Budget Impact Analysis

  • Jean-Michel Josselin
  • Benoît Le Maux


Budget impact analysis examines the extent to which the introduction of a new strategy in an existing program affects an agency’s budget. Not only does the method provide information about the costs generated by a new intervention or treatment, but it also assesses how the new strategy will affect the overall supply of services and the amount of resources devoted to them. The approach may serve for instance to evaluate the impact of a new drug on the health care system, or be part of a budget planning process in order to analyze multiple scenarios. The present chapter first offers an introduction to the method (Sect. 8.1). The analytical framework is then presented in the case of a single supply, e.g., one school, one drug or more generally one service or strategy (Sect. 8.2). The setting is extended to several supplies and compares the current environment with a new one in which an additional strategy is added (Sect. 8.3). An example is performed using an Excel spreadsheet with information about the distribution of populations, exit rates and costs among different strategies (Sect. 8.4). A deterministic sensitivity analysis is based on this example and uses visual basic tools to examine how the budget impact reacts to the changes in forecast assumptions (Sect. 8.5).


Budget impact Multiple supply Cohort of users Exit rate Sensitivity analysis 


  1. Gale, D. (1973). Pure exchange equilibrium of dynamic economic models. Journal of Economic Theory, 6, 12–36.CrossRefGoogle Scholar
  2. Garattini, L., & van de Vooren, K. (2011). Budget impact analysis in economic evaluation: A proposal for a clearer definition. European Journal of Health Economics, 12, 449–502.Google Scholar
  3. Ghabri, S., Poullié, A.-I., Autin, E., & Josselin, J.-M. (2017). Guidelines for budget impact analysis in economic evaluations of drugs and medical devices. French national authority for health [HAS].Google Scholar
  4. ISPOR (International Society for Pharmacoeconomics and Outcomes Research), Sullivan, S. D., Mauskopf, J., Augustovski, F., Jaime Caro, J., Lee, K. M., et al. (2014). Budget impact analysis-principles of good practice: Report of the ISPOR 2012 budget impact analysis good practice II task force. Value in Health, 17, 5–14.CrossRefGoogle Scholar
  5. Mauskopf, J. (1998). Prevalence-based economic evaluation. Value in Health, 1, 251–259.CrossRefGoogle Scholar
  6. Mauskopf, J. (2014). Budget-impact analysis. In A. Culyer (Ed.), Encyclopedia of health economics (Vol. 1, pp. 98–107). San Diego: Elsevier.CrossRefGoogle Scholar
  7. Nuijten, M. J., Mittendorf, T., & Persson, U. (2011). Practical issues in handling data input and uncertainty in a budget impact analysis. European Journal of Health Economics, 12, 231–241.CrossRefGoogle Scholar
  8. Samuelson, P. A. (1958). An exact consumption-loan model of interest with or without the social contrivance of money. Journal of Political Economy, 66, 467–482.CrossRefGoogle Scholar
  9. Trueman, P., Drummond, M., & Hutton, J. (2001). Developing guidance for budget impact analysis. Pharmacoeconomics, 19, 609–621.CrossRefGoogle Scholar

Copyright information

© Springer International Publishing AG 2017

Authors and Affiliations

  • Jean-Michel Josselin
    • 1
  • Benoît Le Maux
    • 1
  1. 1.Faculty of EconomicsUniversity of Rennes 1RennesFrance

Personalised recommendations