HEOR

Health Economics and Outcomes Research (HEOR) is an interdisciplinary field that integrates economic principles, clinical research, and health outcomes to inform healthcare decision-making. It plays a critical role in assessing the value of medical treatments, technologies, and interventions by evaluating their costs, benefits, and real-world effectiveness. HEOR methodologies help stakeholders—including policymakers, payers, pharmaceutical companies, and healthcare providers—make evidence-based choices that optimize patient care and resource allocation.

The core components of HEOR include cost-effectiveness analysis, budget impact modeling, and outcomes research. Cost-effectiveness analysis compares the relative value of different healthcare interventions by measuring their costs against their clinical benefits, often expressed in terms of cost per quality-adjusted life year (QALY). Budget impact models estimate the financial consequences of adopting a new treatment within a specific healthcare system over a defined period. Outcomes research focuses on measuring the effects of medical interventions on patient health, quality of life, and functional status, often through patient-reported outcomes (PROs) or clinical endpoints.

HEOR is widely applied in drug development, where it supports the economic justification of new therapies by demonstrating their value compared to existing alternatives. In healthcare policy, HEOR informs coverage decisions, reimbursement strategies, and priority-setting frameworks. Payers, such as insurance companies and government health programs, rely on HEOR to determine which treatments to cover and at what cost. Additionally, healthcare providers use HEOR insights to optimize treatment pathways and improve patient outcomes while managing budgets.

The field has evolved alongside advancements in data analytics, real-world evidence (RWE), and precision medicine. Modern HEOR increasingly incorporates large-scale databases, registry studies, and machine learning to generate more robust and generalizable findings. Challenges in HEOR include variability in data quality, methodological inconsistencies, and the need for standardized reporting to ensure comparability across studies. Despite these hurdles, HEOR remains essential for fostering transparency, efficiency, and equity in healthcare systems worldwide.