Incremental Cost-Effectiveness Ratios, Net Benefit and Healthcare Decision-Making: A Policy Perspective
*Michael Drummond, University of York 

Keywords: Cost-effectiveness analysis,resource allocation

The decision-maker’s main aim, in reviewing economic data, is to efficiently allocate scarce resources. Ideally one would have good estimates of the benefits from adopting a health treatment and the opportunity cost (benefits forgone from not using the best alternative). If benefits and costs are measured in the same units (eg money) it is easy to assess whether the treatment is worthwhile.

The incremental cost-effectiveness ratio measures benefit not in monetary terms, but in units of health gained. For policy makers, this presents problems in interpretation. Calculation of the net benefit solves this issue, but begs the question whether the threshold value of a unit of health gain is correct. Thus, the cost-effectiveness acceptability curve, which shows the probability a treatment is cost-effective at different willingness-to-pay values, should be a useful approach for policy makers

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