converge · Decision Making · 480–1440 min · 1-5 people · low energy

Cost-Effectiveness Analysis

Cost-Effectiveness Analysis (CEA) compares the relative costs of achieving a specific outcome across two or more interventions. It helps identify the most efficient way to reach a desired goal.

When to use Cost-Effectiveness Analysis

Use when needing to compare different approaches to achieving the same objective, especially when monetary valuation of all benefits is difficult.

What it solves

Difficulty in choosing between multiple interventions with similar goals; needing a clear comparison of their efficiency.

How to run Cost-Effectiveness Analysis, step by step

  1. Define the objective and identify alternative interventions (120 min)
  2. Measure the costs and outcomes of each intervention (240 min)
  3. Calculate the cost-effectiveness ratio for each intervention (60 min)
  4. Compare the cost-effectiveness ratios and identify the most efficient option (30 min)
  5. Conduct sensitivity analysis to assess the impact of uncertainty (30 min)

Materials needed

  • Data on costs and outcomes
  • Spreadsheet software
  • Sensitivity analysis tools

Facilitator tips

  • Ensure the outcomes are measured consistently across interventions.
  • Use appropriate measures of effectiveness.
  • Conduct sensitivity analysis to assess the robustness of the results.

Common pitfalls

  • Difficulty in measuring outcomes; use appropriate measurement tools.
  • Bias in cost estimation; use independent data sources.

Variations

  • Cost-Utility Analysis (CUA)
  • Incremental Cost-Effectiveness Ratio (ICER)

Running it online or hybrid

Data collection and analysis can be done remotely, with findings presented and discussed via video conference.

What it produces

A report outlining the costs, outcomes, and cost-effectiveness ratios of the different interventions.

Origin

Adapted from BetterEvaluation — source

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