Cost-benefit analysis/Addendum

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This addendum is a continuation of the article Cost-benefit analysis.

The NICE cost-effectiveness thresholds

To assess cost-effectiveness, NICE integrates the Quality-adjusted life years (QALY) score with the price of treatment using the incremental cost-effectiveness ratio (ICER). This represents the change in costs in relation to the change in health status. The result is a ‘cost per QALY’ figure.

NICE has stated[1] that it uses a “threshold range” to determine whether the cost per QALY of a treatment offers value for money. It provides its advisory bodies with a framework for decision-making as follows:

  • Below an ICER of £20,000 per QALY, judgements about the acceptability of a technology as an effective use of NHS resources are based primarily on the cost effectiveness estimate.
  • Above an ICER of £20,000 per QALY, judgments about the acceptability of the technology as an effective use of NHS resources are more likely to make more explicit reference to factors including the degree of uncertainty of the ICER, the innovative nature of the technology, the particular features of the condition and population receiving the technology, and (where appropriate) the wider societal costs and benefits.
  • Above an ICER of £30,000 per QALY the case for supporting the technology on these factors has to be increasingly strong. Recommendations for interventions costing more than £20–£30,000 per QALY must be explained

The costs of road traffic injuries

Factors applied to value of life by the United States Department of Transportation [2] and the United Kingdom Depatment for Transport[3]

US D of T UK D for T
Slight/minor 0.002 0.008
Moderate 0.0155
Serious 0.0575 0.11
Severe 0.1875
Critical 0.7625