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Issues in Cost Effectiveness in Health Care
Author(s) -
Warner Kenneth E.
Publication year - 1989
Publication title -
journal of public health dentistry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.64
H-Index - 63
eISSN - 1752-7325
pISSN - 0022-4006
DOI - 10.1111/j.1752-7325.1989.tb02085.x
Subject(s) - risk analysis (engineering) , health care , psychological intervention , cost–benefit analysis , value (mathematics) , outcome (game theory) , computer science , cost effectiveness analysis , management science , cost effectiveness , decision analysis , simple (philosophy) , medicine , actuarial science , operations research , operations management , economics , microeconomics , nursing , engineering , political science , machine learning , philosophy , mathematical economics , epistemology , law , economic growth
Cost‐effectiveness analysis (CEA) is becoming increasingly popular as society moves toward rationalizing health costs. This review describes the applications and limitations of the technique. Conceptually simple though frequently complicated in application, CEA compares the cost of a procedure with its effectiveness, thus helping an administrator to judge whether the procedure is worth its cost. CEA also permits comparison of various interventions that result in a similar health outcome. A major benefit of CEA is that it forces decision makers to confront the tradeoffs implicit in all decisions regarding alternative approaches. Limitations of the CEA philosophy and technique also have to be understood if it is to be employed effectively; it is not an assessment of cost savings, nor is it a decision‐making technique because it does not incorporate value judgments. A number of potential applications to dentistry are described.