Budget-Impact analysis or budget-impact modelling
Budget-impact analysis (BIA or BIM)
Aim: To quantify the impact of changing healthcare practices on a payer’s budget
Application: To inform interaction and communication with payers
Identifies: Cost drivers, target patient segments, and budget changes
Informs: Payer conversations, coverage, and reimbursement
Budget-impact analysis (BIA) or budget-impact modelling (BIM) is an essential part of any health economic assessment. In many jurisdictions, BIA is required to gain reimbursement. Even when not mandated, many healthcare providers will not add new products to their formulary without a comprehensive BIA. The purpose of a BIA is to quantify (with an estimate of uncertainty) the financial consequences of adopting a new healthcare product within a specified healthcare setting. Specifically, the BIA predicts how a change in the product used or the product mix in use to treat a condition will impact overall spending on that condition. The BIA considers both the efficacy and safety of the products, and is generally focused on the short- to mid-term horizon of 1 to 5 years. A BIA is often complemented by a cost-effectiveness analysis (see cost-effectiveness analysis page for more details). These are performed over a longer time horizon, up to patient lifetimes, and can include consideration of patient quality of life. A BIA is used mostly for private payer interactions, whereas a CEA is of more interest to physicians, national payers, and patients.