Economic Evaluation Essay

771 Words2 Pages

Economics
1. Explain why is it important to take a societal view when conducting an economic evaluation?
It is important to consider a broader view when conducting an economic evaluation. In simplistic terms, when conducting an economic evaluation, there is a systematic attempt to identify measure and compare the costs and benefits of interventions so it could be understood on a larger scale and benefit lots of people. From a societal view, all costs and benefits would need to be included in the evaluation or analysis. Costs, for example, would need to include direct and indirect costs. All of the resources that contribute to the outcome would need to be included. For example, if a patient receives services as an out-patient or in-patient, those services can be converted into costs by multiplying the unit cost of each service. It’s difficult to estimate the cost of services. However, when we understand the total cost of the services, then you can evaluate those services per person receiving the services, per unit of service, from an economic business perspective and also from a larger societal view. If the service is appreciated and helps a population of people, then it provides value to a society. The society, as a whole, benefits. Even if it is difficult to quantify components of the service, if the society finds the service worthy, the stakeholders, stockholders and community groups will support the service. In turn, the economic analysis of the service should show a greater benefit on a larger scale that would help society.

2. In looking at measures of effectiveness such as QALY and DALY, how can cultural factors affect the ability to compare the cost-effectiveness data internat...

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...usehold goods, increase government unrest or instability, etc. These are all warning signs that should be observed and reviewed when considering an economic analysis. The analysis could be impacted by a program that is under review and the outcomes may change depending on the economic influence of the direct factors involved.
In addition, there are also opportunity costs that must be factored into an economic analysis decision. In assessing economic evaluation results, incremental cost effective ratios (ICERs) may show whether an economic planner should move forward with a program. The ICER may show the cost effectiveness to move forward with a program or the need to look at other options. Finding out the likely distribution of the ICER, compared to a threshold level, will assist to set priorities of whether to move forward with a program or not.

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