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There’s A Big Difference
Between A CBA and CEA
A CBA has
everything to do with actual monies, while a CEA is more concerned with
the non-financial aspect of health management programs, he explained.
Cost Effectiveness
A CEA focuses
on non-monetary outcomes, such as health improvement, risk reduction,
changes in health status, smoking cessation rates, weight loss and
changes in cholesterol levels, Goetzel said.
"You’re
not looking at dollar savings per se. You’re looking at other
consequences that are often health-related," he noted. "The difference
between a CBA and CEA can depend on what is being measured."
A CEA is defined in the following terms, according to Goetzel:
The comparison consists of the cost of
alternative intervention (health) outcome, such as health improvement,
risk reduction, changes in cholesterol levels, weight loss, smoking
cessation rates, etc.
Results are presented as the incremental cost
per unit of effectiveness for intervention A versus intervention B. For
example, when comparing three separate smoking cessation methods,
determine the cost for each participant who achieves a "quit smoking
status." (Adjustments are made for inflation and a specified discount
rate.)
Cost Benefit
"CBA means
everything is essentially translated into dollars — the inputs
and the outputs," said Goetzel. "The ROI, which is the money saved, is
contrasted with the amount of money spent on the program."
Goetzel said the following definitions apply for a CBA:
All costs and benefits are monetized.
Results are presented as the ratio of
benefit-to-cost and return on investment. For example, three dollars
saved for every dollar that was invested signifies a three-to-one ROI.
(As with a CEA, adjustments are considered for inflation and a
specified discount rate.)
Getting the Message
Goetzel said the terms are not interchangeable, although they are often misused.
"Employers often ask [about CBA and CEA] when
they are evaluating health management programs; they want to know the
distinction between [the terms] when they are examining health and
financial outcomes," he added. "It’s important to understand the
newer terminology."
Address: Dr. Ron Z. Goetzel, The MEDSTAT Group,
4301 Connecticut Ave., NW, Suite 330, Washington, DC 20008; (202)
719-7850, e-mail ron.goetzel@medstat.com.
Copyright 2002 Health Resources Publishing
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