RECOMMENDATIONS OF THE PANEL ON COST-EFFECTIVENESS IN HEALTH AND MEDICINE

Objective.-To develop consensus-based recommendations for the conduct of cost-effectiveness analysis (CEA), This article, the second in a 3- part series, describes the basis for recommendations constituting the reference case analysis, the set of practices developed to guide CEAs that inform societal resource allocation decisions, and the content of these recommendations. Participants.-The Panel on Cost-Effectiveness in Health and Medicine, a nonfederal panel with expertise in CEA, clin ical medicine, ethics, and health outcomes measurement, was convened b y the US Public Health Service (PHS). Evidence.-The panel reviewed the theoretical foundations of CEA, current practices, and alternative me thods used in analyses, Recommendations were developed on the basis of theory where possible, but tempered by ethical and pragmatic consider ations, as well as the needs of users. Consensus Process.-The panel de veloped recommendations through 2 1/2 years of discussions, Comments o n preliminary drafts prepared by panel working groups were solicited f rom federal government methodologists, health agency officials, and ac ademic methodologists. Conclusions.-The panel's methodological recomme ndations address (1) components belonging in the numerator and denomin ator of a cost-effectiveness (C/E) ratio; (2) measuring resource use i n the numerator of a C/E ratio; (3) valuing health consequences in the denominator of a C/E ratio; (4) estimating effectiveness of intervent ions; (5) incorporating time preference and discounting; and (6) handl ing uncertainty, Recommendations are subject to the ''rule of reason,' ' balancing the burden engendered by a practice with its importance to a study, If researchers follow a standard set of methods in CEA, the quality and comparability of studies, and their ultimate utility, can be much improved.