Economic evaluation. Part 2: frameworks for combining costs and benefits in health care.

The first article1 in this two-part series on the economic evaluation of health care interventions examined the key concepts of economic evaluation in health care, and the methodological issues pertaining to identification, measurement and evaluation of costs and benefits. The aim of this article is to examine how the costs and benefits previously identified can be brought together within the framework of an economic evaluation. The three principal economic evaluation techniques are: cost-effectiveness analysis (CEA), cost-utility analysis (CUA) and cost-benefit analysis (CBA). The technique(s) chosen will generally be determined depending on whether the question being addressed is concerned with allocative efficiency or technical efficiency. An allocative efficiency question is concerned with ‘whether’ to allocate resources to a given programme. All health care programmes have to compete for scarce health care resources. These ‘competing’ health care programmes may include, for example, family planning clinics, home visiting services, asthma clinics, rheumatology clinics and elective surgery for hernia repair. An allocative efficiency question would be: Should there be increased neonatal scanning services or increased provision of elective hernia repair surgery? In contrast, technical efficiency is concerned with ‘within programme’ efficiency, namely how best to provide a given service. The resources, or budget allocated to a programme, are taken as given and the issue is simply ‘how best’ to provide that service. A technical efficiency question would be: When providing care for patients with a miscarriage, is surgical, medical or expectant management the most costeffective option? Economic evaluations are often undertaken alongside randomised controlled trials (RCTs) in which the health care (and sometimes non-health care) resources consumed by patients are evaluated in tandem with the estimation of health outcomes. However, more recently, more economic evaluations are being carried out using a combination of multiple sources of information both for outcomes (clinical trials, observational studies, cohort studies, public health statistics, epidemiological data and preference surveys) and for resource use and costs. This evidence is then synthesised using decision analytic modelling. A section on this approach is provided later. Before moving on to the main theme of this article, Box 1 provides a useful reminder of some of the economic evaluation terms employed in the previous article. Bringing costs and benefits together within an economic evaluation framework As outlined above, there are three main frameworks for combining costs and benefits within an economic evaluation framework in health care: CEA, CUA and CBA. Which method is used depends upon the outcomes being measured and, more often than not, depends upon the evaluation context. For example, within an RCT it is often difficult to choose the economic evaluation framework in advance,2 as there may be a large number of possible outcomes including effectiveness and utility measures whose results cannot be predicted in advance of completion of the trial. However, this article will introduce the concept of the cost-effectiveness plane, a method that, despite its name, allows researchers to present economic cost and benefit data from all three economic evaluation frameworks.