Chapter Eight. Cost Effectiveness and Payment Policy

Cost-effectiveness analysis is versatile and used widely to assist in health care decision making. This chapter discusses how cost-effectiveness analysis is used at the system or national level, particularly in the domain of coverage and payment policy. We describe its relationship to other techniques, such as cost/benefit analysis, and the theoretical and practical aspects of applying the analytic technique in a decision framework. We then discuss the diverse ways that it is now used in various settings around the world, and the ways that it might be used in the future.