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19.5: Presentation of results

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    The incremental cost-effectiveness ratio (ICER) is a common way of summarizing results from a cost-effectiveness study (expressed as the ratio of two differences in costs and in effects of the alternative interventions):

    \[\mathrm{ICER = \dfrac{Cost (new intervention) - Cost (current intervention)}{ Effect (new intervention) - Effect (current intervention)}}\]

    The result can be considered as the cost of the additional effect obtained by switching from current practice to the new intervention. If the differential cost is low enough or the differential effect is large enough, the new intervention is considered ‘cost-effective’, as compared to the current. If an intervention is considered to be ‘cost-effective’, it means that local and/or global policymakers believe it is worth paying the amount estimated to produce an additional unit of effect.

    Table 19.2 indicates the various ways a new intervention might be compared with the current intervention. Note that the decision is straightforward only if a new intervention is both less effective and more costly (or both more effective and less costly).

    CEA is sensitive to the choice of interventions being compared. Researchers should consider whether the choices of interventions being compared are really the choice of interest. Clearly, this decision must precede the final design of the trial.

    Consider two strategies intended to lengthen life in patients with heart disease. One is ‘simple’ and cheap (for example, aspirin and beta (β)-blockers) and lengthens life, on average by 5 years; the other is more ‘complex’, more expensive, and more effective (for example, aspirin and β-blockers plus cardiac catheterization, angioplasty, stents, and bypass), lengthening life, on average, by 5.5 years. Table 19.3 shows the relevant (hypothetical) data.

    The incremental cost of the simple intervention is the difference between the cost of that strategy ($5000) and the cost of doing nothing ($0), so the ICER = ($5000 − $0)/(5.0 − 0.0) = $1000/life-year gained. The incremental cost for the complex intervention relative to the simple intervention is the difference between the cost of the complex intervention ($50 000) and the cost of the simple intervention ($5000), so the ICER = ($50 000 − $5000)/(5.5 − 5.0) = $90 000/year gained.

    Thus, implementation of the simple intervention costs $1000 for every year of life gained, and implementation of the complex intervention, compared to the simple intervention, costs $90 000 for every year of life gained. The decision maker will have to decide between these different options, based upon the resources available and taking into account the years of life that might be gained (and the cost of so doing) by intervening against different diseases (with different interventions). But, in this example, while paying $1000 for an extra year of life seems cost-effective, paying $90 000 for an additional year of life appears to be a less worthwhile use of scarce resources. In practice, comparison is often made to cost-effectiveness ‘thresholds’, in order to facilitate the interpretation of ICERs. The most commonly used threshold is the gross domestic product (GDP) per capita of the country in question, i.e. if the cost per DALY averted or QALY gained is less than the country’s GDP per capita, then the intervention being assessed is considered to be relatively cost-effective and hence worth implementing.

    For those who wish to pursue these issues further, Drummond (2005) and Eichler et al. (2004) give a much fuller discussion of CEA.

    Table 19.2 Cost-effectiveness analysis as an aid to decision making

    Effectiveness Cost
    New intervention costs more New intervention costs less
    New intervention is more effective CEA needed Adopt new intervention
    New intervention is less effective Do not adopt new intervention CEA needed

    Table 19.3 Example of the application of cost-effectiveness analysis

    Strategy Additional cost Incremental cost Effectiveness (years gained, compared to ‘nothing’) Incremental effectiveness ICER ($/year gained)
    Nothing (0) 0.0
    Simple intervention (S) $5000 (S vs 0) $5000 5.0 5.0 − 0.0 = 5.0 $1000
    Complex intervention (C) $50 000 (C vs S) $45 000 5.5 5.5 − 5.0 = 0.5 $90 000

    19.5: Presentation of results is shared under a CC BY-NC license and was authored, remixed, and/or curated by LibreTexts.

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