Understanding cost effectiveness: a detailed review.

Overview Given the drive towards the provision of ever better patient care in medicine, and the seemingly contradictory rise of self declared “healthcare crises” in many parts of the world, ophthalmology, like most other medical specialties, is experiencing uncertain, if not turbulent times. Exactly what the result of such changes will be is diYcult to predict. It is certain, nevertheless, that increased economic pressures in healthcare financing, coupled with an ever ageing population, euphemistically referred to as the “demographic time bomb”, do little to reassure even the most optimistic of observers. It is against this backdrop that there is an urgent need to provide the general ophthalmic community with a first hand grasp, however simplified, of the key concepts of health economic analysis. Exactly why an understanding of health economics should be important is simple. On the one hand, knowledge of this area informs the wider non-economically literate, ophthalmic community of the key economic techniques used to inform health policy decisions. On the other hand, those who invest in its acquisition will be better able to respond to those pundits who would rather see money spent in other branches of medicine, further impacting the potential level of available funding for eyecare services and research purposes. Most importantly, however, it is hoped that such knowledge and understanding will serve to launch greater and more rigorous investigations into this relatively unexplored, yet important area of ophthalmology. Although the dawn of health economics is a relatively recent one, its fundamental principles have as their roots the longstanding techniques and concepts of economic science. This said, the aim of the present article is rather more limited and consists of an examination and review of the basic principles of one of the more widely employed forms of health economic evaluation—namely, cost eVectiveness analysis. Having accomplished this goal, the secondary aim of this paper is to briefly review those cost eVectiveness analyses that have been conducted in ophthalmology during the past decade. The following section is designed to equip the reader with the fundamental framework necessary to understand the basic concepts of health economic analysis explored in this paper. The first two ideas explored are those of resource scarcity and opportunity cost. Both concepts are important in that they show how an economy’s scarce resources are both distributed and allocated, hopefully in an eYcient manner.