The healthcare industry is growing exponentially across the globe. Various policies, capabilities, and complexities continue to stack alongside the growth of the healthcare sector. The global healthcare spending is estimated to rise to $9 trillion in 2020.
Our world population is projected to spike up to 9 billion within 2050. An increase in population calls for an increase in demand for health care facilities. Various Sustainable Developmental Growth (SDG) measures are to be taken to meet the demands of the growing population.
However, to achieve SDG goals, governments would require a hefty sum of funds. Having said that, most of the developing and underdeveloped nations will face a lot of health care facility issues.
In developing nations, the healthcare cost is often borne by the patients itself. So, it is important to consider the cost of drugs and their consequences.
There is a prominent scarcity in the therapeutic, diagnostic, and preventive resources in the healthcare sector. Therefore, policymakers should not only consider the therapeutic effectiveness of a drug while formulating and marketing it but also its cost-effectiveness.
Health economic outcome research is used to understand health care standards and allocate funds and expenditure efficiently.
Health economics provides a set of analytical tools that helps the healthcare sector to make informed decisions on the compatibility of the patient and drug accesses. Health economic outcome research relies on clinical developmental information to formulate analytics.
‘Outcomes’ has been a commonly used term to indicate the outcome of a treatment or a drug. But now ‘outcomes’ are coined to include economic outcomes and its impact on the healthcare industry growth and decisions.
Besides, the healthcare investors and the patients are very keen to understand the details about the medical treatments given and they are also interested to take part in any decision-making process that involves their health.
With the rapidly evolving healthcare sector, we are at a place where we need to make decisions that contaminate the exceeding costs.
However, before taking any step to cut down the costs, it is imperative to evaluate the health care program, policy, and intervention. This is where the outcome research comes into the picture, to measure the economic outcomes of health care.
Types of economic evaluation studies
Economic evaluation is a cost-benefit analysis of health research through their decision-making model. There are 6 major types of economic evaluation. These are described in detail below
1. Cost-minimization analysis
In this method, the net cost between two treatment alternatives that give the same result or efficiency is calculated to determine the cheaper alternativeThe most important element to consider while performing this analysis is to make certain that both the treatments produce the same effect and treatment benefits.
Note that it is not ethical to compare two treatments with varied outcomes.
2. Cost-effective analysis
This analysis compares the cost of treatment (in monetary terms) to the benefit achieved through the treatment (increased lifespan, number of days without any symptoms, clinical cures, and the number of lives cured)This analysis is present in a ratio format that specifies the additional cost that is needed to acquire additional health benefits.
This analysis is performed to find a treatment option with a lower cost/unitThe cost-effective analysis is the ideal comparison to find the best alternative between two treatments.
3. Cost-utility analysis
The cost-utility analysis makes a comparison between the cost of treatment and the quality of life of the patient (symptom-free, no adverse side effect of the treatment). It also compares the costs of various treatments to obtain one year of a healthy life.
The main objective of modern medicine is to cure the disease as well as increase the longevity of the patient. The cost-utility analysis takes in not only the longevity of the patient (because of the treatment) but also the quality of life led by the patient after the treatment.
Even though cost-effective cost-utility analysis is somewhat similar, the latter combines the patient’s quality of life to determine the best alternative treatment.
4. Cost-benefit analysis
This analysis focuses on the financial benefits of the patient. It measures both the cost and consequences of treatment in the ratio of money. And then, it compares whether the money was worth the treatment and its benefits.
5. Cost-illness analysis
The monetary burden imposed on the individuals or a society due to a disease is known as the cost-illness analysis. These studies are primarily focused on cost analysis for new treatments.
6. Cost-consequence analysis
A cost-consequence analysis is a direct analysis that includes all the costs and consequences of the treatment (medical, non-medical, indirect, direct, utility impacts, life quality, etc.)