Cost-minimization

Cost-minimization analysis (CMA) is a method that compares the costs of alternative strategies in health care. It is used when two or more interventions have already been proven to be clinically equivalent. The goal of CMA is to determine which strategy provides the same health outcome for the least cost.

Overview

Cost-minimization analysis is a type of economic evaluation comparing the costs of alternative ways of producing the same or similar outcomes. It is the simplest form of economic analysis. Cost-minimization analysis is used in cases where the two or more interventions have been shown to be clinically equivalent. In such cases, the only relevant factor to consider is the cost.

Methodology

The methodology of cost-minimization analysis involves several steps. First, the alternatives to be compared must be identified. These could be different drugs, different types of surgery, or different ways of organizing care. Next, the costs of each alternative must be calculated. This includes both the direct costs of providing the care (such as the cost of drugs or surgery) and the indirect costs (such as the cost of time off work for the patient). Finally, the costs are compared to determine which alternative is the least expensive.

Limitations

There are several limitations to cost-minimization analysis. One is that it assumes that the outcomes of the alternatives being compared are equivalent. This is rarely the case in health care, where small differences in effectiveness can have significant impacts on patient health. Another limitation is that it only considers costs, not benefits. This means that it may not always identify the most cost-effective option.

See also

• Cost-effectiveness analysis
• Cost-benefit analysis
• Cost-utility analysis

References

Cost-minimization Resources
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