Using Cost-Effictiveness Analysis in Policy Formulation in Human Service Organizations

Abstract

This article describes how decision-makers may use a relatively simple cost-effectiveness analysis (CEA) method in policy formulation in human service organizations. The main contention of this article is that decision-makers need to know how to better effect policy decisions based on quantitative data. CEA is a decision-making tool which has been used sparingly in human service organizations, even though it is considered to be extremely useful in developing rational, cost-effective programs for the future. The paper describes the CEA model in a sequential step-by-step fashion and discusses its analytic processes and how it measures the costs and effects of human service programs. The conclusions and recommendations are targeted at decision-makers in human service organizations and stress the importance of obtaining accurate, reliable and useful cost-effectiveness data.