Abstract
The paper is devoted to the investigation of the central features of the cost-effectiveness analysis on the background of the suggested case revolving around diabetes among the population of the USA. The better understanding of the topic is achieved by comparing this type of analysis with the cost-benefit and cost-utility approaches to outline the main differences and situations when these tools can be applied.
Moreover, different perspectives on the cost analysis are introduced to attain the better understanding levels and guarantee that various cases where it can be utilized are discussed. Finally, categories of costs that should be included in CEA are analyzed with the primary aim to perform the in-depth analysis of all aspects of the discussed topic and familiarize readers with the critical elements that should be touched upon while applying the tool to various cases. In such a way, the paper contributes to the field of cost-effectiveness analysis by extending knowledge devoted to it.
Cost-Effectiveness Analysis
The cost-effectiveness analysis (CEA) is an important tool that is used to determine opportunities for further actions or outline advantages or disadvantages associated with a particular decision. For this reason, it is critical to attain higher understanding levels and be able to apply the tool to various cases to investigate them correctly.
Cost-Benefit, Cost-Effectiveness, and Cost-Utility Analyses
The cost-benefit analysis presupposes that a specialist sums all possible benefits associated with a particular solution and then investigates costs related to this decision. A cost-effectiveness analysis is similar to this one; however, it is applied when it is impossible to place value on the outcome (Muennig, 2016). The cost-utility analysis presupposes that an investigator should determine whether an action or solution should be performed or applied (Edlin, McCabe, Hulme, Hall, & Wright, 2015). All these types of investigation can be used in the healthcare sector to determine the effectiveness of a certain approach.
Relationship Between Cost and Effectiveness
There is a direct correlation between the cost and effectiveness as the best possible performance can be achieved due to the minimization of input and maximization of output. In other words, more effectiveness should not cost more money (Muennig, 2016). On the contrary, the detailed cost-effectiveness analysis can help to select the most potent solution that can help to avoid extra spending and save money while achieving outstanding results, which is critical for the healthcare sector.
Perspective of the Analysis
Doing the CEA for situations that presuppose the involvement of more than one actor, it is critical to consider the perspective from which the analysis is performed. The fact is that effectiveness is determined regarding the impact of a certain decision on a particular party, which means that another one can experience losses (Muennig, 2016). That is why there are societal and single player perspectives that should be considered. Regarding the case, costs demanded to perform screening are ignored as individuals should pay for them.
Kinds of Costs
CEA usually considers two types of costs which are fixed and variable. It is demanded to make an accurate forecast and determine the benefits of a particular decision (Roberts et al., 2017). Speaking about the case, the discussed treatment and screening spending can be considered a fixed cost as they remain constant regardless of the changes in output and can impact the final results.
Streams of Cost
Performing CEA analysis, it is critical to get streams of cost over time to monitor the current situation and remain informed about the possible alterations in input (Muennig, 2016). It will help to achieve higher efficiency levels and ensure that the utilization of the given analysis will contribute to the generation of benefits needed to achieve success.
References
Edlin, R., McCabe, C., Hulme, C., Hall, P., & Wright, J. (2015). Cost effectiveness modelling for health technology assessment: A practical course. New York, NY: Adis.
Muennig, P. (2016). Cost-effectiveness analysis in health: A practical approach (3rd ed.). New York, NY: Jossey-Bass.
Roberts, S., Barry, E., Craig, D., Airoldi, M., Bevan, G., & Trisha, G. (2017). Preventing type 2 diabetes: systematic review of studies of cost-effectiveness of lifestyle programmes and metformin, with and without screening, for pre-diabetes. BMJ Open, 7(11). Web.