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Determining the relative value of competing interventions often involves comparing their costs and health outcomes. A common metric used for this purpose is computed by dividing the cost of an intervention by its resulting health benefit, typically measured in units like quality-adjusted life years (QALYs) or disability-adjusted life years (DALYs). For example, if Program A costs $50,000 and yields 10 QALYs, its value would be $5,000 per QALY gained. This allows direct comparison with Program B, which might cost $100,000 but yield 25 QALYs, resulting in a value of $4,000 per QALY. Such comparisons can be further refined by considering factors like discounting future costs and benefits.

Comparing costs against health outcomes provides a structured framework for resource allocation decisions, especially in healthcare and public health. This approach helps ensure that limited resources are used efficiently to maximize population health. Historically, decision-making in these sectors often relied on less formalized methods. The increasing emphasis on evidence-based practice and the need to demonstrate value for money have led to the wider adoption of formal economic evaluation techniques, including this type of comparative analysis.

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