What is the incremental cost-effectiveness ratio (ICER)?

• A. The total cost of an intervention.
• B. The average cost per patient.
• C. The additional cost per additional benefit of one intervention over another.
• D. The ratio of effectiveness to cost.

Answer: (C)

The incremental cost-effectiveness ratio shows how much extra you pay for each additional unit of health gain when moving from one intervention to another. It is calculated by taking the difference in costs and dividing it by the difference in effects between the two options. This focuses on the marginal trade-off, not the total or average cost, and helps determine whether the extra benefit is worth the extra money given a threshold. For example, if a new treatment costs $20,000 and yields 2.5 QALYs, while the standard costs $12,000 and yields 2.0 QALYs, the ICER is ($20,000 − $12,000) / (2.5 − 2.0) = $8,000 per QALY. If the willingness-to-pay threshold is $50,000 per QALY, the new option is considered cost-effective. Domination concepts also matter: a more expensive and less effective option isn’t preferred, while a less costly and more effective option dominates. The other choices describe total cost, average cost per patient, or the ratio of effectiveness to cost, which do not capture the incremental trade-off.