What distinguishes a full from a partial economic evaluation?

A full evaluation compares two or more alternatives on both costs and consequences. A partial evaluation looks at only one of these, or at a single option, and so cannot answer whether one option offers better value than another.

Economic Evaluation Methods

Economic evaluation is the comparative analysis of alternative courses of action in terms of both their costs and their consequences. In health care it provides a structured family of methods — cost-minimisation, cost-effectiveness, cost-utility, and cost-benefit analysis — that differ chiefly in how they measure and value the health consequences of competing interventions, while sharing a common logic of relating what is gained to what is given up.

Definition

Economic evaluation is the comparative analysis of two or more alternatives in terms of both their costs (resources consumed) and their consequences (health and other outcomes), undertaken to inform decisions about the efficient use of scarce resources.

Scope

This topic surveys the main forms of full economic evaluation used in health care, the features that distinguish them, the perspective and time horizon that frame an analysis, and the reporting conventions that make results comparable. It is a methodological reference; it does not recommend any specific intervention or allocation.

Key concepts

Full versus partial economic evaluation
Cost-minimisation analysis
Cost-effectiveness analysis (natural-unit outcomes)
Cost-utility analysis (QALYs and other utility weights)
Cost-benefit analysis (monetised outcomes)
Incremental analysis and the comparator
Analytic perspective and time horizon
Discounting of future costs and effects
Sensitivity analysis and decision uncertainty

Mechanisms

A full economic evaluation compares at least two alternatives on both costs and consequences, in contrast to partial analyses that examine only one side. The forms differ in how consequences are valued: cost-minimisation assumes equivalent outcomes and compares costs only; cost-effectiveness analysis expresses outcomes in natural clinical units such as cases averted or life-years gained; cost-utility analysis weights life-years by health-related quality of life to yield quality-adjusted life-years; and cost-benefit analysis converts consequences into money so that benefits and costs share a common metric. Across all forms the analyst specifies a perspective (whose costs and benefits count), a time horizon, and a discount rate for valuing future events, and conducts incremental analysis against a defined comparator. Sensitivity analysis then probes how robust the conclusion is to uncertainty in the inputs. Reporting standards such as the CHEERS statement aim to make these choices transparent and the results reproducible.

Clinical relevance

Economic evaluations increasingly accompany clinical trials and guidelines and inform health-technology appraisal and coverage decisions. Familiarity with the methods helps readers judge whether a reported cost-effectiveness claim is well founded. The topic describes how such evidence is generated and appraised at the system level and is not a guide to managing any individual patient.

Evidence & guidelines

Methodological reference is provided by Drummond and colleagues' standard textbook; consensus methodological guidance includes the Second Panel on Cost-Effectiveness in Health and Medicine (Sanders and colleagues, 2016), and reporting is standardised by the Consolidated Health Economic Evaluation Reporting Standards (CHEERS) statement (Husereau and colleagues, 2013).

History

The methods grew out of welfare economics, operations research, and decision analysis adapted to medicine. Weinstein and Stason's 1977 paper helped establish cost-effectiveness analysis as a discipline, and Garber and Phelps later articulated its welfare-economic foundations. Successive expert panels and reporting standards, culminating in CHEERS and the Second Panel, progressively standardised how evaluations are designed, conducted, and reported.

Debates

Which analytic perspective should an evaluation take?: Evaluations may adopt a health-system, payer, or broader societal perspective, and the choice changes which costs and benefits are counted; the Second Panel recommended reporting from both a health-care-sector and a societal perspective to make the consequences of the choice visible.

Key figures

Michael Drummond
Milton Weinstein
Gillian Sanders
Don Husereau
Alan Garber

Seminal works

weinstein-stason-1977
drummond-2015
husereau-2013
sanders-2016

Frequently asked questions

What distinguishes a full from a partial economic evaluation?: A full evaluation compares two or more alternatives on both costs and consequences. A partial evaluation looks at only one of these, or at a single option, and so cannot answer whether one option offers better value than another.
How do cost-effectiveness, cost-utility, and cost-benefit analysis differ?: They differ in how they value consequences: cost-effectiveness uses natural clinical units, cost-utility uses quality-adjusted life-years, and cost-benefit converts outcomes into money. The choice depends on the question and on what comparisons the analysis must support.