This chapter is devoted to cost-effectiveness analysis. In a cost-effectiveness analysis the costs are measured in monetary terms and the health effects are measured in non-monetary terms, e.g. the number of life years gained. The ratio between costs and health effects is then estimated as e.g. the cost per gained life year. Cost-effectiveness analysis of health care programmes was developed in the medical field, as a response to the criticism about the use of the human-capital approach for valuing health changes in monetary terms, and the first study in the health care field by Klarman et al appeared in 1968.
KeywordsDecision Rule Constant Return Health Care Programme Fixed Budget Effectiveness Unit
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