Define Net Monetary Benefit (NMB) and its calculation.

• A. NMB = (WTP × Incremental Effect) − Incremental Cost
• B. NMB = Incremental Effect ÷ Incremental Cost
• C. NMB = Incremental Cost − (WTP × Incremental Effect)
• D. NMB = WTP − Incremental Cost

Answer: (A)

Net Monetary Benefit uses a monetary value for health gains at a chosen willingness-to-pay per unit of effect to judge cost-effectiveness. You compare the value of the health gain to the additional cost of the new option.

The correct form is NMB = (WTP × Incremental Effect) − Incremental Cost. Here, WTP is how much society is willing to pay for a unit of health gain (for example, per QALY), Incremental Effect is the difference in health outcomes between the new option and the comparator, and Incremental Cost is the difference in costs between them. If NMB is positive at a given WTP, the new option is cost-effective at that threshold; if negative, it is not.

Why this form fits: it converts health benefits into dollars, then subtracts the extra cost, giving a single monetary value to decide about adoption. The other expressions either misplace operations or mix in ratios, which do not produce a dollar value for a health gain in the same way.