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BACKGROUND

Cost-effectiveness analysis involves the comparison of the incremental cost-effectiveness ratio of a new technology, which is more costly than existing alternatives, with the cost-effectiveness threshold. This indicates whether or not the health expected to be gained from its use exceeds the health expected to be lost elsewhere as other health-care activities are displaced. The threshold therefore represents the additional cost that has to be imposed on the system to forgo 1 quality-adjusted life-year (QALY) of health through displacement. There are no empirical estimates of the cost-effectiveness threshold used by the National Institute for Health and Care Excellence.

OBJECTIVES

(1) To provide a conceptual framework to define the cost-effectiveness threshold and to provide the basis for its empirical estimation.(2) Using programme budgeting data for the English NHS, to estimate the relationship …