Cost-benefit analysis and building CEM models https://digitalho.com/cost-effectiveness-modelling/ is an essential step in developing a new medical product and bringing it to market. Also, this tool allows estimating the value for money and the costs borne during the entire life of a patient.
Analysis of cost-effectiveness in health care
Cost-effectiveness analysis is a process that allows to calculate the ratio of the result of treatment (health gain) and the costs that ensure this result. For example, in the healthcare industry, it is used to estimate the ratio of the results of the treatment of a certain disease to the cost of the procedures performed. It also allows for comparing the effectiveness of different treatment protocols for the same condition, so you can determine which treatment option is the best cost/benefit ratio for health.
Cost-effectiveness studies are conducted in many countries even before the production of new drugs and medical equipment. They allow us to determine and adjust the product costs and form the product’s value. Later on, the results of the study are used in negotiations with health care professionals and state authorities to get the product on the market.
Economic Efficiency Indicators
Economic efficiency is a comparative assessment of performance, which reflects not only its ability to provide the company with profit but also the ability to stimulate progressive structural and qualitative changes. Efficiency indicators are generalized characteristics of the object of study that are used for evaluation.
Economic performance indicators are divided into 2 groups:
- quantitative (income, profitability, production volume, etc.);
- qualitative (efficiency of the process, the degree of its development).
As a rule, a manufacturing company is most interested in the evaluation of the profitability indicator of a new product. However, a comprehensive analysis of efficiency and the formation of product value is possible only through the use of a system of indicators. Therefore, in this study, the main indicator is supplemented by partial ones.
The logic of selecting performance indicators derives from the purpose of the system under study. When evaluating medical drugs or equipment, the performance indicators are:
- treatment outcome;
- the effects and side effects of the drug or procedure;
quality of life and life expectancy of the patient after treatment, etc.
Once the system of indicators is defined, a methodology for their calculation is developed, and a comprehensive cost-effectiveness analysis is performed.
Digital solutions for the calculation of economic efficiency and its indicators
The task of calculating economic efficiency is quite tricky. First of all it is necessary to determine the totality of indicators that will be evaluated and make calculations of their changes. The denominator of the cost-effectiveness indicator must consider the complex costs, which include not only the cost of the medicine but also all the additional costs, including staff compensation.
Modern digital solutions help meet this challenge. Consulting companies offer the development of digital models that integrate all the data needed for a complete analysis. In addition, they allow for up-to-date data and can be used at any stage of the product lifecycle.
Digital CEMs can be used on any device, from a PC to a cell phone. This lets you quickly access the data you need during negotiations or product presentations.
This post has been sponsored by Digital Health Outcomes
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