Cost-Effectiveness Analysis

Before I get on a plane for Seattle this morning, I wanted to talk briefly about cost-effectiveness analysis (CEA). It's the technique of selecting among competing wants when resources are limited, a position most SANE programs know well. Do we get a shiny new piece of equipment or do we send 5 nurses to SANE training? Do we add 8 more hours a week to our coordinator position or do we start paying call time? We have a lot of competing wants in our world, and often a paucity of resources. Not surprisingly, if you've heard me speak, I often talk about the need to make the tough choices, to prioiritize based on what will ultimately benefit patient care.

One of the ways you can examine how to use your precious resources is through cost-effectiveness analysis. Healthcare often turns to this technique, so it's no surprise that the healthcare literature is where you'll find a lot of helpful guidance on the topic. Of the articles I read on CEA, I found this piece, published in 2000, to be pretty accessible and concise. A Primer on Cost-Effectiveness Analysis was published in Effective Clinical Practice, and it's exactly the kind of introduction I was looking for. It's a fairly bare-bones examination of CEA, great for those of you not overly interested in reading more extensive pieces on the topic.

However, if you are one of those people wonky about business (like me), the National Business Group on Health published a more in-depth look at CEA in 2004: Cost-Effectiveness Analysis: An Employer Decision Support Tool (PDF). This guide provides multiple case studies, abstracts and other resources for implementing CEA.

If you're in a position where you're being asked to make budget decisions or are trying to choose where to focus grant writing or fundraising efforts, CEA could be a very useful tool. Not only does it help you prioritize your expenditures; it can also help you justify them, as well.