- S R Finlayson: Department of Surgery, Massachusetts General Hospital, Boston 02114, USA.
BACKGROUND: With tighter constraints on health care spending, many recognize the need to identify and restrict clinical interventions that are not cost-effective. As a result, cost-effectiveness analysis is being used increasingly to assess the relative value of surgical interventions.
METHODS AND RESULTS: We first present the general concept of cost-effectiveness analysis and review a recent study of carotid endarterectomy to demonstrate the technique. We next consider the classic application of cost-effectiveness analysis to resource-allocation decisions and use the Oregon Medicaid experiment to illustrate some potential problems with this approach. We then present the current role of cost-effectiveness analysis: informing decisions about individual interventions that are new, controversial, or in direct competition with an accepted alternative treatment. Finally, we review several limitations of the methods used to measure costs and benefits and discuss problems with the interpretation of cost-effectiveness studies.
CONCLUSIONS: Cost-effectiveness analysis is a systematic approach to assessing the relative value of health care interventions. This technique is being used increasingly to frame clinical policy decisions in surgery. Because of this, surgeons need to understand cost-effectiveness analysis and be prepared to examine these studies critically.