Dictionary
The Dictionary provides concise definitions of health economics terms, arranged alphabetically for quick reference. Use it to understand unfamiliar terminology or confirm the meaning of a specific term.
A
- Absolute Risk ReductionARR, Absolute Benefit Increase
- Absolute risk reduction is the arithmetic difference in the probability of a specified adverse outcome between a comparator group and an intervention group over the same defined time horizon.
B
- Budget Impact RequirementsBIA Submission Standards, Budget-Impact Evidence Requirements
- The specific evidentiary and methodological standards a body requires a manufacturer's budget impact submission to meet, covering time horizon and scenarios.
C
- Chronic Disease EconomicsChronic Illness Economics, NCD Economics
- The application of health economic evaluation to long-lasting, non-communicable conditions such as diabetes and heart disease, typically using long time horizons.
- Cycle LengthCycle Duration, Time-Step Length
- Cycle length is the fixed duration represented by one update of a discrete-time state-transition model, determining when transitions, costs, health outcomes, and discounting are applied within the modelled time horizon.
- Cycle StructureModel Cycle Organisation, Temporal Model Structure
- The overall organisation of time within a Markov model, including the chosen cycle length and total number of cycles across the time horizon.
E
- EffectivenessReal-World Benefit, Routine-Practice Benefit
- The benefits and harms an intervention produces under care conditions relevant to a specified population, comparator, outcome and time horizon.
- Exponential ModelExponential Survival Model, Constant-Hazard Model
- A survival model assuming time-to-event data follow an exponential distribution, implying a constant hazard rate throughout the modelled time horizon.
H
- Health Economic ModelHealth Economics Model, Cost-Effectiveness Model
- A mathematical representation of the costs and health outcomes of alternative interventions over a defined time horizon, used when single-study data are insufficient.
I
- Incremental CostAdditional Cost, Marginal Cost Difference
- Incremental cost is the difference in expected total cost between one healthcare option and its stated comparator, calculated using the same population, perspective, time horizon, currency, price year and costing methods.
- Investment HorizonInvestment Time Horizon, Payback Horizon
- The length of time over which an investment's costs and returns are expected to be realised and evaluated.
L
- Lifetime HorizonLifetime Time Horizon, Whole-of-Life Horizon
- A time horizon for an economic evaluation extending over the remaining expected lifespan of the population studied, rather than a shorter follow-up period.
- Long-Term OutcomeLong-Term Result, Extended-Horizon Outcome
- A clinical or economic outcome observed or projected over an extended time horizon, often beyond a trial's observed follow-up period.
M
- Marginal CostExtra-Unit Cost, Cost at the Margin
- Marginal cost is the change in total economic cost caused by producing one additional unit of output at a specified level of activity and over a specified time horizon.
- Methodological QualityStudy Quality, Methodological Rigour
- An overall assessment of whether a model or study followed accepted good practice standards, covering comparator choice, time horizon, and reporting transparency.
- Model ScopeModelling Scope, Analytic Coverage, Model Boundary
- The range of interventions, populations, outcomes, and time horizon a decision-analytic model is designed to address.
R
- Risk ScoreRisk Adjustment Score, Morbidity Score
- A numerical summary of measured predictors used to estimate or rank the likelihood of a specified future outcome in a defined population and time horizon.
S
- Structural ValidityDimensional Validity, Internal Structure Validity
- The degree to which a model's overall architecture, including its health states and time horizon, appropriately represents the real-world process being studied.
T
- Time HorizonAnalytic Horizon, Evaluation Period
- The span of time over which an economic evaluation captures relevant differences in costs and outcomes among the options being compared.
- Time Horizon ChoiceHorizon Choice, Analytic Horizon Decision
- The methodological decision on how long a model should simulate costs and outcomes, informed by disease natural history and treatment effect duration.
- Time Horizon Selection HTAHTA Time Horizon, Lifetime Horizon Selection
- The methodological decision on how long a cost-effectiveness analysis should simulate costs and outcomes, often requiring a full lifetime horizon for chronic conditions.
- Time-Homogeneous ModelTime-Constant Model, Stationary Markov Model
- A Markov model in which transition probabilities remain constant throughout the entire modelled time horizon, regardless of how many cycles have passed.
- Time-Inhomogeneous ModelTime-Varying Markov Model, Non-Stationary Model
- A Markov model in which transition probabilities are allowed to vary over the time horizon, such as mortality risk rising with age.