Budget impact analysis is designed to determine affordability of new healthcare interventions or as an implementation tool for newly reimbursed interventions. There are three main methods that have been used to estimate the budget impact: (1) the cost calculator approach; (2) Markov or state transition models; and (3) simulation models. For all methods, the primary estimate is the change in annual population costs associated with adding the new healthcare intervention to the treatment mix. Annual changes in resource use or population health outcomes may also be estimated.
Mauskopf, J. (2014). Budget-Impact Analysis. In AJ. Cuyler (Ed.), Encyclopedia of Health Economics (pp. 98-107). New York, NY: Elsevier.