NORMATIVE ISSUES IN COST-EFFECTIVENESS ANALYSIS

Cost effectiveness analysis (CEA) and cost-utility analysis are increa singly used to compare competing uses for limited health care resource s, informing policy decisions at governmental, payer, and clinical lev els of the health system. The authors discuss various methodologic cho ices in CEA and the normative (value) assumptions and implications of those choices. The treatment of adult onset diabetes is used as a simp lified case example to illustrate the choice of perspective, cost incl usion and exclusion, benefit measurement and aggregation, and how thes e and other aspects of CEA can implicitly influence policy decisions w ith consequences for individuals and groups. CEA can be a valuable sou rce of information, but it is a poor ''technologic fix'' for the thorn y problem of allocating limited health care resources.