Question

Please review Good Research Practices for Cost-Effectiveness Analysis alongside Clinical Trials: The ISPOR RCT-CEA Task Force Report (Available at: http://www.ispor.org/workpaper/clinical_trial.asp) and answer the following question: Contrast the differences between cost effectiveness and cost utility studies and give several examples of these.

Answer 1

Cost-benefit analysis (CBA) should be used where cost and benefits are to be necessarily measured in monetary terms. Cost-effectiveness analysis (CEA) should be used where monetary terms are not necessary; rather the impact factor is more important such as environmental protection programs. Cost-utility analysis (CUA) should be used in technology or in the health sector where overall impact is measured in terms of utility or quality adjusted life year. According to the assessment and need of the scenario, methods can be used that give the best result.

Cost effectiveness is meant by how productive a product is yielding its benefits in regards to its expense made to purchase them. For example: 1) the group of people in the hospital say doctors, nurses, researchers, administrators and other medical working people thereby ultimately offer results and care by reducing the costs and enhancing the effectiveness of the health care system. 2) Reducing the number of nurses like for example by assigning a nurse ratio of 1(nurse): 15 (patients) in a medical ward for example a result of cost effectiveness thus reducing the turnover of nurses and the patient system outcomes.

Cost utilities are to point out the cost of various products in terms of quality and quantity for life. This is merely the mathematical calculation of the interventions which are been provided by the healthcare to its patients. For example when a good intervention or a product is given for free a customer increases his/her thinking to gain them until it provides him a positive utility. It is the position of the customer’s maximum satisfaction.