Cost effectiveness analysis (CEA) examines whether treatment benefits outweight treatment costs on average for a given patient population. A 2016 paper by Verguet, Kim and Jamison examine the concept of extended cost effectiveness analysis (ECEA) which applies cost effectiveness methodologies to health care policies. The policies are evaluated over 4 domains: (1) health gains; (2) financial risk protection (FRP) benefits; (3) the total costs to the policy makers; and (4) the distributional benefits.
Policymakers can use these results to identify preferred policy interventions.
Usually, ECEA displays the three outcomes of health gains, private expenditures crowded out, and FRP, by population stratum…Furthermore, the two major outcomes of ECEA, health gains and financial protection per population stratum, can be scaled with the net cost of the policy to a particular budget constraint or per dollar expenditure…The motivation is to enable the expression of ECEA findings in terms of the ‘efficient purchase’ of financial protection and equity, in addition to the efficient purchase of health gains, as in a traditional CEA.
For instance, one could identify the cost of treatment per life year saved or per poverty case avoided.
The authors sum up the benefit of their framework as follows:
ECEA approach permits the inclusion of non-health benefits and distributional consequences and equity in the economic evaluation of health policies. It enables the consideration of key criteria into the resource allocation problem and into the design of health benefits packages.
- Verguet, Stéphane, Jane J. Kim, and Dean T. Jamison. “Extended cost-effectiveness analysis for health policy assessment: a tutorial.” PharmacoEconomics 34, no. 9 (2016): 913-923.