Determining the differences among cost savings, cost avoidance, and cost reduction

Cost savings, cost avoidance, and cost reduction are important factors to measure when valuing clinical pharmacy services. Currently, there are no universally accepted definitions for these terms. The authors of this study evaluated 44 articles which claimed to measure cost savings, cost avoidance, or cost reduction associated with clinical pharmacy services, and offered recommendations for when it would be appropriate to use these terms. Based on the results of our analysis, it is evident that controversy exists in the literature when determining if services result in cost avoidance or cost reduction. Therefore, there is a need for universally accepted definitions of these terms so that future research may evaluate such factors uniformly.