Incremental Cost-effectiveness Ratio

To calculate the cost-effectiveness of a healthcare intervention, cost-effectiveness analysis uses a statistic called the incremental cost-effectiveness ratio (ICER). The explanation is provided by dividing the cost difference between two potential interventions by the difference in their effects. It indicates the typical incremental cost brought on by adding 1 more unit of effect evaluation. We may calculate the ICER as:

Where C0, text style C 0, and E0, text style E 0, respectively, represent the cost and impact in the control care group, and where C1, text style C 1, and E1 display style E 1, respectively. Although effects might be assessed regarding health status or another result of interest, costs are often expressed in monetary terms. The price per quality-adjusted life year (QALY) gained is a typical use of the ICER in cost-utility analysis, where the two terms are interchangeable.

Many people observe that basing health economics on cost-effectiveness is a type of health care rationing and have Many believe that rationing health care occurs when decisions about health care are made based on cost-effectiveness, and they are worried that applying ICER would reduce the number or variety of treatments and interventions available to patients. Currently, the National Institute for Health and Care Excellence (NICE) of England’s National Health Service (NHS) uses cost-effectiveness studies to determine whether new treatments or medications offer a better value than those currently being used when purchased at the suggested prices by the manufacturers. Due to the increase in cost-effectiveness research, a cost-effectiveness ratio criterion may be created in other nations for the consent of reimbursement or formulary listing at a specific price.