Economic evaluation
10.4 Types of economic evaluations
Different types of economic evaluations exist. Table 10.1 presents the main characteristics of each approach, when they are appropriate to use, and their limitations. All types of economic evaluation include the same measurements of costs; the difference between them is how effects are measured.
Table 10.1 Comparison of Types of Economic Evaluations
| Type | Relevant When… | Comparator | Measure of Results | Decision Criteria | Limitations |
| Cost minimization | Several interventions offer the same results in scope and intensity. | Yes: At least one. The most natural and mainstream comparator.
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No need to compare the results as they are the same.
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The least expensive intervention is the preferred choice.
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| Cost-effectiveness | Different interventions presenting the same unique results but at different levels. | Yes: At least one. The most natural and mainstream comparator.
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In natural units (for example: life years saved, case prevented, cholesterol levels, etc.)
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Dominant intervention if there is one, or calculation of the Incremental Cost-Effectiveness Ratio (ICER) | |
| Cost-utility | (1) Quality of life is the important outcome (2) the interventions’ effects are of a different nature (3) interventions have multiple relevant outcomes (4) some outcomes can be considered more important than others (Brousselle et al., 2011c).
Compares interventions with different results in scope and quantity. Utility makes it possible to integrate various effects on morbidity and mortality into the same measure.
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Yes: At least one. The most natural and mainstream comparator.
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Quality Adjusted Life Years (QALYs) are calculated by multiplying the number of life years living with a given health state by the utility associated with this health state. The utility is measured using different methods: Standard gamble, time trade-off, and visual analog scale.
Indirect measures of utility also exist using classification systems of multi-attribute health states, such as EuroQol 5-Dimensions questionnaire (EQ-5D), Health Utilities Index (HUI), Short Form 6-Dimensions (SF-6D) (Bryan et al., 2017; Kim et al., 2022). |
Dominant intervention if there is one, or calculation of the Incremental Cost-Effectiveness Ratio (ICER).
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Measures of utilities vary according to the instruments used and the types of respondents. There is no consistency in utility values including when estimated with indirect measure systems (Brousselle et al., 2011c; Brousselle & Lessard, 2011; Bryan et al., 2017). |
| Cost-benefit | Comparing interventions with different results and when including indirect effects such as reduction of hospitalization costs. | Yes.
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Results are converted into dollar values. The main methods for converting results into dollar values are the human capital approach (for example, time lived in good health valued according to market salary), revealed preferences (injury compensations; wage-risk approach), and contingent valuation studies (willingness-to-pay; willingness-to-accept) (Drummond et al., 1998). | Incremental benefits are compared to differential costs, the difference between these two being the net social benefit (Brousselle et al., 2011c; Drummond et al., 1998) | Many ethical issues when converting value of human life (and potentially other lives and environmental conditions) into monetary value. No consistency across methods used. |
| Return on Investment and Social Return on Investment | One wants to know how much economic benefit is derived from an intervention as compared to its costs (Brousselle et al., 2016). | No. | Direct effects are converted into monetary value and added to indirect effects such as costs avoided. Other studies try to include externalities such as environmental and social benefits, also converted into monetary value. | Ratios of benefits/costs are calculated. ROI of different interventions can be compared. | Many ethical issues when converting value of human life (and potentially other lives and environmental conditions) into monetary value. No consistency across methods used (Brousselle et al., 2016). |
| Cost-consequence analysis | One wants to avoid methodological pitfalls and provide transparent comprehensive information. | Both are possible. | All results (direct effects, indirect effects and externalities) are presented using a tabular or graphical representation. | Deliberations on affordability, efficiency, and other principles such as equity, environmental impacts, access for underserved populations, etc. | Consequences are presented in a disaggregated format which makes the decision criteria less attractive to decision-makers. |
