Economic evaluation of medical technologies.

Innovation in medical science is progressing at a rapid pace. As a result, new medical technologies that offer to improve upon or completely replace existing alternatives are continually appearing. These technologies--which include pharmaceuticals, devices, equipment, supplies, medical and surgical procedures, and administrative and support systems--are changing the way medicine can be practiced and delivered, forcing healthcare providers and policymakers to consistently evaluate and adapt to new treatment options. Meanwhile, society is becoming more demanding of new medical technologies. Emerging medical technology, however, has been viewed as a significant factor in increasing the cost of healthcare. The abundance of new medical alternatives, combined with scarcity of resources, has led to priority setting, rationing and the need for more technology management and assessment. Economic evaluation of medical technologies is a system of analysis used to formally compare the costs and consequences of alternative healthcare interventions. EEMT can be used by many healthcare entities, including national policymakers, manufacturers, payers and providers, as a tool to aid in resource allocation decisions. This paper discusses the four current popular methodologies for EEMT (cost-minimization, cost-benefit, cost-effectiveness and cost-utility), and describes the industry environment that has shaped their development.