Purpose: This review will describe the basic concepts of economic evaluation, using examples from the ophthalmic literature. The aim is to provide readers with knowledge about the fundamentals of economic evaluation to enable them to read papers critically, make healthcare funding and planning decisions, and understand the economic evaluation of interventions.
Review: Ophthalmic services are often constrained by a lack of funding, and this is true in both high- and low-income countries. Ophthalmology also competes with other healthcare specialities for funding. Economic evaluation is used to identify the most efficient way of allocating and planning the use of these scarce resources among alternative activities. An economic evaluation is typically conducted by comparing two or more interventions in terms of their effectiveness and their cost. Cost is the value of all resources used in the intervention. Effects, or consequences of the intervention, can be measured in monetary terms, through disease-specific outcomes or using health-related quality of life measures. The four most commonly used types of economic evaluations are cost-minimization analysis, cost-benefit analysis, cost-effectiveness analysis and cost-utility analysis. There are a variety of intended and unintended consequences of a health intervention, and so the consequences of the intervention may be positive or negative. Economic models, such as decision trees and Markov models, calculate effectiveness and costs, taking into account all the consequences of the intervention, including complications. Uncertainties in the parameters of the models can be expressed through sensitivity analyses and confidence intervals.
Conclusions: Economic evaluation may be used to identify the most efficient way of allocating scarce resources among alternative activities. Its use, if standardized in all areas, can improve the quality of care while enhancing efficiency and thereby enabling more programs to be funded.