Information Created to Evade Reality (ICER)
Cost-effectiveness analysis has been advocated in the health economics methods literature and adopted in a growing number of jurisdictions as an evidence base for decision makers charged with maximising health gains from available resources.
This paper critically appraises the information generated by cost-effectiveness analysis, in particular the incremental cost-effectiveness ratio (ICER). It is shown that this ratio is used as comparative information on what are non-comparable options and hence evades the reality of the decision-maker’s problem. The theoretical basis for the ICER approach is the simplification of theoretical assumptions that have no relevance to the decision maker’s context. Although alternative, well established methods can be used for addressing the decision maker’s problem, faced with the increasing evidence of the theoretical and empirical failures of the cost-effectiveness approach, some proponents of the approach now propose changing the research question to suit the approach as opposed to adopting a more appropriate method for the prevailing and continuing problem.
As long as decision makers are concerned with making the best use of available healthcare resources, cost-effectiveness analysis and the ICER should not be where we look for answers.
KeywordsDecision Maker Incremental Cost Health Gain Mathematical Programming Technique Marginal Opportunity Cost
No sources of funding were used to assist in the preparation of this article. The authors have no potential conflicts of interest that are directly relevant to the contents of this article.
- 2.National Institute for Clinical Excellence. Guide to the methods of technology appraisal. London: National Institute for Clinical Excellence, 2004Google Scholar
- 3.Canadian Agency for Drugs and Technologies in Health. Guidelines for the economic evaluation of health technologies. 3rd ed. Ottawa (ON): Canadian Agency for Drugs and Technologies in Health, 2006Google Scholar
- 6.Gold M, Siegel J, Russell L, et al. Cost-effectiveness in health and medicine. New York: Oxford University Press, 1996Google Scholar
- 7.Drummond M, Sculpher M, Torrance G, et al. Methods for the economic evaluation of health care programmes. Oxford: Oxford University Press, 2005Google Scholar
- 10.Culyer A. Ought NICE to have a cost-effectiveness threshold? In: Towse A, Pritchard C, Devlin N, editors. Cost-effectiveness thresholds: economic and ethical issues. London: Kings Fund and Office of Health Economics, 2002: 9–14Google Scholar
- 12.Williams A. What could be nicer than NICE? London: Office of Health Economics, 2004Google Scholar
- 15.Lorinc J. How much are drugs worth? A fledgling medical science attempts an answer. University of Toronto Magazine [online]. Available from URL: http://www.magazine.utoronto.ca/06Spring/drugs.asp [Accessed 2006 Apr 25]Google Scholar
- 18.Devlin N. An introduction to the use of cost-effectiveness thresholds in decision making: what are the issues? In: Towse A, Pritchard C, Devlin N, editors. Cost-effectiveness thresholds: economic and ethical issues. London: Kings Fund and Office of Health Economics, 2002: 16–24Google Scholar
- 26.Weinstein M. Decision rules for incremental cost-effectiveness analysis. In: Jones A, editor. The Elgar companion to health economics. Northampton: Edward Elgar, 2006: 469–478Google Scholar
- 27.Birch S, Gafni A. Decision rules in economic evaluation. In: Jones A, editor. The Elgar companion to health economics. Northampton: Edward Elgar, 2006: 492–502Google Scholar
- 30.Drummond M. Principles of economic appraisal in health care. Oxford: Oxford University Press, 1980Google Scholar
- 36.Fuchs V. Who shall live? Health, economics and social choice. New York: Basic Books, 1974Google Scholar
- ai]38.Smith R. The triumph of NICE. BMJ 2004 [online]. Available from URL: http://bmj.bmjjournals.com/cgi/content/full/329/7459/0g [Accessed 2006 May 5]Google Scholar
- 47.Baltussen R, Adam T, Tan-Torres Edejer T, et al. What is generalized cost-effectiveness analysis? In: Tan-Torres Edejer T, Baltussen R, Adam T, et al., editors. Making choices in health: WHO guide to cost-effectiveness analysis. Geneva: World Health Organization, 2003: 3–15Google Scholar
- 48.Sculpher M, Claxton K, Akehurst R. Its just evaluation for decision making: recent developments in, and challenges for, cost-effectiveness research. In: Smith P, Ginelly L, Sculpher M, editors. Health policy and economics: opportunities and challenges. Milton Keynes: Open University Press, 2004: 8–41Google Scholar