Cost-Minimization Analysis

Synonyms

Cost analysis; Cost identification; Cost-comparison analysis

Definition

This term refers to an economic evaluation tool. Cost-minimization analysis is mostly applied in the health sector and is a method used to measure and compare the costs of different medical interventions. The principal limitations of this cost evaluation method are that it can only be used to compare treatments that provide the same benefits or effectiveness (identical outcomes, e.g., therapeutic effects); moreover, costs need to be determined accurately. In this way, a decision maker can choose the treatment with the lowest total cost. The assessment of costs is performed by identifying the study’s perspective, all the resources used, and quantifying them into physical units. The most common perspectives are societal perspective (includes all costs incurred by health care services, social services, patients, and society in general) and third-party payer perspective (includes the costs incurred by an...