, Volume 13, Issue 3, pp 277–288 | Cite as

The Role of Cost—Consequence Analysis in Healthcare Decision—Making

  • Josephine A. MauskopfEmail author
  • John E. Paul
  • David M. Grant
  • Andy Stergachis
Leading Article Cost-Consequence Analysis in Decision-Making


A greater understanding of value associated with new pharmaceutical products should lead to better decision—making. Most commonly cost—effectiveness ratios (CERs) are used to indicate value; however, researchers have recently shown that CER estimates are rarely used by decision—makers in making formulary decisions. In this article, a cost—consequence approach to estimating the value for money of a new treatment for a specific disease is described. Using a cost—consequence approach, the impact of the new treatment on lifetime resource use and costs (including specific healthcare service use and costs, and productivity losses) and health outcomes (including disease symptoms, life expectancy and quality of life) for an individual or group of individuals is estimated and presented in a tabular format. The cost—consequence format is more likely to be approachable, readily understandable and applied by healthcare decision—makers than a simple CER. The decision—maker may use selected items from the costconsequence analysis to compute composite measures of drug value, such as cost per life—year gained or cost per quality—adjusted life—year (QALY) gained. In general, the cost—consequence approach, by making the impact of the new treatment as comprehensive and transparent as possible, will enable decision—makers to select the components most relevant to their perspective and will also give them confidence that the data are credible to use as the basis for resource allocation decisions.


Adis International Limited Indirect Cost Herpes Zoster Herpes Zoster Infection Scarce Healthcare Resource 
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Copyright information

© Adis International Limited 1998

Authors and Affiliations

  • Josephine A. Mauskopf
    • 1
    • 5
    Email author
  • John E. Paul
    • 2
  • David M. Grant
    • 3
  • Andy Stergachis
    • 4
  1. 1.Research Triangle InstituteResearch Triangle ParkUSA
  2. 2.Glaxo Wellcome IncResearch Triangle ParkUSA
  3. 3.Glaxo Wellcome PLCEngland
  4. 4.Departments of Pharmacy and Epidemiology, School of Pharmacy and School of Public Health and Community MedicineUniversity of WashingtonSeattleUSA
  5. 5.Glaxo Wellcome IncResearch Triangle ParkUSA

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