What does cost-effectiveness analysis measure and how is it used in program decisions?

• A. It compares costs and health outcomes to determine value; expresses as cost per health outcome gained to guide resource allocation.
• B. It measures only the costs of programs.
• C. It assesses stakeholder opinions about program value.
• D. It evaluates clinical effectiveness without considering costs.

Answer: (A)

Cost-effectiveness analysis measures value by comparing what a program costs with the health benefits it produces, and it reports this as a ratio like cost per unit of health outcome gained (for example, cost per DALY averted or cost per life-year saved). This framing helps program decisions by showing which options deliver more health improvement for each dollar within a fixed budget, guiding resource allocation toward the most cost-effective interventions. It focuses on both costs and health outcomes rather than just spending, and it doesn’t rely on stakeholder opinions or evaluate clinical effectiveness in isolation; instead, it integrates costs with outcomes to assess value for money. If benefits were to be monetized to compare against costs, cost-benefit analysis would be used instead.