- Cost-utility analysis
Cost-utility analysis (CUA) is a form of
economic analysis used to guideprocurement decisions. The most common and well-known application of this analysis is inpharmacoeconomics , especiallyhealth technology assessment (HTA).CUA in health economics
In health economics, the purpose of CUA is to estimate the ratio between the cost of a health-related intervention and the benefit it produces in terms of the number of years lived in full health by the beneficiaries. Hence it can be considered a special case of
cost-effectiveness analysis , and the two terms are often used interchangeably.Cost is measured in monetary units. Benefit needs to be expressed in a way that allows health states that are considered less preferable to full health to be givenquantitative values. However, unlikecost-benefit analysis , the benefits do not have to be expressed inmonetary terms. In HTAs it is usually expressed inquality-adjusted life years (QALYs).If, for example, intervention A allows a patient to live for three additional years than if no intervention had taken place, but only with a quality of life weight of 0.6, then the intervention confers 3 * 0.6 = 1.8 QALYs to the patient. If intervention B confers two extra years of life at a quality of life weight of 0.75, then it confers an additional 1.5 QALYs to the patient. The net benefit of intervention A over intervention B is therefore 1.8 - 1.5 = 0.3 QALYs.
The
incremental cost-effectiveness ratio (ICER) is the ratio between the difference in costs and the difference in benefits of two interventions. Athreshold value is often set by policy makers, who may decide that only interventions with an ICER below the threshold are cost effective (and therefore should be funded).In the
United Kingdom , as of January 2005, theNational Institute for Health and Clinical Excellence (NICE) is believed to have a threshold of about £30,000 per QALY, although a formal figure has never been made public [ [cite journal
last = Devlin
first = Nancy
coauthors = David Parkin
date = 2004
title = Does NICE have a cost-effectiveness threshold and what other factors influence its decisions? A binary choice analysis
journal = Health Economics
volume = 13
issue = 5
pages = pp. 437–52
doi = 10.1002/hec.864 [http://www.city.ac.uk/economics/dps/discussion_papers/0301.pdf Article also available directly from the authors at City University, London, UK.] ] Thus, any health intervention which has anincremental cost of more than £30,000 per additional QALY gained is likely to be rejected and any intervention which has an incremental cost of less than or equal to £30,000 per extra QALY gained is likely to be accepted ascost-effective .In North America, US$50000 per QALY is often suggested as a threshold ICER for a cost-effective intervention.
A complete compilation of cost-utility analyses in the peer reviewed medical literature is available at the [http://www.tufts-nemc.org/CEARegistry CEA Registry Website]
References
See also
*
Cost-effectiveness
*Cost-benefit analysis
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