision-making. Results from these studies can be used for priority-setting and advocating to a wide variety of stakeholders. Also, the evidence generated by a CEA has a variety of uses. Evidence on resource useD and efficiency can aid in improving the programs This can also be used for future budgeting.

2. Acknowledging contributions of partners, communities, and households

3. Program evaluation and learning :- It helps to improve the new methods and practices. Performances are being evalutaed and audited at each stage of each staff.

4.Quantifying costs for nutrition scale-up and integration

5.Moving beyond cost-efficiency in food security and livelihoods

Cons of CEAs are as follows :-

1. Dangers of reductive interpretation.

2. Challenge of quantifying diverse outcomes in nutrition and food security :- CEA methods can be used to eradicate the cost per any outcome of importance for an intervention. However, selecting an optimal outcome is not always a straightforward process. In the health field, where interventions often aim to prevent, reduce, or eradicate a particular disease, the choice of outcome indicator for a CEA is relatively unambiguous.

CEA is considered to be the most appropriate method for the evaluation of health economics when at least 2 alternatives are being compared and when outcomes can be expressed in a common unit, such as cost per life years saved.

(b) Cost Benefit Analysis is referred as a process of comparing the investment costs, today and ongoing, whether it is additional labor hours, capital, or reallocation of existing resources in today’s dollars versus the total benefit. It is often done when a company have to decide between several options to implement a desired, and often required, output . This may include - new equipment to replace outdated or dameged or obsolete equipment, developing a new product, hiring or replacing the staff, etc.). It also occurs when a business is presented with an opportunity which requires an additional analysis.

There is a list of pros for performing a cost-benefit analysis which are as follows:-

1) It Generates a calculated “best guess” to determine feasibility:- A cost-benefit analysis is really an estimate; however, it is important to be prepared. Costs would be easier to assess than the benefits forecasted; therefore, it is a merely a guess. The results from a cost-benefit analysis should give business owners, if every variable is entered correctly, enough data to make a decision with confidence.

2) Determines affordability today:- Depending on the business’s cash flow the demands from additional costs could derail the company’s cash position. Upon reviewing the costs required from the new venture being analyzed, business owners can determine their ability to reallocate resources or conclude if they are capable of securing financing with their current financial situation. The ability to afford the costs ongoing especially if the benefits is scheduled to occur in the future instead of instantly.

3) Potentially discovers unknown variables:- While collecting the relevant data to exercise a cost-benefit analysis additional variables may materialize in the review process. Unknown variables could aid the calculation to be more favorable or it could take away from it. It helps to dicover the variable which were not known earlier.

The following is a list of cons for performing a cost-benefit analysis:

1) It may not factor indirect benefits:- Indirect benefits involves producing an output for social profit. However, it is very difficult to monetize or get the monetary value of the benefits earned from social profits.

2) Variables might be biased:- While conducting a CBA, there could be a possibilty that the variables might be biased by the ambitious decision makers. Therefore, Business owners must be honest with the information they decided to choose to create a CBA.

3) Unknown variables might significantly add to costs or lower benefits

(c) CBA compares different programs with different outcomes (e.g., health vs. other area). Cost-Benefit Analysis in health care is an analysis of health care resource expenditures relative to possible medical benefit. This analysis helps in setting priorities while making choices from the limited resources.This analysis is used in determining the degree of access to, or benefits of, health care to be provided. Clarity of the medical decision-making process demands that cost-benefit analysis be separated and differentiated from risk-benefit analysis as well as from determinations of efficient and cost-effective medical care during medical decision-making. Cost–utility analysis (CUA) is genearlly a form of financial analysis which is used to guide the procurement decisions.The most commonally and well-known application of this analysis is in pharmacoeconomics, especially health technology assessment (HTA). Cost-utility analysis is used to determine the cost in terms of utilities, especially quantity and quality of life. This type of analysis is said to be controversial because it is quite difficult to put a value on health status or on an improvement in health status as perceived by different individuals and is generally expressed in the value for money in terms of a single type of health outcome.