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October 9, 1996

The Role of Cost-effectiveness Analysis in Health and Medicine

Author Affiliations

for the Panel on Cost-Effectiveness in Health and Medicine
From the Institute for Health, Health Care Policy, and Aging Research, Rutgers University, New Brunswick, NJ (Dr Russell); Office of Disease Prevention and Health Promotion, US Public Health Service, Washington, DC (Dr Gold); School of Public Health, Harvard University, Cambridge, Mass (Drs Siegel and Weinstein); and the Department of Philosophy, Tufts University, Medford, Mass (Dr Daniels).

JAMA. 1996;276(14):1172-1177. doi:10.1001/jama.1996.03540140060028

Objective.  —To develop consensus-based recommendations guiding the conduct of cost-effectiveness analysis (CEA) to improve the comparability and quality of studies. The recommendations apply to analyses intended to inform the allocation of health care resources across a broad range of conditions and interventions. This article, first in a 3-part series, discusses how this goal affects the conduct and use of analyses. The remaining articles will outline methodological and reporting recommendations, respectively.

Participants.  —The Panel on Cost-Effectiveness in Health and Medicine, a nonfederal panel with expertise in CEA, clinical medicine, ethics, and health outcomes measurement, was convened by the US Public Health Service (PHS).

Evidence.  —The panel reviewed the theoretical foundations of CEA, current practices, and alternative procedures for measuring and assigning values to resource use and health outcomes.

Consensus Process.  —The panel met 11 times during 21/2 years with PHS staff and methodologists from federal agencies. Working groups brought issues and preliminary recommendations to the full panel for discussion. Draft recommendations were circulated to outside experts and the federal agencies prior to finalization.

Conclusions.  —The panel's recommendations define a "reference case" costeffectiveness analysis, a standard set of methods to serve as a point of comparison across studies. The reference case analysis is conducted from the societal perspective and accounts for benefits, harms, and costs to all parties. Although CEA does not reflect every element of importance in health care decisions, the information it provides is critical to informing decisions about the allocation of health care resources.

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