Economic evaluation in healthcare is the analysis of the costs and effects of alternative interventions that may be given to a defined population in order to support decision-making about reimbursement or implementation of the preferred interventions. Both the immediate costs and health effects and their ‘downstream’ consequences (future events averted) are considered. The output/result of an economic evaluation is an incremental cost-effectiveness ratio, which may be compared with a threshold value (willingness to pay for a unit of health outcome). The choice of type of output included underpins the classification of economic evaluation into cost-effectiveness (health effect), cost-utility (QALY) and cost-benefit (valuation of outcome in money terms). Comparisons considered in an economic evaluation may best be considered as treatment strategies: alternative courses of action to be including diagnostic work-up, treatment, monitoring and management of consequences. Key considerations are the perspective (whose costs), time horizon (over what period into the future) and metric of outcome/effect to be used. Most economic evaluations rely on modelling to synthesise the outputs of different studies, although some evaluations are based directly on trials or other comparative studies. An important part of an economic evaluation is a sensitivity analysis which is the robustness of the results to choices of model input values or assumptions underlying the analysis. More sophisticated evaluations may include assessment of indirect impacts (e.g. on other family members or broader economic consequences), distributional consequences (equity), or the value of collecting more information to reduce the uncertainty of the economic result (value of information analysis).
How to cite: Economic Evaluation [online]. (2016). York; York Health Economics Consortium; 2016. https://yhec.co.uk/glossary/economic-evaluation/