What is Economic Evaluation

Economic evaluation is an empirical method used to make well-informed

choices by cost-benefit analysis. The cost side comprises the overall expenses
incurred in setting up the project and implementing it. Additionally, there is a
phenomenon called residual cost, which is incurred as the cost of any extra
unit of production (Dukhanin et al., 2018). On the one side, the profit requires
the importance of clinical outcomes a patient may receive and their close
relatives.

Economic evaluation is essential to the achievement of Organization missions.

Its goals are:

 To prevent any losses in the competitiveness of services, provided in

compliance with applicable legislation and regulations.
 For this purpose, to provide the guidelines with a reasonable estimation of
impacts.

Economic analyses quantify costs and advantages in a standard format but

interpret such calculations in various ways. Differences among procedures are
crucial in deciding standards of performance. Economic evaluation is more
successful when it is followed by the three mentioned below.

 Effectiveness means that a clinical treatment will make a difference and

judge the product's acceptance and usability.
 Efficacy means to calculate the application's success and effectiveness, and
these protocols are accessible for those that are intended.
 Availability means the treatment is open to all who are expected.

Importance of Economic Evaluation in the health care sector

Economic evaluation plays a significant part in health care to offer a standard

of care to all. It provides evidence-based research, particularly on cost-
effectiveness, and aiding and enhancing decision making concerning accessible
health care services. This growth has been expressed in the literature snd
economic evolution helps determine the option of services to use and provide a
decent standard of healthcare in society to prepare one-year resources for a
single year for a particular economic year (Jommi, 2017). And with this, we can
help where healthcare loves and where healthcare is excellent; we will
determine where it is weak and where we need to pay attention to reduce the
death rate and morbidity rates.

Economic estimation is historically divided into cost-effectiveness analysis,

cost-utility analysis, and cost-benefit analysis. Developing Countries aim to
enhance health care by improving government-provided services or
procurement of services from suppliers through public and private

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collaborations. A complete economic assessment is necessary to have the best
health care available and allow for optimal economic gain.

Discuss in term of the cost that a hospital faces.

From the cost standpoint, hospitals ought to integrate cost-related ideas and
the financial elements.

Cost-benefit analysis
Cost-effectiveness analysis
Cost-utility analysis

1- Cost-benefit analysis
It measures the importance of expenses, rewards, and costs plus benefits.
Pertinent expense analysis. In healthcare assessment, cost-benefit analysis
(CBA) is a calculation of measures and their results. All expenses and resulting
gains (health effects and others) are represented in monetary terms. Cost-
benefit analysis compares multiple strategies and their impact in which all
costs and advantages are expressed in financial terms. This allows contrasts by
measuring the net monetary value of a procedure, which is the benefit of a
treatment measured by the treatment's expense. Economic valuations of
rewards are widely collected by a questionnaire telling respondents how much
they can spend (DCEs). While CBA may be more prevalent in other areas, it is
not widespread in health technology evaluation due to its difficulties
associating monetary values with health outcomes (Rognoni, Armeni,
Tarricone, and Donin, 2020). CBA is more widely used to calculate the success
of significant construction investments (new hospitals) or programs that
increase access to resources.

2- Cost-effectiveness analysis
Cost-effectiveness research explores how much money is expended to
accomplish a particular objective and how successful it is. It contrasts an
action to another intervention (or the status quo) by measuring the importance
of a unit of a health result, such as a life year obtained or a death avoided
(Klebanoff et al., 2017). Cost-effectiveness research helps recognize neglected
resources by highlighting comparatively affordable approaches but can
significantly reduce the disease burden. More than a million small children
have recently died from a shortage of clean water in the world. Oral rehydration
treatment may not diminish diarrhea but substantially decreases the incidence
and the related mortality risk.

3. Cost-utility analysis

Cost-utility analysis (CUA) is an economic analysis under which a service's

cumulative cost from a single point of view is contrasted to the incremental
health improvement reflected in terms of quality-adjusted life years (QALY). The
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cost-utility study often discusses healthcare expenses and their results;
however, the efficacy test aims to value the implications of the health outcomes
by applying weights to the outcomes. Utilities aim to estimate the morbidity
and mortality correlated with treatment and assess the utility of the treatment.
Specific interests and choices may be obtained by either the patient or the
public. Preferences may be elicited either by challenging respondents to
disclose their preferences by strategies such as the traditional gamble or
implicitly by letting respondents identify themselves using a health
classification scheme.

Utilities are utilized as a product of cost in terms of quantity and quality of life.
Cost-utility analysis is a different type of cost-benefit analysis used to evaluate
two different medication or treatment analyses. CUA incorporates the resources
gained from including X in the wellbeing result Y.

References

1- Dukhanin, V., Searle, A., Zwerling, A., Dowdy, D., Taylor, H., and Merritt,
M., 2018. Integrating social justice concerns into economic evaluation for
healthcare and public health: A systematic review. Social Science &
Medicine, [online] 198, pp.27-35. Available at:
https://www.sciencedirect.com/science/article/abs/pii/S02779536173074
26.
2- Jimmi, C., 2017. An Introduction to Economic Evaluation of Health Care
Programs. Economic Evaluation of Pharmacy Services, [online] pp.1-9.
Available at:
https://www.sciencedirect.com/science/article/pii/B97801280365940000
11.
3- Klebanoff, M., Corey, K., Chhatwal, J., Kaplan, L., Chung, R. and Hur, C.,
2017. Bariatric surgery for nonalcoholic steatohepatitis: A clinical and cost-
effectiveness analysis. Hepatology, [online] 65(4), pp.1156-1164. Available
at:
https://aasldpubs.onlinelibrary.wiley.com/doi/abs/10.1002/hep.28958.
4- Rognoni, C., Armeni, P., Tarricone, R., and Donin, G., 2020. Cost-benefit
Analysis in Health Care: The Case of Bariatric Surgery Compared With Diet.
Clinical Therapeutics, [online] 42(1), pp.60-75.e7. Available at:
https://www.sciencedirect.com/science/article/pii/S0149291819305843.

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