The cost-effectiveness threshold is the maximum amount a decision-maker is willing to pay for a unit of health outcome. If the cost-effectiveness (ICER) of a new therapy (compared with a relevant alternative) is estimated to be below the threshold, then (other things being equal) it is likely that the decision-maker will recommend the new therapy. However for values near the threshold, the level of uncertainty may become important. Thresholds are often established by analysis of previous (reimbursement) decisions: they are not themselves outputs of cost-effectiveness analyses, but guides (or rules) to interpretation of these outputs for decision-making, and they are specific to each unit of health outcome used. They are closely related to the economic concept of ‘opportunity cost’, in which the value of an intervention is considered to be the value of what is foregone in order to implement the intervention. The threshold value stands for the health outcome that could have been achieved if the resource required to implement the intervention of interest had been used elsewhere. Although some countries (e.g. NICE for England and Wales) make the thresholds that they use explicit, in other countries the thresholds may not be explicit and they may vary by health care sector or disease area.

 

How to cite: Cost-Effectiveness Threshold [online]. (2016). York; York Health Economics Consortium; 2016. https://yhec.co.uk/glossary/cost-effectiveness-threshold/