A Proposed Cost Effectiveness Method for Use in Policy Formulation in Human Service Organizations

Abstract

This article builds on a previous publication and presents additional information on how cost effectiveness analysis may be used by policy and decision-makers in human service organizations (HSO's). It presents a brief history of the use of cost effectiveness analysis to demonstrate its efficacy in assisting policy makers in a variety of fields. It then comparatively describes two of the best known cost effective methods--cost benefit analysis (CBA) and cost effective analysis (CEA), and argues that the latter is the more appropriate method to be used to effect policy decisions in HSO's. The discussion centres around refining the limitations of the CEA method and proposes a simple model for use in this regard. Recommendations and implications are directed toward managers, administrators and decision-makers of HSO's. Finally, the article is attempting to fill a distinct void in the literature in this field and also suggests the use of more meaningful policy formulation and analyses methods in HSO's.