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The concept of a cost‑effectiveness threshold represents the highest value that society is willing to pay for a unit of health gain or forgo by funding the intervention (opportunity cost). Interventions below the threshold value are usually accepted and funded, while those above the threshold value are rejected.

Several approaches have been used for deriving the cost‑effectiveness threshold by regulatory agencies and policy makers, four of which are discussed here. An approach of using benchmark interventions to derive a cost‑effectiveness threshold is used in the United States, where a threshold of $50,000 per QALY gained is based on an estimate of the cost‑effectiveness of dialysis for chronic renal disease. Use of a single benchmark ignores the fact that there might be other options with better‑cost‑effectiveness ratios compared to the benchmark option. Benchmark intervention may not be a true measure of society …