On the Estimation of the Cost-Effectiveness Threshold: Why, What, How?

Abstract

Background: Many health care systems claim to incorporate the cost-effectiveness criterion in their investment decisions. Information on the system's willingness to pay per effectiveness unit, normally measured as quality-adjusted life-years (QALYs), however, is not available in most countries. This is partly because of the controversy that remains around the use of a cost-effectiveness threshold, about what the threshold ought to represent, and about the appropriate methodology to arrive at a threshold value.

Objectives: The aim of this article was to identify and critically appraise the conceptual perspectives and methodologies used to date to estimate the cost-effectiveness threshold.

Methods: We provided an in-depth discussion of different conceptual views and undertook a systematic review of empirical analyses. Identified studies were categorized into the two main conceptual perspectives that argue that the threshold should reflect 1) the value that society places on a QALY and 2) the opportunity cost of investment to the system given budget constraints.

Results: These studies showed different underpinning assumptions, strengths, and limitations, which are highlighted and discussed. Furthermore, this review allowed us to compare the cost-effectiveness threshold estimates derived from different types of studies. We found that thresholds based on society's valuation of a QALY are generally larger than thresholds resulting from estimating the opportunity cost to the health care system.

Conclusions: This implies that some interventions with positive social net benefits, as informed by individuals' preferences, might not be an appropriate use of resources under fixed budget constraints.

Keywords: cost-effectiveness analysis; quality-adjusted life-year; threshold.