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Cost-Effectiveness Analysis

Although the aforementioned approaches are used, the most common type of economic evaluations in practice is cost-effectiveness analysis. Cost-effectiveness evaluations are used to compare competing interventions to determine the additional cost per unit of effectiveness when competing interventions are not equally effective. An example of a cost-effectiveness study would be comparing a behavioral intervention to manage problem behaviors in dementia (e.g., the Tailored Activity Program) to the use of antipsychotics for the management of behaviors in dementia. Although not always the case, more effective interventions are also generally more costly, and cost-effectiveness studies help to understand the additional cost per unit of benefit gained from implementing the more effective intervention. In cost-effectiveness studies, the benefit is measured in terms of natural units or intermediate endpoint (e.g., depression cases identified, or percentage reduction in blood pressure). Intermediate endpoints are often appealing to use because most clinical studies report results in natural units. Although intermediate endpoints are easy to use, there are several drawbacks. Foremost, in cost-effectiveness analyses, only one intermediate endpoint can be evaluated at a single time; yet, many interventions are multidimensional and impact multiple intermediate endpoints. In addition, intermediate endpoints may be surrogate in that they are a short-term proxy for effectiveness but fall short of actual effectiveness. For example, a stress reduction program aimed at reducing cardiovascular events might employ blood pressure readings as an intermediate measure of effectiveness owing to the design challenges of measuring cardiovascular events (e.g., need large sample size and a much longer observation period).

 
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