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Health Economics and Modeling Unit (HEMU)

About HEMU

The Health Economics and Modeling Unit (HEMU) was established in 2011 as a means to address the health economics and modeling needs of the National Center for Emerging and Zoonotic Infectious Diseases (NCEZID), along with other CDC centers and offices.

Health Economics

Health economics is the evaluation of efficiency, effectiveness, value, and impact of health related services. HEMU strives to evaluate the total health impact of disease programs and illnesses through the use of comprehensive evaluations and modeling.

The three main methods used to assess the economics of an intervention designed to control and prevent a disease are: cost-benefit analysis (CBA), cost- effectiveness analysis (CEA), and cost-utility analysis (CUA) (Adapted from Meltzer Lancet 2001; 358: 993–98)

Cost-benefit analysis

In its simplest form, a CBA lists all the costs and benefits that might arise as a result of an intervention up to a pre-specified time. It requires, however, that all costs and all benefits (including, for example, the value of life) be placed in a common value, such as dollar value.

Cost-effectiveness analysis

A CEA expresses the net direct and indirect costs and cost savings in terms of a predefined unit of health outcome (e.g., lives saved or cases of illness avoided). CEA is best used when comparing two or more strategies or interventions that have the same health outcome in the same population—e.g., is vaccination more cost-effective than chemoprophylaxis in prevention of a case of influenza in people aged 65 or older?

Cost-utility analysis

CUA is a special form of CEA, in which the health outcomes in the denominator are valued in terms of utility or quality. A CUA, for example, might attempt to differentiate between the quality associated with an averted case of poliomyelitis and one of influenza. These non-monetary units of valuation include the quality-adjusted life year (QALY) and the disability-adjusted life year (DALY).

Modeling and Economic Analyses

Many economic analyses of health interventions use a particular type of mathematical model to simulate the conditions under which an intervention might be used. “Decision tree”, “Markov model”, and “Monte Carlo model” are examples of the tools that can be used in any of the three types of economic analysis. There is no definitive method to pick the “best” model to be used for the analysis of any given problem.

Sensitivity Analyses

Since one of the main reasons that mathematical models are used is because the researchers are trying to bridge gaps in data, it is always appropriate to ask—What if some of the assumptions used in the model were changed? That is, how sensitive are the results to changes in the underlying assumptions? One aim of sensitivity analysis is to find out which variables in the model “drive” the results.

An Innovative and Practical Approach to Modeling

HEMU’s approach to modeling is innovative and practical, as demonstrated by its use of simple spreadsheet-based models. These models are straight forward and relatively easy to understand, and therefore can be shared persons, who may not be not modeling experts, such as administrators and other decision makers. For example, decision-makers can open the spreadsheet, enter different variables, run the model, and then see how the output changes. HEMU encourages the active participation of other modelers on a wide range of topics to ensure meaningful representation of interests, while securing a mutually beneficial presence across the CDC and other agencies of the Department of Health and Human Services (HHS) and U.S. Government.