Health Economics Letter
The death of cost-minimization analysis?
Article first published online: 9 MAR 2001
Copyright © 2001 John Wiley & Sons, Ltd.
Volume 10, Issue 2, pages 179–184, March 2001
How to Cite
Briggs, A. H. and O'Brien, B. J. (2001), The death of cost-minimization analysis?. Health Econ., 10: 179–184. doi: 10.1002/hec.584
- Issue published online: 9 MAR 2001
- Article first published online: 9 MAR 2001
- Manuscript Accepted: 20 JUL 2000
- Manuscript Received: 3 MAY 2000
- Joint UK Medical Research Council/Southeast Region Training Fellowship and CEM
- Health Research Foundation of the Prescription Drug Manufacturers Association and the Medical Research Council of Canada. Grant Number: Career Award in Health Sciences
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.