Abstract
Economic evaluations involve a comparison of costs and outcomes from alternative uses of resources to improve health. Although economists are seen as experts on costing by health professionals, the key issue in an economic evaluation is the choice of outcome measure. There may be instances when outcome measurement is not necessary, for example when the alternatives compared have exactly the same outcome. In this case it is enough to compare the costs. It may also sometimes be helpful to undertake a cost consequence analysis where the different consequences are just listed together with the relevant costs. However, in that case we have a multidimensional description of the outcome, which can be difficult to interpret. For example, when the different dimensions move in different directions, it is not evident how to determine which treatment results in the best health outcome. To facilitate comparison, there is a need for a unidimensional outcome measure. Dependent on the type of comparison that is wanted, distinction between cost-effectiveness, cost-utility and cost-benefit analysis is often made. We follow this distinction in our report. A cost-effectiveness analysis gives the most narrow options for comparison. It may only facilitate comparison between different ways to treat a specific disease. Cost-utility analysis has been developed to facilitate comparisons between different medical specialities. Cost-benefit analysis offers a direct comparison between costs and outcomes, since both are expressed in monetary terms. In cost-effectiveness and cost-utility analysis comparisons are made in terms of ratios between costs and outcome.