The chronically ill and those toward the end of their lives are accounting for potentially 80% of the total health care bill. There is going to have to be a very difficult democratic conversation that takes place.

The decision is not whether or not we will ration care. The decision is whether we will ration with our eyes open.

—Donald Berwick, Former Administrator of the U.S. Centers for Medicare and Medicaid Services

Economic evaluations are emerging as a critical component to the conduct of behavioral intervention research and are important for several reasons. They provide an understanding of what it costs to deliver a behavioral intervention in relationship to specified outcomes such as clinical effectiveness and health utility; and they enable a comparison of an intervention to usual care and/or other treatments as to expended resources and benefits. Any intervention requires resources for its implementation, and these resources can be measured in terms of their costs. Interventions also have specified outcomes, which may be positive (e.g., improved health) or negative (e.g., adverse events). An economic evaluation will involve the measurement of both costs and outcomes.

The relationship between resources and cost is an important one to consider and can be illustrated by the Tailored Activity Program, which is a home-based occupational therapy intervention designed to reduce behavioral symptoms in participants with dementia and burden in caregivers (Gitlin et al., 2009). The resources used to implement the Tailored Activity Program included the cost of employing the interventionists (occupational therapists), interventionist travel, and intervention supplies (Gitlin, Jutkowitz, Hodgson, & Pizzi, 2010). Benefits of this intervention included the reduction in behavioral symptoms and improved quality of life of the person with dementia as well as time saved by caregivers in providing hands-on care. The cost of delivering the Tailored Activity Program is critical to informing stakeholders who are considering adopting the intervention. Cost information informs planning for the need and allocation of resources, and whether the intervention is feasible to implement given an existing budget.

This chapter examines the importance of economic evaluations of behavioral interventions and introduces the basic methods for conducting economic evaluations and the key scientific issues involved in costing behavioral interventions. As analyzing the costs of interventions draws upon fundamental terminology that may be new to readers, Table 18.1 provides a summary of brief terms and serves as a reference point throughout this chapter.

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