. 2023 Apr 18;41(6):607–617. doi: 10.1007/s40273-023-01265-8

Table 1.

Stylised examples applying $v_{Q} [Δ Q - \frac{1}{k} {Δ c}_{h}] - {Δ c}_{c}$ (Eq. 3) in various scenarios (worlds)

	Intervention A: intervention targeted at patients with heart failure	Intervention B: intervention targeted at patients with depression
ICER in the societal perspective	$Δ c_{c} = + 10, 000$ ICER = (50,000 + 10,000)/1 QALY = 60,000 per QALY	$Δ c_{c} = - 20, 000$ ICER = (50,000 − 20,000)/1 QALY = 30,000 per QALY
First best world:k = v_Q $v_{Q}$ = 50,000 (consumption value of health) k₁ = 50,000 (least cost-effective care identified through a league table)	50,000 × [1 – 50,000/50,000] − 10,000 = −10,000 Reject intervention A (costs exceed benefits)	50,000 × [ 1 − 50,000/50,000] + 20,000 = + 20,000 Accept intervention B (benefits exceed costs)
Second best world: k > v_Q: $v_{Q}$ = 50,000 (consumption value of health) k₂ = 80,000 (least cost-effective care identified through a league table)	50,000 × [1 − 50,000/80,000] − 10,000 = 50,000 × [0.375] − 10,000 = 18,750 − 10,000 = 8750 Accept intervention A Efficiency gains by displacing less cost-effective care, which outweigh additional costs outside the healthcare sector	50,000 × [1 − 50,000/80,000] + 20,000 = 18,750 + 20,000 = 38,750 Accept intervention B Accepting this intervention increases efficiency of healthcare spending and yields gains outside of the healthcare sector
Second best world: k<v_Q $v_{Q}$ = 50,000 (consumption value of health) k₃ = 40,000 (least cost-effective care identified through a league table)	50,000 × [1 − 50,000/40,000] – 10,000 = 50,000 × [−0.25] – 10,000 = −12,500 − 10,000 = −22,500 Reject intervention A You displace more health than you gain and have more societal costs	50,000 × [1 − 50,000/40,000] + 20,000 = −12,500 + 20,000 = 7500 Accept intervention B The value of lost health is compensated by the gains outside the healthcare sector
Third best world: suboptimal displacement $v_{Q}$ = 50,000 (consumption value of health) k₄ = 40,000 (based on marginal cost effectiveness)	50,000 × [1 − 50,000/40,000] – 10,000 = −22,500 Reject Intervention A You displace more health than you gain and have more societal costs	50,000 × [1 − 50,000/40,000] + 20,000 = 7500 Accept intervention B The value of lost health is made up for by the gains outside the healthcare sector

Intervention A: intervention targeted at patients with heart failure

Intervention B: intervention targeted at patients with depression

ICER in the societal perspective

$Δ c_{c} = + 10, 000$

ICER = (50,000 + 10,000)/1 QALY = 60,000 per QALY

$Δ c_{c} = - 20, 000$

ICER = (50,000 − 20,000)/1 QALY = 30,000 per QALY

First best world:k = v_Q

$v_{Q}$ = 50,000 (consumption value of health)

k₁ = 50,000 (least cost-effective care identified through a league table)

50,000 × [1 – 50,000/50,000] − 10,000 = −10,000

Reject intervention A (costs exceed benefits)

50,000 × [ 1 − 50,000/50,000] + 20,000 = + 20,000

Accept intervention B (benefits exceed costs)

Second best world: k > v_Q:

$v_{Q}$ = 50,000 (consumption value of health)

k₂ = 80,000 (least cost-effective care identified through a league table)

50,000 × [1 − 50,000/80,000] − 10,000 = 50,000 × [0.375] − 10,000 = 18,750 − 10,000 = 8750

Accept intervention A

Efficiency gains by displacing less cost-effective care, which outweigh additional costs outside the healthcare sector

50,000 × [1 − 50,000/80,000] + 20,000 = 18,750 + 20,000 = 38,750

Accept intervention B

Accepting this intervention increases efficiency of healthcare spending and yields gains outside of the healthcare sector

Second best world: k<v_Q

$v_{Q}$ = 50,000 (consumption value of health)

k₃ = 40,000 (least cost-effective care identified through a league table)

50,000 × [1 − 50,000/40,000] – 10,000 = 50,000 × [−0.25] – 10,000 = −12,500 − 10,000 = −22,500

Reject intervention A

You displace more health than you gain and have more societal costs

50,000 × [1 − 50,000/40,000] + 20,000 = −12,500 + 20,000 = 7500

Accept intervention B

The value of lost health is compensated by the gains outside the healthcare sector

Third best world: suboptimal displacement

$v_{Q}$ = 50,000 (consumption value of health)

k₄ = 40,000 (based on marginal cost effectiveness)

50,000 × [1 − 50,000/40,000] – 10,000 = −22,500

Reject Intervention A

You displace more health than you gain and have more societal costs

50,000 × [1 − 50,000/40,000] + 20,000 = 7500

Accept intervention B

The value of lost health is made up for by the gains outside the healthcare sector

The table shows the application of the general decision rule [Eq. (3)] for two interventions with different healthcare and societal costs in three different scenarios. In the first best world, the healthcare budget is set optimally, in the sense that the marginal cost effectiveness implied by the budget is equal to the societal value of care, so that k = v. In the second-best world, the healthcare budget is either set too high or too low compared with the societal value of health. In the third-best world, the healthcare budget deviates from the optimal, and moreover, the decision maker is not able to displace the least cost-effective care

ICER incremental cost-effectiveness ratio, QALY quality-adjusted life-year