The term ‘cost-effectiveness analysis’ properly
refers to an evaluation where the outcomes
are one-dimensional. Cost-effectiveness
analysis is therefore used in health economics
to compare the financial costs of therapies
whose outcomes can be measured purely in
terms of health effect (for example, years of
life saved, ulcers healed). For instance, if we
wanted to compare the use of a proton pump
inhibitor to relieve severe reflux oesophagitis
with the use of H2 blockers to achieve the
same end, we could calculate the costs per
patient relieved of symptoms for each
therapy. Cost-effectiveness analysis is the
most commonly applied form of economic
analysis in the heath economics literature,
and is frequently used in drug therapy.
However, it does not allow comparisons to be
made between courses of action that have
completely different therapeutic outcomes
(see What is cost-effectiveness?1 for further
discussion).