The Primary Process and Key Concepts of Economic Evaluation in Healthcare

Younhee Kim, Yunjung Kim, Hyeon Jeong Lee, Seulki Lee, Sun Young Park, Sung Hee Oh, Suhyun Jang, Taejin Lee, Jeonghoon Ahn, Sangjin Shin

Research output: Contribution to journalReview articlepeer-review

2 Scopus citations

Abstract

Economic evaluations in the healthcare are used to assess economic efficiency of pharmaceuticals and medical interventions such as diagnoses and medical procedures. This study introduces the main concepts of economic evaluation across its key steps: planning, outcome and cost calculation, modeling, cost-effectiveness results, uncertainty analysis, and decision-making. When planning an economic evaluation, we determine the study population, intervention, comparators, perspectives, time horizon, discount rates, and type of economic evaluation. In healthcare economic evaluations, outcomes include changes in mortality, the survival rate, life years, and quality-adjusted life years, while costs include medical, non-medical, and productivity costs. Model-based economic evaluations, including decision tree and Markov models, are mainly used to calculate the total costs and total effects. In cost-effectiveness or cost-utility analyses, cost-effectiveness is evaluated using the incremental cost-effectiveness ratio, which is the additional cost per one additional unit of effectiveness gained by an intervention compared with a comparator. All outcomes have uncertainties owing to limited evidence, diverse methodologies, and unexplained variation. Thus, researchers should review these uncertainties and confirm their robustness. We hope to contribute to the establishment and dissemination of economic evaluation methodologies that reflect Korean clinical and research environment and ultimately improve the rationality of healthcare policies.

Original languageEnglish
Pages (from-to)415-423
Number of pages9
JournalJournal of Preventive Medicine and Public Health
Volume55
Issue number5
DOIs
StatePublished - 1 Sep 2022

Bibliographical note

Publisher Copyright:
Copyright © 2022 The Korean Society for Preventive Medicine.

Keywords

  • Decision trees
  • Economic evaluation
  • Incremental cost-effective ratio
  • Markov model
  • Medical cost
  • Quality-adjusted life year

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