Cost-effectiveness Analysis

Cost-effectiveness analysis involves comparison of the additional costs and health benefits of an intervention with those of the available alternative(s). The aim of such an analysis is to determine the value in terms of money of the intervention(s). Within a cost-effectiveness analysis, the health benefits associated with the various interventions are measured in terms of natural units (e.g., survival, life years gained, the number of clinical events avoided). This entry introduces the concept of cost-effectiveness analysis and reviews the key elements, including the incremental cost-effectiveness ratio (ICER), the cost-effectiveness plane, the cost-effectiveness threshold, and the cost-effectiveness frontier.


The objective of economic evaluation of healthcare interventions is to inform resource allocation decisions in the healthcare sector, through determining whether a proposed intervention is a “good” use of ...

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