Social science & medicine
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Social science & medicine · Aug 1995
The relationship between cost-effectiveness analysis and cost-benefit analysis.
This paper examines the relationship between cost-effectiveness analysis and cost-benefit analysis. Provided that a cost-effectiveness analysis includes all the relevant societal costs, it is shown that a cost-effectiveness analysis can be interpreted as a cost-benefit analysis where the willingness to pay per effectiveness unit is assumed to be constant and the same for everyone. ⋯ It is argued that cost-effectiveness analysis is best viewed as a subset of cost-benefit analysis, where the aim of the analysis is to estimate the cost function of producing health effects. It is also concluded that to interpret and use cost-effectiveness analysis as a tool to maximize the health effects for one specified real-world budget, will be inconsistent with a societal perspective and is likely to lead to major problems of suboptimization.
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This paper examines the equity characteristics of health care financing and delivery in Australia and compares its performance with recent findings on systems in Europe and the United States. Vertical equity of finance is evaluated with income and payment concentration indices derived from published survey data on taxes and expenditure by income decile. Horizontal equity of health care delivery is assessed with standardized expenditure concentration coefficients for three measures of health status and four types of health services, derived from household survey data on health care utilization, health status, income and demographics. ⋯ This analysis provides a benchmark for monitoring the equity of the Australian system and provides information on the equity of a mixed private and public financing system that covers the entire population. This is relevant to the U. S. which is moving in this direction by extending private cover to the uninsured and to European countries that are increasing private sector involvement in health care financing.