2 - Cost-Effectiveness Analysis for Healthcare: From Theory to Practice to Problems and Solutions

Summary

Facing the challenges of aging populations, new technologies provide a potential solution to meeting the increasing needs associated with demographic changes by increasing productivity in healthcare production. However, decision-makers require evidence of whether the adoption of new technologies improves the efficiency of healthcare resource use. Cost-effectiveness analysis (CEA) is a methodology for evaluating new technologies by comparing a new intervention with the current intervention (or mix of different interventions) used for treating the same patient group. This chapter explores the theoretical foundations of CEA and the conditions required for CEA to inform decision-makers about the efficiency of implementing the new intervention are identified. The implications of using CEA as a basis for decision-making in the absence of these theoretical conditions are discussed, and solutions to addressing the efficiency problems under real-world conditions are derived. Where practical considerations limit the ability of decision-makers to apply these solutions, an alternate practical approach, focused on efficiency improvements as opposed to efficiency maximization, is presented.