Cost-effectiveness analysis for decision making in health care-concept, relevance and methodological challenges

With continuous rise in health spending among countries, the need to make use of limited resources in health systems has become crucial. Health policy makers in countries strive to identify the interventions which can contribute to improving health outcomes. Techniques of economic evaluation, especially cost effectiveness analysis (CEA) have been widely applied in health sector to identify interventions that are more effective in terms of resources utilization. An understanding of CEA will not only help policy makers to take appropriate decisions in health sector but also in judicious spending of scarce resources. However, CEA studies have been flaunted with series of methodological challenges and practicability issues. This paper provides an introduction to CEA as one of the techniques of economic evaluation of health interventions and its relevance in making decisions in health sector. The paper also discusses some of the practical issues that arise while doing a CEA study in the health sector.