GLOSSARY (with definition of terms and live calculator examples)
- Contingent valuation
- a method for evaluation of benefit or value to individuals of therapy that uses survey methods to establish willingness-to-pay.
Cost-benefit analysis (CBA)
- a type of analysis that measures costs and benefits in pecuniary units and computes a net monetary gain/loss or a cost-benefit ratio.
Cost-effectiveness analysis (CEA)
- a type of analysis that compares interventions or programs having a common health outcome (e.g., reduction of blood pressure; life-years saved) in a situation where, for a given level of resources, the decision maker wishes to maximize the health benefits conferred to the population of concern. This type of analysis can be used to assess cost-effectiveness efficiency.
Cost-minimization analysis (CMA)
- A comparison in which inputs are measured in monetary values and outputs are assumed to be identical.
Cost-utility analysis (CUA)
- a type of analysis that measures benefits in utility-weighted life-years (QALYs) and which computes a cost per utility-measure ratio for comparison between programs.
- An explicit quantitative approach for analyzing decisions options under conditions of uncertainty.
Tree - CEA - Demo
- A framework for representing alternatives for use in decision analysis.
Tree - CEA - Demo
- direct costs are those that are wholly attributable to the service in question, for example, the services of professional and paraprofessional personnel, equipment, and materials
- rate of discount used to convert future costs and benefits into equivalent present values; typically 2% to 6% per annum.
- fairness in the allocation of resources or treatments among different individuals or groups
- (1) indirect costs are societal, economic and productivity losses due to morbidity and early mortality; also (2) indirect cost is sometimes used to refer to overhead costs that are based on costs that are shared by many services concurrently, for example maintenance, electricity, and administration
Net Benefit (NB)
- total benefit (in monetary units) minus total cost (in monetary units): a basic decision criterion in cost-benefit analysis.
- the opportunity cost of a commodity is the value of the best alternative use to which those resources could have been put; the value of the productive opportunities foregone by the decision to use them in producing that commodity
- the study of how individuals and societies choose to allocate scarce pharmaceutical and health resources among competing alternative uses and to distribute the products and services among members of the society
- Also referred to a utility measures or quality-adjusted life year measures. Patients are asked to imagine possible health states and provide score to reflect their preferences for various scenarios, usually on a scale of 1.0 (perfect health) to 0 (worst possible health state or death)
Quality of life (QOL)
- Physical, social and emotional aspects of a patient's well being that are relevant and important to the individual
Quality-adjusted life year (QALY)
- a common measure of health improvement used in cost-utility analysis; combines mortality and quality of life gains (outcome of a treatment measured as the number of years of life saved, adjusted for quality)
- A process through which the robustness of an economic model is assessed by examining the changes in results of the analysis when key variables are varied over a specified range
- is a measure of value of an outcome that reflects attitudes toward risk. Utility scores are often obtained from patients with questionnaires (EQ-5D) or instruments such Visual Analog Scales (VAS), Standard Gamble (SG) or Time Trade Off (TTO).
Standard Gamble Demo
- the maximum amount of money that an individual is prepared to give up to ensure that a proposed health care intervention is undertaken.
For a more comprehensive glossary see Berger ML et al. Health Care Cost, Quality, and Outcomes. ISPOR Book of Terms. Published by the International Society for Pharmacoeconomics and Outcomes Research. Lawrenceville, NJ. 2003.