In this article, we walk you through a framework for deciding which economic evaluation is right for your Digital Health Technology (DHT) within the broader context of digital healthcare. Choosing the right economic evaluation for your DHT is crucial to ensure that it is assessed appropriately within your chosen context, this enables your target audience to make informed conclusions about the technology’s value.
It helps stakeholders understand the value proposition of your technology by comparing the costs and benefits associated with its implementation.
It allows healthcare providers to assess the immediate impact on patient care and operational efficiency.
It enables policymakers to make informed decisions regarding resource allocation in healthcare systems where budgets are often constrained.
It offers investors insights into the potential return on investment and financial viability of the DHT, which can be pivotal in gaining support.
It provides a framework for assessing the long-term sustainability and scalability of the technology, ensuring that it can deliver consistent value over time.
A recent systematic review of analytical frameworks for economic evaluation reported recommendations for measuring the effects of DHTs, we have distilled these insights below and formed suggestions for how you should decide which type of economic evaluation to perform.
The Impact Matrix for Digital Health Technologies
An impact matrix is a tool used to assess and visualise the potential impacts of various actions or decisions on specific outcomes. It typically features a grid with one axis representing effort (high or low) and the other axis representing impact (high or low). Each quadrant in the matrix shows how much effort is required and the potential impact of each action, highlighting those solutions that are easy to achieve and have significant effects.
In healthcare, this tool is essential for prioritising interventions, optimising resource allocation, and ensuring the most beneficial and feasible solutions are pursued. For DHTs, impact matrices help reveal the effects on various stakeholders—such as patients, caregivers, healthcare professionals, institutions, and governments—in terms of accessibility, organisation, quality and safety of care, and costs. It enables policymakers to make informed decisions regarding resource allocation in health systems where budgets are often constrained. This can serve as a preparatory activity for developing a cost-consequence analysis (CCA).
See our example for a hypothetical Electronic Patient Record (EPR) system, adapted from Le Goff-Pronost & Sicotte below:
Cost Consequence Analysis (CCA)
What is a Cost Consequence Analysis?
Cost Consequence Analysis (CCA) is an economic evaluation method that involves listing and comparing the costs and consequences of different interventions without aggregating them into a single metric. This approach allows decision-makers to see a detailed breakdown of the various outcomes and costs associated with each option, facilitating a greater understanding of the trade-offs involved across different areas.
Why Perform a Cost Consequence Analysis?
CCA is the analysis suggested in NICE’s Evidence Standards Framework when DHTs affect non-health outcomes. It is particularly useful when the outcomes of an intervention are multidimensional and cannot be easily combined into a single measure of benefit. This method is beneficial when the decision-making process involves multiple criteria that need to be considered separately, as the disaggregated results provide a comprehensive view of the different impacts.
What makes Cost Consequence Analysis the Best Choice?
DHTs often have complex and varied impacts on healthcare systems, patients, and other stakeholders. You should perform a CCA if your technology has the following considerations:
Non-Health Outcomes: DHTs can affect clinical but also non-clinical outcomes – such as patient satisfaction, workflow efficiency, and cost savings – CCA allows for the separate evaluation of these outcomes.
Broad Health Benefits: DHTs that provide general health benefits, such as improved disease management, increased adherence to treatment, or better access to care, can be evaluated using CCA to capture their impact on outcomes.
Stakeholder Diversity: Your DHT may affect different stakeholders (e.g., patients, healthcare providers, payers), who may value different outcomes. CCA provides a transparent way to present all the relevant effects, helping to address the concerns of various groups.
Flexibility: CCA is adaptable to various contexts and can be tailored to specific needs (see our recent guide to choosing the right costing perspective for your DHT), making it suitable for the dynamic and evolving nature of DHTs.
Cost Benefit Analysis (CBA)
What is Cost Benefit Analysis?
Cost Benefit Analysis (CBA) is an economic evaluation method that quantifies and compares the costs and benefits of an intervention in monetary terms. This approach aims to determine whether the benefits of an intervention outweigh its costs, providing a clear basis for assessing economic viability and potential return on investment. The use of electronic health records can provide valuable data for cost benefit analysis.
Why Perform a Cost Benefit Analysis?
CBA is particularly useful when all the outcomes of a technology can be easily translated into monetary units, allowing for a direct comparison of costs and benefits. However, converting outcomes into monetary units is often difficult and there are no set methods for converting each outcome, leaving the validity of the final monetary unit in the hands of the health economist performing the evaluation.
This method is often employed when the primary objective is to assess the financial feasibility or profitability of a DHT. It aids informed decision-making by providing a clear picture of the economic impact associated with introducing the DHT into the market. Ensuring health insurance portability can enhance the reliability of data used in cost benefit analysis.
What makes Cost Benefit Analysis the Best Choice?
Performing a CBA is a requirement for the Economic Case of an Outline Business Case (OBC) when following Treasury Green book guidance if you plan to seek approval and reimbursement for your technology within the NHS. Protecting patient data is crucial for the integrity of cost benefit analysis.
A CBA should be performed when your technology has the following considerations:
Quantifiable Financial Benefits: DHTs that can demonstrate clear and quantifiable financial benefits, such as cost savings or increased revenue, are well-suited for CBA. Examples include technologies that improve operational efficiency, reduce hospital readmissions, or enable remote monitoring and care delivery.
Monetisable Outcomes: DHTs with outcomes that can be readily monetised, such as productivity gains, reduced absenteeism, or avoided healthcare costs, are ideal candidates for CBA.
Commercial Feasibility: When the primary goal is to assess the commercial feasibility or potential return on investment of a DHT, CBA provides a direct measure of the financial viability and profitability of the technology.
Financial Stakeholder Focus: If the primary stakeholders are investors, payers, or decision-makers with a strong emphasis on financial considerations, CBA can provide the necessary information to support investment or reimbursement decisions.
Cost Utility Analysis (CUA)
What is Cost Utility Analysis?
Cost Utility Analysis (CUA) is an economic evaluation method that measures the cost of a technology in relation to the health-related quality of life (HRQoL) it provides. This approach combines costs and health outcomes into a single metric – commonly quality-adjusted life years (QALYs) or alternatively disability-adjusted life years (DALYs) – allowing for a direct comparison of the cost-effectiveness of different technologies across different disease areas. The use of electronic medical records can provide valuable data for cost utility analysis.
Why Perform a Cost Utility Analysis?
If your DHT is patient facing, in the sense that it is directly used by patients to improve their health, then CUA could be your preferred method of evaluation. CUA is particularly useful when your primary objective is to assess the value for money or cost-effectiveness of a technology in terms of its impact on HRQoL. HRQoL is best captured using generic measures of quality of life, such as the EuroQoL-5 Dimension (EQ-5D) and Short Form-6D (SF-6D) questionnaires.
What Makes Cost Utility Analysis the Best Choice?
If you plan to submit your technology to NICE (in the UK) for Health Technology Assessment, then CUA is the preferred method for evaluating the cost-effectiveness. CUA is often employed in healthcare decision-making processes – such as the NICE technology appraisal process – where resources are limited (the NHS is UK government funded) and there is a need to prioritise interventions that provide the greatest health benefits at the lowest cost (cost-effectiveness below a certain threshold level). The integration of medical devices can enhance the accuracy and efficiency of cost utility analysis.
A CUA should be performed when your technology has the following considerations:
Quality of Life Impact: DHTs that have a significant impact on health-related quality of life, such as those targeting chronic conditions, mental health, or pain management, are well-suited for CUA. The ability to quantify these effects using utility measures makes CUA an appropriate choice.
Comparative Effectiveness: When the primary goal is to compare the cost-effectiveness of different DHTs or interventions in terms of their impact on health outcomes, CUA provides a standardised metric (e.g., cost per QALY) for direct comparison.
Resource Allocation Decisions: If the primary stakeholders are healthcare payers, policymakers, or decision-makers responsible for resource allocation within healthcare systems, CUA can provide valuable information to support evidence-based decision-making and prioritisation of interventions based on their cost-effectiveness.
Cost Effectiveness Analysis (CEA)
Cost effectiveness analysis is a method used to compare the relative costs and outcomes (effects) of different courses of action. It is often used in the field of health economics to assess the value of medical interventions. The use of digital health can enhance the accuracy and efficiency of cost effectiveness analysis.
What is Cost Effectiveness Analysis?
Cost Effectiveness Analysis (CEA) is an economic evaluation method that assesses the cost of an intervention relative to a specific health outcome, such as life years gained, cases averted, or improvements in clinical measures. This approach facilitates a direct comparison of the cost-effectiveness of various interventions aimed at achieving a particular health outcome in the same disease area. The use of health care data can provide valuable insights for cost effectiveness analysis.
Why Perform a Cost Effectiveness Analysis?
CEA is particularly valuable when the primary objective is to determine the value for money or cost-effectiveness of an intervention in terms of a disease specific health outcome. This method is frequently used in addition to CUA for healthcare decision-making processes, where resources are constrained, and there is a need to prioritise interventions that deliver the most significant health benefits at the lowest cost. Digital health tools can provide valuable data for cost effectiveness analysis.
What Makes Cost Effectiveness Analysis the Best Choice?
If you have assessed health improvements of your technology using disease specific measures of HRQoL, and it is possible to map responses from the chosen disease specific measure to a generic measure of HRQoL, then CEA may be useful to perform for your technology. The integration of digital technologies can enhance the accuracy and efficiency of cost effectiveness analysis.
A CUA should be performed when your DHT has the following considerations:
Targeted Health Outcomes: DHTs designed to improve specific health outcomes for a particular disease, such as reducing the incidence, enhancing survival rates, or preventing complications, are ideal candidates for CEA. The ability to quantify these outcomes and compare different technologies for the same disease makes CEA an appropriate choice.
Comparative Effectiveness: When the primary goal is to compare the cost-effectiveness of different DHTs or interventions in achieving a specific health outcome, CEA provides a standardised metric (e.g., cost per life year gained) for direct comparison.
Resource Allocation Decisions: If the primary stakeholders are healthcare payers, policymakers, or decision-makers responsible for resource allocation within healthcare systems, CEA can provide valuable information to support evidence-based decision-making and prioritisation of interventions based on their cost-effectiveness in achieving specific health outcomes.
Impact on Equity
Digital health technologies have the potential to significantly impact healthcare equity. By providing access to remote consultations and personalised care, these technologies can help bridge the gap for underserved populations. Digital health tools can play a crucial role in addressing equity issues in healthcare.
The Impact on Equity of Digital Health Technologies
With DHTs applicable to multiple health areas, they naturally share equity-related concerns common to other healthcare interventions. However, some equity issues are unique to DHTs:
Accessibility: It is essential to assess whether DHTs are accessible to all segments of the population, especially underserved groups such as those in rural or low-income areas. Evaluating accessibility ensures that DHTs do not exacerbate existing health disparities.
Usability: Different population groups may have varying levels of digital literacy. Economic evaluations should consider if the DHTs are user-friendly for all potential users, including the elderly, individuals with disabilities, and those with limited technological skills.
Equity of Outcomes: The impact of DHTs should be measured across different socioeconomic and demographic groups to ensure that benefits are distributed fairly. This could involve analysing health outcomes by age, gender, ethnicity, and socioeconomic status.
Resource Allocation: Healthcare settings differ in their capacity to invest in new technologies. Economic evaluations should consider whether resource constraints might prevent some settings from adopting DHTs and how this could affect overall health equity.
Digital health tools can play a crucial role in addressing equity issues in healthcare.
In a scenario in which your DHT triggers an impact on equity, whether that may be equitable access, equitable use or equity in outcomes produced, then you should consider strong justification for or against the relevance of this impact. Or alternatively you could consider analysing the impact using extended cost-effectiveness analyses (CEAs) to complement traditional economic evaluations by examining the equitable distribution of costs and benefits of DHTs. This can be achieved by formally analysing the effects of DHTs on different subgroups using the Net Benefit Regression Framework (NBRF), considering factors such as socioeconomic status, education level, and clinical difference.
How Healthonomix Can Help?
If you are developing a digital health product and you would like to explore the possibility of an early economic evaluation for your technology, then contact us at Healthonomix and we can discuss the best type of evaluation for your specific needs. Healthonomix can help you leverage digital health tools to enhance the accuracy and efficiency of your economic evaluations.
