Cost-effective analysis (CEA) is used to identify the most cost-effective way to achieve social and health goals where quantifying benefits in monetary terms is difficult. CEA calculates a cost-effectiveness ratio by dividing total costs by units of effectiveness. For example, comparing costs per patient diagnosis of different medical diagnostic machines. While one machine costs less per diagnosis, a more expensive machine could diagnose many more patients and be more cost-effective overall. CEA was demonstrated for wound care and antenatal visits, showing potential cost savings from evidence-based best practices. CEA seeks the most resource-efficient way to achieve desired outcomes.

1. COST EFFECTIVE ANALYSIS
Presented By
Mr. Naveena. J H
Asst. Professor
Subharti Nursing College
SVSU , Meerut, UP

9. Direct Nursing Cost Indirect Nursing Cost

13. Scope
 Cost effectiveness analysis (CEA) used heavily in
social programs and projects where identification
and quantification of benefits in money terms is not
straightforward but, at the same time, the desirability
of the activity is not in question.
 For example, in the case of health care:
- What is the best way to prevent heart
attacks?
- What drugs are most cost effective in the
treatment of illness?
- What is the least cost way of providing
nutrition to poor children?
- Which of the programs is most cost
effective for AIDS prevention?

29. Formula for Analysis
 Cost - effectiveness analysis seeks to identify and
place currency on the costs of a program. It then
relates these costs to specific measures of program
effectiveness. Analysts can obtain a program ’ s cost
- effectiveness (CE) ratio by dividing costs by what
we term units of effectiveness :
Cost-Effectiveness Ratio = Total Cost
Units of Effectiveness

30. 30
Scale Problem in CEA
 Let’s say there are two mutually exclusive options in the choice of medical diagnostic
equipment for a clinic.
 The first type of machine (A) costs R 50,000 and it can diagnose 200 patients a month.
 The second option involves more expensive equipment (B), which will cost R 300,000 but
could serve up to 1,150 people a month.
 The CEA results in the selection of the least costly alternative, option A, which costs R 250
per diagnosis.
 Option B allows to process almost a six-fold higher number of medical tests a month, at cost
of R 261 per patient.
 Unless there is a severe budget constraint for implementation of alternative B, this
alternative could be justified even if its average costs are higher than costs of alternative A.
This is because the total benefits that alternative B generates are very much larger than the
benefits of alternative A.
Method
Effectiveness
(Patients a Month)
Cost
(Rand)
CE Ratio Ranking
Alternative A 200 50,000 250 1
Alternative B 1,150 300,000 261 2

32. ACTIVITY: 1:
 Cost effective Analysis On wound Care
FIGURE -1

33. FIGURE -2

34. Cost Comparison: Previous Management vs. Best Practice
Previous Care Cost Present Care Cost
Nursing labour $9,600.00 Duplex scan $161.30
($40.00 x 240 visits ) Nursing labour $240.00
Fucidic acid cream $ 240.00 ($40.00 x 6 visits)
Gauze bandages $ 360.00 Multi-layer bandage x 4
$100.00
Gloves $ 48.00 Nanocrystalline silver
4x4dressings (x2) $26.00
Dressing trays $6.00
Gloves $1.20
Total $10,248.00 Total (best practice) $534.50
Outcome No healing Outcome Closed wounds
Difference in cost: $9,713.50

35. ACTIVITY:2
 Cost effective Analysis on Antenatal Visits

38. CONCLUSION
 A cost−effectiveness analysis (CEA) seeks
to find the best alternative activity, process,
or intervention that minimises resource use
to achieve a desired result. Like
Cost−Benefit Analysis, Cost−Effectiveness
Analysis can be used either to assess the
expected impacts of alternative policy
measures before they are implemented , or
to assess the effectiveness of a policy
measure that is already in place .