Analyzing Uncertainty in Cost-effectiveness For Decision-making

Susan Griffin and Karl Claxton

in The Oxford Handbook of Health Economics

Published in print April 2011 | ISBN: 9780199238828
Published online September 2012 | | DOI:

Series: Oxford Handbooks in Economics

 Analyzing Uncertainty in Cost-effectiveness For Decision-making

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  • Economics
  • Health, Education, and Welfare
  • Microeconomics


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Cost-effectiveness analysis (CEA) is intended to help collective purchasers of health care to determine which interventions to prioritize, by ranking them according to the cost of each unit of “health benefit” they produce. The primary focus of this article is on the social decision-making approach where the decision-maker's objective is assumed to be the maximization of health gains subject to a given budget constraint. This article begins with the rationale for presenting a full characterization and analysis of uncertainty within any CEA. An overview of methods that can be used to conduct a CEA that accounts for uncertainty is provided, including the means to present and interpret the results. The benefits and limitations of the methods for analyzing uncertainty are considered in the context of providing information to decision-makers. The article concludes by discussing the additional questions that arise when the need for further research to support those decisions is considered.

Keywords: cost-effectiveness analysis; health benefit; decision-making; further research; uncertainty

Article.  11901 words. 

Subjects: Economics ; Health, Education, and Welfare ; Microeconomics

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