What is a willingness-to-pay (WTP) threshold and how is it used?

• A. A specified monetary value society is willing to pay per unit of health gain; used to judge if an ICER is acceptable.
• B. The maximum budget for the program in a year.
• C. The minimum sample size for a trial.
• D. A fixed discount rate used in calculations.

Answer: (A)

A willingness-to-pay threshold is the amount a society is willing to spend for a unit of health improvement, typically per quality-adjusted life year gained. In cost-effectiveness analyses, you compare the incremental cost per unit of health gained (the ICER) to this threshold. If the ICER is at or below the threshold, the intervention is considered cost-effective and represents good value for money within that health system; if it’s above, it’s unlikely to be funded given the available budget and other health priorities. This threshold reflects societal preferences and budget constraints and can vary by country or program. It’s not the total program budget, not a minimum sample size, and not a fixed discount rate—those are different concepts in economic evaluation.