Budget impact analysis (BIA)

Budget Impact Analysis is an essential part of a comprehensive economic assessment of a health care technology and is increasingly required, along with cost-effectiveness analysis (CEA), prior to formulary approval or reimbursement.
The purpose of a BIA is to estimate the financial consequences of adoption and diffusion of a new health care intervention within a specific health care setting or system context given inevitable resource constraints. In particular, a BIA predicts how a change in the mix of medicines and other therapies used to treat a particular health condition will impact the trajectory of spending on that condition.
Users of BIA include those who manage and plan for health care budgets such as administrators of national or regional health care programs, administrators of private insurance plans, administrators of health care delivery organisations and employers who pay for employee health benefits.
BIA should be viewed as complementary to cost-effectiveness analysis (CEA), not as a variant or replacement. Whereas, CEA evaluates the costs and outcomes of alternative technologies over a specified time horizon to estimate their economic efficiency, BIA addresses the financial stream of consequences related to the uptake and diffusion of technologies to assess their affordability.

Last update: 7 June 2023

Source: ISPOR Taskforce, updated by PPRI