Introduction to Economic Evaluation Page 1   

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What Is an Economic Evaluation?
In the United States, the public health infrastructure is a network of local, state, and federal agencies entrusted with the task of implementing curative and preventive health programs and interventions, including emergency and response strategies, to improve and secure population health.
Therefore a certain amount of resources (e.g., financial) are allocated to local, state, and federal agencies.
Public health programs and interventions can be thought of as a production process that transforms inputs (resources) into outputs (changes in health outcomes), as illustrated in this diagram:
Public health programs transform resources into changes in health outcomes.
Decisionmakers responsible for allocating resources and implementing public health programs and interventions need to understand the relationship between resources used and health outcomes achieved by the program or intervention. One analytical tool available to decisionmakers is economic evaluation.
In an economic evaluation, analytic techniques are applied to identify, measure, value, and compare the costs and consequences of two or more alternative programs or interventions.
In the health field, economic evaluations are used to analyze how efficiently resources have been allocated and how resources should be allocated to ultimately maximize welfare.
When applied to public health programs, economic evaluation is concerned with the
  • amount of resources used by a program or intervention, and
  • corresponding level of health-related outcomes.
Economic evaluation is therefore an effort to
  • analyze inputs (resources) and outputs (changes in health outcomes) simultaneously, and
  • help decisionmakers assess whether a certain level of output is worth the amount of resources expended to produce it (given that resources are scarce and can be used for alternative purposes).
Why Should Economic Evaluations Be Conducted?
What Forms of Economic Evaluation Can We Use?
How Do We Determine Which Form of Evaluation To Use?
What Next?
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