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The death of cost‐minimization analysis?

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

Abstract

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.

Suggested Citation

  • 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

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    1. 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.
    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.
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    Cited by:

    1. Lairson, David R. & Chan, Wen & Chang, Yu-Chia & del Junco, Deborah J. & Vernon, Sally W., 2011. "Cost-effectiveness of targeted versus tailored interventions to promote mammography screening among women military veterans in the United States," Evaluation and Program Planning, Elsevier, vol. 34(2), pages 97-104, May.
    2. Nikki McCaffrey & Meera Agar & Janeane Harlum & Jonathon Karnon & David Currow & Simon Eckermann, 2015. "Better Informing Decision Making with Multiple Outcomes Cost-Effectiveness Analysis under Uncertainty in Cost-Disutility Space," PLOS ONE, Public Library of Science, vol. 10(3), pages 1-19, March.
    3. Anthony Scott & Michela Tinelli & Christine Bond, 2007. "Costs of a Community Pharmacist-Led Medicines Management Service for Patients with Coronary Heart Disease in England," PharmacoEconomics, Springer, vol. 25(5), pages 397-411, May.
    4. Erin M Graybill & Peter McMeekin & John Wildman, 2014. "Can Aging in Place Be Cost Effective? A Systematic Review," PLOS ONE, Public Library of Science, vol. 9(7), pages 1-6, July.
    5. Nicholas Graves & Mary Courtney & Helen Edwards & Anne Chang & Anthony Parker & Kathleen Finlayson, 2009. "Cost-Effectiveness of an Intervention to Reduce Emergency Re-Admissions to Hospital among Older Patients," PLOS ONE, Public Library of Science, vol. 4(10), pages 1-9, October.
    6. 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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