Extended Dominance

The term dominance in the context of cost-effectiveness analysis refers to the situation in which two clinical strategies are being compared. One strategy, Strategy X, is said to dominate another, Strategy Y, if either (a) the expected costs of Strategy X are less than the expected costs of Strategy Y and the expected benefits of Strategy X are at least as great as the expected benefits of Strategy Y or (b) the expected benefits of Strategy X are greater than the expected benefits of Strategy Y and the expected costs of Strategy X are not greater than the expected costs of Strategy Y. Usually, the dominant strategy is both more effective and less costly than the alternative. This concept of dominance is also referred to as strong dominance or simple dominance.

The extended dominance principle (also known as weak dominance) is applied in cost-effectiveness studies that compare mutually exclusive interventions. This is the situation where only one of the strategies is available to each participant.

The concept of extended dominance is applied in incremental cost-effectiveness analysis to eliminate from consideration strategies whose costs and benefits are improved by a mixed strategy of two other alternatives. That is, two strategies may be used together as a “blended” strategy, instead of assigning a single treatment strategy to all members of a population. Blending strategies only becomes relevant when the most effective strategy is too costly to recommend to all.

The concept may have been first suggested when a particular clinical strategy was “dominated in an extended sense,” thus leading to the term extended dominance. Extended dominance rules out any strategy with a higher incremental cost-effectiveness ratio (ICER), which is greater than that of a more effective strategy. That is, extended dominance applies to strategies that are not cost-effective because another available strategy provides more units of benefit at a lower cost per unit of benefit.

Among competing choices, an alternative is said to be excluded by extended dominance if its ICER relative to the next less costly undominated alternative is greater than that of a more costly alternative.

Here is a simple example of a competing choice problem that can be evaluated for strong dominance and extended dominance. Table 1 shows costs and outcomes for standard of care and five hypothetical interventions.

From the comparison of costs and outcomes, we can rule out Intervention E because it is strongly dominated by Intervention D. Intervention D costs [Page 500]less and gives better outcomes than E. Having ruled out Intervention E, we can compare the remaining strategies based on their ICERs. This is where the principle of extended dominance comes in. Table 2 shows the remaining interventions listed in order of effectiveness. The ICER of each intervention is found by comparing it with the next most effective option.

We can now use the principle of extended dominance to rule out Intervention C. Intervention C has an ICER of $15,000 per quality-adjusted life year (QALY). To agree to use Intervention C, the deciding body would have to agree to adopt all interventions with ICERs up to $15,000 per QALY. If so, they would be much better off choosing Intervention B over Intervention C, since a greater number of QALYs can be obtained with this intervention at a lower cost per QALY. The logic goes thus: If one is willing to pay a smaller amount to gain a life year (or QALY or whatever unit of effectiveness) with the more expensive strategy, then one should not choose the strategy with the higher ICER.

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