Cost Effectiveness Analysis Glossary    HHS    CDC

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 IntroductionJump to page 1.
 Framing CEAJump to page 2.
 Which Outcomes are Relevant in CEA?Jump to page 3.
 Interpreting CEA ResultsJump to page 4.
Glossary — CEA
Analytic horizon
Audience
Average cost-effectiveness ratio (ACER)
Cost effectiveness analysis (CEA)
Cost of illness (COI)
Cost-effectiveness ratio (CER)
Decision analysis
Disease costs averted
Economic burden
Economic evaluation
Effective
Efficacious
Final outcome
Human capital approach
Incremental cost-effectiveness ratio (ICER)
Intermediate outcome
Marginal cost-effectiveness ratio (MCER)
Model
Outcome measure
Output
Payer
Perspective
Productivity losses
Program costs
Prospective study
Retrospective study
Sensitivity analysis
Societal perspective
Target population
Time frame

Analytic horizon
The period over which costs and outcomes associated with the intervention accrue. Costs and outcomes are measured during the intervention and after it ends.

Audience
The consumers or users of the results of a cost effectiveness analysis.

Average cost-effectiveness ratio (ACER)
Ratio that deals with a single intervention and evaluates that intervention against its baseline option (e.g., no program or current practice).
The ACER is calculated by dividing the net cost of the intervention by the total number of health outcomes prevented by the intervention.

Cost effectiveness analysis (CEA)
An economic evaluation method in which all costs are related to a single common outcome or natural unit (e.g., life years saved).

Cost of illness (COI)
A method generally used to determine the economic burden of a disease by assessing the direct medical and nonmedical costs of disease averted as well as productivity losses averted.

Cost-effectiveness ratio (CER)
An end result that summarizes the intervention's net cost and effectiveness. The three types of CERs are:
  • Average cost-effectiveness ratio (ACER),
  • Marginal cost-effectiveness ratio (MCER), and
  • Incremental cost-effectiveness ratio (ICER).

Decision analysis
A modeling technique that systematically aids in decision making by considering the uncertainty associated with alternative solutions to a particular problem

Disease costs averted
All expected costs that are related to a disease or condition and that are not incurred by society (or some other entity) as a result of implementing a program or intervention.

Economic burden
The total cost incurred by society for a particular disease or condition.

Economic evaluation
The use of applied analytic techniques to identify, measure, value, and compare the net costs and outcomes of alternative interventions.

Effective
The improved health outcome that a prevention strategy can achieve under typical community-based settings.

Efficacious
The improved health outcome that a prevention strategy can achieve under ideal settings.

Final outcome
The ultimate outcome of interest, such as years of life gained or deaths prevented.

Human capital approach
As a method of COI, the human capital approach assesses productivity losses by using forgone income attributable to morbidity and premature mortality of a disease or condition.

Incremental cost-effectiveness ratio (ICER)
The additional cost of one unit of outcome when we change to a more effective, mutually exclusive intervention.

Intermediate outcome
Near-term effects of an intervention, such as persons screened, rate of condom use, or number of vaccine doses administered.

Marginal cost-effectiveness ratio (MCER)
The additional cost of one unit expansion of a single intervention.

Model
A simplified yet accurate representation of a program or intervention based on a set of assumptions.

Outcome measure
A measurement unit used to assess the effectiveness of a program or intervention.

Output
The product or service produced (e.g., patients seen, patient days).

Payer
An individual or organization that provides money to pay for health-care services.

Perspective
The viewpoint of the bearers of the costs and benefits of an intervention (e.g., society, government, health-care providers, businesses, or patients).

Productivity losses
Refer to the value of time (usually in terms of wages) that is forgone as a result of the morbidity or premature mortality associated with a disease or condition.

Program costs
Include all fixed and variable costs that are incurred as a result of program implementation and maintenance.

Prospective study
A study in which the events of interest (costs and outcomes) have not yet taken place when the study begins.

Retrospective study
A study in which the events of interest (costs and outcomes) have already occurred when the study begins.

Sensitivity analysis
Method for testing the validity of decision analysis findings by providing a range for all probabilities and outcome values included in the decision model that are particularly important to the results.

Societal perspective
The broadest possible perspective for an economic evaluation. It includes all program costs, no matter who incurs them, and all program consequences, no matter who experiences them.

Target population
The population(s) for whom the program is intended.

Time frame
The period over which program or intervention costs are tracked.

See the previous page in the tutorialPrev   NextNo next page ContentsOpen this tutorial's Contents page in a new window   GlossaryShowing the Glossary page   PrefaceOpen the Series Preface page in a new window   Print AllIn a new window, see a composite of all the pages in this tutorial. It will have all sections expanded - ready to print.   HelpOpen the Help page in a new window. 
Find out how to run the tutorial
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Centers for Disease Control and Prevention
U.S. Department of Health & Human Services
Hosted by
Office of Workforce and Career Development
Acknowledgements
Produced by
Prevention Effectiveness Branch
Division of Prevention Research and Analytic Methods
Epidemiology Program Office
Funded by
Office of Terrorism Preparedness and Emergency Response
Developed by
Norbert Denil, OWCD (Webmaster)
Kwame Owusu-Edusei, NIOSH (Content)
Kakoli Roy, OWCD (Project Supervision)
Amanda Schofield (Content)
Ara Zohrabian, OWCD (Content)
Based on earlier, paper-based Framing &
Cost Analysis self-study guides by
Phaedra Corso, NCIPC
Odile Ferroussier, NCHSTP
Amanda Schofield
Additional acknowledgements
Vilma Carande-Kulis, OCSO
Sajal Chattopadhyay, OSI
Martin Meltzer, NCID
Contacts
Norbert Denil (Site design and production) 321-633-6150 ngd1@cdc.gov
Ara Zohrabyan (Technical content) 404-498-6322 aqz0@cdc.gov

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