title: An introduction to economic evaluation: what's in a name?
abstract: OBJECTIVE
  This paper describes the main types of economic evaluation techniques.
  
  
  METHODS
  To examine the strengths and limitations of different types of economic evaluations, we used a hypothetical example to review the reasoning underlying each method and to illustrate when it is appropriate to use each method.
  
  
  RESULTS
  The choice of economic evaluation method reflects a decision about what should represent "success" and how success should be valued. Measures of benefit and cost must be considered systematically and simultaneously. Claiming that a new treatment is cost-effective requires making a value judgment based on the personal beliefs of the claimant. Even when cost and effect data are objective, a verdict of cost-effective is subjective. The conclusions of an economic study can change significantly, depending on which patient outcome is used to measure success.
  
  
  CONCLUSIONS
  Clinicians must be sure that important patient outcomes are not excluded from economic evaluations. Economic evaluation is a process designed to produce an estimate rather than a decision. New treatment can be more costly and still be cost-effective (if the extra benefit is valued more than the extra cost to produce it). However, since economic evaluation does not explicitly consider a decision maker's available budget, a new treatment can be deemed cost-effective but too expensive to approve.
authors.affiliation: Department of Health Policy Management and Evaluation, University of Toronto, Ontario. hochj@smh.toronto.on.ca
authors.forename: Jeffrey S
authors.initials: JS
authors.lastname: Hoch
authors.forename: Carolyn S
authors.initials: CS
authors.lastname: Dewa
mesh_terms: D002170:Canada; D003362:Cost-Benefit Analysis; D003365:Costs and Cost Analysis / Q000191:economics; D003695:Delivery of Health Care / Q000191:economics*; D017048:Health Care Costs / Q000706:statistics & numerical data*; D006801:Humans; D018803:Models, Economic; D009313:National Health Programs / Q000191:economics*; D016896:Treatment Outcome