Incremental Cost Effectiveness Ratio Example
For example a bicycle that costs 200 and can be used for 1500 miles. For example in a study that assessed the cost effectiveness of testing cholesterol levels in children compared with not testing the cost effectiveness ratio would be in this example if the cost effectiveness ratio were 35 000 per life year gained one would expect to gain one more life year for each additional 35 000 that was spent.
Cost Effectiveness Analysis
Incremental cost effectiveness ratio icer 900 0 1 9000.
Incremental cost effectiveness ratio example. For example you could compare two programs designed to prevent overweight or obesity where one program focuses on physical activity and the other focuses on nutrition. An incremental or marginal cost effectiveness ratio includes a comparison of the differences in cost and effectiveness of more than one imaging modality. The incremental cost effectiveness ratio icer is a statistic used in cost effectiveness analysis to summarise the cost effectiveness of a health care intervention.
Each unit of effectiveness saves 9000 with the new intervention strategy. It is defined by the difference in cost between two possible interventions divided by the difference in their effect. Incremental cost 100 1000 900.
Transportation strategies can be compared with cost effectiveness metrics such as cost per mile. Incremental cost e ectiveness ratio icer once we have a measure of bene t we can calculate the icer among alternatives reminder. As previously stated an icer includes the calculation of upfront and downstream cost differences as well as near term and or long term i e life expectancy outcome differences.
It has an incremental cost effectiveness ratio of 15 000 per qaly. Icer c 1 c 2 e 1 e 2 c e c i and e i are the costs and e ectiveness measure of alternative i the purpose is to compare the incremental costs to the incremental bene ts the result is the incremental cost per unit. It represents the average incremental cost associated with 1 additional unit of the measure of effect.
Incremental effectiveness 0 9 0 8 0 1. The icer is expressed as the ratio of the difference in costs between two strategies to the difference in effectiveness. An incremental cost effectiveness ratio is a summary measure representing the economic value of an intervention compared with an alternative comparator.
We can use extended dominance to rule out intervention c. This may include costs such as energy the value of people s time environmental impact and the cost of capital such as trains and roads. Cea summary measures average cost effectiveness ratio incremental cost effectiveness ratio net costs a net effects a net costs b net costs a.
In order to adopt c the decision maker must have decided to adopt interventions with a cost effectiveness ratio of 15 000 per qaly. Statistical methods for cea have been developed and a measure called the incremental cost effectiveness ratio icer has been widely adopted by researchers and policy makers weinstein and stason 1977. An icer is calculated by dividing the difference in total costs incremental cost by the difference in the chosen measure.
It is usually the main output or result of an economic evaluation. Status quo costs 1000 and is assigned an effectiveness value of 0 8.
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