Cost-benefit analysis in healthcare assesses the costs of medical treatment compared to the benefits to patients or society. It is used by healthcare providers, insurance companies, and hospitals to make policy decisions and determine whether a treatment should proceed. Patients may also use it to make treatment decisions.
A cost-benefit analysis in healthcare is an assessment of the costs associated with a particular medical treatment as opposed to the benefits to the patient or society at large. This is a component of health economics, the study of economic factors that may play a role in decisions about medical care by patients, physicians, insurance companies, and public health agencies. Subjecting medical decisions to this type of analysis makes some patients uncomfortable and can be balanced with evidence-based medicine and other measures to determine whether a treatment should proceed.
One use for a cost benefit analysis in healthcare is when limited resources are available and healthcare providers want to use them efficiently to provide the greatest benefit to the greatest number. This is especially evident in triage, where healthcare professionals must make quick decisions about who gets care and when. In the wake of a serious train crash, paramedics and other personnel may decide not to exert substantial energy and effort to rescue a person with severe and possibly fatal energies if it means depriving more people of care that could help them survive, for example. In this case, the cost could be counted in resources and lives, versus the marginal benefit of perhaps saving a life.
Insurance companies routinely use cost-benefit analyzes in healthcare to set policies and decide whether to approve claims. Many companies have general policies on general treatments, to approve or deny them. If the cost is unacceptably high and the benefit is marginal or low, the company may deny you treatment. In the event of an appeal, it can carry out a more rigorous analysis of the situation. For example, a cancer patient who will die might not receive approval for a drug that adds two weeks of life, on the grounds that the drug is expensive and the benefit is minimal.
Hospitals and clinics can also use health care cost-benefit analysis to make policy decisions. In many regions, there is a requirement to treat patients at serious risk of death, but hospitals can be selective about the type of treatments they provide and how much support they offer to patients who cannot afford treatment. While hospitals and clinics want to promote health, they don’t want to go bankrupt by expending resources, thus depriving the entire community of their services.
Individual patients may also use a cost-benefit analysis in health care and some may find it helpful in making treatment decisions. A doctor can present a series of treatment options and their costs, not only in terms of money but also in terms of side effects, potential complications and risks. The patient can consider the benefits, such as whether treatments will be curative, might prolong life, or offer a chance of survival pending better treatment. Patients may forego high-cost, low-benefit treatments if they feel the costs are simply not worth it to them.
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