Input costs are usually classified into three categories in a health economic analysis. Organizing and operating costs, which include health professional time , health care institution or facility operating and capital costs, or overhead costs. Patient costs include direct costs to patients and their families for lost work time, patient and family investment in therapy and emotional cost. This includes changes in the individuals physical, social or emotional function that result from the therapy, the impact on use of health care resources, the impact on the patient's family and on leisure and work. Quality of life is very difficult to quantify yet is very is an essential parameter in a meaningful economic analysis.
Efficacy is the measurement of the consequences of two or more comparable interventions.
This measurement includes both costs and all other impacts of the interventions. Effectiveness does not take into account the difference in cost of two or more comparable interventions. An example is the actual cost of an intervention calculated in terms of the dollars cost per life year saved by the intervention. Cost utility analysis goes one step beyond cost effectiveness and includes the measures of quality of life as well as measures of cost. Discounting in an economic analysis accounts for the fact that the benefit or saving of a dollar today is greater than the same benefit or saving occurring in the future.