Course: Understanding Cost-Effectiveness Analysis in Health Care

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Course Description

The primary objective of this course is to prepare students to read and interpret cost-effectiveness studies. The students will first be introduced to basic economic concepts that are needed in order to understand the recommendations from the United States Panel on Cost Effectiveness in Health and Medicine. One example is the distinction between opportunity costs and budgetary costs. The recommendations will then be reviewed, particularly as they apply to what students should expect to read in cost-effectiveness research reports. Next, the relationship between cost-effectiveness results and other elements of the health care policy decision-making process will be discussed. More information will be provided on several aspects of how to conduct cost-effectiveness analyses. A critical discussion of several current articles demonstrating cost-effectiveness analyses will be an integral part of this course. When a student has completed this course, he or she will be able to read, comprehend, and perform a basic critique of cost-effectiveness papers and take part in discussions of planned cost-effectiveness research.

Course Objectives

By the end of the course, students should be able to do the following:

  • Read and interpret cost-effectiveness studies.


You must successfully complete Introduction to Online Learning (550.002.81), offered by the Distance Education Division. For more information and to register, visit the Introduction to Online Learning course Web site.

There are no economic, budgeting, or accounting prerequisites.


Required Materials

  • Readings: Article readings are available via the Welch Medical Library E-Reserves System. Instructions on how to access course readings are provided on individual lecture pages.
  • Textbook: Prevention Effectiveness: A Guide to Decision Analysis and Economic Evaluation: Second Edition, by A.C. Haddix, S.M. Teutsch, P.S. Corso (editors).

You can buy the textbook from any online bookstore or through the Matthews Johns Hopkins Medical Book Center.

Matthews Johns Hopkins Medical Book Center
1830 East Monument Street
Baltimore, MD 21205 USA
410.955.0576 Fax

Time Commitment

On average, students should expect to spend six hours per week on a two-unit course at the School of Public Health.

Course Topics

This course covers the following topics:

  • Economic concept overview
  • Recommendations of the Panel on Cost-Effectiveness in Health and Medicine
  • Decision rules
  • Quality adjusted life years
  • One year cost calculations
  • Multiple year cost calculations
  • Examples from readings

Course Format

Lectures: There will be eight lectures. Each lecture is approximately one hour long and is divided into three sections of approximately twenty minutes. Students will be expected to read materials relevant to each lecture before they view the online presentation.

Practical Exercises: There will be three exercises that will help students understand the basics of how costs and quality adjusted life years are calculated.

LiveTalk Sessions:
The instructor will lead six online LiveTalk sessions for the purpose of answering questions, reviewing exercises, discussing articles, and moderating the exchanges between students. There also will be an electronic bulletin board in which students may post any course-related messages.

Final Paper: At the end of the course, students will submit an essay (no longer than ten pages double-spaced) in which they demonstrate their mastery of the course material. Details are provided in the syllabus. There will be no examinations.

Grading Policy

Students will be expected to submit exercises and the final paper on time and to participate actively in the LiveTalk sessions and BBS discussions. Students taking this course for graduate academic credit will be evaluated based on three exercises and a final paper. Grades will be computed as follows:

  • Participation: 10%
  • Final paper: 60%
  • Practical exercises: 30%

The final letter grade will be based on the following point system:

  • A = 90-100
  • B = 80-89
  • C = 70-79
  • P = 70 + (For those taking the course pass/fail)
  • D = 60-69
  • F = < 59