Cost-Utility
Analysis
What is it?
Cost-Utility Analysis (CUA) is an economic evaluation is used to identify cost of utilities in terms of quantity and quality of life. It's one of the more controversial evaluations in healthcare since it seeks to put a dollar tag on health status or improvement of health. Essentially, the cost-utility analysis compares the cost of a program to health improvement as a unit of quality-adjusted life years (QALY) or disability adjusted life years (DALY). The value for money is a health outcome and includes survival time and change of life quality (incremental cost-effectiveness ration or ICER).
How to Calculate CEA
1. Determination of Costs
2.Determination of Outcomes in Utility
Measured in QALY and DALY
YLL= # deaths x life expectancy at age of death
YLD= #cases x avg duration of disease x disability weight (1 for death, 0 for healthy)
DALY= YLL + YLD
3. Calculate Cost-Utility Ratio
ICUR= change in Cost(s)
change in Utility
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Terms to Know
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QALY- Quality Adjusted Life Years: number of years lived in perfect health adjusted based on utility
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DALY- Disability Adjusted Life Years: tool for measuring burden of disease or injury
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YLL- Years of life lost to premature death
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YLD- Healthy years lost to morbidity or disability
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ICUR- Incremental Cost-Utility Ratio
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Change in Cost(s)- Cost of program 1 - cost of program 2
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Change in Utility- QALY of program 1 - QALY of program 2