Base Case Analysis
The base case analysis is the primary analysis in a health economic evaluation that uses the most plausible, best supported set of assumptions and parameter values.
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Health Economics Terms
How health care decisions weigh costs against health gains: cost effectiveness, QALYs, ICERs, decision models and budget impact. Written for health economists, HEOR teams and anyone reading an economic evaluation or a health technology assessment.
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Cost Benefit Analysis (CBA)
Cost benefit analysis (CBA) is a form of full economic evaluation that compares the total costs of an intervention or program with its total benefits, with both costs and benefits measured in monetary terms.
Cost Consequence Analysis
Cost consequence analysis (CCA) is a form of economic evaluation that presents the costs and multiple outcomes of two or more alternatives in a disaggregated format, listing each cost and consequence separately without combining them into a single summary…
Cost Effectiveness Analysis (CEA)
Cost effectiveness analysis (CEA) is a form of full economic evaluation that compares the costs and health outcomes of two or more interventions, expressing results as an incremental cost effectiveness ratio (ICER): the difference in costs divided by the…
Cost Minimization Analysis
Cost minimization analysis (CMA) is a form of economic evaluation used when two or more interventions have been demonstrated to produce equivalent health outcomes, so that the evaluation reduces to a simple comparison of costs to identify the least expensive…
Cost of Illness Study
A cost of illness (COI) study estimates the total economic burden that a specific disease or health condition imposes on society, the health care system, patients, or payers.
Cost Per QALY
Cost per quality adjusted life year (QALY) is the incremental cost of an intervention divided by its incremental gain in QALYs compared with an alternative, serving as a standard measure of cost effectiveness in health care decision making.
Cost Utility Analysis (CUA)
Cost utility analysis (CUA) is a form of economic evaluation that compares the costs of health care interventions with their outcomes expressed in quality adjusted life years (QALYs), capturing both the quantity and quality of life in a single measure.
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Decision Model
A decision model is a mathematical framework that structures a clinical, policy, or resource allocation decision by mapping out the possible pathways, their associated probabilities, costs, and outcomes.
Decision Tree
A decision tree is a graphical and mathematical model used in clinical decision analysis and health economics to represent a sequence of decisions and chance events, mapping out possible pathways and their associated probabilities, costs, and outcomes.
Disability Adjusted Life Year (DALY)
The Disability Adjusted Life Year (DALY) is a composite measure of disease burden that expresses the total number of years of healthy life lost due to both premature mortality and disability. One DALY represents one year of healthy life lost.
Discount Rate
In health economic evaluations, the discount rate is the annual percentage rate at which future costs and health outcomes are reduced to their present value, reflecting the principle that people generally prefer benefits sooner rather than later and costs…
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Economic Evaluation
An economic evaluation is a systematic, comparative analysis of the costs and consequences of two or more alternative health interventions, programs, or policies.
Economic Model
An economic model in health care is a simplified mathematical representation of a complex disease process, treatment pathway, or health care system used to estimate the costs and health outcomes of alternative interventions over time.
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HEOR (Health Economics and Outcomes Research)
Health Economics and Outcomes Research (HEOR) is a multidisciplinary field that evaluates the clinical, economic, and humanistic outcomes of health care interventions to inform decision making about resource allocation, pricing, reimbursement, and health…
HTA (Health Technology Assessment)
Health technology assessment (HTA) is a multidisciplinary process that evaluates the medical, social, economic, and ethical implications of health technologies.
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Incremental Cost Effectiveness Ratio (ICER)
The incremental cost effectiveness ratio (ICER) is the ratio of the difference in costs to the difference in health outcomes between two interventions, typically expressed as the additional cost per quality adjusted life year (QALY) gained.
Intangible Costs
In health economics, intangible costs are the costs associated with pain, suffering, grief, loss of leisure, and diminished quality of life that are difficult to express in monetary terms.
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Markov Model
A Markov model is a mathematical framework used primarily in health economics and decision analysis to simulate transitions between a set of discrete health states over time.
Multi Criteria Decision Analysis (MCDA)
Multi criteria decision analysis (MCDA) is a structured, transparent approach to decision making that evaluates alternatives against multiple criteria simultaneously.