large health care capital expenditures. CON applications by institutions are reviewed by local health systems agencies, who recommend approval or disapproval; they are denied or approved by State health planning agencies (SHPDAs).

Consensus development conference: A process in which knowledgeable biomedical researchers, practicing health professionals, and others, as appropriate, are brought together by NIH to explore publicly the scientific background, state of knowledge, proper use(s), and any other issues pertinent to the technology under consideration. Controlled clinical trial: An experimental design by which human or animal subjects are assigned, in accordance with predetermined rules, either to an experimental group (in which subjects receive a clinical intervention or dosage level of uncertain efficacy or safety) or to a control group (in which subjects receive some other intervention or dosage level, usually the customary or conventional one, or a placebo). If the predetermined rules specify that the subjects are assigned to groups randomly, the result is a randomized controlled clinical trial. The vast majority of randomized clinical trials are also controlled trials.

Cost-benefit analysis: An analytical technique that compares the costs of a project or technological application to the resultant benefits, with both costs and benefits expressed by the same measure. This measure is nearly always monetary. Cost-effectiveness analysis: An analytical technique that compares the costs of a project or of alternative projects to the resultant benefits, with cost and benefits/effectiveness not expressed by the same measure. Costs are usually expressed in dollars, but benefits/effectiveness are ordinarily expressed in terms such as "lives saved," "disability avoided," "quality-adjusted life years (QALYs) saved," or any other relevant objectives. Also, when benefits/effectiveness are difficult to express in a common metric, they may be presented as an "array."

Device (medical): Any physical item, excluding drugs, used in medical care (including instruments, apparatus, machines, implants, and reagents). Discount rate: A factor used in economic analysis to reduce to present value those costs and effects that occur in future years. Discounting is based on two premises: 1) individuals prefer to receive benefits today rather than in the future, and 2) resources invested today in alternative programs could earn a return over time.

Drug: Any chemical or biological substance that may be applied to, ingested by, or injected into humans

in order to prevent, treat, or diagnose disease or other medical conditions. Effectiveness: Same as efficacy (see below) except that it refers to ". . . average conditions of use." Efficacy: The probability of benefit to individuals in a defined population from a medical technology applied for a given medical problem under ideal conditions of use.

Fee-for-service: A method of paying for medical care on a retrospective basis by which each service actually received by an individual bears a related charge.

Health maintenance organization: A health care organization that acts as both insuror and provider of comprehensive medical services by a defined set of physicians to a voluntarily enrolled population paying a prospective per capita fee (i.e., paying by "capitation").

Health status index (HSI): A composite measure of well-being of an individual or a population. An HSI may include any two or more measures such as morbidity, mortality, level of function or mobility, and potential for developing disease. Health services research: A field of inquiry that focuses on the structure, production, distribution, and effects of delivering personal health services. Health systems agency (HSA): One of the local health planning agencies which are charged with developing local health planning goals and implementing plans in consonance with State and National health care goals. HSAs are federally funded and are governed by a body which is broadly representative of both provider and consumer interests, the latter being in the majority. The country is divided into areas each of which is served by an HSA.

Human capital: An economic concept used to assess "livelihood," or the earnings potential of an individual. It has often been used as a proxy for the value of life in terms of an individual's productive capacity to society.

Investigational new drug (IND) application: Short for "notice of claimed investigational exemption for a new drug." An IND application is submitted to FDA by a drug's sponsor. It is a request for permission to use the drug in humans in order to investigate the drug's safety and efficacy for specific conditions. It must include the results of toxicity studies in animals, the qualifications of the investigators, and the design of the proposed clinical studies.

Marginal benefit: An economic concept referring to the additional benefit achieved by incurring an additional unit of cost.

Marginal cost: An economic concept referring to the additional cost of achieving one more unit of benefit.

Medical care evaluation studies: Intensive retrospec

tive reviews of patients' records to evaluate the quality, variation, and utilization of health care services delivered to the patient. Medical technology: The drugs, devices, and medical and surgical procedures used in medical care, and the organizational and support systems within which such care is provided.

Morbidity: Illness, injury, impairment, or disability in an individual.

Mortality: The death of an individual; often used in epidemiological studies where mortality rates for a population for a certain disease or injury are calculated.

Net cost analysis: A form of CEA/CBA (see above) that concentrates on costs, with less attention paid to analyzing outcomes in terms of health benefit. When alternatives are under study, their efficacy is often assumed to be equal.

New drug application (NDA): An application to FDA by the sponsor of a new drug for permission to market the drug. The NDA must provide information that demonstrates the safety and efficacy of the drug.

Procedure: A medical technology involving any combination of drugs, devices, and provider skills and abilities. Appendectomy, for example, may involve at least drugs (for anesthesia), monitoring devices, surgical devices, and physicians', nurses', and support staffs' skilled actions. Professional Standards Review Organization: Community-based nonprofit agencies directed by physicians that monitor the quality and appropriateness of institutional health care provided to medicare and medicaid beneficiaries.

Quality-adjusted life year (QALY): A health status index in which 1 year of life is adjusted for various types and degrees of disability to yield 1 year of healthy life. QALYs are sometimes used to meas

ure in common terms the effects on morbidity and mortality of health care technologies or programs. Risk: A measure of the probability of an adverse or untoward outcome's occurring and the severity of the resultant harm to health of individuals in a defined population associated with use of a medical technology applied for a given medical problem under specified conditions of use.

Risk-benefit analysis: The formal comparison of the probability and level of adverse or untoward outcomes versus positive outcomes for any given action. The comparison of outcomes does not take into consideration the resource costs involved in the intended action.

Safety: A judgment of the acceptability of risk (see above) in a specified situation.

State Health Coordinating Council (SHCC): The State advisory body to the State health planning and development agency (SHPDA). SHCCs consist of a consumer majority, mostly from health system agencies' representatives who are appointed by the Governor, and are responsible for approving the State health plan which is submitted by the SHPDA.

State health planning and development agency (SHPDA): State-level health planning organizations which are federally mandated to develop and implement statewide health plans in consonance with national goals and local planning objectives. SHPDAs must approve or disapprove health system agencies' recommendations regarding certificate of need for large new capital investments. Willingness-to-pay: An economic concept used to as

sess the monetary value of life in terms of what an individual is "willing to pay" to prolong life or postpone death. The willingness-to-pay technique is used to try to assess how much an individual values his or her own life. Sometimes, the technique is also used to assess how much an individual is willing to pay to decrease risk to others or to prolong others' lives.

ACKNOWLEDGMENTS