What a physician needs to know about cost-effectiveness

The cost of medical care in the United States continues to spiral upward, partly as a result of new technological breakthroughs that promise improved length of life and quality of life for patients. But how good are these treatments in everyday practice? How do we make policies for adopting innovations that improve outcome but also increase costs? Cost-effectiveness studies are designed to answer these questions. They reveal important aspects of a particular medical decision and inform treatment choices by systematically analyzing the relationships between the costs and outcomes of alternative health care interventions. This article provides an introduction to the field of cost-effectiveness analysis and describes an approach to interpreting the rapidly proliferating cost-effectiveness literature.