Cost-utility analysis
Cost-utility analysis (pronunciation: kɒst juːˈtɪlɪti əˈnælɪsɪs) is a form of economic evaluation used to guide procurement decisions. The most common form of cost-utility analysis is a cost-effectiveness analysis (CEA) where the effects are measured in natural units.
Etymology
The term "cost-utility analysis" is derived from the words "cost," referring to the total amount spent to produce a particular outcome, and "utility," a term used in economics to refer to the total satisfaction received from consuming a good or service.
Definition
Cost-utility analysis is a method of comparing the cost-effectiveness of different medical interventions. The outcomes of the interventions are measured in terms of their utility, usually in the form of Quality-Adjusted Life Years (QALYs) or Disability-Adjusted Life Years (DALYs).
Methodology
The cost-utility analysis involves several steps:
- Identifying the interventions to be compared
- Measuring the costs of each intervention
- Measuring the outcomes of each intervention in terms of utility
- Comparing the cost per unit of utility for each intervention
The intervention with the lowest cost per unit of utility is considered the most cost-effective.
Related Terms
- Cost-Benefit Analysis
- Cost-Effectiveness Analysis
- Quality-Adjusted Life Years
- Disability-Adjusted Life Years
See Also
External links
- Medical encyclopedia article on Cost-utility analysis
- Wikipedia's article - Cost-utility analysis
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