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Cost-Effectiveness Methodology in the Health Care


Cost-effectiveness analysis is applied in the healthcare system to determine the ways of redirecting the reserves in order to attain better results. This analysis shows the advantage of designating the resources from inefficient to efficient programs, and it also demonstrates the benefit of designating the resources from cheaper to more expensive programs. Redirecting the resources can lead to saving more lives, thus, the cost-effective analysis is crucial in the healthcare system (Health outcomes, 2014). However, the influence of the indirect expenditures varies depending on the intervention. Therefore, there exist opposite views on the capability of cost-effective methodology.

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Arguments supporting the cost-effectiveness analysis

The biggest advantage of cost-effectiveness methodology is that it allows to compare various programs concentrated on the same disease. Such comparison makes it possible to find the best solutions to the problem. For instance, the research by Li, Zhang, Barker, Chowdhury, and Zhang (2010) presents the results of cost-effectiveness analysis in preventing and controlling diabetes. The authors remark that applying this methodology allows to save a lot of expenditures. Their research results are presented applying two approaches: summing up the fundamental aspects and outcomes of each study and incorporating the cost-effectiveness of the interventions (Li et al. 2010). A comprehensive research covering various aspects of patients with diabetes was possible due to applying the cost-effectiveness methodology. The use of this methodology allowed the authors to draw conclusions regarding the main causes and ways of treatment of diabetes with the greatest effect. Thus, the cost-effectiveness analysis makes it possible to make prospects about the future efficient ways of treatment, allowing many people to relieve their suffering from a disease.

Another benefit of cost-effectiveness methodology is its capability to compare different interventions for a concrete demographic category. The research by Li et al. (2010) is dedicated to establishing the cost-effectiveness of a combined care intervention in comparison with usual care for older adults with depression and diabetes. The intervention proposed by the authors was presented by a “stepped collaborative care program” carried out by the depression care manager (Li et al., 2010, p. 266). Li et al. discovered that the collaborative care program allowed to substantially decrease the costs. The higher expenditure on mental health was compensated by lower expenditure on ambulatory treatment costs (Li et al., 2010, p. 268). Li et al. conclude that the intervention is a productive contribution for older adults suffering from diabetes. Cost-effective program is connected with clinical advantages which do not require higher costs

Arguments opposing the cost-effectiveness methodology

While many scholars consider cost-effectiveness methodology beneficial, others think that its ratios are excessive (Diamond & Kaul, 2009). They call it a “utilitarian moral calculus” which is only able to measure the worth of actions as a ratio of the detectable negative features (costs) to the detectable positive features (benefits) (Diamond & Kaul, 2009, p. 49). Diamond and Kaul argue that the cost-effectiveness analysis has many drawbacks diminishing its efficiency. They consider the lack of transportability of the cost-effective strategy as a major weakness. Under such circumstances, the policy which is supposed to be cost-effective all over the country has a disparate impact in various regions (Diamond & Kaul, 2009). The disadvantage of cost-effectiveness analysis is connected with diverse needs for groups and individuals. Thus, the researchers suggest that the conventional explanation of marginal profits and costs is the most reasonable approach to crucial resolutions in the society aspect. Only costs and benefits concerning the particular patients have pertinence to clinical resolutions concerning specific patients (Diamond & Kaul, 2009).

Another limitation of cost-effectiveness analysis is connected with the impossibility to conform to its rules at all times (Weintraub & Cohen, 2009). Weintraub and Cohen remark that as the cost-effectiveness is defined by the comparison of the added costs to a control group, the process of choosing a proper control group represents the first difficulty. Sometimes the suitable control is “placebo,” and sometimes it is “active therapy” based on the clinical question (Weintraub & Cohen, 2009, p. 55). Still, when cost-effectiveness analysis is performed via applying data from a clinical investigation, the choice of the control group will not be impacted by the analyst. Weintraub and Cohen emphasize that cost-effectiveness methodology involves a number of hypotheses in almost every case since it is unlikely to assess all the necessary features for an exhaustive analysis. Moreover, even in the case if calculations are available, they may illustrate the values suitable for the analysis in an unsatisfactory way. As a result, cost-effectiveness methodology usually involves a sensitivity study which identifies the “input variables” for evaluating both effectiveness and cost (Weintraub & Cohen, 2009, p. 55).


Despite having some disadvantages, the cost-effectiveness analysis is a powerful methodology on the way of improving the healthcare system and providing people with the best treatment facilities. The professionals should pay effort and make the methodology work at its highest capacity. This way, it will become entirely beneficial and will help thousands of people in their desire to receive the appropriate treatment access.


Diamond, G. A., & Kaul, S. (2009). Cost, effectiveness, and cost-effectiveness. Circulation: Cardiovascular Quality and Outcomes, 2(1), 49-54.

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Health outcomes and cost: a 166-country comparison (2014). Web.

Katon, W., Unützer, J., Fan, M., Williams, J., Schoenbaum, M., Lin, E., & Hunkeler, E. (2006). Cost-effectiveness and net benefit of enhanced treatment of depression for older adults with diabetes and depression. Diabetes Care, 29(2), 265-270.

Li, R., Zhang, P., Barker, L. E., Chowdhury, F. M., & Zhang, X. (2010). Cost-effectiveness of interventions to prevent and control diabetes mellitus: A systematic review. Diabetes Care, 33(8), 1872-1894.

Weintraub, W. S., & Cohen, D. J. (2009). The limits of cost-effectiveness analysis. Circulation: Cardiovascular Quality and Outcomes, 2(1), 55-58.

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"Cost-Effectiveness Methodology in the Health Care." StudyCorgi, 21 Feb. 2021,

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