Two key features of cost-effectiveness analysis are the measurement of effectiveness and the measurement of costs. Cost-effectiveness analysis commonly uses the Quality-Adjusted Life Year (QALY) to measure effectiveness. The (QALY) is one of the routinely used to measure health outcomes in for economic evaluation, which incorporates the impact on both the quantity and quality of life. There is a summary description of QALY and its calculation in Chapter 9. 

A number factors are taken into consideration in measuring costs including types of costs (i.e., initial costs, induced costs, etc.), the perspective from which costs are derived, and the manner in which costs are discounted.

There is great controversy about how effectiveness and costs are measured in cost-effectiveness analysis. The chapter alludes allude to some of the major debates, and the literature is filled with arguments about these issues. The debates have become increasingly heated given that resources allocation decisions are often made on the basis of cost-effectiveness analysis.

Select one aspect of measuring effectiveness or measuring costs and discuss an area of controversy. For example, in the discussion of QALYs, there is discussion about who should be involved in determining the weights associated with disease and disability. After identifying an area of controversy, describe why this is problematic as well as your thoughts about resolving the controversy.

In sum, as we move forward with evidence-based medicine and comparative effectiveness research, the issue of cost will continue to emerge. If decisions are to be at least partially on the basis of effectiveness and costs, we should be aware of the assumptions we are making.


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