Cost-Benefit Analysis

Cost-benefit analysis is a form of economic evaluation that can be used to assess the value in terms of money of healthcare interventions. In contrast with cost-effectiveness analysis and cost-utility analysis, which were developed specifically for the healthcare field, cost-benefit analysis has a long history of use in economics and is particularly linked to the theory of welfare economics. Its link with economic theory has led to some favoring this form of evaluation as the “correct” approach to problems of resource allocation in health systems, although it is worthy of note that other commentators have argued that the cost-utility analysis embodies its own theoretical properties and have coined the term extrawelfarism to counter the suggestion that only cost-benefit analysis has a grounding in economic theory.

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