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The death of cost‐minimization analysis?


  • Andrew H. Briggs
  • Bernie J. O'Brien


Four different types of evaluation methods, cost‐benefit analysis (CBA), cost‐utility analysis (CUA), cost‐effectiveness analysis (CEA) and cost‐minimization analysis (CMA), are usually distinguished. In this note, we pronounce the (near) death of CMA by showing the rare circumstances under which CMA is an appropriate method of analysis. We argue that it is inappropriate for separate and sequential hypothesis tests on differences in effects and costs to determine whether incremental cost‐effectiveness (or cost‐utility) should be estimated. We further argue that the analytic focus should be on the estimation of the joint density of cost and effect differences, the quantification of uncertainty surrounding the incremental cost‐effectiveness ratio and the presentation of such data as cost‐effectiveness acceptability curves. Two examples from recently published CEA are employed to illustrate the issues. The first shows a situation where analysts might be tempted (inappropriately) to employ CMA rather than CEA. The second illustrates one of the rare circumstances in which CMA may be justified as a legitimate form of analysis. Copyright © 2001 John Wiley & Sons, Ltd.

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  • Andrew H. Briggs & Bernie J. O'Brien, 2001. "The death of cost‐minimization analysis?," Health Economics, John Wiley & Sons, Ltd., vol. 10(2), pages 179-184, March.
  • Handle: RePEc:wly:hlthec:v:10:y:2001:i:2:p:179-184
    DOI: 10.1002/hec.584

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    References listed on IDEAS

    1. Aaron A. Stinnett & John Mullahy, 1998. "Net Health Benefits," Medical Decision Making, , vol. 18(2_suppl), pages 68-80, April.
    2. Eugene M. Laska & Morris Meisner & Carole Siegel, 1997. "Statistical Inference for Cost–Effectiveness Ratios," Health Economics, John Wiley & Sons, Ltd., vol. 6(3), pages 229-242, May.
    3. Magnus Tambour, 1997. "The Impact of Health Care Policy Initiatives on Productivity," Health Economics, John Wiley & Sons, Ltd., vol. 6(1), pages 57-70, January.
    4. Aaron A. Stinnett & John Mullahy, 1998. "Net Health Benefits: A New Framework for the Analysis of Uncertainty in Cost-Effectiveness Analysis," NBER Technical Working Papers 0227, National Bureau of Economic Research, Inc.
    5. Cam Donaldson & Vanora Hundley & Emma McIntosh, 1996. "Using economics alongside clinical trials: Why we cannot choose the evaluation technique in advance," Health Economics, John Wiley & Sons, Ltd., vol. 5(3), pages 267-269, May.
    6. Andrew Briggs & Paul Fenn, 1998. "Confidence intervals or surfaces? Uncertainty on the cost‐effectiveness plane," Health Economics, John Wiley & Sons, Ltd., vol. 7(8), pages 723-740, December.
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    5. Andrew R. Willan & Eleanor M. Pinto & Bernie J. O'Brien & Padma Kaul & Ron Goeree & Larry Lynd & Paul W. Armstrong, 2005. "Country specific cost comparisons from multinational clinical trials using empirical Bayesian shrinkage estimation: the Canadian ASSENT‐3 economic analysis," Health Economics, John Wiley & Sons, Ltd., vol. 14(4), pages 327-338, April.
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