What does the incremental cost-effectiveness ratio (ICER) represent in a cost-effectiveness analysis?

What does the incremental cost-effectiveness ratio (ICER) represent in a cost-effectiveness analysis?

• A. The net monetary benefit
• B. The total cost of the program
• C. The discount rate
• D. The additional cost per additional unit of effect

Answer: (D)

The key idea is that the incremental cost-effectiveness ratio shows the extra cost required to gain one more unit of health benefit when moving from one option to another. It compares two interventions, taking the difference in costs in the numerator and the difference in effects (like QALYs or life-years) in the denominator. The result is expressed as cost per unit of effect, such as dollars per QALY gained, which helps decide whether the additional benefit is worth the extra expense given a willingness-to-pay threshold. If one option is cheaper and more effective, it dominates and you wouldn’t typically compute an ICER. The ICER is not the total cost of the program, nor the discount rate, nor the net monetary benefit. For example, if switching from a cheaper, less effective option to a more expensive, more effective one costs $8,000 per additional 0.5 QALYs gained, the ICER is $16,000 per QALY.

The key idea is that the incremental cost-effectiveness ratio shows the extra cost required to gain one more unit of health benefit when moving from one option to another. It compares two interventions, taking the difference in costs in the numerator and the difference in effects (like QALYs or life-years) in the denominator. The result is expressed as cost per unit of effect, such as dollars per QALY gained, which helps decide whether the additional benefit is worth the extra expense given a willingness-to-pay threshold. If one option is cheaper and more effective, it dominates and you wouldn’t typically compute an ICER. The ICER is not the total cost of the program, nor the discount rate, nor the net monetary benefit. For example, if switching from a cheaper, less effective option to a more expensive, more effective one costs $8,000 per additional 0.5 QALYs gained, the ICER is $16,000 per QALY.