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I would like to compare the results of several diagnostic modalities on a population to identify a disease. More specifically I would like to compare the sensitivity of the modalities (all have 100% specificity) and would like to include cost considerations.

Could some one point to me information sources on the proper way to analyze and report cost-benefit or cost effectiveness?

Thank you very much

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  • $\begingroup$ Cost benefit analysis is not a trivial exercise, normally valuing the costs is not that easy, and the valuing of the benefits is extremely hard. Also, a discount rate is used for out-year costs and benefits, although costs tend to be front-loaded. Do you have any economists you can talk to? $\endgroup$ – Michelle Mar 7 '12 at 17:04
  • $\begingroup$ I dont think my problem is that difficult or complex. My cost and benefits are one-time and instant and both are easy to numerically evaluate. My questions deals with the appropriate way to compare and report this issues. $\endgroup$ – nostock Mar 7 '12 at 18:36
  • $\begingroup$ In that case, why not just use a net present value, see en.wikipedia.org/wiki/Net_present_value $\endgroup$ – Michelle Mar 7 '12 at 18:51
  • $\begingroup$ There is no time issue in my problem. Costs and Benefits are instant. $\endgroup$ – nostock Mar 7 '12 at 20:27
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Based on the comments, you have a simple cost benefit analysis to perform, and you can do this in something like Excel: do line items for costs in one section, line items for the benefit values in a second section, and simply difference the two.

For cost effectiveness, that is normally assessed by comparing outcomes to the cost-benefit analysis result. To do this, you need different ways of achieving the same outcome(s) as cost effectiveness is comparative. It's a matter of comparing the cost (or benefit) per unit outcome, and picking the method that gives you the lowest cost or greatest benefit. If you have only one method, you can look at cost effectiveness if you have some sort of agreed baseline that you can compare against.

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Cost-benefit analysis (CBA) is by no means the right tool to apply to your problem, since in CBA both cost and results (and this latter point is very tricky to perform) are expressed in montery terms. Usually, benefits are expressed in mometary terms via the Willingness-To-Pay approach.

Cost-effectivenes analysis (CEA) might be the right choice, provided that: -you consider an outcome that is common to all the alternatives under investigation (e.g., number of cases of a given disease that are correctly diagnosed); -you perform an incremental analysis of cost and effectiveness; - costs and outcomes (if any) that occur in the future are properly discounted (as Michelle advised you to); - you check the robustness of your base case findings via a comprehensive set of sensitivity analyses (deterministic; probabilistic; scenario); - you provide the readers wit soem guidance about the affordability of the incremental cost-effectiveness ratio (ICER) obtained in your CEA. With diagnostic tests this step is usually tricky (what is the amount of money decision-makers are willing to pay for identifying a case of a given disease?), unless your results contribute to populate a wider model that links your CEA results to (say) years of live saved or quality-adjusted life years (for which threshold values for ICER are indeed available.

An authoritative source for these (and many other) topics concerning the economic evaluation of health care programmes is: Drummond, M.F.; Sculpher, M.J.; Torrance, G.W.; O'Brien, B.J.; Stoddart, G.L. Methods for the economic evaluation of health care programme. Third edition. Oxford: Oxford University Press, 2005.

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