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Disease Prevention

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


  • © 2002 Health Resources Publishing