UNDERSTANDING THE ESSENTIALS OF ECONOMIC-EVALUATION

Economic evaluation (EE) answers the following simple question: ''From which course of action do we get the most value for our money?'' We ask this question because resources are always limited, i.e., we never have enough money to do all the things we would like to do. Three types of economic evaluations are used: cost-effectiveness analysis, cost-utility analysis, and cost-benefit analysis. Although all involve a monetary and outcome comparison of two or more courses of action, the methodologies and outcomes of each type vary, making each one particularly suited for specific and different indications. Although the performance of an EE may be complex, its concept is intuitively simple. Understanding the basic elements of economic analysis is more and more important to all health-care providers because health-care policy makers at all levels are increasingly using EE for allocating resources.