Economic Evaluation of Public Health Preparedness and Response Efforts Composite page for printing

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Series Glossary
Analytic horizon
Time period during which costs and outcomes associated with the intervention accrue.

Annuitization
The allocation, on a constant annual basis, of the cost of a capital item over its lifetime.

Audience
Consumers or users of study results

Average cost
Total costs divided by the number of units of output, reported as the cost per unit of output.

Capital costs
Resources that have a useful life of 1 year or more, usually purchased only once or a few times during the lifespan of the intervention/program.

Constant dollars
Dollar amounts that have been adjusted for inflation, also called "real dollars."

Consumer Price Index (CPI)
The Consumer Price Index (CPI) is the ratio of the value of a basket of goods in the current year to the value of that same basket of goods in an earlier year. It measures the change over time in the average level of prices of the goods and services typically consumed by an urban American household.

Cost analysis
An economic evaluation technique that involves the systematic collection, categorization, and analysis of program costs.

Cost inventory
A comprehensive list of all the resources required to carry out a policy, program, or intervention.

Costs
Value of the resources (e.g., personnel, buildings, vehicles, equipment, and supplies) used to produce a good or service.
See What are Costs?Open this in a new window in the Cost analysis tutorial.

Cost-to-charge ratio
A method used to convert charges from patient bills to costs by applying the ratio of the organization's costs to its charges.

Decision sciences
Interdisciplinary approach to problem-solving and decisionmaking, using modeling techniques and analytic methods.

Direct costs
Medical and non-medical costs identified and estimated for the cost of an intervention.

Discount rate
The quantitative measure of time preference. Usually noted as r in formulae.

Discounting
A method for converting the value of future costs and benefits accrued due to an intervention to an equivalent value today (present value) to account for time preference (i.e., a dollar today is worth more than $1 a year from now).

Diseconomies of scale
An increase of average costs due to an increased output level.

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

Economics
Social science that describes and analyzes the production, distribution, and consumption of goods and services.

Economies of scale
A reduction of average costs due to an increased output level.

Epidemiology
Scientific discipline that deals with the prevalence, incidence, and control of a disease within a given population.

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

Financial cost
The monetary cost of a resource (i.e., its market price).

Fixed costs
Costs that do not vary in total as the volume of units of service changes.

Future value
The amount a present amount of money will grow to be worth at some point in the future.

Incidence
Number of new cases of a disease or health condition that develops within a specified population in a time period, usually 1 year.

Indirect costs
Productivity losses identified and estimated for the cost of patients' participation in an intervention.

Inflation
The increase in the general price level over time.

Intangible costs
Costs associated with emotional anxiety and fear and with physical pain and suffering.

Intermediate outcome
The near-term effects of a policy, program, or intervention, such as persons screened or cases prevented.

Key variables
Things that can change and have a significant impact on the results of the program/intervention/analysis.

Line item
Any resource that is listed as a separate line on a budget.

Long term
The period of time when fixed costs become variable and can be adjusted for any given output level.

Marginal cost
The change in cost related to a change in activity; the cost of producing one additional unit of output. Includes variable costs and any additional fixed costs incurred because the volume change exceeds existing capacity.

Market price
The price at which a resource is traded on the market.

Market resource
A resource traded on the market.

Micro-costing
The process of closely examining the actual resources used by a particular patient or activity.

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

Multi-way sensitivity analysis
A sensitivity analysis in which more than one variable differs from the base-case scenario.

One-way sensitivity analysis
A sensitivity analysis in which one variable differs from the base-case scenario.

Opportunity cost
A measure of cost based on the value of the alternatives given up in order to use the resource as the program so chooses.

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

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

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).

Present value
The value of costs and benefits to occur in the future, discounted to the present.

Prevalence
Number of existing cases of a disease or health condition in a given population.

Productivity loss
Costs associated with the decrease in production and income attributable to a disease or disability.

Prospective study
Study in which the events of interest (costs and outcomes) take place during the course of the study.

Provider
Person or institution that provides a health-related service.

Randomized clinical trial (RCT)
Type of research design used for comparing treatments, in which patients are assigned to a treatment group or control group by a random mechanism.

Recurrent costs
Resources purchased regularly, at least once per year (e.g., personnel, supplies, vehicle insurance, and gasoline).

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

Scrap value
The resale value of a capital item at the end of its useful life.

Seasonality
A predictable pattern of monthly, quarterly, or other periodic variation in historical data within each year.

Sensitivity analysis
The process of changing the values of some parameters, variables, or model structure in a meaningful way to examine the robustness of the results.

Shadow price
An estimate of the opportunity cost of a resource.

Social discount rate
The rate at which society as a whole is willing to exchange present costs for future benefits.

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

Target population
The population(s) for whom the policy, program, or intervention is intended.

Threshold analysis
A kind of sensitivity analysis that calculates the critical value(s) beyond which conclusions change.

Time frame
The period of time over which the costs of a policy, program, or intervention are tracked.

Time preference
The fact that society and individuals place a premium or preference on benefits received today versus benefits received in the future.

Total costs
A measure of all the costs entailed in producing a given level of output, derived by summing all of the costs of the component activities.

Useful life
The total number of years a capital asset is likely to last from when it is purchased.

Utility
A quantitative measure of the strength of a preferred health outcome in terms of personal preference.

Variable costs
Costs that vary in direct proportion to the level of activity.

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