Cost analysis: concepts and application

Public health nurses are increasingly called upon to justify the cost of care or to decide which of two alternative programs is more cost-effective. Cost studies can be complex and difficult to conduct, but an understanding of the basic techniques allows nurses to fully participate in planning, implementing, and evaluating programs that greatly impact the health of the community. This article defines some of the basic terms used in health economics, discusses standard methods of cost analysis, and provides an example of neonatal screening to illustrate methods of describing, measuring, and assigning a value to cost items.